INDENTURE

 

CROSS REFERENCE SHEET*

 

Provisions of the Trust Indenture Act of 1939 and the Indenture (the “Indenture”), dated as of                 ,       , by and among Meritage Homes Corporation, a Maryland corporation, the guarantors listed on Schedule 1 to the Indenture, and HSBC Bank USA, National Association, as Trustee:

 

TIA Section		Indenture Section
310(a)(1)		7.10
310(a)(2)		7.10
310(a)(3)		Not applicable
310(a)(4)		Not applicable
310(a)(5)		Not applicable
310(b)		7.03; 7.08; 7.10
310(b)(1)		7.10
310(c)		Not applicable
311(a)		7.03; 7.11
311(b)		7.03; 7.11
311(c)		Not applicable
312(a)		2.05
312(b)		11.03
312(c)		11.03
313(a)		7.06
313(b)(1)		Not applicable
313(b)(2)		7.06
313(c)		7.06;11.02
313(d)		7.06
314(a)		4.03; 4.04; 11.02
314(b)		Not applicable
314(c)(1)		11.04(a)
314(c)(2)		11.04(b)
314(c)(3)		Not applicable
314(d)		Not applicable
314(e)		11.05
314(f)		Not applicable
315(a)		7.01(b)
315(b)		7.05; 11.02
315(c)		7.01(a)
315(d)		7.01(c)
315(e)		6.12
316(a)(1)(A)		6.05
316(a)(1)(B)		6.04
316(a)(2)		Not applicable
316(a) (last sentence)		2.08; 6.04
316(b)		6.08
317(a)(1)		6.09
317(a)(2)		6.10
317(b)		2.04; 7.12
318(a)		11.01

 

*                  This cross reference sheet shall not, for any purpose, be deemed to be a part of the Indenture.

 

 

TABLE OF CONTENTS

 

				Page
ARTICLE 1	DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01		Certain Definitions		1
SECTION 1.02		Other Definitions		4
SECTION 1.03		Incorporation by Reference of Trust Indenture Act		4
SECTION 1.04		Rules of Construction		5
ARTICLE 2	THE SECURITIES
SECTION 2.01		Unlimited in Amount, Issuable in Series, Form and Dating		5
SECTION 2.02		Execution and Authentication		8
SECTION 2.03		Registrar and Paying Agent		8
SECTION 2.04		Paying Agent to Hold Money in Trust		9
SECTION 2.05		Securityholder Lists		9
SECTION 2.06		Transfer and Exchange		9
SECTION 2.07		Replacement Securities		10
SECTION 2.08		Outstanding Securities		10
SECTION 2.09		Temporary Securities		11
SECTION 2.10		Cancellation		11
SECTION 2.11		Defaulted Interest		11
SECTION 2.12		Special Record Dates		11
SECTION 2.13		Global Securities		12
SECTION 2.14		CUSIP Numbers		13
SECTION 2.15		Computation of Interest		13
SECTION 2.16		Treasury Notes		13
ARTICLE 3	REDEMPTION
SECTION 3.01		Notices to Trustee		14
SECTION 3.02		Selection of Securities to be Redeemed		14
SECTION 3.03		Notice of Redemption		15
SECTION 3.04		Effect of Notice of Redemption		16
SECTION 3.05		Deposit of Redemption Price		16
SECTION 3.06		Securities Redeemed or Purchased in Part		16
ARTICLE 4	COVENANTS
SECTION 4.01		Payment of Securities		16
SECTION 4.02		Maintenance of Office or Agency		17
SECTION 4.03		Reports		17
SECTION 4.04		Compliance Certificate		17
SECTION 4.05		Taxes		18
SECTION 4.06		Stay, Extension and Usury Laws		18
SECTION 4.07		Maintenance of Properties; Insurance; Compliance with Law		18
SECTION 4.08		Payments for Consent		19
SECTION 4.09		Legal Existence		19

 

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TABLE OF CONTENTS

(continued)

 

