-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L+o4NZRv2t9k6/N3J+F0afV9bwCTIXgM1PDemVKVQEsZVz7TwbpUcPCePJg5YPD1 HmWEaOST6n3Hx+0zg7cj2A== 0000950134-99-004252.txt : 19990517 0000950134-99-004252.hdr.sgml : 19990517 ACCESSION NUMBER: 0000950134-99-004252 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTEX CORP CENTRAL INDEX KEY: 0000018532 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 750778259 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-72893 FILM NUMBER: 99624481 BUSINESS ADDRESS: STREET 1: P O BOX 199000 STREET 2: 2728 N HARWOOD CITY: DALLAS STATE: TX ZIP: 75219 BUSINESS PHONE: 2145596500 MAIL ADDRESS: STREET 1: PO BOX 199000 STREET 2: 2728 N HARWOOD CITY: DALLAS STATE: TX ZIP: 75219 FORMER COMPANY: FORMER CONFORMED NAME: CENTEX CONSTRUCTION CO INC DATE OF NAME CHANGE: 19681211 S-3/A 1 AMENDMENT NO. 1 TO FORM S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1999. REGISTRATION NO. 333-72893 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------------- CENTEX CORPORATION (Exact name of registrant as specified in its charter) NEVADA 75-0778259 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification number) 2728 NORTH HARWOOD RAYMOND G. SMERGE DALLAS, TEXAS 75201 EXECUTIVE VICE PRESIDENT, CHIEF LEGAL (214) 981-5000 OFFICER AND SECRETARY (Address, including zip code, and CENTEX CORPORATION telephone number, including area code, 2728 NORTH HARWOOD of registrant's principal executive DALLAS, TEXAS 75201 offices) (214) 981-5000 (Name, address, including zip code, and telephone number, including area code, of agent for service)
--------------------------- Copy To: JAMES R. PEACOCK III THOMPSON & KNIGHT, P.C. 1700 PACIFIC AVENUE DALLAS, TEXAS 75201 (214) 969-1700 --------------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after this Registration Statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] --------------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. ================================================================================ 2 [Form of Prospectus Supplement. A prospectus supplement containing the terms of [Debt Securities] being offered will be given to prospective investors along with the prospectus.] PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED , 199 [LOGO] $ [DEBT SECURITIES] CENTEX CORPORATION 2728 North Harwood Street Dallas, Texas 75201 (214) 981-5000 [Brief description of the [Debt Securities] to be completed at time of offering.] [Brief description of offering price of the [Debt Securities], including price to the public of the [Debt Securities], the underwriter's discounts and commissions and the net proceeds we are to receive, on both a per unit basis and for the total amount of the offering.] --------------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement. Any representation to the contrary is a criminal offense. --------------------------- [UNDERWRITERS] --------------------------- THE DATE OF THIS PROSPECTUS SUPPLEMENT IS , 199 . 3 TABLE OF CONTENTS
Page ---- Prospectus Supplement USE OF PROCEEDS.................................................................................................S-3 CAPITALIZATION..................................................................................................S-3 [RATINGS........................................................................................................S-4 [RECENT DEVELOPMENTS............................................................................................S-4 DESCRIPTION OF [DEBT SECURITIES]................................................................................S-4 General ...................................................................................................S-4 UNDERWRITING....................................................................................................S-4 Prospectus ABOUT THIS PROSPECTUS.............................................................................................2 THE COMPANY.......................................................................................................2 Home Building................................................................................................2 Investment Real Estate.......................................................................................2 Financial Services...........................................................................................3 Construction Products........................................................................................3 Contracting and Construction Services........................................................................3 WHERE YOU CAN FIND MORE INFORMATION...............................................................................3 A WARNING ABOUT FORWARD-LOOKING STATEMENTS........................................................................4 USE OF PROCEEDS...................................................................................................5 RATIO OF EARNINGS TO FIXED CHARGES................................................................................5 SUMMARY OF SELECTED FINANCIAL DATA................................................................................5 DESCRIPTION OF DEBT SECURITIES....................................................................................8 General Information About the Debt Securities................................................................8 Covenants Included in the Indentures.........................................................................9 Payment of Principal, Interest and Premium; Transfer of Securities...........................................9 Specific Characteristics of Our Debt Securities..............................................................9 Global Certificates.........................................................................................10 Events of Default...........................................................................................12 Defeasance of Debt Securities...............................................................................13 Consolidation, Merger or Sale of Centex.....................................................................13 Modification of the Indentures..............................................................................13 Certificates and Opinions to be Furnished to Trustee........................................................14 Report to Holders of Debt Securities........................................................................14 The Trustee.................................................................................................14 Ratings of Our Debt Securities by Rating Agencies...........................................................14 Method for Calling Meetings of the Holders of Debt Securities...............................................14 Governing Law...............................................................................................15 Notices to Holders of Debt Securities.......................................................................15 PLAN OF DISTRIBUTION.............................................................................................15 Sale of Debt Securities By Agents...........................................................................15 Sale of Debt Securities By Underwriters.....................................................................15 Direct Sales of Our Debt Securities.........................................................................15 General Information About Our Plan of Distribution..........................................................15 LEGAL OPINIONS...................................................................................................16 EXPERTS..........................................................................................................16
S-2 4 USE OF PROCEEDS The net proceeds from the sale of the offered securities are estimated to be approximately $ , after we pay underwriting discounts and expenses. We will use these proceeds initially to repay short-term notes payable to banks and commercial paper borrowings with a weighted average interest rate of approximately %. CAPITALIZATION The following table sets forth the capitalization of Centex as of , 199 and as adjusted (unaudited) to give effect to the issuance of the [Debt Securities] and the application of the proceeds as indicated under "Use of Proceeds".
, 199 ------------------------------------------------------------------ CENTEX CORPORATION CENTEX AND SUBSIDIARIES CORPORATION FINANCIAL SERVICES ------------------- ------------------- ------------------ AS AS AS ACTUAL ADJUSTED ACTUAL ADJUSTED ACTUAL ADJUSTED ------ -------- ------ -------- ------ -------- (dollars in thousands) Short-term debt(1)(6)(7)............................ $ $ $ $ $ $ Long-term debt(2)(6)................................ [Debt Securities], offered hereby................... Senior notes(3)..................................... Subordinated debentures(4).......................... Other indebtedness(5)............................... Total debt.......................................... Stockholders' Equity: Preferred stock, undesignated par value; authorized 5,000,000 shares; none issued......................................... Common stock, $.25 par value; authorized 100,000,000 shares; shares outstanding(8)....................... Capital in excess of par value...................... Retained earnings................................... Total stockholders' equity.......................... Total debt and stockholders' equity................. $ $ $ $ $ $ ========= =========== ========== =========== ========== ===========
- ------------ (1) Short-term debt of $ billion at , 199 included $ million in commercial paper, $ million owed to banks and $ million owed to other financial institutions. Centex borrows on a short-term basis from banks under uncommitted lines which bear interest at prevailing money market rates. The weighted average interest rate on such short-term debt at , 199 was %. (2) [Description of Centex's long term credit facilities with banks in effect at time of offering.] (3) On October 1, 1998, Centex commenced a Medium Term Note program pursuant to which, on October 21, 1998, it issued $15,000,000 of 6.40% senior notes maturing October 5, 2002. On October 23, 1998, also pursuant to this program, Centex issued $50,000,000 of floating rate senior notes maturing April 28, 2000. On November 13, 1998, Centex replaced its existing Medium Term Note program with a Senior/Subordinated Medium Term Note program pursuant to which, on November 17, 1998, it issued $10,000,000 of floating rate senior notes maturing May 19, 2000. (4) In March 1987, Centex issued $100,000,000 of 8.75% subordinated notes maturing March 1, 2007. These notes are not redeemable prior to maturity. In June 1987, Centex issued $20,000,000 of 8.80% subordinated notes maturing June 30, 2007. These notes were redeemed by Centex in April 1998. In June 1995, Centex issued $100,000,000 of 73/8% subordinated notes maturing June 1, 2005. These notes are not redeemable by Centex prior to maturity. [Description of the priority of such indebtedness compared to the offered Debt Securities and an appropriate cross reference to the prospectus.] (5) Includes $2.1 million of convertible subordinated debt due in the year 2000. (6) At , 199 , the total amount of Centex's outstanding debt that would rank [senior to][equal to] the [Debt Securities] was approximately $ million, including approximately $ million of debt to Centex's subsidiaries. See "Description of Debt Securities" in the accompanying prospectus. (7) In an effort to be more meaningful, this table shows the capitalization of Centex on a fully-consolidated basis, including the consolidated debt of Centex's financial services operations, which include [CTX Mortgage Company (Centex's mortgage banking subsidiary),] [Centex S-3 5 Financial Services, Inc.] and [Centex Home Equity Corporation (Centex's subprime mortgage lender)]; the capitalization related to Centex's business operations other than financial services operations; and the capitalization related to Centex's financial services operations. Centex also uses this format in presenting its consolidated balance sheets. (8) At , 199 , Centex had shares of its common stock reserved for issuance under its stock option plans, of which were subject to outstanding options. [RATINGS At the time of their issuance, the [Debt Securities] will be rated by and by . A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organization.] [RECENT DEVELOPMENTS To be completed with additional information, if necessary.] DESCRIPTION OF [DEBT SECURITIES] You should read carefully the following description of the terms of the [Debt Securities] along with the description of the general terms of the Debt Securities set forth in the accompanying prospectus. GENERAL [Terms to be completed at time of offering.] UNDERWRITING [Terms to be completed at time of offering.] S-4 6 ================================================================================ YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT COVER. [LOGO] $ [DEBT SECURITIES] ---------- Prospectus Supplement ---------- [UNDERWRITERS] ____________, 199 ================================================================================ 7 SUBJECT TO COMPLETION, DATED MAY 14, 1999 PROSPECTUS [LOGO] $250,000,000 DEBT SECURITIES CENTEX CORPORATION 2728 North Harwood Street Dallas, Texas 75201 (214) 981-5000 We may offer unsecured general obligations of our company in the form of either senior or subordinated debt. Senior debt includes both our notes and debt, and our guarantees of debt incurred by our subsidiaries, all of which are for money borrowed and not subordinated to any of our other indebtedness. Subordinated debt is entitled to interest and principal payments after the senior debt payments. We will provide the specific terms of these securities in supplements to this prospectus. You should read this prospectus and the supplements carefully before you invest. ------------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. ------------------------- The information in this prospectus is incomplete and may be changed. We may not sell these securities until a registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. We may not use this prospectus to sell debt securities unless we also give prospective investors a prospectus supplement. ------------------------- The date of this prospectus is May , 1999. 