Exhibit 4.10
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AMENDED AND RESTATED DECLARATION OF TRUST
MDC CAPITAL FUNDING TRUST [ ]
Dated as of
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TABLE OF CONTENTS
PAGE
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ARTICLE I INTERPRETATION AND DEFINITIONS.....................................................2
SECTION 1.1. Definitions.........................................................................2
ARTICLE II TRUST INDENTURE ACT................................................................9
SECTION 2.1. Trust Indenture Act; Application....................................................9
SECTION 2.2. Lists of Holders of Securities......................................................9
SECTION 2.3. Reports by the Property Trustee....................................................10
SECTION 2.4. Periodic Reports to Property Trustee...............................................10
SECTION 2.5. Evidence of Compliance with Conditions Precedent...................................10
SECTION 2.6. Events of Default; Waiver..........................................................10
SECTION 2.7. Event of Default; Notice...........................................................12
ARTICLE III ORGANIZATION......................................................................13
SECTION 3.1. Name...............................................................................13
SECTION 3.2. Office.............................................................................13
SECTION 3.3. Purpose............................................................................14
SECTION 3.4. Authority..........................................................................14
SECTION 3.5. Title to Property of the Trust.....................................................14
SECTION 3.6. Powers and Duties of the Regular Trustees..........................................14
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees...............................18
SECTION 3.8. Powers and Duties of the Property Trustee..........................................19
SECTION 3.9. Certain Duties and Responsibilities of the Property Trustee........................21
SECTION 3.10. Certain Rights of the Property Trustee.............................................23
SECTION 3.11. Delaware Trustee...................................................................25
SECTION 3.12. Execution of Documents.............................................................26
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.............................26
SECTION 3.14. Duration of Trust..................................................................26
SECTION 3.15. Mergers............................................................................26
ARTICLE IV SPONSOR...........................................................................28
SECTION 4.1. Sponsor's Purchase of Common Securities............................................28
SECTION 4.2. Responsibilities of the Sponsor....................................................28
SECTION 4.3. Expenses...........................................................................29
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ARTICLE V TRUSTEES..........................................................................30
SECTION 5.1. Number of Trustees.................................................................30
SECTION 5.2. Delaware Trustee...................................................................31
SECTION 5.3. Property Trustee; Eligibility......................................................31
SECTION 5.4. Qualifications of Regular Trustees and Delaware Trustee Generally..................32
SECTION 5.5. Initial Trustees...................................................................32
SECTION 5.6. Appointment, Removal and Resignation of Trustees...................................33
SECTION 5.7. Vacancies Among Trustees...........................................................34
SECTION 5.8. Effect of Vacancies................................................................34
SECTION 5.9. Meetings...........................................................................35
SECTION 5.10. Delegation of Power................................................................35
ARTICLE VI DISTRIBUTIONS.....................................................................36
SECTION 6.1. Distributions......................................................................36
ARTICLE VII ISSUANCE OF SECURITIES............................................................36
SECTION 7.1. General Provisions Regarding Securities............................................36
ARTICLE VIII DISSOLUTION OF TRUST..............................................................38
SECTION 8.1. Dissolution of Trust...............................................................38
ARTICLE IX TRANSFER OF INTERESTS.............................................................39
SECTION 9.1. Transfer of Securities.............................................................39
SECTION 9.2. Transfer of Certificates...........................................................39
SECTION 9.3. Deemed Security Holders............................................................40
SECTION 9.4. Book Entry Interests...............................................................40
SECTION 9.5. Notices to Clearing Agency.........................................................41
SECTION 9.6. Appointment of Successor Clearing Agency...........................................41
SECTION 9.7. Definitive Capital Security Certificates...........................................41
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates..................................42
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS................43
SECTION 10.1. Liability..........................................................................43
SECTION 10.2. Exculpation........................................................................44
SECTION 10.3. Fiduciary Duty.....................................................................44
SECTION 10.4. Indemnification and Reimbursement..................................................45
SECTION 10.5. Outside Businesses.................................................................46
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ARTICLE XI ACCOUNTING........................................................................47
SECTION 11.1. Fiscal Year........................................................................47
SECTION 11.2. Certain Accounting Matters.........................................................47
SECTION 11.3. Banking............................................................................48
SECTION 11.4. Withholding........................................................................48
ARTICLE XII AMENDMENTS AND MEETINGS...........................................................49
SECTION 12.1. Amendments.........................................................................49
SECTION 12.2. Meetings of the Holders; Action by Written Consent.................................51
ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE..........................53
SECTION 13.1. Representations and Warranties of Property Trustee.................................53
SECTION 13.2. Representations and Warranties of Delaware Trustee.................................54
ARTICLE XIV MISCELLANEOUS.....................................................................55
SECTION 14.1. Notices............................................................................55
SECTION 14.2. Governing Law......................................................................56
SECTION 14.3. Intention of the Parties...........................................................56
SECTION 14.4. Headings...........................................................................56
SECTION 14.5. Successors and Assigns.............................................................56
SECTION 14.6. Partial Enforceability.............................................................56
SECTION 14.7. Counterparts.......................................................................57
ANNEX I TERMS OF SECURITIES...................................................................I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE.................................................A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE..................................................A2-1
EXHIBIT B SPECIMEN OF SUBORDINATED NOTE.........................................................B-1
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CROSS-REFERENCE TABLE*
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED DECLARATION
310(a) ........................................... 5.3(a)
310(b) ........................................... 5.3(c), 5.3(d)
310(c) ........................................... Inapplicable
311(a) ........................................... 2.2(b)
311(b) ........................................... 2.2(b)
311(c) ........................................... Inapplicable
312(a) ........................................... 2.2(a)
312(b) ........................................... 2.2(b)
313 ........................................... 2.3
314(a) ........................................... 2.4
314(b) ........................................... Inapplicable
314(c) ........................................... 2.5
314(d) ........................................... Inapplicable
314(e) ........................................... 1.1, 2.5
314(f) ........................................... Inapplicable
315(a) ........................................... 3.9(b)
315(c) ........................................... 3.9(a)
315(d) ........................................... 3.9(b)
316(a) ........................................... Annex I
316(c) ........................................... 3.6(e)
317(a) ........................................... 3.8(d)
317(b) ........................................... 3.8(h)
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* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
AMENDED AND RESTATED DECLARATION OF TRUST
OF
MDC CAPITAL FUNDING TRUST [ ]
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"),
dated and effective as of [ ], [ ], by the Trustees (as defined
herein), the Sponsor (as defined herein) and by the holders, from time to
time, of undivided beneficial interests in the assets of the Trust to be
issued pursuant to this Declaration.
W I T N E S S E T H:
WHEREAS, the Trustees and the Sponsor created MDC Capital
Funding Trust [ ] (the "Trust") as a business trust under the Delaware
Business Trust Act pursuant to a Declaration of Trust dated as of [ ],
[ ] (the "Original Declaration") and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on [ ], [ ] for the
exclusive purposes of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust, investing the
proceeds thereof in certain Trust Debentures of the Trust Debenture Issuer
(as defined herein) and engaging in activities necessary or incidental
thereto;
WHEREAS, prior to the date hereof, no interests in the Trust
have been issued; and
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration.
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
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ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. DEFINITIONS.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference in this Declaration to the singular includes
the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"AUTHORIZED OFFICER" of a Person means any Person that is
authorized to bind such Person.
"BOOK ENTRY INTEREST" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"BUSINESS DAY" means any day other than a Saturday, a Sunday
or any other day on which banking institutions in New
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York, New York or Denver, Colorado, or the New York Stock Exchange are
authorized or required by law to close.