				Page
ARTICLE 5	SUCCESSORS
SECTION 5.01		When The Issuer May Merge, Etc		19
SECTION 5.02		Successor Person Substituted		20
ARTICLE 6	DEFAULTS AND REMEDIES
SECTION 6.01		Events of Default		20
SECTION 6.02		Acceleration		22
SECTION 6.03		Other Remedies		22
SECTION 6.04		Waiver of Past Defaults		22
SECTION 6.05		Control by Majority		23
SECTION 6.06		Limitation on Suits		23
SECTION 6.07		No Personal Liability of Directors, Officers, Employees and Stockholders		23
SECTION 6.08		Rights of Holders to Receive Payment		24
SECTION 6.09		Collection Suit by Trustee		24
SECTION 6.10		Trustee May File Proofs of Claim		24
SECTION 6.11		Priorities		24
SECTION 6.12		Undertaking for Costs		25
ARTICLE 7	TRUSTEE
SECTION 7.01		Duties of Trustee		25
SECTION 7.02		Rights of Trustee		26
SECTION 7.03		Individual Rights of Trustee		27
SECTION 7.04		Trustee’s Disclaimer		27
SECTION 7.05		Notice of Defaults		27
SECTION 7.06		Reports by Trustee to Holders		28
SECTION 7.07		Compensation and Indemnity		28
SECTION 7.08		Replacement of Trustee		29
SECTION 7.09		Successor Trustee by Merger, Etc		30
SECTION 7.10		Eligibility; Disqualification		30
SECTION 7.11		Preferential Collection of Claims Against the Issuer		30
SECTION 7.12		Paying Agents		30
ARTICLE 8	SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.01		Satisfaction and Discharge		31
SECTION 8.02		Option to Effect Legal Defeasance or Covenant Defeasance		32
SECTION 8.03		Legal Defeasance and Discharge		32
SECTION 8.04		Covenant Defeasance		32
SECTION 8.05		Conditions to Legal or Covenant Defeasance		33
SECTION 8.06		Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions		34
SECTION 8.07		Repayment to the Issuer		35
SECTION 8.08		Reinstatement		35

 

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TABLE OF CONTENTS

(continued)

 

				Page
ARTICLE 9	SUPPLEMENTS, AMENDMENTS AND WAIVERS
SECTION 9.01		Without Consent of Holders		35
SECTION 9.02		With Consent of Holders		36
SECTION 9.03		Compliance with the Trust Indenture Act		37
SECTION 9.04		Revocation and Effect of Consents		37
SECTION 9.05		Notation on or Exchange of Securities		37
SECTION 9.06		Trustee to Sign Amendments, Etc		38
ARTICLE 10	GUARANTEES
SECTION 10.01		Guarantee		38
ARTICLE 11	MISCELLANEOUS
SECTION 11.01		Trust Indenture Act Controls		38
SECTION 11.02		Notices		38
SECTION 11.03		Communication by Holders With Other Holders		39
SECTION 11.04		Certificate and Opinion as to Conditions Precedent		40
SECTION 11.05		Statements Required in Certificate or Opinion		40
SECTION 11.06		Rules by Trustee and Agents		40
SECTION 11.07		Legal Holidays		40
SECTION 11.08		No Recourse Against Others		41
SECTION 11.09		Counterparts		41
SECTION 11.10		Governing Law		41
SECTION 11.11		Submission to Jurisdiction; Service of Process; Waiver of Jury Trial		41
SECTION 11.12		Severability		42
SECTION 11.13		Effect of Headings, Table of Contents, Etc		42
SECTION 11.14		Successors and Assigns		42
SECTION 11.15		No Interpretation of Other Agreements		42

 

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INDENTURE dated as of                  by and among Meritage Homes Corporation, a Maryland corporation, (the “Issuer”), the guarantors listed on Schedule 1 hereto (herein called the “Guarantors”) and HSBC Bank USA, National Association, as Trustee (the “ Trustee ”).

 

The Issuer has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its debentures, notes or other evidences of indebtedness to be issued in one or more series (the “ Securities ”), as herein provided, up to such principal amount as may from time to time be authorized in or pursuant to one or more resolutions of the Board of Directors or by supplemental indenture.

 

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of each series of the Securities:

 

ARTICLE 1
DEFINITIONS AND INCORPORATION  BY REFERENCE

 

SECTION 1.01                                        Certain Definitions .

 

“ Affiliate ” of any person means any other person which directly or indirectly controls or is controlled by, or is under direct or indirect common control with, the referent person.  For purposes of the covenant described under “—Certain Covenants—Limitations on Transactions with Affiliates,” Affiliates shall be deemed to include, with respect to any person, any other person (1) which beneficially owns or holds, directly or indirectly, 10% or more of any class of the voting stock of the referent person, (2) of which 10% or more of the voting stock is beneficially owned or held, directly or indirectly, by the referenced person or (3) with respect to an individual, any immediate family member of such person.  For purposes of this definition, “control” of a person shall mean the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

 

“ Agent ” means any Registrar, Paying Agent, authenticating agent or co-Registrar.