8 ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that we filed with the SEC utilizing a "shelf" registration process. Under this shelf process, we may sell any combination of the securities described in this prospectus in one or more offerings up to a total dollar amount of $250,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add or update information contained in this prospectus. Together, this prospectus and the related prospectus supplement will set forth all of the material information regarding any particular offering. However, in order to get a complete picture of a particular offering, you should read both this prospectus and any prospectus supplement, together with additional information, such as the exhibits filed with this registration statement and described under the heading WHERE YOU CAN FIND MORE INFORMATION. THE COMPANY Through its various subsidiaries, Centex Corporation is one of the nation's largest home builders, mortgage lenders and general building contractors. We currently operate in five principal business segments: o Home Building; o Investment Real Estate; o Financial Services; o Construction Products; and o Contracting and Construction Services. HOME BUILDING The Home Building business has expanded to include both Conventional Homes and Manufactured Homes. The Conventional Homes operations currently involve the construction and sale of single-family homes, town homes and low-rise condominiums and also include the purchase and development of land. In March 1997, we entered into the Manufactured Homes business when we acquired approximately 80% of the common stock of Cavco Industries, Inc. Manufactured Homes operations include the manufacture of quality residential and park model homes and their sale through company-owned retail outlets and a network of independent dealers. INVESTMENT REAL ESTATE Investment Real Estate operations involve the acquisition, development and sale of land, the development of industrial, office, retail and other commercial projects and apartment complexes. 2 9 FINANCIAL SERVICES Through our Financial Services operations, we offer financing of conventional and manufactured homes, home equity and sub-prime lending and the sale of title and other insurance coverages. These activities include mortgage origination and other related services for homes sold by our subsidiaries and by others. CONSTRUCTION PRODUCTS Through our Construction Products operations, we also manufacture cement, gypsum wallboard and ready-mix concrete for distribution and sale. CONTRACTING AND CONSTRUCTION SERVICES Contracting and Construction Services activities involve the construction of buildings for both private and government interests, including office, commercial and industrial buildings, hospitals, hotels, museums, libraries, airport facilities and educational facilities. In April 1994, our construction products subsidiary, Centex Construction Products, Inc., completed an initial public offering of 51% of its common stock. Principally as a result of stock repurchases by Centex Construction Products, our ownership interest in Centex Construction Products was 59.2% as of December 31, 1998. Our principal executive office is located at 2728 N. Harwood Street, Dallas, Texas 75201, and our telephone number is (214) 981-5000. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's Regional Offices at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New York, New York 10048. Our SEC filings are also available to the public over the Internet at the SEC's web site at http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC (File No. 001-06776) under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell all of the securities. o Joint Annual Report on Form 10-K of Centex 3333 Holding Corporation and Centex Development Company, L.P. for the year ended March 31, 1998; 3 10 o Joint Quarterly Reports on Form 10-Q of Centex 3333 Holding Corporation and Centex Development Company, L.P. for the quarters ended June 30, 1998, September 30, 1998 and December 31, 1998; and o Current Reports on Form 8-K of Centex Corporation dated October 21, 1998, November 24, 1998 and February 18, 1999. You may request a copy of these filings at no cost, by writing or telephoning us at the following address: Corporate Secretary Centex Corporation 2728 North Harwood Street Dallas, Texas 75201 (214) 981-5000 You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents. A WARNING ABOUT FORWARD-LOOKING STATEMENTS Statements contained in this prospectus, including the documents that are incorporated by reference, that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include information about possible or assumed future results of our operations. Also, when we use any of the words "believes," "expects," "anticipates" or similar expressions, we are making forward-looking statements. Many possible events or factors could affect the future financial results and performance of our company. This could cause results or performance to differ materially from those expressed in our forward-looking statements. You should consider these risks when you purchase securities. These possible events or factors include the following: o changes in interest rates; o competitive factors, governmental regulation and the cost and availability of raw materials; o growth in home building, investment real estate, financial services, construction products and contracting and construction services industries in the local markets where we conduct business; o pending litigation; and o general business conditions. 4 11 USE OF PROCEEDS Except as otherwise provided in the related prospectus supplement, the net proceeds from the sale of the offered securities will be used for general corporate purposes, and substantially all of the proceeds initially will be used to repay short-term notes payable to banks and commercial paper borrowings. RATIO OF EARNINGS TO FIXED CHARGES
NINE MONTHS ENDED DECEMBER 31, FISCAL YEARS ENDED MARCH 31, ------------------ ------------------------------------ 1998 1997 1998 1997 1996 1995 1994 ---- ---- ---- ---- ---- ---- ---- Total enterprise ............................ 4.19x 4.14x 4.16x 3.71x 1.82x 2.99x 2.80x Centex (excluding financial services and savings and loan operations) ........ 7.62x 6.79x 6.83x 5.22x 1.99x 4.16x 2.85x
These computations include Centex Corporation, and except as otherwise noted, our subsidiaries, and 50% or less owned companies. For these ratios, fixed charges include: o Interest on all debt and amortization of debt discount and expense; o Interest capitalized; o An interest factor attributable to rentals. Earnings include the following: o Income from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investments; o Fixed charge as defined above, but excluding capitalized interest; o Amortization of capitalized interest. SUMMARY OF SELECTED FINANCIAL DATA In the table below, we provide you with selected historical consolidated financial data of Centex Corporation. We prepared this information using the consolidated financial statements of Centex Corporation for each of the fiscal years in the five-year period ended March 31, 1998, as well as for the nine-month periods ended December 31, 1998 and 1997. The financial statements as of the dates indicated and for each of the fiscal years in the five-year period ended March 31, 1998 have been audited by Arthur Andersen LLP, independent public accountants. The financial statements for the nine-month periods ended December 31, 1998 and 1997 have not been audited. When you read this selected historical consolidated financial data, you should also read the historical financial statements and accompanying Notes that Centex Corporation has included in 5 12 its joint annual report on Form 10-K for the year ended March 31, 1998 and its joint quarterly report on Form 10-Q for the nine months ended December 31, 1998. You can obtain these reports by following the instructions we provide under "Where You Can Find More Information" on page 2. We specifically refer you to Note 6 under "Capitalization" in the accompanying prospectus supplement and to the consolidated balance sheet and Note (A) to our consolidated financial statements for the year ended March 31, 1998.
NINE MONTHS ENDED DECEMBER 31, FISCAL YEARS ENDED MARCH 31, ------------------------- ------------------------------------------------------------------- 1998 1997 1998 1997 1996 1995 1994 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Revenues (1) ................. $ 3,609,774 $ 2,836,204 $ 3,975,450 $ 3,784,991 $ 3,102,987 $ 3,277,504 $ 3,039,709 Net earnings (2) ............. 163,767 100,781 144,806 106,563 53,365 92,248 85,162 Total assets ................. 4,393,284 3,059,159 3,416,219 2,678,829 2,336,966 2,049,698 2,580,356 Total long-term debt, including debentures (3) ....................... 284,151 240,183 237,715 236,769 321,002 222,530 222,832 Total debt (3) ............... 669,427 377,683 311,538 283,769 408,253 427,381 429,470 Deferred income tax (asset) liability (3) ..... (90,785) (166,471) (144,090) (195,983) 16,085 27,795 35,088 Stockholders' equity ......... 1,136,466 947,401 991,172 835,777 772,836 668,227 668,659 Total debt as a percent of total capitalization (total debt, deferred income tax liability, negative goodwill, minority interest and stockholders' equity) (3) ....................... 33.2% 24.3% 20.3% 20.9% 35.6% 38.0% 37.9% Basic earnings per share: Earnings before 1995 CXP gain ............... $ 2.75 $ 1.71 $ 2.45 $ 1.86 $ 0.94 $ 0.93 $ 1.35 Gain on CXP's IPO for 1995, net of tax .................... -- -- -- -- -- 0.63 -- ----------- ----------- ----------- ----------- ----------- ------------- ----------- Net earnings .............. $ 2.75 $ 1.71 $ 2.45 $ 1.86 $ 0.94 $ 1.56 $ 1.35 =========== =========== =========== =========== =========== ============= =========== Diluted earnings per share: Earnings before 1995 CXP gain ............... $ 2.65 $ 1.65 $ 2.36 $ 1.80 $ 0.91 $ 0.90 $ 1.29 Gain on CXP's IPO for 1995, net of tax .................... -- -- -- -- -- 0.61 -- ----------- ----------- ----------- ----------- ----------- ------------- ----------- Net earnings .............. $ 2.65 $ 1.65 $ 2.36 $ 1.80 $ 0.91 $ 1.51 $ 1.29 =========== =========== =========== =========== =========== ============= ===========
(1) As a result primarily of repurchases by Centex Construction Products of its own stock, Centex's ownership interest in Centex Construction Products increased to 59.2% as of December 31, 1998. Accordingly, beginning with the quarter ended June 30, 1996, Centex Construction Products' financial results have been consolidated with those of Centex and are reflected in Centex's revenues and earnings. Had Centex Construction Products' revenues been consolidated for the years ended March 31, 1996, 1995 and 1994, Centex's consolidated revenues for those years would have increased by $222,594, $194,313 and $166,826, respectively. 6 13 (2) Net earnings for the fiscal year ended March 31, 1995 include a nonrecurring gain of $37.5 million realized in connection with an initial public offering of 51% of Centex Construction Products' common stock. (3) Excludes debt and deferred income taxes of the financial services subsidiaries and discontinued savings and loan operations. 