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. CODE Section 3801 ET SEQ., as it may be amended from time
to time.
"CAPITAL SECURITIES GUARANTEE" means the guarantee agreement,
dated as of [ ], [ ] of the Sponsor in respect of the Capital
Securities.
"CAPITAL SECURITY" has the meaning specified in Section 7.1.
"CAPITAL SECURITY BENEFICIAL OWNER" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"CAPITAL SECURITY CERTIFICATE" means a certificate
representing a Capital Security substantially in the form of Exhibit A-1.
"CERTIFICATE" means a Common Security Certificate or a Capital
Security Certificate.
"CLEARING AGENCY" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Capital Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Capital
Securities.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank or
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
"CLOSING DATE" means [ ].
"CODE" means the Internal Revenue Code of 1986 as amended from
time to time, or any successor legislation.
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"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES GUARANTEE" means the guarantee agreement,
dated as of [ ], [ ] of the Sponsor in respect of the Common
Securities.
"COMMON SECURITY" has the meaning specified in Section 7.1.
"COMMON SECURITY CERTIFICATE" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
"COVERED PERSON" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.2.
"DEFINITIVE CAPITAL SECURITY CERTIFICATES" has the meaning set
forth in Section 9.4.
"DIRECTION" by a Person means a written direction signed:
(a) if the Person is a natural Person, by that Person; or
(b) in any other case, in the name of such Person by one or
more Authorized Officers of that Person.
"DISTRIBUTION" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"EVENT OF DEFAULT" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Trust Debentures.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
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"GLOBAL CERTIFICATE" has the meaning set forth in Section 9.4.
"HOLDER" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"INDEMNIFIED PERSON" means (a) any Trustee; (b) any Affiliate
of any Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"INDENTURE" means the Indenture dated as of [ ],
between the Trust Debenture Issuer and the Trust Debenture Trustee, and any
further indentures supplemental thereto relating to the Trust Debentures.
"INVESTMENT COMPANY" means an investment company (as defined
in the Investment Company Act) that is required to register as such under the
Investment Company Act.
"INVESTMENT COMPANY ACT" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"INVESTMENT COMPANY EVENT" has the meaning set forth in Annex
I hereto.
"LEGAL ACTION" has the meaning set forth in Section 3.6(g).
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means,
except as provided in the terms of the Capital Securities and by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Capital Securities
or Holders of outstanding Common Securities voting separately as a class, who
are the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"MINISTERIAL ACTION" has the meaning set forth in the terms of
the Securities as set forth in Annex I.
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"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"PAYING AGENT" has the meaning specified in Section 3.8(h).
"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association or
government or any agency or political subdivision of a government, or any other
entity of whatever nature.
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in
Section 3.8(c).
"QUORUM" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"REGULAR TRUSTEE" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"RELATED PARTY" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor
7
or any other Person that owns, directly or indirectly, 100% of the outstanding
voting securities of the Sponsor.
"RESPONSIBLE OFFICER" means, with respect to the Property
Trustee, (a) any vice president, the secretary, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or any other officer in the corporate trust
department of the Property Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject and (b) who shall have direct responsibility for the
administration of this Declaration.
"RULE 3A-7" means Rule 3a-7 under the Investment Company Act.
"SECURITIES" means the Common Securities and the Capital
Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"SECURITIES GUARANTEES" means the Capital Securities Guarantee
and the Common Securities Guarantee.
"SPECIAL EVENT" has the meaning set forth in Annex I hereto.
"SPONSOR" means M.D.C. Holdings, Inc., a Delaware corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"SUPER MAJORITY" has the meaning set forth in Section
2.6(a)(ii).
"TAX EVENT" has the meaning set forth in Annex I hereto.
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holders of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Capital Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including
8
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
"TREASURY REGULATIONS" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"TRUST DEBENTURE ISSUER" means the Sponsor in its capacity as
issuer of the Trust Debentures.
"TRUST DEBENTURE TRUSTEE" means [ ], as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"TRUST DEBENTURES" means the [ ]% Trust Debentures Due
[ ] to be issued by the Trust Debenture Issuer under the Indenture
and held by the Property Trustee. A specimen certificate representing a Trust
Debenture is attached hereto as Exhibit B. The Trust Debentures will be
subordinate and junior in right of payment to certain other indebtedness of
the Trust Debenture Issuer as set forth in the Indenture.
"TRUSTEE" or "TRUSTEES" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939,
as amended to the date hereof.
"UNDERWRITING AGREEMENT" means the underwriting agreement
among the Trust, the Trust Debenture Issuer and the underwriters designated by
the Regular Trustees with respect to the offer and sale of the Capital
Securities.
9
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Property Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, PROVIDED that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Property Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request therefor, a
List of Holders as of a date no more than 14 days before such List of Holders is
given to the Property Trustee. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity of Paying Agent (if
acting in such capacity); PROVIDED that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
10
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after December 31 of each year or at such other
time as required under Section 313(b) of the Trust Indenture Act, the Property
Trustee shall provide to the Holders of the Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions PRECEDENT.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital Securities
and its consequences, PROVIDED that, if the underlying Event of Default under
the Indenture:
11
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority
in principal amount of the holders of the Trust Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
the Declaration may be waived only by the vote of the Holders of at
least the proportion in liquidation amount of the Capital Securities
outstanding that the relevant Super Majority represents of the
aggregate principal amount of the Trust Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Upon
such waiver, any such default shall cease to exist, and any Event of Default
with respect to the Capital Securities arising therefrom shall be deemed to have
been cured, for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Capital Securities or impair any right consequent thereon. Any waiver by the
Holders of the Capital Securities of an Event of Default with respect to the
Capital Securities shall also be deemed to constitute a waiver by the Holders of
the Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, PROVIDED that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default
12
under the Declaration may be waived only by the vote of the Holders of
at least the proportion in liquidation amount of the Common Securities
outstanding that the relevant Super Majority represents of the
aggregate principal amount of the Trust Debentures outstanding;
PROVIDED, FURTHER, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and their consequences until all Events of Default with
respect to the Capital Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Capital Securities and only the Holders of the
Capital Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Capital Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with respect
to the Securities actually
13
known to a Responsible Officer of the Property Trustee, unless such defaults
have been cured before the giving of such notice (the term "defaults" for the
purposes of this Section 2.7(a) being hereby defined to be an Event of Default
as defined in the Indenture, not including any periods of grace provided for
therein and irrespective of the giving of any notice provided therein); PROVIDED
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Trust Debentures, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 6.01(a) and 6.01(b) of the
Indenture; or
(ii) any default as to which a Responsible Officer shall have
actual knowledge or a Responsible Officer charged with the
administration of the Declaration shall have obtained written notice.
ARTICLE III
ORGANIZATION
SECTION 3.1. NAME.
The Trust is named "MDC Capital Funding Trust I," as such name
may be modified from time to time by the Regular Trustees following written
notice to the Holders of the Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.2. OFFICE.
The address of the principal office of the Trust is c/o M.D.C.
Holdings, Inc., 3600 S. Yosemite Street, Suite 900, Denver, Colorado 80237. On
ten Business Days' written notice to the Holders of the Securities, the Regular
Trustees may designate another principal office.
14
SECTION 3.3. PURPOSE.