 

“ asset ” means any asset or property.

 

“ Board of Directors ” means, with respect to any Person, the board of directors of such Person (or, if such Person is a limited liability company, the board of managers of such Person) or similar governing body or any authorized committee thereof.

 

“ Board Resolution ” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Issuer to have been duly adopted by the Board of Directors or pursuant to authorization by the Board of Directors and to be in full force and effect on the date of such certification (and delivered to the Trustee, if appropriate).

 

“ Business Day ” means any day other than a Legal Holiday.

 

“ Closing Date ” means the date on which the Securities of a particular series were originally issued under this Indenture.

 

 

“ Commission ” means the Securities and Exchange Commission.

 

“ Corporate Trust Office ” shall mean the corporate trust office of the Trustee, which shall initially be HSBC Bank USA, National Association, 10 East 40th Street, 14th Floor, New York, New York 10016.

 

“ Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

 

“ Depositary ” means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the person designated as Depositary for such series by the Issuer, which Depositary shall be a clearing agency registered under the Exchange Act; and if at any time there is more than one such person, “Depositary” as used with respect to the Securities of any series shall mean the Depositary with respect to the Securities of such series.

 

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time.

 

“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the applicable measurement date.

 

“ Global Security ” shall mean a Security issued to evidence all or a part of any series of Securities that is executed by the Issuer and authenticated and delivered by the Trustee to a Depositary or pursuant to such Depositary’s instructions, all in accordance with this Indenture and pursuant to Section 2.01, which shall be registered as to principal and interest in the name of such Depositary or its nominee.

 

“ Holder ” or “ Securityholder ” means a Person in whose name a Security is registered in the register of Securities kept by the Registrar.

 

“ Indenture ” means this Indenture, as amended or supplemented from time to time.

 

“ Issuer ” means the party named as such above until a successor replaces it pursuant to this Indenture and thereafter means the successor.

 

“ Issuer Order ” means a written order signed in the name of the Issuer by two Officers, one of whom must be the Issuer’s principal executive officer, principal financial officer, treasurer, principal accounting officer or vice president and delivered to the Trustee.

 

“ maturity ” when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at stated maturity or by declaration of acceleration, call for redemption or otherwise.

 

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“ Officer ” means, with respect to any Person, a chairman of the board, a chief executive officer, a president, the chief financial officer, any vice-president, the treasurer, the controller, the secretary, any assistant treasurer or any assistant secretary of such Person.

 

“ Officers’ Certificate ” means a certificate signed by two or more Officers, one of whom must be the principal executive officer, principal financial officer or principal accounting officer of the Issuer that meets the requirements of Section 11.05 hereof.

 

“ Opinion of Counsel ” means an opinion from legal counsel who is reasonably acceptable to the Trustee that meets the requirements of Section 11.05 hereof.  The counsel may be an employee of or counsel to the Issuer or the Trustee.

 

“ Person ” means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

“ principal ” of a Security means the principal amount due on the stated maturity of the Security plus the premium, if any, on the Security.

 

“ Securities ” means the Securities authenticated and delivered under this Indenture.

 

“ Securities Act ” means the Securities Act of 1933, as amended from time to time.

 

“ stated maturity ” when used with respect to any Security or any installment of interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of interest is due and payable.

 

“ Subsidiary ” means, with respect to any Person:

 

(1)           any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of the Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof are at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

 

(2)           any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).

 

Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Issuer.

 

“ TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA provided, however, that in the event the TIA is amended after such date, “TIA” means, to the extent required by such amendment, the Trust Indenture Act, as amended.

 

3

 

“ Trust Officer ” when used with respect to the Trustee, means any officer assigned to the Corporate Trust Office of the Trustee with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

 

“ Trustee ” means the party named as such above until a successor becomes such pursuant to this Indenture and thereafter means or includes each party who is then a trustee hereunder, and if at any time there is more than one such party, “Trustee” as used with respect to the Securities of any series means the Trustee with respect to Securities of that series.  If Trustees with respect to different series of Securities are trustees under this Indenture, nothing herein shall constitute the Trustees co-trustees of the same trust, and each Trustee shall be the trustee of a trust separate and apart from any trust administered by any other Trustee with respect to a different series of Securities.