7 14 DESCRIPTION OF DEBT SECURITIES Any debt securities that we offer will be our direct unsecured general obligations. Such debt securities will be either senior debt securities or subordinated debt securities and will be issued under one or more separate indentures between us and Chase Bank of Texas, National Association, which is the successor to Texas Commerce Bank National Association, as trustee. A debt security is considered "senior" or "subordinated" depending on how it ranks in relation to our other debts. Senior debt securities will generally rank equal to other senior debt securities or unsubordinated debt. Holders of our subordinated debt securities will only be entitled to payment after we pay our senior debts, including our senior debt securities. Any senior debt securities that we offer will be issued under a senior indenture and subordinated debt securities will be issued under a subordinated indenture. Unless specifically stated otherwise, all references below to an article or section refer to that article or section in both indentures. We have summarized the material provisions of the indentures in this section, but this is only a summary. The senior indenture and the subordinated indenture have been filed with the SEC as Exhibit 4.3 and Exhibit 4.5, respectively, to our registration statement (File No. 333-72893) that contains this prospectus. You should read the indentures for provisions that may be important to you. In the summary below, we have included references to section numbers of the applicable indentures so that you can easily locate these provisions. You should review the applicable indenture for additional information before you buy any debt securities. Capitalized terms used in the following summary have the meanings specified in the indentures unless otherwise defined below. GENERAL INFORMATION ABOUT THE DEBT SECURITIES Because we are a holding company that conducts all of our operations through our subsidiaries, holders of our debt securities will generally have a junior position to claims of creditors of our subsidiaries, including trade creditors, debtholders, secured creditors, taxing authorities, guarantee holders and any preferred stockholders. All of our operating subsidiaries have ongoing corporate debt programs used to finance their business activities. As of December 31, 1998, our subsidiaries had approximately $1.5 billion of outstanding debt. Moreover, our ability to pay principal and interest on our debt securities is, to a large extent, dependent upon our receiving dividends, interest or other amounts from our subsidiaries. The indentures under which the debt securities are to be issued do not contain any limitation on our ability to incur additional debt or on our subsidiaries' ability to incur additional debt to us or to unaffiliated third parties. In addition, we borrow funds and lend funds to our subsidiaries from time to time to manage our working capital needs. Our indebtedness to our subsidiaries will rank equally in right of payment to our senior debt securities and senior in right of payment to our subordinated debt securities. A prospectus supplement and a supplemental indenture relating to any series of debt securities being offered will include specific terms relating to the offering. These terms will include some or all of the following: o The title, type and amount of the debt securities; o The total principal amount and priority of the debt securities; o The percentage of the principal amount at which the debt securities will be issued and any payments due if the maturity of the debt securities is accelerated; o The dates on which the principal of the debt securities will be payable; o The interest rate which the debt securities will bear and the interest payment dates for the debt securities; o Any optional redemption periods; o Any sinking fund or other provisions that would obligate us to repurchase or otherwise redeem the debt securities; 8 15 o Any provisions granting special rights to holders when a specified event occurs; o Any changes to or additional Events of Defaults or covenants; o Any special tax implications of the debt securities, including provisions for Original Issue Discount Securities, if offered; and o Any other terms of the debt securities. None of the indentures limits the amount of debt securities that may be issued. Each indenture allows debt securities to be issued up to the principal amount that may be authorized by us and may be in any currency or currency unit designated by us. Debt securities of a series may be issued in registered, bearer, coupon or global form. COVENANTS INCLUDED IN THE INDENTURES Under the indentures, we will: o pay the principal, interest and any premium on the debt securities when due; o maintain a place of payment; o deliver a report to the trustee at the end of each fiscal year reviewing our obligations under the indentures; and o deposit sufficient funds with any paying agent on or before the due date for any principal, interest or any premium. PAYMENT OF PRINCIPAL, INTEREST AND PREMIUM; TRANSFER OF SECURITIES Unless we designate otherwise, we will pay principal, interest and any premium on fully registered securities in Dallas, Texas. We will make payments by check mailed to the persons in whose names the debt securities offered hereby are registered on days specified in the indentures or any prospectus supplement. We will make debt securities payments in other forms at a place we designate and specify in a prospectus supplement. You may transfer or exchange fully registered securities at the corporate trust office of the trustee or at any other office or agency maintained by us for such purposes, without having to pay any service charge except for any tax or governmental charge. (Sections 2.04, 2.06 and 5.02) SPECIFIC CHARACTERISTICS OF OUR DEBT SECURITIES Senior Debt Securities Generally speaking, our senior debt securities will rank equally with all of our other senior debt and unsubordinated debt. All series of senior debt securities issued under the senior indenture will rank equally in right of payment with each other and with our other senior debt. Any additional senior debt securities would rank equally in right of payment with the senior debt securities offered hereby. Further, the senior indenture does not prohibit us from issuing additional debt securities that may rank equally in right of payment to the senior debt securities. Any senior debt securities offered pursuant to the senior indenture will be senior in right of payment to our subordinated debt securities. The following table sets forth our senior and subordinated long-term indebtedness as of December 31, 1998: 9 16 Senior debt: 6.40% Senior Notes due October 25, 2002.......................................... $ 15,000,000 Floating Rate Notes due April 28, 2000........................................... 50,000,000 Gloating Rate Notes due May 12, 2000............................................. 10,000,000 Debt to subsidiaries............................................................. 354,000,000 Other senior notes............................................................... 290,900,000 -------------- Total senior debt.......................................................... $ 719,900,000 Subordinated debt: 8.75% Subordinated Notes due March 1, 2007....................................... $ 100,000,000 7-3/8% Subordinated Notes due June 1, 2005....................................... 100,000,000 Convertible Subordinated Note due 2000........................................... 2,100,000 -------------- Total subordinated debt $ 202,100,000 -------------- Total long-term debt................................................. $ 922,000,000 ==============
"Senior debt" is defined to include all notes or other unsecured evidences of indebtedness including guarantees of Centex for money borrowed by us, not expressed to be subordinate or junior in right of payment to any other indebtedness of Centex. Subordinated Debt Securities The subordinated debt securities that may be offered will have a junior position to all of our senior debt. Under the subordinated indenture, payment of the principal, interest and any premium on the subordinated debt securities will generally be subordinated and junior in right of payment to the prior payment in full of all senior debt. The subordinated indenture provides that no payment of principal, interest and any premium on the subordinated debt securities may be made in the event: o of any insolvency, bankruptcy or similar proceeding involving us or our property, or o we fail to pay the principal, interest, any premium or any other amounts on any senior debt when due. The subordinated indenture will not limit the amount of senior debt that we may incur. The subordinated indenture provides that all series of subordinated debt securities that may be offered are equal in priority to our subordinated debt securities and will rank equally in right of payment to our subordinated debt securities. (Subordinated Indenture Section 3.02.) Except as discussed below, the subordinated indenture prohibits us from making any payment of principal of or premium, if any, or interest on, or sinking fund requirements for, any subordinated debt securities during the continuance of any default in respect of certain senior debt or any default under any agreement pursuant to which the senior debt was issued beyond the period of grace, unless and until such default on the senior debt is cured or waived. (Subordinated Indenture Section 3.02.) Except as discussed below, upon any distribution of our assets in connection with any dissolution, winding up, liquidation, reorganization, bankruptcy or other similar proceeding relative to us, our creditors or our property, the holders of all senior debt will first be entitled to receive payment in full of the principal and premium, if any, and interest due on the senior debt before the holders of any subordinated debt securities are entitled to receive any payment of the principal of and premium, if any, or interest on any subordinated debt securities. (Subordinated Indenture Section 3.02.) Because of this subordination, if we become insolvent, our creditors who are not holders of senior debt may recover less, ratably, than holders of senior debt but may recover more, ratably, than holders of our subordinated debt securities. GLOBAL CERTIFICATES The debt securities of a series may be issued in whole or in part in the form of one or more global certificates that will be deposited with a depository identified in a prospectus supplement. 10 17 The specific terms of the depository arrangements with respect to any debt securities of a series will be described in a prospectus supplement. Unless otherwise specified in a prospectus supplement, debt securities issued in the form of a global certificate to be deposited with a depository will be represented by a global certificate registered in the name of the depository or its nominee. Upon the issuance of a global certificate in registered form, the depository for the global certificate will credit, on its book-entry registration and transfer system, the respective principal amounts of the debt securities represented by the global certificate to the accounts of institutions that have accounts with the depository or its nominee. The accounts to be credited shall be designated by the underwriters or agents of the debt securities or by us, if the debt securities are offered and sold directly by us. Ownership of beneficial interests in a global certificate will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests by participants in a global certificate will be shown on, and the transfer of that ownership interest will be effected only through, records maintained by the depository or its nominee for the global certificate. Ownership of beneficial interests in a global certificate by persons that hold through participants will be shown on, and the transfer of that ownership interest within such participant will be effected only through, records maintained by such participant. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in a global certificate. So long as the depository for a global certificate in registered form, or its nominee, is the registered owner of the global certificate, the depository or its nominee, as the case may be, will be considered the sole owner or holder of the debt securities of the series represented by the global certificate for all purposes under the indentures. Except as set forth below, owners of beneficial interests in a global certificate will not be entitled to have debt securities of the series represented by the global certificate registered in their names, will not receive or be entitled to receive physical delivery of debt securities in definitive form, and will not be considered the owners or holders of the global certificate under the applicable indenture. Payment of principal of, premium, if any, and any interest on debt securities of a series registered in the name of or held by a depository or its nominee will be made to the depository or its nominee, as the case may be, as the registered owner or the holder of a global certificate representing the debt securities. None of Centex, the trustee, any paying agent, or the applicable debt security registrar for the debt securities will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a global certificate for such debt securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. We expect that the depository for debt securities of a series, upon receipt of any payment of principal, premium or interest in respect of a permanent global certificate, will credit immediately participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global certificate as shown on the records of the depository. We also expect that payments by participants to owners of beneficial interests in a global certificate held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and such payments will be the responsibility of the participants. However, we have no control over the practices of the depository and/or the participants and there can be no assurance that these practices will not be changed. Unless it is exchanged in whole or in part for debt securities in definitive form, a global certificate may generally be transferred only as a whole unless it is being transferred to certain nominees of the depository. Unless otherwise stated in any prospectus supplement, The Depository Trust Company, New York, New York will act as depository. Beneficial interests in global certificates will be shown on, and transfers of global certificates will be effected only through, records maintained by The Depository Trust Company and its participants. 