The exclusive purposes and functions of the Trust are (a) to
issue and sell the Securities and use the proceeds from such sale to purchase
and hold the Trust Debentures and the Capital Securities Guarantee, and (b)
except as otherwise limited herein, to engage in only those other activities
necessary, or incidental thereto. The Trust shall not borrow money, issue debt
or reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
SECTION 3.4. AUTHORITY.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust, and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5. TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the Trust
Debentures and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6. POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration; PROVIDED
15
that the Trust may issue no more than one series of Capital Securities and no
more than one series of Common Securities, and PROVIDED, FURTHER, that there
shall be no interests in the Trust other than the Securities, and the issuance
of Securities shall be limited to a one-time, simultaneous issuance of both
Capital Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Capital
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any amendments
thereto, pertaining to the Capital Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in order
to qualify or register all or part of the Capital Securities in any
State in which the Sponsor has determined to qualify or register such
Capital Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange, Inc. or any other national securities
exchange or with The Nasdaq Stock Market for listing upon notice of
issuance of any Capital Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Capital Securities
under Section 12(b) of the Exchange Act; and
(v) designate underwriters to be party to the Underwriting
Agreement and execute and enter into the Underwriting Agreement
providing for the sale of the Capital Securities;
(c) to acquire the Trust Debentures with the proceeds of the
sale of the Capital Securities and the Common Securities; PROVIDED that the
Regular Trustees shall cause legal title to the Trust Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Capital Securities and the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event;
16
PROVIDED that the Regular Trustees shall consult with the Sponsor and the
Property Trustee before taking or refraining from taking any Ministerial Action
in relation to a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Capital Securities and Holders of Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar
and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Trust Debentures Issuer of its
election to defer payments of interest on the Trust Debentures by extending the
interest payment period under the Indenture;
(n) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of
17
the Trust in all matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction in which such existence
is necessary to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Trust Debenture Issuer to ensure
that the Trust Debentures will be treated as indebtedness of the Trust
Debenture Issuer for United States federal income tax purposes,
PROVIDED that such action does not adversely affect the interests of Holders;
and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on behalf of
the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
18
SECTION 3.7. Prohibition of Actions by the Trust and the TRUSTEES.
(a) The Trust shall not, and the Trustees (including the
Property Trustee) shall not, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding
the Trust Debentures, but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Trust Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration, (A) direct
the time, method and place of exercising any trust or power conferred
upon the Trust Debenture Trustee with respect to the Trust Debentures,
(B) waive any past default that is waivable under [Section 6.04] of the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Trust Debentures shall be due and
payable, or (D) consent to any amendment or modification of the
Indenture or the Trust Debentures where such consent shall be required
unless the Trust shall have received an opinion of counsel to the
effect that such amendment or modification will not cause more than an
insubstantial risk that for United States federal income tax purposes
the Trust will not be classified as a grantor trust.
19
SECTION 3.8. POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Trust Debentures shall be owned by
and held of record in the name of the Property Trustee in trust for the benefit
of the Holders of the Securities. The right, title and interest of the Property
Trustee to the Trust Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.6. Such
vesting (and cessation as to the resigning Property Trustee) of title shall be
effective whether or not conveyancing documents with regard to the Trust
Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Trust Debentures to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under
the exclusive control of the Property Trustee on behalf of the Holders
of the Securities and, upon the receipt of payments of funds made in
respect of the Trust Debentures held by the Property Trustee, deposit
such funds into the Property Trustee Account and make payments to the
Holders of the Capital Securities and Holders of the Common Securities
from the Property Trustee Account in accordance with Section 6.1. Funds
in the Property Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Property Trustee
Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Capital Securities by a
"nationally recognized statistical rating organization", as that term
is defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital
Securities and the Common Securities to the extent the Trust Debentures
are redeemed or mature; and
(iii) upon notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be
20
necessary or appropriate to effect the distribution of the Trust
Debentures to Holders of Securities upon the occurrence of a Special
Event.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default or the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act.
(f) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant to
the terms of the Securities; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Trust
Debentures under the Indenture and, if an Event of Default occurs and is
continuing, the Property Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Trust Debentures subject to the
rights of the Holders pursuant to the terms of such Securities.
(h) The Property Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all Securities and
any such Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3,
21
and the Property Trustee shall not take any action that is inconsistent
with the purposes and functions of the Trust set out in Section 3.3.
SECTION 3.9. Certain Duties and Responsibilities of the PROPERTY TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration and the Property Trustee shall not be
liable except for the performance of or failure to perform
such duties and obligations as are specifically set forth in
this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Property
Trustee; and
(B) in the absence of bad faith or willful misconduct
on the part of the Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; but in the
case of any such certificates or opinions that by any
provision hereof are specifically required to
22
be furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Declaration
(but need not confirm or investigate the accuracy of
mathematical calculations or the facts stated therein);
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with and pursuant to the direction of the Holders of not
less than a Majority in liquidation amount of the Securities relating
to the time, method and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Trust Debentures
and the Property Trustee Account shall be to deal with such property in
a manner that is customary in the industry, subject to the protections
and limitations on liability afforded to the Property Trustee under
this Declaration, the Trust Indenture Act and Rule 3a-7;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of
the Trust Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
23
(vii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law;
and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the Property
Trustee be liable for the default or misconduct of the Regular Trustees
or the Sponsor.
SECTION 3.10. CERTAIN RIGHTS OF THE PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) absent bad faith or willful misconduct, the Property
Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on
its part, request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by the
Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any
24
filing under tax or securities laws) or any rerecording, refiling or
reregistration thereof;
(v) the Property Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of the Sponsor's or its Affiliates'
employees. The Property Trustee shall have the right at any time to
seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee adequate security and indemnity,
which would satisfy a reasonable person in the position of the Property
Trustee, against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as
may be requested by the Property Trustee; PROVIDED that nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;
25
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders, and the signature of
the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be
required to inquire as to the authority of the Property Trustee to so
act or as to its compliance with any of the terms and provisions of
this Declaration, both of which shall be conclusively evidenced by the
Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the
Holders of the Securities which instructions may be given only by the
Holders of the same proportion in liquidation amount of the Securities
as would be entitled to direct the Property Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
acting in accordance with such instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11. DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Regular
26
Trustees or the Property Trustee described in this Declaration. Except as set
forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Business
Trust Act.
SECTION 3.12. EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, a majority of or, if
there are only two, any Regular Trustee or, if there is only one, such Regular
Trustee is authorized to execute on behalf of the Trust any documents that the
Regular Trustees have the power and authority to execute pursuant to Section
3.6; PROVIDED that the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. DURATION OF TRUST.
The Trust, unless dissolved pursuant to the provisions of
Article VIII hereof, shall have existence for fifty-five (55) years from the
Closing Date.
SECTION 3.15. MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees and without
the consent of the Holders, the Delaware Trustee or the Property Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; PROVIDED that:
27
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities
rank the same as the Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Trust Debenture Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same powers and
duties as the Property Trustee as the Holder of the Trust Debentures;
(iii) the Capital Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on the New York Stock Exchange, Inc. or such other national
securities exchange or with The Nasdaq Stock Market or such other
organization on which the Capital Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Capital Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical
rating organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of such
Holders' interests in the Successor Entity as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters
to the effect that:
28
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the
Successor Entity); and
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided
by the Capital Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes and any
Holder of Securities not to be treated as owning an undivided beneficial
interest in the Trust Debentures.
ARTICLE IV
SPONSOR
SECTION 4.1. SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all of the
Common Securities issued by the Trust, in an amount equal to at least 3% of the
capital of the Trust, at the same time as the Capital Securities are sold.
SECTION 4.2. RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
29
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Capital
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Capital
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be executed
and filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the
New York Stock Exchange, Inc. or any other national securities exchange
or with The Nasdaq Stock Market for listing upon notice of issuance of
any Capital Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Capital Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement
providing for the sale of the Capital Securities.