 

“ U.S. Government Obligations ” means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that is not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation evidenced by such depository receipt.

 

SECTION 1.02                                        Other Definitions .

 

Term		Defined in Section
“Bankruptcy Law”		6.01
“Custodian”		6.01
“Event of Default”		6.01
“Legal Holiday”		11.07
“Paying Agent”		2.03
“Place of Payment”		2.01
“redemption price”		3.03
“Registrar”		2.03

 

SECTION 1.03                                        Incorporation by Reference of Trust Indenture Act .

 

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

 

4

 

“ indenture securities ” means the Securities.

 

“ indenture securityholder ” means a Securityholder.

 

“ indenture to be qualified ” means this Indenture.

 

“ indenture trustee ” or “ institutional trustee ” means the Trustee.

 

“ obligor ” on the Securities means the Issuer and any Guarantor and any successor obligor on the Securities.

 

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned to them.

 

SECTION 1.04                                        Rules of Construction .

 

Unless the context otherwise requires:

 

(i)            a term has the meaning assigned to it;

 

(ii)           an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(iii)          “or” is not exclusive;

 

(iv)          words in the singular include the plural, and in the plural include the singular;

 

(v)           provisions apply to successive events and transactions; and

 

(vi)          references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time.

 

ARTICLE 2
THE SECURITIES

 

SECTION 2.01                                        Unlimited in Amount, Issuable in Series, Form and Dating .

 

The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited.  The Securities may be issued in one or more series.

 

There shall be established in or pursuant to a Board Resolution or an Officers’ Certificate pursuant to authority granted under a Board Resolution or established in one or more indentures supplemental hereto authorized by a Board Resolution, prior to the issuance of Securities of any series:

 

5

 

(a)           the title of the Securities of the series, whether the Securities rank as senior Securities, senior subordinated Securities or subordinated Securities, or any combination thereof;

 

(b)           the price or prices (expressed as a percentage of the principal amount thereof) at which the Securities of the series will be issued;

 

(c)           the aggregate principal amount of the Securities and any limit upon the aggregate principal amount of the Securities that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to this Article 2);

 

(d)           the date or dates on which the principal on the Securities will be payable and the amount of principal that will be payable;

 

(e)           the rate or rates (which may be fixed or variable) at which the Securities of the series will bear interest, if any, as well as the dates from which interest will accrue, the dates on which the interest will be payable and the record date for the interest payable on any payment date;

 

(f)            the form and terms of any guarantee of the Securities, including the terms of subordination, if any, of the series;

 

(g)           any depositories, interest rate calculation agents or other agents with respect to Securities of such series if other than those appointed herein;

 

(h)           the right, if any, of Holders of the Securities to convert them into common stock or other securities of the Issuer, including any provisions to prevent dilution of such conversion rights;

 

(i)            the place or places where the principal, premium, if any, and interest, if any, on the Securities of the series will be payable and where the Securities which are in registered form can be presented for registration of transfer or exchange and the identification of any depositary or depositaries for any Global Securities;

 

(j)            the provisions, if any, regarding the Issuer’s right to redeem, repay or purchase Securities of the series, in whole or in part, or the right of the Holders to require the Issuer to redeem, repay or purchase Securities of the series, in whole or in part;

 

(k)           the provisions, if any, requiring or permitting the Issuer to make payments in a sinking fund or analogous provision to be used to redeem the Securities of the series or a purchase fund or analogous provision to purchase the Securities of the series;

 

(l)            if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable;

 

(m)          the percentage of the principal amount at which the Securities of the series will be issued and, if other than the full principal amount thereof, the percentage of the principal

 

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amount of the Securities of the series which is payable if maturity of such Securities is accelerated because of a Default;

 

(n)           the currency or currencies in which principal, premium, if any, and interest, if any, of the Securities of the series will be payable;

 

(o)           if payments of principal of, premium or interest on the Securities of the series will be made in one or more currencies other than that or those in which the Securities of the series are denominated, the manner in which the exchange rate with respect to such payments will be determined;

 

(p)           the manner in which the amounts of payment of principal of, or premium or interest on the Securities of the series will be determined, if these amounts may be determined by reference to an index based on a currency or currency other than that in which the Securities of the series are denominated or designated to be payable;

 

(q)           the provisions, if any, relating to any security provided for the Securities of the series;

 

(r)            any addition to or change in the Events of Default with respect to the Securities of a particular series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 6.02 hereof;

 

(s)           any addition to, change in or deletion from, the covenants set forth in Articles 4 or 5 that applies to Securities of the series;

 

(t)            the Trustee for the series of Securities;

 

(u)           any other terms of the series (which terms may modify, supplement or delete any provision of this Indenture with respect to such series; provided, however, that no such term may modify or delete any provision hereof if imposed by the TIA; and provided, further, that any modification or deletion of the rights, duties or immunities of the Trustee hereunder shall have been consented to in writing by the Trustee).