11 18 EVENTS OF DEFAULT "Event of Default" when used in an indenture will mean any of the following: o failure to pay the principal or any premium on any debt security when due; o failure to deposit any sinking fund payment when due; o failure to pay interest on any debt security for 30 days; o failure to perform any other covenant in the indenture that continues for 60 days after being given written notice; o certain events in bankruptcy, insolvency or reorganization of Centex; or o any other Event of Default included in any indenture or supplemental indenture. (Section 7.01.) An Event of Default for a particular series of debt securities does not necessarily constitute an Event of Default for any other series of debt securities issued under an indenture. The trustee may withhold notice to the holders of debt securities of any default, except in the payment of principal or interest, if it considers such withholding of notice to be in the best interests of the holders. If an Event of Default for any series of debt securities occurs and continues, the trustee or the holders of at least 25% of the total principal amount of the debt securities of the series may declare the entire principal of that series due and payable immediately. (Section 7.01.) If this happens, subject to certain conditions, the holders of a majority of the aggregate principal amount of the debt securities of that series can void the declaration. (Section 7.01.) The trustee will not be charged with knowledge of any Event of Default other than our failure to make principal and interest payments unless actual written notice is received by the trustee. (Section 7.01.) The indentures limit the right to institute legal proceedings. No holder of any debt securities will have the right to bring a claim under an indenture unless o the holder has given written notice of default to the trustee; o the holders of not less than 25% of the aggregate principal amount of debt securities of such series shall have made a written request to the trustee to bring the claim and furnished the trustee such reasonable indemnification as it may require; o the trustee has not commenced such action within 60 days of receipt of such notice and indemnification; and o no direction inconsistent with such request has been given to the trustee by the holders of not less than a majority of the aggregate principal amount of the debt securities of the series then outstanding. Subject to applicable law and any applicable subordination provisions, the holders of debt securities may enforce payment of the principal of or premium, if any, or interest on their debt securities. No holder of debt securities of a particular series has the right to prejudice the rights or obtain priority or preference over the rights of any other holder of debt securities of such series. (Section 7.04.) The holders of a majority of the aggregate principal amount of any series of debt securities may direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any power conferred on the trustee. The trustee, however, may decline to follow such direction if, being advised by counsel, the trustee determines that the action is not lawful. In addition, the trustee may refuse to act if it in good faith determines that the action would unduly prejudice the holders of the debt securities not taking part in the action or would impose personal liability on the trustee. (Section 7.06.) 12 19 Each indenture provides that, in case an Event of Default in respect of a particular series of debt securities has occurred, the trustee is to use the degree of care of a prudent man in the conduct of his own affairs. (Section 8.01.) Subject to such provisions, the trustee is under no obligation to exercise any of its rights or power under the indentures at the request of any of the holders of the debt securities of such series unless they have furnished to the trustee security or indemnity in reasonable amounts against the costs, expenses and liabilities which may be incurred by the trustee. (Section 8.02.) We will be required to furnish to the trustee an annual statement as to the fulfillment by Centex of all of our obligations under the relevant indenture. (Section 5.06.) DEFEASANCE OF DEBT SECURITIES We will be discharged from our obligations on the debt securities of any series at any time we deposit with the trustee sufficient cash or government securities to pay the principal, interest, any premium and any other sums due to the stated maturity date or a redemption date of the debt securities of the series. If this happens, the holders of the debt securities of the series will not be entitled to the benefits of the indenture except for registration of transfer and exchange of debt securities and replacement of destroyed, lost, stolen or mutilated debt securities. (Section 13.01.) Under federal income tax law as of the date of this prospectus, a discharge may be treated as an exchange of the related debt securities. Each holder might be required to recognize a gain or loss equal to the difference between the holder's cost or other tax basis for the debt securities and the value of the holder's interest in the trust. Holders might be required to include as income a different amount than would be includable without the discharge. We urge you to consult your tax adviser as to the consequences of a discharge, including the applicability and effect of tax laws other than the federal income tax law. CONSOLIDATION, MERGER OR SALE OF CENTEX Each indenture generally permits us to consolidate or merge with another corporation. The indentures also permit us to sell all or substantially all of our property and assets. If this happens, the remaining or acquiring corporation shall assume all of our responsibilities and liabilities under the indentures including the payment of all amounts due on the debt securities of each series outstanding and performance of the covenants in the indentures. However, we will only consolidate or merge with or into any other corporation or sell all or substantially all of our assets according to the terms and conditions of the indentures. The remaining or acquiring corporation will be substituted for us in the indentures with the same effect as if it had been an original party to the indenture. Thereafter, the successor corporation may exercise our rights and powers under any indenture, in our name or in its own name. Any act or proceeding required or permitted to be done by our Board of Directors or any of our officers may be done by the board or officers of the successor corporation. (Article Twelve.) MODIFICATION OF THE INDENTURES Under each indenture we may modify rights and obligations and the rights of the holders with the consent of the holders of a majority in aggregate principal amount of the outstanding debt securities of each series affected by the modification. We cannot, however, modify the principal or interest payment terms, or reduce the percentage required for modification, against any holder without its consent. We may also enter into supplemental indentures with the trustee, without obtaining the consent of the holders of any series of debt securities, to cure any ambiguity or to correct or supplement any provision of an indenture or any supplemental indenture which may be defective or inconsistent with any other provision, to pledge any property to or with the trustee or to make any other provisions with respect to matters or questions arising under the indentures, provided that such action does not adversely affect the interests of the holders of the debt securities. We may also enter into supplemental indentures without the consent of holders of any series of debt securities to set forth the terms of additional series of debt securities, to evidence the succession of another person to our obligations under the indenture or to add to our covenants. (Article Eleven.) 13 20 CERTIFICATES AND OPINIONS TO BE FURNISHED TO TRUSTEE Each indenture provides that, in addition to other certificates or opinions that may be specifically required by other provisions of an indenture, every time we ask the trustee to take action under such indenture, we must provide a certificate of certain of our officers and an opinion of counsel, who may be our counsel, stating that, in the opinion of the signers, all conditions precedent to such action have been complied with. (Section 15.07.) REPORT TO HOLDERS OF DEBT SECURITIES We will provide audited financial statements annually to holders of debt securities. (Section 6.03.) The trustee is required to submit an annual report to the holders of the debt securities regarding, among other things, the trustee's eligibility to serve as such, the priority of the trustee's claims regarding certain advances made by it, and any action taken by the trustee materially affecting the debt securities. THE TRUSTEE Chase Bank of Texas, National Association, whose Corporate Trust Office is located at 2200 Ross Avenue, Fifth Floor, Dallas, Texas 75201, will be the trustee under the subordinated indenture and the senior indenture. Chase Bank of Texas, National Association also serves as trustee with respect to our $100,000,000 8.75% subordinated notes due March 1, 2007 and our $100,000,000 7-3/8% subordinated notes due June 1, 2005, all previously issued under the subordinated indenture, as supplemented by a subordinated indenture supplement dated as of March 12, 1987 and a subordinated indenture supplement dated as of June 9, 1995, respectively. Chase Bank of Texas, National Association also serves as trustee with respect to our $15,000,000 6.40% senior notes due October 25, 2002, our $50,000,000 floating rate senior notes due April 28, 2000 and our $10,000,000 floating rate senior notes due May 19, 2000, all previously issued under the senior indenture, as supplemented by a senior indenture supplement dated as of October 1, 1998, respectively. Pursuant to the indentures and the Trust Indenture Act of 1939, any uncured Event of Default with respect to any series of debt securities will force the trustee to resign as trustee under the applicable indenture. If the trustee resigns, a successor trustee will be appointed in accordance with the terms and conditions of the applicable indenture. Centex and its affiliates maintain other banking relationships in the ordinary course of business with the trustee and its affiliates. The trustee may resign or be removed by us with respect to one or more series of debt securities and a successor trustee may be appointed to act with respect to any such series. The holders of a majority in aggregate principal amount of the debt securities of any series may remove the trustee with respect to the debt securities of such series. (Section 8.10.) Each indenture contains certain limitations on the right of the trustee thereunder, in the event that it becomes a creditor of Centex, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. (Section 8.13.) RATINGS OF OUR DEBT SECURITIES BY RATING AGENCIES Particular series of debt securities may be rated by one or more nationally recognized statistical rating agencies. The rating agency or agencies and rating or ratings to be assigned with respect to a series of debt securities will be specified in the prospectus supplement for the series of debt securities. METHOD FOR CALLING MEETINGS OF THE HOLDERS OF DEBT SECURITIES Each indenture contains provisions describing how meetings of the holders of debt securities of a series may be convened. A meeting may be called at any time by the trustee, and also, upon request, by us or the holders of at least 10% in principal amount of the outstanding debt securities of a series. A notice of the meeting must always be 14 21 given in the manner described under "-Notices to Holders of Debt Securities" below. Generally speaking, except for any consent that must be given by all holders of a series as described under "-Modification of the Indentures" above, any resolution presented at a meeting of the holders of a series of debt securities may be adopted by the affirmative vote of the holders of a majority in principal amount of the outstanding debt securities of that series, unless the indenture allows the action to be voted upon to be taken with the approval of the holders of a different specific percentage of principal amount of outstanding debt securities of a series. In that case, the holders of outstanding debt securities of at least the specified percentage must vote in favor of the action. Any resolution passed or decision taken at any meeting of holders of debt securities of any series in accordance with the applicable indenture will be binding on all holders of debt securities of that series and any related coupons, unless, as discussed in "-Modification of the Indentures" above, the action is only effective against holders that have approved it. The quorum at any meeting called to adopt a resolution, and at any reconvened meeting, will be holders holding or representing a majority in principal amount of the outstanding debt securities of a series. GOVERNING LAW Each indenture and each series of debt securities will be governed by and construed in accordance with the laws of the State of Texas. NOTICES TO HOLDERS OF DEBT SECURITIES Notices to holders of debt securities will be mailed to the addresses of the holders listed in the senior debt security register or the subordinated debt security register, as applicable. PLAN OF DISTRIBUTION We may sell the offered securities (a) through agents; (b) through underwriters or dealers; or (c) directly to one or more purchasers. SALE OF DEBT SECURITIES BY AGENTS Offered securities may be sold through agents designated by us. The agents agree to use their reasonable best efforts to solicit purchases for the period of their appointment. SALE OF DEBT SECURITIES BY UNDERWRITERS If underwriters are used in the sale, the offered securities will be acquired by the underwriters for their own account. The underwriters may resell the securities in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the securities will be subject to certain conditions. The underwriters will be obligated to purchase all the securities of the series offered if any of the securities are purchased. Any initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. DIRECT SALES OF OUR DEBT SECURITIES Offered securities may also be sold directly by us. In this case, no underwriters or agents would be involved. GENERAL INFORMATION ABOUT OUR PLAN OF DISTRIBUTION Underwriters, dealers and agents that participate in the distribution of the offered securities may be underwriters as defined in the Securities Act of 1933, and any discounts or commissions received by them from us and any profit on the resale of the offered securities by them may be treated as underwriting discounts and commissions under the Securities Act. Any underwriters or agents will be identified and their compensation described in a prospectus supplement. 