SECTION 4.3. EXPENSES.
(a) The Sponsor shall be responsible for and shall pay for all
debts and obligations (other than with respect to the Securities) and all costs
and expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Securities, fees and expenses of filing a registration statement with the
Commission relating to the Capital Securities, the fees and expenses (including
reasonable counsel fees and expenses) of the Trustees, the costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and the use of computing or accounting equipment, Paying
Agent(s), registrar(s), transfer agent(s), duplication, travel and telephone and
other telecommunications expenses and costs and expenses incurred in connection
with the disposition of Trust assets).
30
(b) The Sponsor will pay any and all taxes (other than United
States withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.3 shall be
for the benefit of, and shall be enforceable by, the Property Trustee and any
Person to whom any such debts, obligations, costs, expenses and taxes are owed
(a "Creditor") whether or not such Creditor has received notice hereof. The
Property Trustee and any such Creditor may enforce the Sponsor's obligations
under this Section 4.3 directly against the Sponsor and the Sponsor irrevocably
waives any right or remedy to require that the Property Trustee or any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 4.3.
ARTICLE V
TRUSTEES
SECTION 5.1. NUMBER OF TRUSTEES.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities,
PROVIDED that, if the Property Trustee does not also act as Delaware Trustee,
the number of Trustees shall be at least three (3).
31
SECTION 5.2. DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law,
PROVIDED that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application. The Delaware Trustee may be an Affiliate of the
Property Trustee.
SECTION 5.3. PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination
by federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and to the extent Rule
3a-7 requires a trustee having certain qualifications to hold title to
the "eligible assets" of
32
the Trust, the Property Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of Section310(b) of the Trust
Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4. QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5. INITIAL TRUSTEES.
The initial Regular Trustees shall be:
[ ]
[ ]
[ ]
The initial Delaware Trustee shall be:
[ ]
The initial Property Trustee shall be:
[ ]
33
SECTION 5.6. APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common Securities
or by unanimous written consent.
(b)(i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Property Trustee has
been appointed and has accepted such appointment by written instrument executed
by such successor Property Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.2 and
5.4 (a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; PROVIDED that:
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor and the resigning Property Trustee; or
34
(B) if the Trust is deemed not to be an Investment
Company solely by reason of Rule 3a-7, until the assets of the
Trust have been completely liquidated and the proceeds thereof
distributed to the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to appoint a Successor Property Trustee or Successor Delaware Trustee
promptly, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 30 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may (at the expense of the Sponsor) petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
SECTION 5.7. VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8. EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the
35
Trust. Whenever a vacancy in the number of Regular Trustees shall occur, until
such vacancy is filled by the appointment of a Regular Trustee in accordance
with Section 5.6, the Regular Trustees in office, regardless of their number,
shall have all the powers granted to the Regular Trustees and shall discharge
all the duties imposed upon the Regular Trustees by this Declaration.
SECTION 5.9. MEETINGS.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Unless notice is waived,
notice of any in-person meetings of the Regular Trustees shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Unless notice is
waived, notice of any telephonic meetings of the Regular Trustees or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 24
hours before such meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in person
or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be taken
at a meeting by vote of a majority of the Regular Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous written
consent of the Regular Trustees. In the event there is only one Regular Trustee,
any and all action of such Regular Trustee shall be evidenced by a written
consent of such Regular Trustee.
SECTION 5.10. DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
36
(b) The Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Trust Debenture Issuer makes a payment of interest
(including Additional Interest (as defined in the Indenture)), premium and/or
principal on the Trust Debentures held by the Property Trustee (the amount of
any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to the Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall on behalf of the Trust issue
one class of capital securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Annex I (the
"Capital Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities.") The Trust shall not issue any
securities or other
37
interests in respect of the assets of the Trust other than the Capital
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by
two Regular Trustees. Each such signature shall be the manual or facsimile
signature of any present or any future Regular Trustee. In case any Regular
Trustee of the Trust who shall have signed any of the Certificates shall cease
to be such Regular Trustee before the Certificates so signed shall be delivered
by the Trust, such Certificates nevertheless may be delivered as though the
person who signed such Certificates had not ceased to be such Regular Trustee;
and any Certificate may be signed on behalf of the Trust by such persons who, at
the actual date of execution of such Certificate, shall be the Regular Trustees
of the Trust, although at the date of the execution and delivery of the
Declaration any such person was not such a Regular Trustee. Certificates shall
be printed, lithographed or engraved or may be produced in any other manner as
is reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Securities may be listed, or to conform to usage.
Upon a written order of the Trust signed by one Regular Trustee, the Property
Trustee shall countersign the Capital Security Certificate for original issue.
(c) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
(f) Every Person who becomes a Holder or a Capital Security
Beneficial Owner shall be deemed to have agreed to treat the Trust Debentures as
indebtedness for United States
38
federal income tax purposes and the Capital Securities as evidence of an
indirect beneficial ownership in the Trust Debentures.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1. DISSOLUTION OF TRUST.
(a) The Trust shall dissolve and its affairs shall be wound
up:
(i) upon the bankruptcy of the Holder of the Common Securities
or the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or the
Sponsor; the filing of a certificate of cancellation with respect to
the Trust or the revocation of the Holder of the Common Securities or
the Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance
with the terms of the Securities and all of the Trust Debentures in
accordance with the terms thereof shall have been distributed to the
Holders of Securities in exchange for all of the Securities; or
(vi) before the issuance of any Securities, with the consent
of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall
39
file a certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. TRANSFER OF SECURITIES.
(a) Securities may be transferred, in whole or in part, only
in accordance with the terms and conditions set forth in this Declaration and in
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration and these Securities shall be null and void.
(b) Subject to this Article IX, Capital Securities shall be
freely transferable.
(c) Subject to this Article IX, (x) the Sponsor may transfer
Common Securities only to a Related Party and (y) a Related Party may transfer
Common Securities only to the Sponsor or another Related Party; PROVIDED that
any such transfer is subject to the condition precedent that the transferor
obtain the written opinion of nationally recognized independent counsel
experienced in such matters that such transfer would not cause more than an
insubstantial risk that:
(i) the Trust would no longer be classified for United States
federal income tax purposes as a grantor trust; or
(ii) the Trust would become an Investment Company or the
transferee would become an Investment Company.
SECTION 9.2. TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of
40
any Certificate, the Regular Trustees shall cause one or more new Certificates
to be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration and
the terms of the Securities represented by such Certificate.
SECTION 9.3. DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole Holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
SECTION 9.4. BOOK ENTRY INTERESTS.
Unless otherwise specified in the terms of the Capital
Securities, the Capital Securities Certificates, on original issuance, will be
issued in the form of one or more, fully registered, global Capital Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Capital Security Beneficial Owner will
receive a definitive Capital Security Certificate representing such Capital
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered Capital
Security Certificates (the "Definitive Capital Security Certificates") have been
issued to the Capital Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force
and effect;
41
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Capital
Securities and the sole holder of the Global Certificates and shall
have no obligation to the Capital Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions
of this Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Capital Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. The Clearing Agency will make book entry transfers among
the Clearing Agency Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency
Participants.
SECTION 9.5. NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Capital
Security Holders is required under this Declaration, unless and until Definitive
Capital Security Certificates shall have been issued to the Capital Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Capital
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Capital Security Beneficial Owners.
SECTION 9.6. APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to the Capital Securities.
SECTION 9.7. DEFINITIVE CAPITAL SECURITY CERTIFICATES.