 

All Securities of any series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution or Officers’ Certificate or in any such indenture supplemental hereto.

 

The principal of and any interest on the Securities shall be payable at the office or agency of the Issuer designated in the form of Security for the series (each such place herein called the “ Place of Payment ”); provided, however, that payment of interest may be made at the option of the Issuer by check mailed to the address of the Person entitled thereto as such address shall appear in the register of Securities referred to in Section 2.03 hereof.

 

Each Security shall be in one of the forms approved from time to time by or pursuant to a Board Resolution or Officers’ Certificate, or established in one or more indentures supplemental hereto.  Prior to the delivery of a Security to the Trustee for authentication in any form approved

 

7

 

by or pursuant to a Board Resolution or Officers’ Certificate, the Issuer shall deliver to the Trustee the Board Resolution or Officers’ Certificate by or pursuant to which such form of Security has been approved, which Board Resolution or Officers’ Certificate shall have attached thereto a true and correct copy of the form of Security that has been approved by or pursuant thereto.

 

The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage.  Each Security shall be dated the date of its authentication.

 

SECTION 2.02                                        Execution and Authentication .

 

One or more Officers shall sign the Securities for the Issuer by manual or facsimile signature.

 

If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.

 

A Security shall not be valid until authenticated by the manual signature of the Trustee.  The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

 

The Trustee shall authenticate Securities for original issue upon receipt of an Issuer Order.

 

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Securities.  An authenticating agent may authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as an Agent to deal with the Issuer or an Affiliate of the Issuer.

 

SECTION 2.03                                        Registrar and Paying Agent .

 

The Issuer shall maintain an office or agency (which, unless otherwise set forth in a Board Resolution or Supplemental Indenture, shall be located in the Borough of Manhattan in the City of New York, State of New York) where Securities of a particular series may be presented for registration of transfer or for exchange (the “ Registrar ”) and an office or agency where Securities of that series may be presented for payment (a “ Paying Agent ”).  The Registrar for a particular series of Securities shall keep a register of the Securities of that series and of their registration of transfer and exchange.  The Issuer may appoint one or more co-Registrars and one or more additional paying agents for each series of Securities.  The term “Paying Agent” includes any additional paying agent.  The Issuer may change any Paying Agent, Registrar or co-Registrar without prior notice to any Securityholder.  The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture.

 

If the Issuer fails to maintain a Registrar or Paying Agent for any series of Securities, the Trustee shall act as such.  The Issuer or any of its Affiliates may act as Paying Agent, Registrar or co-Registrar.

 

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The Issuer hereby appoints the Trustee the initial Registrar and Paying Agent for each series of Securities unless another Registrar or Paying Agent, as the case may be, is appointed prior to the time Securities of that series are first issued.

 

SECTION 2.04                                        Paying Agent to Hold Money in Trust .

 

Whenever the Issuer has one or more Paying Agents it will, prior to each due date of the principal of or interest on, any Securities, deposit with a Paying Agent a sum sufficient to pay the principal or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal or interest, and (unless such Paying Agent is the Trustee) the Issuer will promptly notify the Trustee of its action or failure so to act.

 

The Issuer shall require each Paying Agent other than the Trustee to agree in writing that such Paying Agent will hold in trust for the benefit of the Securityholders of the particular series for which it is acting, or the Trustee, all money held by the Paying Agent for the payment of principal or interest on the Securities of such series, and that such Paying Agent will notify the Trustee of any Default by the Issuer or any other obligor of the series of Securities in making any such payment and at any time during the continuance of any such Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.  If the Issuer or an Affiliate acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Securityholders of the particular series for which it is acting all money held by it as Paying Agent.  The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee.  Upon so doing, the Paying Agent (if other than the Issuer or an Affiliate of the Issuer) shall have no further liability for such money.  Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Securities.

 

SECTION 2.05                                        Securityholder Lists .

 

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders, separately by series, and shall otherwise comply with TIA Section 312(a).  If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee as of the relevant record date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders, separately by series, relating to such interest payment date or request, as the case may be.