15 22 We may have agreements with the underwriters, dealers and agents to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments which the underwriters, dealers or agents may be required to make. If we enter into any indemnification agreements of this nature, we will describe each of those agreements in the prospectus supplement. Underwriters, dealers and agents may engage in transactions with, or perform services for, us or our subsidiaries in the ordinary course of their businesses. LEGAL OPINIONS Raymond G. Smerge, Esq., our Executive Vice President, Chief Legal Officer and Secretary, will issue an opinion about the legality of the offered securities for us. Certain legal matters in connection with the offered securities will be passed upon for us by Thompson & Knight, P.C., Dallas, Texas, our special counsel. Any underwriters will be advised about other issues relating to any offering by their own legal counsel. EXPERTS Arthur Andersen LLP, independent accountants, audited our financial statements and schedules incorporated by reference in this prospectus and elsewhere in the registration statement. These documents are incorporated by reference herein in reliance upon the authority of Arthur Andersen as experts in accounting and auditing in giving the report. 16 23 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION SEC registration fee.................................................... $ 69,500 Trustee's fees and expenses (including legal fees)...................... 20,000 Accounting fees and expenses............................................ 25,000 Legal fees and expenses................................................. 25,000 Printing expenses....................................................... 10,000 Blue Sky fees and expenses (including legal fees)....................... 10,000 Rating Agency fees...................................................... 65,000 Miscellaneous........................................................... 5,500 ----------- Total................................................................... $ 230,000 ===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Registrant is a Nevada corporation. Pursuant to the provisions of Section 78.751 of the Nevada General Corporation Law, every Nevada corporation has authority to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause or belief his conduct was unlawful. Under Nevada law, the Registrant also has the authority to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation, to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust of other enterprise against expenses including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. No indemnification shall be made, however, for any claim, issue or matter as to which a person has been adjudged by a court of competent jurisdiction to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court determines that in view of all the circumstances, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. To the extent any person referred to in the two immediately preceding paragraphs is successful on the merits or otherwise in defense of any action, suit or proceeding, the Nevada General Corporation Law provides that such person must be indemnified by the corporation against expenses including attorneys' fees, actually and reasonably incurred by him in connection with the defense. Section 78.751 of the Nevada General Corporation Law requires the corporation to obtain a determination that any discretionary indemnification is proper under the circumstances. Such a determination must be made by the corporation's stockholders; its board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding; or under certain circumstances, by independent legal counsel. The Articles of Incorporation of the Registrant provide for indemnification of its directors and officers to the extent provided by Nevada law. II-1 24 In addition, Section 78.037 of the Nevada General Corporation Law permits Nevada corporations to include in their articles of incorporation a provision eliminating the personal liability of their directors and officers, to the corporation or stockholders, for damages resulting from their breach of fiduciary duties. An amendment to the Articles of Incorporation of the Registrant was adopted by its stockholders at the annual meeting held on July 15, 1987 in order to effect the permitted limitation on liability. This limitation on liability is also reflected in the Bylaws of the Registrant. The Bylaws of the Registrant provide that the corporation shall indemnify its directors, officers, employees and agents to the fullest extent provided by the Nevada General Corporation Law and its Articles of Incorporation. In addition, the Bylaws of the Registrant provide for indemnification to the same extent of any director, officer or employee of the corporation who serves in any fiduciary capacity with respect to any profit sharing, pension or other type of welfare plan or trust for the benefit of employees of the corporation or its subsidiaries. Reference is also made to the indemnification provisions of Section 8 of the form Underwriting Agreement filed as Exhibit 1.1 hereto for provisions relating to the indemnification of directors, officers and controlling persons against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Registrant has entered into indemnification contracts with its directors and may enter into similar contracts from time to time with certain officers and employees of the Registrant and its subsidiaries who are not directors of the Registrant. The general effect of the indemnification contracts is to provide that the indemnitees shall be indemnified to the fullest possible extent permitted by the law against all expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by them in any action or proceeding, including any action by or in the right of the Registrant, by reason of their service in the foregoing capacities. The provisions of the aforementioned indemnification contracts were approved by the Registrant's stockholders at the annual meeting of stockholders held on July 16, 1986. The Registrant also maintains insurance to protect itself and its directors, officers, employees and agents against expenses, liabilities and losses incurred by such persons in connection with their service in the foregoing capacities. The foregoing summaries are necessarily subject to the complete text of the statute, articles of incorporation, bylaws, agreements and insurance policies referred to above and are qualified in their entirety by reference thereto. ITEM 16. EXHIBITS The information required by this Item 16 is set forth in the Index to Exhibits accompanying this Registration Statement. ITEM 17. UNDERTAKINGS (a) Rule 415 offering. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registrant Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; II-2 25 Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration Statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) Filings incorporating subsequent Exchange Act documents by reference. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Acceleration of effectiveness. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions of Item 15, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (d) Rule 430A offering. The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 26 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, Centex Corporation has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State of Texas, as of May 14, 1999. CENTEX CORPORATION By: /s/ Laurence E. Hirsch ---------------------------- Laurence E. Hirsch Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
SIGNATURES CAPACITY IN WHICH SIGNED DATE ---------- ------------------------ ---- /s/ Laurence E. Hirsch Chairman of the Board and May 14, 1999 --------------------------------- Chief Executive Officer; Laurence E. Hirsch Director (Principal Executive Officer) * Vice Chairman of the Board and May 14, 1999 --------------------------------- Chief Financial Officer; David W. Quinn Director (Principal Financial Officer) * Controller May 14, 1999 --------------------------------- (Principal Accounting Officer) Barry G. Wilson * Director May 14, 1999 --------------------------------- Alan B. Coleman * Director May 14, 1999 --------------------------------- Dan W. Cook III * Director May 14, 1999 --------------------------------- Juan L. Elek * Director May 14, 1999 --------------------------------- Clint W. Murchison, III
27
SIGNATURES CAPACITY IN WHICH SIGNED DATE ---------- ------------------------ ---- * Director May 14, 1999 --------------------------------- Charles H. Pistor * Director May 14, 1999 --------------------------------- Paul R. Seegers * Director May 14, 1999 --------------------------------- Paul T. Stoffel
*By: /s/ Laurence E. Hirsch ------------------------------- Laurence E. Hirsch Attorney-in-fact 28 INDEX TO EXHIBITS
EXHIBIT NUMBER 1.1* Form of Underwriting Agreement, including form of Pricing Agreement 4.1 Restated Articles of Incorporation of the Registrant (filed as Exhibit 4.1 to the Joint Registration Statement (File No. 333-55717) of the Registrant, 3333 Holding Corporation and Centex Development Company, L.P. on Form S-8, and incorporated herein by reference) 4.2 By-laws of the Registrant (filed as Exhibit 3.2 to the Joint Annual Report of the Registrant, 3333 Holding Corporation and Centex Development Company, L.P. on Form 10-K for the fiscal year ended March 31, 1993, and incorporated herein by reference) 4.3 Indenture with respect to Senior Debt Securities ("Senior Indenture"), including form of Senior Debt Security, dated as of October 1, 1998, between the Registrant and Chase Bank of Texas, National Association, as Trustee (filed as Exhibit 4.1 to the Registrant's Form 8-K dated October 21, 1998 and incorporated herein by reference) 4.4* Form of Indenture Supplement to Senior Indenture 4.5 Indenture with respect to Subordinated Debt Securities ("Subordinated Indenture"), including form of Subordinated Debt Security, dated as of March 12, 1987, between the Registrant and Texas Commerce Bank National Association, as Trustee 4.6* Form of Indenture Supplement to Subordinated Indenture 5.1 Opinion of Raymond G. Smerge, Esq. 12.1++ Computation of Ratio of Earnings to Fixed Charges 23.1 Consent of Arthur Andersen LLP 23.2 Consent of Raymond G. Smerge, Esq. (contained in his opinion filed as Exhibit 5.1) 24.1 Power of attorney of certain signatories (contained on signature page included in Part II of the Registration Statement) 25.1++ Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, with respect to Trustee for Senior Debt Securities 25.2++ Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, with respect to Trustee for Subordinated Debt Securities 99.1 Form of Prospectus Supplement (contained in Part I of this Registration Statement)
- ---------------------- * To be filed by amendment or by Form 8-K ++ Previously filed EX-4.5 2 SUBORDINATED INDENTURE 1 EXHIBIT 4.5 - -------------------------------------------------------------------------------- CENTEX CORPORATION Issuer AND TEXAS COMMERCE BANK-DALLAS, N.A. Trustee --------------- I N D E N T U R E Dated as of March 12, 1987 --------------- SUBORDINATED DEBT SECURITIES (Issuable in Series) 2 TIE-SHEET of provisions of the Trust Indenture Act of 1939 with the Indenture, dated as of March 12, 1987, between Centex Corporation and Texas Commerce Bank - Dallas, N.A., as Trustee:
Section Section of Act of Indenture - ------ ------------ 310 (a)(1) 8.09 (a)(2) 8.09 (a)(3) Not applicable (a)(4) Not applicable (b) 8.08 and 8.10(b) (c) Not applicable 311 (a) 8.13 (b) 8.13 (c) Not applicable 312 (a) 6.01 and 6.02(a) (b) 6.02(b) (c) 6.02(c) 313 (a) 6.04(a) (b)(l) Not applicable (b)(2) 6.04(b) (c) 6.04(c) (d) 6.04(d) 314 (a)(l) 6.03(a) (a)(2) 6.03(b) (a)(3) 6.03(c) (b) Not applicable (c)(l) 15.07 (c)(2) 15.07 (c)(3) Not applicable (d) Not applicable (e) 15.07 315 (a)(l) 8.01(a)(1) (a)(2) 8.01(a)(2) (b) 7.07 (c) 8.01 (d) 8.01 (e) 7.08
(i) 3
Section Section of Act of Indenture - ------ ------------ 316 (a)(l) 7.01 and 7.06 (a)(2) Omitted (a) last sentence 9 04 (b) 7.04 317 (a) 7.02 (b) 5.05 318 (a) 15.09