If:
42
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities and a
successor Clearing Agency is not appointed within 90 days after such
election pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency
with respect to the Capital Securities,
then:
(c) Definitive Capital Security Certificates shall be prepared
by the Regular Trustees on behalf of the Trust with respect to the
Capital Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Capital Security Certificates to be delivered to
Capital Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be
liable for any failure or delay in delivery of such instructions and
each of them may conclusively rely on and shall be protected in relying
on, said instructions of the Clearing Agency. The Definitive Capital
Security Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the
Regular Trustees, as evidenced by their execution thereof, and may have
such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Capital Securities may be listed, or
to conform to usage.
SECTION 9.8. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificate should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any
Certificate; and
43
(b) there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep each of them
harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. LIABILITY.
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders, which
shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder any deficit
upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for
all of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation of
personal liability extended to stockholders
44
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
SECTION 10.2. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence (or, in
the case of the Property Trustee, negligence) or willful misconduct with respect
to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3. FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
45
(i) whenever a conflict of interest exists or arises between
any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provide terms that are, fair and
reasonable to the Trust or any Holder,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4. INDEMNIFICATION AND REIMBURSEMENT.
(a) The Sponsor shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by such Indemnified
Person by reason of the creation, operation or termination of the Trust or any
act or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified
46
Person reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts or
omissions.
(b) Expenses (including legal fees and expenses) incurred by
an Indemnified Person in defending any claim, demand, action, suit or proceeding
(whether such claim, demand, action, suit or proceeding arises between the
parties hereto or results from suits involving third parties) shall, from time
to time, be advanced by the Sponsor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Sponsor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 10.4(a). The indemnification set forth in
this Section 10.4 shall survive the termination of this Declaration.
(c) The Sponsor shall reimburse the Trustees upon request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustees in accordance with any provision of this Declaration (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel).
The Property Trustee shall have a lien prior to the Securities
as to all property and funds held by its hereunder for any amount owing it or
any predecessor Property Trustee pursuant to this Section 10.4, except with
respect to funds held in trust for the benefit of the Holders of particular
Securities.
The provisions of this Section shall survive the termination
of this Declaration.
SECTION 10.5. OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business
47
of the Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee, or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee and
the Property Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1. FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2. CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account, records
and supporting documents which shall reflect, in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with U.S. generally accepted
accounting principles, consistently applied. The Trust shall use the accrual
method of accounting for United States federal income tax purposes.
(b) The Regular Trustees shall cause to be duly prepared and
delivered to each Holder, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by such Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees
48
shall endeavor to deliver all such statements within 30 days after the end of
each Fiscal Year of the Trust.
(c) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Regular Trustees on behalf of the Trust with any state or local
taxing authority.
SECTION 11.3. BANKING.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; PROVIDED that all payments of funds in
respect of the Trust Debentures held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; PROVIDED that the Property
Trustee shall designate the signatories for the Property Trustee Account.
SECTION 11.4. WITHHOLDING.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular Trustee shall file required
forms with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with respect to
such Holder to applicable jurisdictions. To the extent that the Trust is
required to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be deemed
to be a distribution in the amount of the withholding to such Holder. In the
event of any claim over withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be withheld was
not withheld from actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding.
49
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended only by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) No amendment shall be made, and any purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor and an opinion of counsel (who may be counsel
to the Sponsor or the Trust) that such amendment is permitted
by, and conforms to, the terms of this Declaration (including
the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted
50
by, and conforms to, the terms of this Declaration (including
the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers
of the Property Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act.
(c) If the Trust has any Securities outstanding, any amendment
that would adversely affect the rights, privileges or preferences of any Holder
of such Securities may be effected only with such additional requirements as may
be set forth in the terms of such Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities.
(f) The rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove,
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
51
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) in the event the Trust is deemed not to be an Investment
Company solely by reason of Rule 3a-7, conform to any change in Rule
3a-7 or written change in interpretation or application of Rule 3a-7 by
any legislative body, court, government agency or regulatory authority
which amendment does not have a material adverse effect on the rights,
preferences or privileges of the Holders; and
(v) cause the Trust to continue to be classified for purposes
of United States federal income taxation as a grantor trust; PROVIDED
that such amendment does not have a material adverse effect on the
rights, preferences or privileges of the Holders.
SECTION 12.2. MEETINGS OF THE HOLDERS; ACTION BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be called. Any
Holders calling a meeting shall specify in writing the Security Certificates
held by the Holders exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
any class of Securities:
52
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of Holders is permitted or required under
this Declaration or the rules of any stock exchange on which the
Capital Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of such Holders. Any
action that may be taken at a meeting of Holders may be taken without a
meeting if a consent in writing setting forth the action so taken is
signed by Holders owning not less than the minimum amount of Securities
in liquidation amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders of Securities
entitled to vote who have not consented in writing. The Regular
Trustees may specify that any written consent submitted to Holders for
the purpose of taking any action without a meeting shall be returned to
the Trust within the time specified by the Regular Trustees;
(ii) each Holder may authorize any Person to act for it by
proxy on all matters in which such Holder is entitled to participate,
including waiving notice of any meeting, or voting or participating at
a meeting. No proxy shall be valid after the expiration of 11 months
from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder executing it.
Except as otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders were stockholders of a Delaware
corporation;
(iii) each meeting of Holders shall be conducted by the Regular
Trustees or by such other Person that the Regular Trustees may
designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Capital Securities are then listed
or trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings
53
of Holders, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders, waiver of
any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or
any other matter with respect to the exercise of any such right to
vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1. REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the successor Property Trustee's acceptance of its
appointment as Property Trustee, that:
(a) the Property Trustee is a banking corporation or
association with trust powers, duly organized, validly existing and in
good standing under the laws of a state of the United States or of the
United States, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(c) the execution, delivery and performance of the Declaration
by the Property Trustee does not conflict with
54
or constitute a breach of the charter or by-laws of the Property
Trustee; and
(d) no consent, approval or authorization of, or registration
with or notice to, any New York State or Federal banking authority is
required for the execution, delivery or performance by the Property
Trustee of the Declaration.
SECTION 13.2. REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) the Delaware Trustee is a Delaware banking corporation
with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware, with trust power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or
at law);
(c) no consent, approval or authorization of, or registration
with or notice to, any Delaware State or Federal banking authority is
required for the execution, delivery or performance by the Delaware
Trustee of the Declaration; and
(d) the Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware.
55
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. NOTICES.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Trust may give notice of to the Holders):
c/o M.D.C. Holdings, Inc.
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
Attention:
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may give
notice of to the Holders):
Attention:
(c) if given to the Property Trustee, at the mailing address
set forth below (or such other address as the Property Trustee may give
notice of to the Holders):
[ ]
Attention:
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice of to the
Trust):
56
M.D.C. Holdings, Inc.
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
Attention:
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when
received.
SECTION 14.2. GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3. INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4. HEADINGS.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5. SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6. PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than
57
those to which it is held invalid, shall not be affected thereby.
SECTION 14.7. COUNTERPARTS.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
58
IN WITNESS WHEREOF, the undersigned has caused this
Declaration to be executed as of the day and year first above written.
---------------------------------
, as Trustee
---------------------------------
, as Trustee
----------------------------
, as Trustee
[ ],
as Delaware Trustee
By:
---------------------------------
Name:
Title:
[ ],
as Property Trustee
By:
---------------------------------
Name:
Title:
M.D.C. HOLDINGS, INC.,
as Sponsor
By:
---------------------------------
Name:
Title:
ANNEX I
TERMS OF
CAPITAL SECURITIES
COMMON SECURITIES
Further to Section 7.1 of the Amended and Restated Declaration
of Trust, dated as of , 1999 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Capital Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
(1) DESIGNATION AND AMOUNT.