 

SECTION 2.06                                        Transfer and Exchange .

 

Where Securities of a series are presented to the Registrar or a co-Registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities of the same series of other authorized denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met.  To permit registrations of transfers and exchanges, the Issuer shall issue and the Trustee shall authenticate Securities at the Registrar’s request.

 

No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax or similar governmental

 

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charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.09, 2.13, 3.06 or 9.05).

 

The Issuer need not issue, and the Registrar or co-Registrar need not register the transfer or exchange of, (i) any Security of a particular series during a period beginning at the opening of business 15 days before the day of any selection of Securities of that series for redemption under Section 3.02 and ending at the close of business on the day of selection, or (ii) any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security of that series being redeemed in part.

 

Any Holder of a Global Security shall, by acceptance of such Global Security, agree that transfers of the beneficial interests in such Global Security may be effected only through a book entry system maintained by the Issuer of such Global Security (or its agent), and that ownership of a beneficial interest in the Global Security shall be required to be reflected in a book entry.

 

SECTION 2.07                                        Replacement Securities .

 

If a mutilated Security is surrendered to the Trustee or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Security of same series if the Issuer’s and the Trustee’s requirements are met.  The Trustee or the Issuer may require an indemnity bond to be furnished which is sufficient in the judgment of both to protect the Issuer, the Trustee, and any Agent from any loss which any of them may suffer if a Security is replaced.  The Issuer or the Trustee may charge such Holder for its expenses in replacing a Security.

 

Every replacement Security is an obligation of the Issuer and shall be entitled to all the benefit of the Indenture equally and proportionately with any and all other Securities of the same series.

 

SECTION 2.08                                        Outstanding Securities .

 

The Securities of any series outstanding at any time are all the Securities of that series authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, and those described in this Section as not outstanding.

 

If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a protected purchaser.

 

If Securities are considered paid under Section 4.01, they cease to be outstanding and interest on them ceases to accrue.

 

Except as set forth in Section 2.09 hereof, a Security does not cease to be outstanding because the Issuer or an Affiliate holds the Security.

 

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SECTION 2.09                                        Temporary Securities .

 

Until definitive Securities are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Securities upon an Issuer Order.  Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Issuer considers appropriate for temporary Securities.  Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities.

 

Holders of temporary Securities shall be entitled to all of the benefits of this Indenture.

 

SECTION 2.10                                        Cancellation .

 

The Issuer at any time may deliver Securities to the Trustee for cancellation.  The Registrar and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment.  The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall return such canceled Securities to the Issuer at the Issuer’s written request.  The Issuer may not issue new Securities to replace Securities that it has paid or that have been delivered to the Trustee for cancellation.

 

SECTION 2.11                                        Defaulted Interest .

 

If the Issuer fails to make a payment of interest on any series of Securities, the Issuer shall pay such defaulted interest plus (to the extent lawful) any interest payable on the defaulted interest, in any lawful manner.  It may elect to pay such defaulted interest, plus any such interest payable on it, to the Persons who are Holders of such Securities on which the interest is due on a subsequent special record date.  The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each such Security and the date of the proposed payment.  The Issuer shall fix or cause to be fixed any such record date and payment date for such payment; provided, however, that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest.  At least 15 days before any such record date, the Issuer shall mail to Securityholders affected thereby a notice that states the record date, payment date, and amount of such interest to be paid.

 

SECTION 2.12                                        Special Record Dates .

 

(a)           The Issuer may, but shall not be obligated to, set a record date for the purpose of determining the identity of Holders entitled to consent to any supplement, amendment or waiver permitted by this Indenture.  If a record date is fixed, the Holders of Securities of that series outstanding on such record date, and no other Holders, shall be entitled to consent to such supplement, amendment or waiver or revoke any consent previously given, whether or not such Holders remain Holders after such record date.  No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities of that series required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period.

 

(b)           The Issuer may, but shall not be obligated to, fix any day as a record date for the purpose of determining the Holders of any series of Securities entitled to join in the

 

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giving or making of any notice of Default, any declaration of acceleration, any request to institute proceedings or any other similar direction.  If a record date is fixed, the Holders of Securities of that series outstanding on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided, however, that no such action shall be effective hereunder unless taken on or prior to the date 90 days after such record date.

 

SECTION 2.13                                        Global Securities .