- ---------- This tie-sheet is not a part of the Indenture as executed. (ii) 4 INDENTURE, dated as of March 12, 1987, between CENTEX CORPORATION, a corporation duly organized and existing under the laws of the State of Nevada (hereinafter sometimes referred to as the "Company"), and TEXAS COMMERCE BANK-DALLAS, N.A., a national banking association existing under the laws of the United States (hereinafter sometimes referred to as the "Trustee"). PRELIMINARY STATEMENT The Company has duly authorized the execution and delivery of this Indenture to provide for one or more series of Subordinated Debt Securities, issuable as provided in this Indenture. Each series of such Subordinated Debt Securities will be issued only under a separate Series Supplement to this Indenture duly executed and delivered by the Company and the Trustee and limited to amounts therein prescribed. All covenants and agreements made by the Company herein are for the benefit and security of the holders of Subordinated Debt Securities. The Company is entering into this Indenture, and the Trustee is accepting the trust created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. ARTICLE ONE. DEFINITIONS. Section 1.01. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. All other terms used in this Indenture which are defined in the Trust Indenture Act of 1939 or which are by reference therein defined in the Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture as originally executed. Authorized Newspaper: The term "authorized newspaper" shall mean a newspaper printed in the English language and customarily published at least once a day for at least five days in each calendar week, whether or not published on Saturdays, Sundays or legal holidays, and of general circulation in the Borough of Manhattan, The City of New York. Whenever under the provisions of this Indenture two or more publications of a notice or other communication are required or permitted, such publications may be in the same or different newspapers. Board of Directors: The term "Board of Directors" shall mean the Board of Directors of the Company and duly authorized committees of such Board. (1) 5 Business Day: The term "business day" shall mean any day except a Saturday, a Sunday or a day on which banking institutions are legally authorized to close in The City of New York or Dallas, Texas. Capitalized Lease Obligation: The term "Capitalized Lease Obligation" shall mean any obligation of the Company, as lessee or guarantor, to pay rent under a lease of real or personal property, which obligation, in the judgment of the Company, is required to be capitalized on the balance sheet of the Company in accordance with generally accepted accounting principles. Certificate of a Firm of Independent Public Accountants: The term "Certificate of a Firm of Independent Public Accountants" shall mean a certificate signed by an individual, partnership or corporation engaged in accounting work who may be the accountants regularly employed by the Company. Each such certificate shall include the statements provided for in Section 15.07, if and to the extent required by the provisions thereof. Company: The term "Company" shall mean CENTEX CORPORATION, a Nevada corporation, and, subject to the provisions of Article Twelve, shall also include its successors and assigns. Corporate trust office: The term "corporate trust office" of the Trustee shall mean with respect to functions required to be transacted in New York, an office or agency of the Trustee in the Borough of Manhattan, City and State of New York, designated by the Trustee, from time to time, as the Trustee's corporate trust office for purposes of this Indenture which office at the date of the execution of this Indenture is located at Texas Commerce Trust Company of New York, 80 Broad Street, New York, New York 10004, and with respect to any other function to be performed by Trustee hereunder either at the foregoing address or at the principal corporate trust office of Trustee which office at the date of execution of this Indenture is located at 600 N. Pearl, Suite 344, Dallas, Texas 75201 or at any other office or agency so designated by the Trustee. Subordinated Debt Security; "outstanding" with reference to subordinated Debt Securities: The term "Subordinated Debt Security" or "Subordinated Debt Securities" shall mean a Subordinated Debt security or Subordinated Debt Securities, as the case may be, consisting of debentures, notes and/or other unsecured evidences of indebtedness, authenticated and delivered under this Indenture. (2) 6 The term "outstanding", when used with reference to Subordinated Debt Securities, shall, subject to the provisions of Section 9.04, mean, as of any particular time, all Subordinated Debt Securities authenticated and delivered by the Trustee under this Indenture, except (a) Subordinated Debt Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (b) Subordinated Debt Securities for the payment or redemption for which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent), provided that, if such Subordinated Debt Securities are to be redeemed, notice of such redemption shall have been given as in Article Four provided or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Subordinated Debt Securities in lieu of or in substitution for which other Subordinated Debt Securities shall have been authenticated and delivered pursuant to the terms of Section 2.08. Subordinated Debt Security Register; Subordinated Debt security Registrar: The terms "Subordinated Debt Security Register" and "Subordinated Debt Security Registrar" shall have the respective meanings specified in Section 2.06. Event of Default; default: The term "Event of Default" shall mean any event specified in Section 7.01, continued for the period of time, if any, and after the giving of notice, if any, therein designated. Unless the context otherwise requires, the term "default" shall mean any occurrence which is, or with notice or the lapse of time or both would become, an Event of Default; provided that any occurrence which would become an Event of Default pursuant to Section 7.01(c) hereof shall not be deemed a default (but may nonetheless constitute an Event of Default upon notice and lapse of time as provided in Section 7.01(c) for purposes of the Indenture until the expiration of five days after such occurrence shall first become known, or in the exercise of reasonable care should become known, to an officer of the Company. Holder: The term "holder", "holder of Subordinated Debt Securities", or other similar term, shall mean any person in whose name a Subordinated Debt Security shall at the time be registered in the Subordinated Debt Security Register kept for that purpose. (3) 7 Indenture: The term "Indenture" shall mean this instrument as originally executed, or, if amended or supplemented as herein provided, as so amended or supplemented. Officers' Certificate: The term "Officers' Certificate" shall mean a certificate signed by the Chairman of the Board, the President or any Vice President and by the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary of the Company. Each such certificate shall include the statements provided for in Section 15.07, if and to the extent required by the provisions thereof. Opinion of Counsel: The term "Opinion of Counsel" shall mean an opinion in writing signed by legal counsel who shall be satisfactory to the Trustee and may be counsel to the Company. Each such opinion shall include the statements provided for in Section 15.07, if and to the extent required by the provisions thereof. Responsible Officer: The term "responsible officer" when used with respect to the Trustee shall mean the chairman or the vice-chairman of the board of directors, the chairman of the executive committee of the board of directors, the president, any vice president, any second or assistant vice president, the cashier, any assistant cashier, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any senior trust officer or trust officer, or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject. Senior Indebtedness of the Company: The term "Senior Indebtedness of the Company" shall mean (a) the principal of, and premium, if any, and interest on, (i) indebtedness (other than the Subordinated Debt Securities and the Company's $2,100,000 convertible subordinated debenture due 1995) of the Company for money borrowed, whether or not evidenced by bonds, notes, debentures or similar obligations, including any guarantee by the Company of any indebtedness for money borrowed of any other person, whether any such indebtedness or guarantee is outstanding on the date of this Indenture or is hereafter created, assumed or incurred, (ii) Capitalized Lease Obligations of the Company, whether outstanding on the date of this Indenture or hereafter incurred, (iii) all indebtedness arising in favor of any bonding company under any performance or payment bond or other similar bond issued by a company in connection with any construction contract to which the Company is or was a party, and (iv) indebtedness or obligations incurred, assumed or guaranteed by the Company (whether outstanding on the date of this Indenture or hereafter created, assumed or incurred) in connection with the acquisition or improvement of any property or asset, tangible or intangible (including, without limitation, services or (4) 8 materials purchased or contracted for purchase in the ordinary course of the Company's business), or the acquisition by it or a Subsidiary of the Company of any other business, unless, in each case referred to in clauses (i), (ii), (iii) and (iv) above, by the terms of the instrument creating or evidencing the indebtedness it is provided that such indebtedness ranks on a parity with the Subordinated Debt Securities and is entitled to like rights of subrogation, or is subordinated to, or is otherwise not superior in right of payment to, the Subordinated Debt Securities; and (b) any other indebtedness, liability or obligation, contingent or otherwise, of the Company (any such indebtedness, liability or obligation being hereinafter in this definition referred to as an "Obligation"), and any guarantee, endorsement or other contingent obligation in respect of an Obligation of another, which is created, assumed or incurred by the Company after the date of this Indenture and which, when created, assumed or incurred, is specifically designated by the Company as Senior Indebtedness of the Company for the purposes hereof in the instrument creating or evidencing such Obligation or in the instrument creating or evidencing the Company's liability with respect to the Obligation of another; and (c) any refundings, renewals or extensions of any indebtedness, liability or obligation described in clause (a) or (b) above. Series: The term "Series" shall mean a separate series of Subordinated Debt Securities issued pursuant to this Indenture and the related Series Supplement. Series Supplement or Supplement: The term "Series Supplement" or "Supplement" shall mean an indenture supplemental to this Indenture, in substantially the form attached hereto as an exhibit, that authorizes a particular Series. Subsidiary: The term "Subsidiary" with respect to any person shall mean a corporation or association, more than 50% of the voting securities of which is owned by that person or by one or more of its other Subsidiaries, or by that person in conjunction with one or more of its other Subsidiaries. The term "voting securities" shall mean those securities of a corporation or association having voting power for the election of directors or trustees, either at all times or only so long as no senior class of securities has such voting power arising out of defaults in dividends or the existence of some other default, and the above percentage shall mean such number of units thereof as shall have such percentage of such voting power. Trust Indenture Act of 1939: The term "Trust Indenture Act of 1939" (except as herein otherwise expressly provided or unless the context otherwise requires) shall mean the Trust Indenture Act of 1939 as in force at the date of this Indenture as originally executed. (5) 9 Trustee: The term "Trustee" shall mean Texas Commerce Bank-Dallas, N.A., and, subject to the provisions of Article Eight, shall also include its successors and assigns. ARTICLE TWO. ISSUE, DESCRIPTION, FORM, EXECUTION, REGISTRATION OF TRANSFER AND EXCHANGE OF SUBORDINATED DEBT SECURITIES. Section 2.01. The Subordinated Debt Securities and the Trustee's certificate of authentication are to be substantially in the forms set forth in this Section 2.01, with such appropriate insertions, omissions, substitutions, amendments, changes and other variations as are required or permitted by this Indenture or any Series Supplement, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange on which the Subordinated Debt Securities may be listed or as may, consistently herewith, be determined by the officers executing such Subordinated Debt Securities as evidenced by their execution of the Subordinated Debt Securities. The definitive Subordinated Debt Securities shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by any Series Supplement or the rules of any securities exchange on which the Subordinated Debt Securities may be listed, all as determined by the officers executing such Subordinated Debt Securities, as evidenced by their execution of such Subordinated Debt Securities. (6) 10 The form of Subordinated