(a) CAPITAL SECURITIES. Capital Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust
of [ ]United States dollars ($[ ]) and a liquidation amount with
respect to the assets of the Trust of $ per Capital Security, are hereby
designated for the purposes of identification only as " " (" "
or the "Capital Securities"). The Capital Security Certificates evidencing the
Capital Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Capital Securities are listed.
(b) COMMON SECURITIES. Common Securities of the Trust with
an aggregate liquidation amount with respect to the assets of the Trust of
United States dollars ($ ) and a liquidation amount with
respect to the assets of the Trust of $ per common security, are hereby
designated for the purposes of identification only as "Common Securities"
(the "Common Securities"). The Common Security Certificates evidencing the
Common Securities shall be substantially in the form of Exhibit A-2 to the
Declaration, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice.
I-1
(2) DISTRIBUTIONS.
(a) Distributions payable on each Security will be fixed at a
rate per annum of % (the "Coupon Rate") of the stated liquidation amount of
$ per Security, such rate being the rate of interest payable on the Trust
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Trust Debentures held by the Property
Trustee and to the extent the Property Trustee has funds available therefor in
the Payment Account. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative,
will accrue from the date of original issuance, and will be payable quarterly
in arrears, on March 31, June 30, September 30 and December 31 of each year,
commencing on [ ], except as otherwise described below. The
Distribution payable on [ ], [ ], which will be based on a period
shorter than a full quarter, will be in an amount of $ per Capital
Security. The Trust Debenture Issuer has the right under the Indenture to
defer payments of interest by extending the interest payment period from time
to time on the Trust Debentures for a period not exceeding 20 consecutive
quarters (each an "Extension Period"), PROVIDED that no Extension Period
shall last beyond the date of maturity of the Trust Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accrue with interest
thereon at the Coupon Rate compounded quarterly during any such Extension
Period. Prior to the termination of any such Extension Period (to the extent
permitted by applicable law), the Trust Debenture Issuer may further extend
such Extension Period; PROVIDED that such Extension Period together with all
previous and such further extensions thereof may not exceed 20 consecutive
quarters or last beyond the date of maturity of the Trust Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record
I-2
date for the payment of Distributions after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Trust Debenture Issuer may commence a new Extension Period, subject to
the above requirements.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Capital Securities remain in book-entry only
form, the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Trust Debentures. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Capital
Securities will be made as described in the book-entry provisions of the
prospectus supplement relating to the Capital Securities in the form first
delivered to investors to confirm sales (the "Prospectus Supplement"). The
relevant record dates for the Common Securities shall be the same record dates
as for the Capital Securities. If the Capital Securities shall not continue to
remain in book-entry only form, the relevant record dates for the Capital
Securities shall conform to the rules of any securities exchange on which such
securities are listed and, if none, shall be selected by the Regular Trustees,
which dates shall be at least one Business Day but less than 60 Business Days
before the relevant payment dates, which payment dates correspond to the
interest payment dates on the Trust Debentures. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Trust Debenture Issuer having failed to make a payment under the
Trust Debentures, will cease to be payable to the Person in whose name such
Securities are registered on the relevant regular record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture for the making of such payment. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
I-3
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders of the
Securities.
(3) LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders
after satisfaction of liabilities of creditors an amount equal to the aggregate
of the liquidation amount of $[ ] per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, Trust Debentures in an aggregate principal amount equal to the
aggregate liquidation amount of such Securities, with an interest rate equal to
the Coupon Rate of, and bearing accrued and unpaid interest in an amount equal
to the accrued and unpaid Distributions on, such Securities, shall be
distributed on a Pro Rata basis to the Holders of the Securities in exchange for
such Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
(4) REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Trust Debentures in whole or
in part, whether at maturity or upon redemption, the proceeds from such
repayment shall be simultaneously applied to redeem Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Trust Debentures so repaid or redeemed at a redemption price of $ per
Security plus an amount equal to accrued and unpaid Distributions thereon at
the date of the redemption, payable in cash (the "Redemption Price"). Holders
will be given not less than 30 nor more than 60 days notice of such
redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be redeemed Pro
Rata and the procedure for redeeming
I-4
Capital Securities will be as described in Section 4(f)(ii) below.
(c) If a Tax Event or an Investment Company Event (each as
defined below, and each a "Special Event") shall occur and be continuing, the
Regular Trustees shall, except in certain limited circumstances in relation to a
Tax Event described in this Section 4(c), dissolve the Trust and, after
satisfaction of liabilities to creditors, cause Trust Debentures held by the
Property Trustee, having an aggregate principal amount equal to the aggregate
stated liquidation amount of, with an interest rate identical to the Coupon Rate
of, and accrued and unpaid interest equal to accrued and unpaid Distributions
on, and having the same record date for payment, as the Securities, to be
distributed to the Holders in liquidation of such Holders' interests in the
Trust on a Pro Rata basis, within 90 days following the occurrence of such
Special Event (the "90 Day Period"); PROVIDED that, as a condition of such
dissolution and distribution, the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the Holders
will not recognize any gain or loss for United States federal income tax
purposes as a result of the dissolution of the Trust and the distribution of
Trust Debentures, and PROVIDED, FURTHER, that, if at the time there is available
to the Trust the opportunity to eliminate, within the 90 Day Period, the Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure that has no adverse
effect on the Trust, the Trust Debenture Issuer, the Sponsor or the Holders
("Ministerial Action"), the Trust will pursue such Ministerial Action in lieu of
dissolution.
If in the event of a Tax Event (i), after receipt of a Tax
Event Opinion (as defined hereinafter) by the Regular Trustees, the Trust
Debenture Issuer has received an opinion (a "Redemption Tax Opinion") from a
nationally recognized independent tax counsel experienced in such matters that,
as a result of a Tax Event, there is more than an insubstantial risk that the
Trust Debenture Issuer would be precluded from deducting the interest on the
Trust Debentures for United States federal income tax purposes even if the Trust
Debentures were distributed to the Holders in liquidation of such Holders'
interests in the Trust as described in this Section 4(c), or (ii), after receipt
of a Tax Event Opinion, the Regular Trustees
I-5
shall have been informed by such tax counsel that a No Recognition Opinion
cannot be delivered to the Trust, the Trust Debenture Issuer shall have the
right at any time, upon not less than 30 nor more than 60 days notice, to redeem
the Trust Debentures in whole or in part for cash within 90 days following the
occurrence of such Tax Event, and, following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Trust Debentures so redeemed shall be redeemed by the Trust at the Redemption
Price on a Pro Rata basis; PROVIDED that, if at the time there is available to
the Trust the opportunity to eliminate, within such 90 day period, the Tax Event
by taking some Ministerial Action, the Trust or the Trust Debenture Issuer shall
pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have
received an opinion from a nationally recognized independent tax counsel
experienced in such matters (a "Tax Event Opinion") to the effect that, on or
after the date of the Prospectus Supplement, as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, in each case which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is taken,
on or after the date of the Prospectus Supplement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the date
thereof, subject to United States federal income tax with respect to interest
accrued or received on the Trust Debentures, (ii) interest payable by the Trust
Debenture Issuer to the Trust on the Trust Debentures is not, or within 90 days
of the date thereof will not be, deductible, in whole or in part, by the Trust
Debenture Issuer for United States federal income tax purposes or (iii) the
Trust is, or will be within 90 days of the date thereof, subject to more than a
de minimis amount of taxes, duties or other governmental charges.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion from a nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative
I-6
body, court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), there is a more than an insubstantial risk that the Trust is or will be
considered an Investment Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the date of the Prospectus Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Trust Debentures and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding and (ii) DTC (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Capital Securities, will receive a registered global
certificate or certificates representing the Trust Debentures to be delivered
upon such distribution and any certificates representing Securities, except for
certificates representing Capital Securities held by the Depository or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Trust Debentures having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on such Securities until such
certificates are surrendered or presented to the Trust Debenture Issuer or its
agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Trust Debentures are distributed to holders of the
Securities, pursuant to the terms of the Indenture the Trust Debenture Issuer
will use its best efforts to have the Trust Debentures listed on the New York
Stock Exchange, Inc. or on such other national securities exchange or with The
Nasdaq Stock Market or such other organization as the Capital Securities were
listed immediately prior to the distribution of the Trust Debentures.