 

(a)           Terms of Securities.  A Board Resolution, a supplemental indenture hereto or an Officers’ Certificate shall establish whether the Securities of a series shall be issued in whole or in part in the form of one or more Global Securities and the Depositary for such Global Security or Securities.

 

(b)           Transfer and Exchange.  Notwithstanding any provisions to the contrary contained in Section 2.06 of this Indenture and in addition thereto, any Global Security shall be exchangeable pursuant to Section 2.06 of this Indenture for securities registered in the names of Holders other than the Depositary for such Security or its nominee only if (i) such Depositary notifies the Issuer that it is unwilling or unable to continue as Depositary for such Global Security or if at any time such Depositary ceases to be a clearing agency registered under the Exchange Act, and, in either case, the Issuer fails to appoint a successor Depositary within 90 days of such event or (ii) the Issuer executes and delivers to the Trustee an Officers’ Certificate to the effect that such Global Security shall be so exchangeable.  Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Securities registered in such names as the Depositary shall direct in writing in an aggregate principal amount equal to the principal amount of the Global Security with like tenor and terms.

 

Except as provided in this paragraph (b) of this Section, a Global Security may not be transferred except as a whole by the Depositary with respect to such Global Security to a nominee of such Depositary, by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such a successor Depositary.

 

(c)           Legend.  Any Global Security issued hereunder shall bear a legend in substantially the following form:

 

“Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), New York, New York, to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as may be requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as may be requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest herein.”

 

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“Transfer of this Global Security shall be limited to transfers in whole, but not in part, to nominees of DTC or to a successor thereof or such successor’s nominee and limited to transfers made in accordance with the restrictions set forth in the Indenture referred to herein.”

 

(d)           Acts of Holders.  The Depositary, as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under this Indenture.

 

(e)           Payments.  Notwithstanding the other provisions of this Indenture, unless otherwise specified as contemplated by Section 2.01 hereof, payment of the principal of and interest, if any, on any Global Security shall be made to the Person specified therein.

 

(f)            Consents, Declaration and Directions.  Except as provided in paragraph (e) of this Section, the Issuer, the Trustee and any Agent shall treat a Person as the Holder of such principal amount of outstanding Securities of such series represented by a Global Security as shall be specified in a written statement of the Depositary with respect to such Global Security, for purposes of obtaining any consents, declarations or directions required to be given by the Holders pursuant to this Indenture.

 

SECTION 2.14                                        CUSIP Numbers .

 

The Issuer in issuing any series of Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on such Securities or as contained in any notice and that reliance may be placed only on the other identification numbers printed on such Securities, and any such action relating to such notice shall not be affected by any defect in or omission of such numbers in such notice.  The Issuer shall promptly notify the Trustee of any change in the “CUSIP” numbers.

 

SECTION 2.15                                        Computation of Interest .

 

Unless otherwise set forth in a Board Resolution or Supplemental Indenture, interest on the Securities will be computed on the basis of a 360-day year of twelve 30-day months.

 

SECTION 2.16                                        Treasury Notes .

 

In determining whether the Holders of the required principal amount of Securities have concurred in any declaration of acceleration or notice of default or direction, waiver or consent or any amendment, modification or other change to this Indenture, Securities owned by the Issuer or any other Affiliate of the Issuer shall be disregarded as though they were not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent or any amendment, modification or other change to this Indenture, only Securities as to which a responsible officer of the Trustee has received an Officers’ Certificate stating that such Securities are so owned shall be so disregarded.  Securities so owned which have been pledged in good faith shall not be disregarded

 

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if the pledgee established to the satisfaction of the Trustee the pledgee’s right so to act with respect to the Securities and that the pledgee is not the Issuer, a Guarantor, any other obligor on the Securities or any of their respective Affiliates.

 

ARTICLE 3
REDEMPTION

 

SECTION 3.01                                        Notices to Trustee .

 

If the Issuer elects to redeem Securities of any series pursuant to any optional redemption provisions thereof, it shall furnish to the Trustee at least 45 days, but not more than 60 days before a redemption date, an Officers’ Certificate which shall specify (i) the provisions of such Security or this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Securities of that series to be redeemed and (iv) the redemption price.

 

If the Issuer elects to reduce the principal amount of Securities of any series to be redeemed pursuant to mandatory redemption provisions thereof, it shall notify the Trustee of the amount of, and the basis for, any such reduction.  If the Issuer elects to credit against any such mandatory redemption Securities it has not previously delivered to the Trustee for cancellation, it shall deliver such Securities with such notice.