Debt Securities and the Trustee's certificate of authentication are to be substantially in the following forms, respectively: [FORM OF FACE OF SUBORDINATED DEBT SECURITY] No. $ ---------------------- ------------------------ CENTEX CORPORATION [SUBORDINATED DEBT SECURITY] CENTEX CORPORATION, a corporation duly organized and existing under the laws of the State of Nevada (herein referred to as the "Company"), for value received, hereby promises to pay to _________________________________ or registered assigns, the principal sum of ________________ Dollars on __________, _____, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts, and to pay interest on said principal sum at the rate per annum specified in the title of this [Subordinated Debt security], with respect to interest accrued from [insert accrual date] to the date of the current interest payment, to the registered holder hereof as of the close of business on the _______ day of the month preceding the month in which an interest payment is due, in like coin or currency, all at any office or agency of the Company to be maintained by the Company pursuant to Section 5.02 of the Indenture, which at all times shall include an office or agency in the Borough of Manhattan, The City of New York, such interest payments to be made, except as otherwise provided in the Indenture hereinafter referred to, [insert interest frequency] on [insert payment dates], in each year, commencing _____________, 198_, until payment of said principal sum has been made or duly provided for; provided, however, that payment of interest may be made at the option of the Company by check mailed on or before such payment date to the address of the person entitled thereto as such address shall appear on the Subordinated Debt Security Register. This [Subordinated Debt Security] shall be deemed to be a contract made under the laws of the State of Texas, and for all purposes shall be construed in accordance with the laws of said State. Additional provisions of this [Subordinated Debt Security] are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth at this place. This [Subordinated Debt Security] shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Trustee under the Indenture. (7) 11 IN WITNESS WHEREOF, CENTEX CORPORATION has caused this instrument to be signed in its Corporate name by the facsimile signature of its President or a Vice President and by its Secretary or an Assistant Secretary by his signature or a facsimile thereof, and a facsimile of its corporate seal to be affixed hereunto or imprinted hereon. Dated: CENTEX CORPORATION By --------------------------------- [Title] ATTEST: - --------------------------- [Title] TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the [Subordinated Debt Securities] described in the within-mentioned Indenture. TEXAS COMMERCE BANK-DALLAS, N.A., as Trustee By -------------------------------- Authorized Signature (8) 12 [FORM OF REVERSE OF SUBORDINATION DEBT SECURITY] CENTEX CORPORATION This [Subordinated Debt Security] is one of a duly authorized issue of Subordinated Debt Securities of the Company issued and to be issued in one or more Series, and this [Subordinated Debt security] is one of the Series of Subordinated Debt Securities designated as its [Subordinated Debt Securities] (herein referred to as the [Subordinated Debt Securities]), limited to the aggregate principal amount of __________________ Million Dollars ($__________________), all issued or to be issued under and pursuant to an indenture dated as of ________, 198__ (herein referred to as the "Indenture"), duly executed and delivered by the Company to _____________ (referred to herein as the "Trustee"), to which Indenture and all indentures supplemental thereto (including the Series Supplement dated as of ____________, 198 _ which authorizes the [Subordinated Debt Securities]) reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Subordinated Debt Securities of each particular Series and the terms upon which the Subordinated Debt Securities of each Series are, and are to be, authenticated and delivered. All terms used in this Subordinated Debt Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. As provided in the Indenture, the Subordinated Debt Securities are issuable in Series which may vary as in the Indenture provided or permitted. [The indebtedness evidenced by the [Subordinated Debt Securities] is, to the extent and in the manner provided in the Indenture, subordinated and subject in right of payment to the prior payment in full of all Senior Indebtedness of the Company. As provided in the Indenture, each holder of this [Subordinated Debt Security], by his acceptance hereof, agrees to and shall be bound by all the provisions of the Indenture relating to such subordination and authorizes the Trustee to take such action in his behalf as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and appoints the Trustee his attorney-in-fact for any and all such purposes.] In case an Event of Default shall have occurred and be continuing with respect to the [Subordinated Debt Securities], the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture provides that in certain events such declaration and its consequences may be waived by the holders of a majority in aggregate principal amount of the [Subordinated Debt Securities] then outstanding. An Event of Default with respect to the Subordinated Debt Security of any other Series issued under the Indenture, including the failure to make any payment of principal or interest with respect thereto when and as due, will not be an Event of Default with respect to [Subordinated Debt Securities]. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of the [Subordinated Debt Securities] at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or (9) 13 eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the [Subordinated Debt Securities]; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any [Subordinated Debt Securities], or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable on the redemption thereof, without the consent of the holder of each [Subordinated Debt Security] so affected, or (ii) reduce the aforesaid percentage of [Subordinated Debt Securities], the consent of the holders of which is required for any such supplemental indenture, without the consent of the holders of all [Subordinated Debt Securities] then outstanding. It is also provided in the Indenture that the holders of a majority in aggregate principal amount of the [Subordinated Debt Securities] at the time outstanding may on behalf of the holders of all the [Subordinated Debt Securities] waive any past default under the Indenture and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any of the [Subordinated Debt Securities]. Any such consent or waiver by the holder of this [Subordinated Debt Security] (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this [Subordinated Debt Security] and of any [Subordinated Debt Security] issued in exchange or substitution herefor, whether or not any notation of such consent or waiver is made upon this [Subordinated Debt Security]. Subject to the rights of holders of Senior Indebtedness of the Company set forth in the Indenture, no reference herein to the Indenture and no provision of this [Subordinated Debt Security] or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest. on this [Subordinated Debt Security] at the place, at the respective times, at the rate and in the currency herein prescribed. The [Subordinated Debt Securities] are issuable in registered form in denominations of $1,000 and any integral multiple of $l,000. [As provided in the Indenture, the [Subordinated Debt Securities] may be redeemed, at the option of the Company, as a whole or from time to time in part (otherwise than through the operation of the Sinking Fund), at any time prior to maturity, upon the notice referred to below, [on terms specified in the Series Supplement]. Notwithstanding the foregoing, no such redemption may be made prior to ________, 19 ___ , directly or indirectly from or in anticipation of moneys borrowed by the Company at an interest cost which is less than [interest rate of the [Subordinated Debt Securities] as specified in the Series Supplement.] [The [Subordinated Debt Securities] are entitled to the benefits of a Sinking Fund, operation of the provisions of which is required to begin on ____________, 19 __ as provided in the Series Supplement. The [Subordinated Debt Securities] are subject to redemption (on notice as set forth below) through the operation of the Sinking Fund at a redemption price equal to the principal amount thereof, together with accrued interest to the date fixed for redemption.] (10) 14 Notice of redemption shall be given by mailing by first-class mail a notice of such redemption not less than 20 nor more than 60 days prior to the date fixed for redemption to the holders of [Subordinated Debt Securities] to be redeemed to their last addresses as they shall appear upon the Subordinated Debt Security Register for the [Subordinated Debt Securities], all as provided in the Indenture. Upon due presentment for registration of transfer of this [Subordinated Debt Security] at any designated office or agency of the Company to be maintained by the Company pursuant to Section 5.02 of the Indenture, which at all times shall include an office or agency in the Borough of Manhattan, The City of New York, a new [Subordinated Debt Security] or [Subordinated Debt Securities] of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange herefor, subject to the limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in connection therewith, and the [Subordinated Debt Securities] may in like manner be exchanged for one or more new [Subordinated Debt Securities] of other authorized denominations but of the same aggregate principal amount. The Company, the Trustee, any paying agent and any Subordinated Debt Security Registrar (as defined in the Indenture) for the [Subordinated Debt Securities] may deem and treat the registered holder hereof as the absolute owner of this [Subordinated Debt Security] (whether or not this [Subordinated Debt Security] shall be overdue and notwithstanding any notation of ownership or other writing hereon made by anyone other than the Company or any such Subordinated Debt Security Registrar), for the purpose of receiving payment hereof or on account hereof and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any such Subordinated Debt Security Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of, or premium, if any, or interest on, this [Subordinated Debt Security], or for any claim based hereon or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. --------------- Section 2.02. The aggregate principal amount of Subordinated Debt Securities which may be authenticated and delivered under this Indenture is unlimited. The Subordinated Debt Securities may, at the election of and as authorized by the Board of Directors, be issued in one or more Series, and a particular Series shall be designated as the Board of Directors may determine. Each Subordinated Debt Security shall bear upon its face the designation so selected for the Series for which it belongs. All Subordinated Debt (11) 15 Securities of the same Series shall be identical in all respects except for the denominations thereof. Each Series of Subordinated Debt Securities shall be created by a Series Supplement authorized by the Board of Directors in establishing the terms and provisions of such Series. The several Series may differ as between Series, in respect of any of the following matters: (1) designation of the Series; (2) the maximum aggregate principal amount of the Series; (3) accrual date; (4) interest rate; (5) stated maturity of principal; (6) payment dates; (7) authorized denominations; (8) currency of issue and payment; (9) redemption dates; (10) provisions relating to redemption of the related Series on an optional or mandatory basis by the Company or pursuant to a sinking fund; (11) subordination provisions; and (12) any other provisions expressing or referring to the terms and conditions upon which the Subordinated Debt Securities of that Series are to be issued under this Indenture which are not in conflict with the provisions of this Indenture, or any provisions expressly amending or modifying the terms of this Indenture with respect to the Series of Subordinated Debt Securities to which such Series Supplement relates. In authorizing issuance of any Series, the Board of Directors shall determine and specify all matters in respect of the Subordinated Debt securities of such Series set forth in clauses (1) to (12) inclusive and shall also determine and specify the form of Subordinated Debt Securities of such Series. Section 2.03. The Subordinated Debt Securities shall be executed by the Company and be delivered to the Trustee for authentication, and the Trustee shall thereupon, or from time to time thereafter, authenticate and deliver said Subordinated Debt Securities to and upon the written order of the Company, signed by its President or a Vice President and by its Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, without any further action by the Company. Section 2.04. The Subordinated Debt Securities shall be issuable as registered Subordinated Debt Securities without coupons in denominations prescribed by the terms of the Series Supplement creating the particular Series. Each Subordinated Debt Security shall be dated the date of its authentication, shall