(f) The following provisions shall apply to any call for
redemption of Securities or any distribution of Trust Debentures to Holders:
(i) Notice of any redemption of, or notice of distribution of
Trust Debentures in exchange for, Securities (a
"Redemption/Distribution Notice") will be given by the
I-7
Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will
be the date fixed for redemption of the Trust Debentures. For purposes
of the calculation of the date of redemption or exchange and the dates
on which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders. Each Redemption/Distribution Notice shall be addressed to each
Holder at the address of such Holder appearing in the books and records
of the Trust. No defect in the Redemption/Distribution Notice or in the
mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Securities, it being understood
that in respect of Capital Securities registered in the name of and
held of record by the Depository or its nominee (or any successor
Clearing Agency or its nominee), the distribution of the proceeds of
such redemption will be made to each Clearing Agency Participant (or
Person on whose behalf such Clearing Agency or nominee holds such
securities) by lot in accordance with the procedures applied by such
agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may be issued only if the
Trust Debentures are redeemed as set out in this Section 4 (which
notice will be irrevocable), then (A) while the Capital Securities are
in book-entry only form, with respect to the Capital Securities, by
12:00 noon, New York City time, on the redemption date, the Property
Trustee will deposit irrevocably with the Depository or its nominee (or
successor Clearing Agency or its nominee) immediately available funds
sufficient to pay the applicable Redemption Price with respect to the
Capital Securities and will give the Depository irrevocable
instructions and authority to pay the Redemption Price to the Holders
of the Capital Securities; PROVIDED that the Trust Debenture Issuer has
deposited with the Property Trustee a sufficient amount of cash in
connection with the
I-8
related redemption or maturity of the Trust Debentures by 10:00 a.m.,
New York City time, on the redemption date, and (B) with respect to
Capital Securities issued in definitive form and Common Securities, the
Property Trustee will pay the relevant Redemption Price to the Holders
of such Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the
redemption date; PROVIDED that the Trust Debenture Issuer has deposited
with the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Trust Debentures, prior
to such mailing. If a Redemption/Distribution Notice shall have been
given and funds deposited with the Property Trustee on or before the
redemption date as required, then immediately prior to the close of
business on the redemption date Distributions will cease to accrue on
the Securities so called for redemption and all rights of Holders of
such Securities so called for redemption will cease, except the right
of the Holders of such Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither the Regular Trustees
nor the Trust shall be required to register or cause to be registered
the transfer of any Securities that have been so called for redemption.
If any date fixed for redemption of Securities is not a Business Day,
then payment of the Redemption Price payable on such date will be made
on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid on the redemption date
either by the Property Trustee or by the Sponsor as guarantor pursuant
to the relevant Securities Guarantee, Distributions on such Securities
will continue to accrue from the original redemption date to the actual
date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating
the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the
Capital Securities, the Depository or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive
I-9
Capital Security Certificates have been issued, to the Holders thereof
at their addresses appearing on the books and records of the Trust, and
(B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the Sponsor
or any of its subsidiaries may at any time and from time to time
purchase outstanding Capital Securities by tender, in the open market
or by private agreement.
(5) VOTING RIGHTS - CAPITAL SECURITIES.
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Capital
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a Majority in liquidation amount of the Capital Securities,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Trust Debenture Trustee, or
exercising any trust or power conferred on the Trust Debenture Trustee with
respect to the Trust Debentures, (ii) waive any past default and its
consequences that is waivable under [Section 6.04] of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Trust Debentures shall be due and payable; PROVIDED that where a consent
under the Indenture would require the consent or act of the Holders of greater
than a majority in principal amount of Trust Debentures affected thereby (a
"Super Majority"), the Property Trustee may give such consent or take such
action only at the direction of the Holders of at least the proportion in
liquidation amount of the Capital Securities outstanding which the relevant
Super Majority represents of the aggregate principal amount of the Trust
Debentures outstanding. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Capital
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee or the Trust Debenture
Trustee as set forth above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the
I-10
Capital Securities under this paragraph unless the Property Trustee has received
an opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Property Trustee fails to enforce its
rights under the Declaration, any Holder of Capital Securities may, to the
extent permitted by applicable law, institute a legal proceeding directly
against any Person to enforce the Property Trustee's rights under the
Declaration without first instituting a legal proceeding against the Property
Trustee or any other Person. If an Event of Default occurs that results from the
failure of the Trust Debenture Issuer to pay principal of or interest on the
Trust Debentures when due, then during the continuance of such Event of Default
each Holder of Capital Securities may directly institute proceedings against the
Trust Debenture Issuer to obtain payment to such Holder of an amount equal to
the principal or interest so defaulted on with respect to Trust Debentures in a
principal amount equal to the aggregate liquidation amount of the Capital
Securities owned by such Holder. No Holder of Capital Securities will be
entitled to exercise directly against the Trust Debenture Issuer any other
remedy available to the Property Trustee, as the record holder of the Trust
Debentures, unless the Property Trustee first fails to exercise such remedy.
Any approval or direction of Holders of Capital Securities may
be given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Capital Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities
will be required for the Trust to redeem and cancel Capital Securities or to
distribute the Trust Debentures in accordance with the Declaration and the terms
of the Securities.
I-11
Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
(6) VOTING RIGHTS - COMMON SECURITIES.
(a) Except as provided under Sections 6(b), (c) and 7 or as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
all Events of Default with respect to the Capital Securities have been cured,
waived, or otherwise eliminated and subject to the requirements of the
penultimate sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the Trust
Debenture Trustee, or exercising any trust or power conferred on the Trust
Debenture Trustee with respect to the Trust Debentures, (ii) waive any past
default and its consequences that is waivable under [Section 6.04] of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Trust Debentures shall be due and payable; PROVIDED
that where a consent or action under the Indenture would require the consent or
act of the Holders of a Super Majority, the Property Trustee may give such
consent or take such action only at the direction of the Holders of at least the
proportion in liquidation amount of the Common Securities outstanding which the
relevant Super Majority represents of the aggregate principal amount of the
Trust Debentures outstanding. Notwithstanding any vote pursuant to this Section
6(c), the Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Capital Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Property
I-12
Trustee or the Trust Debenture Trustee as set forth above, the Property Trustee
shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Property Trustee has
received an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Property Trustee fails to
enforce its rights under the Declaration, any Holder of Common Securities, to
the extent permitted by applicable law, may institute a legal proceeding
directly against any Person to enforce the Property Trustee's rights under the
Declaration, without first instituting a legal proceeding against the Property
Trustee or any other Person.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Trust Debentures in accordance with the Declaration and the terms
of the Securities.