 

SECTION 3.02                                        Selection of Securities to be Redeemed .

 

If less than all the Securities of any series are to be redeemed, or purchased in an offer to purchase at any time, the Trustee shall select the Securities of that series to be redeemed or purchased as follows: (1) if the Securities of such series are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Securities of that series are listed or (2) if the Securities of that series are not listed on a national securities exchange, on a pro rata basis, by lot or by such other method as the Trustee deems fair and appropriate.  In the event of a partial redemption or purchase by lot, the particular Securities to be redeemed or purchased will be selected not less than 45 nor more than 60 days prior to the redemption or purchase date by the Trustee from Securities of that series outstanding and not previously called for redemption.

 

The Trustee shall notify the Issuer promptly in writing of the Securities or portions of Securities to be called for redemption or purchase and, in the case of any Securities selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased.  Except as otherwise provided as to any particular series of Securities, Securities and portions thereof that the Trustee selects shall be in amounts equal to the minimum authorized denomination for Securities of the series to be redeemed or purchased or any integral multiple thereof, except that if all of the Securities of the series are to be redeemed or purchased, the entire outstanding amount of the Securities of the series held by such Holder, even if not equal to the minimum authorized denomination for the Securities of that series, shall be redeemed or purchased.  Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption.  The Issuer may acquire Securities by means

 

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other than redemption, whether pursuant to an Issuer tender offer, open market purchase or otherwise provided such acquisition does not otherwise violate the other terms of this Indenture.

 

SECTION 3.03                                        Notice of Redemption .

 

Except as otherwise provided as to any particular series of Securities, at least 30 days but not more than 60 days before a redemption date, the Issuer shall mail a notice of redemption to each Holder whose Securities are to be redeemed.

 

The notice shall identify the Securities of the series to be redeemed and shall state:

 

(1)           the redemption date;

 

(2)           the redemption price fixed in accordance with the terms of the Securities of the series to be redeemed, plus accrued interest, if any, to the date fixed for redemption (the “redemption price”);

 

(3)           if any Security is being redeemed in part, the portion of the principal amount of such Security to be redeemed and that, after the redemption date, upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Securities;

 

(4)           the name and address of the Paying Agent;

 

(5)           that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price;

 

(6)           that, unless the Issuer defaults in payment of the redemption price, interest on Securities called for redemption ceases to accrue on and after the redemption date;

 

(7)           the CUSIP number, if any, of the Securities to be redeemed;

 

(8)           the paragraph of the Securities and/or the section of the Indenture pursuant to which the Securities called for redemption are being redeemed; and

 

(9)           that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Securities.

 

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at its expense, provided, however, that the Issuer shall have delivered to the Trustee, at least six Business Days prior to the date on which notice is to be given, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.  The notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Holder receives such notice.  In any case, failure to give such notice by mail or any defect in the notice of the Holder of any Security shall not affect the validity of the proceeding for the redemption of any other Security.

 

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SECTION 3.04                                        Effect of Notice of Redemption .

 

Subject to the subordination provisions of any series of Securities, once notice of redemption is mailed in accordance with Section 3.03 hereof, Securities called for redemption become due and payable on the redemption date for the redemption price.  Upon surrender to the Paying Agent, such Securities will be paid at the redemption price.

 

SECTION 3.05                                        Deposit of Redemption Price .

 

On or before 10:00 a.m., New York City time, on the redemption or purchase date, the Issuer shall deposit with the Trustee or Paying Agent (or, if the Issuer or any Affiliate is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption or purchase price of all Securities called for redemption on that date other than Securities that have previously been delivered by the Issuer to the Trustee for cancellation.  The Paying Agent shall return to the Issuer any money not required for that purpose.

 

If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Securities (or the portions thereof) called for redemption or purchase.  If a Security is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Securities were registered at the close of business on such record date.  If any Securities called for redemption or purchase shall not be so paid upon surrender for redemption because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in accordance with the terms of the Securities of the series to be redeemed.

 

SECTION 3.06                                        Securities Redeemed or Purchased in Part .

 

Upon surrender of a Security that is redeemed or purchased in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Security of same series equal in principal amount to the unredeemed or unpurchased portion of the Security surrendered.

 

ARTICLE 4
COVENANTS

 

SECTION 4.01                                        Payment of Securities .

 

The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest on the Securities on the dates and in the manner provided in this Ind