(7) AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than under the
circumstances described in Section 8.1 of the Declaration, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal
(but not
I-13
on any other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
PROVIDED that, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Capital Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the
holder of the Trust Debentures is required under the Indenture with respect to
any amendment or modification of the Indenture or the Trust Debentures, the
Property Trustee shall request the direction of the Holders of the Securities
with respect to such amendment or modification and shall vote with respect to
such amendment or modification as directed by a Majority in liquidation amount
of the Securities voting together as a single class; PROVIDED that where a
consent under the Indenture would require the consent of the holders of a Super
Majority, the Property Trustee may give such consent only at the direction of
the Holders of at least the proportion in liquidation amount of the Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Trust Debentures outstanding; PROVIDED, FURTHER, that the Property
Trustee shall not take any action in accordance with the directions of the
Holders of the Securities under this Section 7(b) unless the Property Trustee
has received an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action.
(8) PRO RATA.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration in respect of the Capital Securities has occurred and is
continuing, in which case any funds available to make such payment shall be paid
first to each Holder of the Capital Securities pro rata according to the
aggregate liquidation amount of Capital Securities held by the relevant Holder
relative to the aggregate liquidation amount of
I-14
all Capital Securities outstanding, and only after satisfaction of all amounts
owed to the Holders of the Capital Securities, then to each Holder of Common
Securities pro rata according to the aggregate liquidation amount of Common
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Common Securities outstanding.
(9) RANKING.
The Capital Securities rank PARI PASSU, and payment thereon
shall be made Pro Rata, with the Common Securities except that, where an Event
of Default occurs and is continuing under the Indenture in respect of the Trust
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Capital Securities.
(10) LISTING.
The Regular Trustees and the Sponsor shall use their best
efforts to cause the Capital Securities to be listed for quotation on the New
York Stock Exchange, Inc.
(11) ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, and to the
provisions of the Indenture, including the subordination provisions of each
document.
(12) NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
(13) MISCELLANEOUS.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee or the Common Securities Guarantee (as may be
appropriate) and the Indenture to a Holder without charge on written request to
the Sponsor at its principal place of business.
I-15
(14) AGREEMENT OF HOLDERS AND CAPITAL SECURITY BENEFICIAL
OWNERS.
Every Person who becomes a Holder or a Capital Security
Beneficial Owner shall be deemed to have agreed to treat the Trust Debentures as
indebtedness for United States federal income tax purposes and the Capital
Securities as evidence of an indirect beneficial ownership in the Trust
Debentures.
I-16
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[IF THE CAPITAL SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT
- - This Capital Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
Capital Security is exchangeable for Capital Securities registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Capital
Security (other than a transfer of this Capital Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Capital Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Capital Security issued is registered in the name of Cede & Co.
or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number: Number of Capital Securities
CUSIP NO.
Certificate Evidencing Capital Securities
of
MDC CAPITAL FUNDING TRUST [ ]
[title of security]
(liquidation amount $[ ] per Capital Security)
MDC Capital Funding Trust [ ], a statutory business trust
formed under the laws of the State of Delaware (the
A1-1
"Trust"), hereby certifies that ______________ (the "Holder") is the
registered owner of _______ Capital Securities of the Trust representing an
undivided beneficial interest in the assets of the Trust designated the
[ ] (liquidation amount $[ ] per Capital Security) ("
SM" or the "Capital Securities"). The Capital Securities are transferable on
the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer. The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities are set forth in,
and this certificate and the Capital Securities represented hereby are issued
and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Declaration of Trust of the Trust dated as of
[ ], [ ], as the same may be amended from time to time (the
"Declaration") including the designation of the terms of Capital Securities
as set forth in Annex I to the Declaration. The Capital Securities and the
Common Securities (as defined in the Declaration) issued by the Trust
pursuant to the Declaration represent undivided beneficial interests in the
assets of the Trust, including the Trust Debentures (as defined in the
Declaration) issued by M.D.C. Holdings, Inc., a Delaware corporation (the
"Trust Debenture Issuer"), to the Trust pursuant to the Indenture referred to
in the Declaration. The Holder is entitled to the benefits of the Capital
Securities Guarantee Agreement of the Trust Debenture Issuer dated as of
[ ], [ ] (the "Guarantee") to the extent provided therein. The
Trust will furnish a copy of the Declaration, the Guarantee and the Indenture
to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
The Holder of this certificate, by accepting this certificate,
is deemed to have: (i) agreed to the terms of the Indenture and the Trust
Debentures, including that the Trust Debentures are subordinate and junior in
right to payment to all Senior Indebtedness (as defined in the Indenture) as and
to the extent provided in the Indenture; (ii) agreed to the terms of the
Guarantee; and (iii) agreed to treat the Trust Debentures as indebtedness for
United States federal income tax purposes and the Capital Securities as evidence
of an indirect beneficial ownership of the Trust Debentures.
This certificate and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
A1-2
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A1-3
IN WITNESS WHEREOF, the undersigned Regular Trustees of the
Trust have executed this certificate for and on behalf of the Trust.
Dated:
MDC CAPITAL FUNDING TRUST [ ]
By:
----------------------------------
Regular Trustee
By:
----------------------------------
Regular Trustee
By:
----------------------------------
Regular Trustee
COUNTERSIGNED AND REGISTERED:
[ ]
( )
Transfer Agent and Registrar
By:
----------------------------------
Authorized Signature
A1-4
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM --as tenants in common UNIF GIFT ACT ___ Custodian ___
TEN ENT --as tenants by the entireties (Cust) (Minor)
JT TEN --as joint tenants with Under Uniform Gifts to Minors
right of survivorship and Act _________
not as tenants in common State)
Additional abbreviations may also be used though not in the
above list.
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFICATION NUMBER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name(s) and address(es)
including postal zip code(s), of assignee(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
_______ of the Capital Securities represented by this
Certificate and does hereby irrevocably appoint
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
attorney to transfer such Capital Securities on the books of the Trust.
The attorney may substitute another to act for him or her.
Date:
----------------------
A1-5
Signature:
----------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature:
----------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
*IMPORTANT READ CAREFULLY!
The signature(s) to this assignment must correspond with the name(s) as written
upon the face of the certificate in every particular without alteration,
enlargement or change whatsoever. The signature(s) of the person(s) executing
this power must be guaranteed by an eligible guarantor institution which, at the
time of issuing the guarantee, is a member of, or a participant in the medallion
signature guarantee program recognized by the Securities Transfer Association.
A1-6
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number: Number of Common Securities:
Certificate Evidencing Common Securities
of
MDC CAPITAL FUNDING TRUST [ ]
Common Securities
(liquidation amount $ per Common Security)
MDC Capital Funding Trust [ ], a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby certifies
that _________________ (the "Holder") is the registered owner of common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the Common Securities (liquidation amount $
per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of [ ],
[ ], as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to the Holder without charge upon written request to the
Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Trust Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Trust Debentures.
This certificate and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
IN WITNESS WHEREOF, the undersigned Regular Trustees of the
Trust have executed this certificate this [ ] day of [ ], [ ].
MDC CAPITAL FUNDING TRUST [ ]
By:
------------------------------
Regular Trustee
By:
------------------------------
Regular Trustee
By:
------------------------------
Regular Trustee
A2-2
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers this Common Security Certificate unto:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's name and social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert Address and zip code of assignee)
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_______ of the Common Securities represented by this
Certificate and does hereby irrevocably appoint
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attorney to transfer these Common Securities on the books of the Trust.
The attorney may substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-3
EXHIBIT B
SPECIMEN OF SUBORDINATED NOTE
B-1