bear interest from the applicable date, and shall be payable on the dates, as prescribed by the terms of the Series Supplement creating the particular Series. The person in whose name any Subordinated Debt Security is registered at the close of business on any record date (as hereinafter defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date (subject to the provisions of Article Four in the case of any Subordinated Debt Security or Subordinated Debt Securities, or portion thereof, redeemed on a date subsequent to the record date and on or prior to such interest payment date), except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the persons in whose names outstanding Subordinated Debt Securities are registered on a subsequent special record date established by notice given by mail by or on (12) 16 behalf of the Company to the holders of Subordinated Debt Securities not less than 15 days preceding such special record date, which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment. The term "record date" as used with respect to any interest payment date shall mean the day of the calendar month prescribed by the terms of the Series Supplement creating the particular Series preceding the day on which such interest payment date falls or, in the case of defaulted interest, the close of business on any special record date established as hereinabove provided. The principal of, and premium, if any, and interest on, the Subordinated Debt Securities shall be payable at the office or agency of the Company designated for that purpose in the Borough of Manhattan, The City of New York and any other office or agency of the Company designated for that purpose; provided, however, that interest may be payable at the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear on the Subordinated Debt Security Register. Section 2.05. The Subordinated Debt Securities shall be signed manually or by facsimile signature on behalf of the Company by its President or a Vice President under its corporate seal attested by the manual or facsimile signature of its Secretary or an Assistant Secretary. The seal of the Company may be in the form of a facsimile of the seal of the Company and may be impressed, affixed, imprinted or otherwise reproduced on the Subordinated Debt Securities. Only such Subordinated Debt Securities as shall bear thereon a certificate of authentication substantially in the form hereinabove recited, manually executed by the Trustee, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee upon any Subordinated Debt Security executed by the Company shall be conclusive evidence that the Subordinated Debt Security so authenticated has been duly authenticated and delivered hereunder. In case any officer of the Company who shall have signed any of the Subordinated Debt Securities shall cease to be such officer before the Subordinated Debt Securities so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Subordinated Debt Securities nevertheless may be authenticated and delivered or disposed of as though the person who signed such Subordinated Debt Securities had not ceased to be such officer of the Company; and any Subordinated Debt Security may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Subordinated Debt Security, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not an officer. Section 2.06. The Subordinated Debt Securities may be exchanged for a like aggregate principal amount of Subordinated Debt Securities of other authorized denominations of a like Series, Subordinated Debt Securities to be exchanged shall be surrendered at any office or agency to be maintained by the Company in accordance with the provisions of Section 5.02, and the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor the Subordinated Debt Security or Subordinated Debt Securities which the holder making the exchange shall be entitled to receive. (13) 17 The Company shall keep or cause to be maintained at said office or agency a register (herein sometimes referred to as the "Subordinated Debt Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall register Subordinated Debt Securities and shall register the transfer of Subordinated Debt Securities as in this Article Two provided. For the purposes of registration, exchange or registration of transfer of Subordinated Debt Securities, the Trustee is hereby appointed Subordinated Debt Security Registrar. Upon surrender for registration of transfer of any Subordinated Debt Security at said office or agency, the Company shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Subordinated Debt Security or Subordinated Debt Securities in a like aggregate principal amount and of a like Series. At all reasonable times the Subordinated Debt Security Register shall be open for inspection by the Trustee. No transfer of any Subordinated Debt Security shall be valid unless made at said office or agency. All Subordinated Debt Securities presented or surrendered for registration of transfer, exchange, redemption or payment shall (if so required by the Company or the Trustee) be accompanied by a written instrument or instruments of transfer, in form satisfactory to the Company and the Trustee, duly executed by the registered holder or his attorney duly authorized in writing. No service charge shall be made for any exchange or registration of transfer of Subordinated Debt Securities, or issue of new Subordinated Debt Securities in case of partial redemption, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. For the Subordinated Debt Securities of a Series which has a redemption provision, the Company shall not be required (i) to issue, register the transfer of, or exchange any Subordinated Debt Security during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of the Subordinated Debt Securities selected for redemption and ending on the day of such mailing, or (ii) to register the transfer of or exchange any Subordinated Debt Security so selected for redemption in whole or in part, except the unredeemed portions of Subordinated Debt Securities being redeemed in part. Section 2.07. Pending the preparation of definitive Subordinated Debt Securities, the Company may execute, and the Trustee shall authenticate and deliver, temporary Subordinated Debt Securities (printed, lithographed or typewritten), of any denomination, and substantially in the form of the definitive Subordinated Debt Securities, but with such omissions, insertions and variations as may be appropriate for temporary Subordinated Debt Securities, all as may be determined by the Company. Temporary Subordinated Debt Securities may be issued without a recital of any specific redemption prices as prescribed by the terms of the series Supplement creating the particular Series and may contain such reference to any provisions of this Indenture as may be appropriate. Every temporary Subordinated Debt Security shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Subordinated Debt Securities. The Company shall execute and furnish definitive Subordinated Debt Securities of the same Series as soon as practicable, and thereupon any or all temporary Subordinated Debt (14) 18 Securities of such Series may be surrendered in exchange therefor at the corporate trust office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such temporary Subordinated Debt Securities a like aggregate principal amount of definitive Subordinated Debt Securities of the same Series. Until so exchanged, the temporary Subordinated Debt Securities of such Series shall be entitled to the same benefits under this Indenture as definitive Subordinated Debt Securities of the same Series authenticated and delivered hereunder. Section 2.08. In case any temporary or definitive Subordinated Debt Security shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and the Trustee shall authenticate and deliver, a new Subordinated Debt Security of a like Series, in exchange and substitution for the mutilated Subordinated Debt Security or in lieu of and substitution for the Subordinated Debt Security destroyed, lost or stolen. In every case, the applicant for a substituted Subordinated Debt Security shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and to the Trustee evidence to their satisfaction of the destruction, loss or theft of such Subordinated Debt security and of the ownership thereof. The Trustee may authenticate any such substituted Subordinated Debt security and deliver the same upon the request or authorization of the Company, Upon the issuance of any substituted Subordinated Debt Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith, including fees and expenses of the Trustee. In case any Subordinated Debt Security which has matured or is about to mature or has been called for redemption shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Subordinated Debt Security of a like Series, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Subordinated Debt Security) if the applicant for such payment shall furnish the Company and the Trustee with such security or indemnity as may be required by them to save each of them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Subordinated Debt Security and of the ownership thereof. Every substituted Subordinated Debt Security issued pursuant to the provisions of this Section 2.08 upon evidence that any Subordinated Debt Security is destroyed, lost or stolen shall, with respect to such Subordinated Debt Security, constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Subordinated Debt Security shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Subordinated Debt Securities of the same Series duly issued hereunder. All Subordinated Debt Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Subordinated Debt Securities, and shall preclude any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. (15) 19 Section 2.09. All Subordinated Debt Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be canceled by it, and no Subordinated Debt Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. On request of the Company, the Trustee shall deliver to the Company canceled Subordinated Debt Securities held by the Trustee; provided, however, that the Trustee may at any time destroy any canceled Subordinated Debt Securities and deliver to the Company a certificate of such destruction. If the any of the Subordinated Debt Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Subordinated Debt Securities unless and until the same are delivered to the Trustee or surrendered to the Trustee for cancellation. Section 2.10. Except as provided in Section 3.01, nothing in this Indenture or in the Subordinated Debt Securities, expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and the holders of the Subordinated Debt Securities of a Series, any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all its covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Subordinated Debt Securities of such Series. ARTICLE THREE. SUBORDINATION OF SUBORDINATED DEBT SECURITIES. Section 3.01. Unless otherwise specified in the related Series Supplement and except as otherwise provided in Section 3.09, the Company, for itself, its successors and assigns, covenants and agrees, and each holder of Subordinated Debt Securities, by his acceptance thereof, likewise covenants and agrees, that, notwithstanding any other provisions of the Subordinated Debt Securities, this Indenture or any other agreement under which the Subordinated Debt Securities are outstanding, the payment of the principal of, and the premium or prepayment charge, if any, sinking funds and interest on, each and all of the Subordinated Debt Securities is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, to the prior payment in full of all Senior Indebtedness of the Company. Section 3.02. (a) Unless otherwise specified in the related Series Supplement and except as otherwise provided in Section 3.09, upon any distribution of assets of the Company, upon any dissolution, winding up, liquidation, reorganization, recapitalization or readjustment of the Company or its securities (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or any other arrangement or marshaling of the assets and liabilities of the Company, or otherwise): (1) the holders of Senior Indebtedness of the Company shall first be entitled to receive payment in full, or have provision satisfactory to such holders made for payment in full, of the principal thereof, and the premium or prepayment charge. if any, and interest thereon (including interest thereon accruing before or in respect of (16) 20 periods subsequent to the commencement of any such bankruptcy, insolvency, receivership, liquidation, reorganization or similar proceedings for dissolution or winding up of the Company), before the holders of the Subordinated Debt Securities are entitled to receive or retain any payment or distribution in respect of the principal of or interest on, the Subordinated Debt Securities, and (2) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the holders of the Subordinated Debt Securities would be entitled except for the provisions of these subparagraphs (a)-(h) shall be paid by the liquidating trustee or agent or other person making such payment or distribution, directly to the holders of the Senior Indebtedness of the Company or their representative or representatives, ratably according to the aggregate amounts remaining unpaid on account of the principal of, and premium or prepayment charge, if any, and interest on, the Senior Indebtedness of the Company held or represented by such holders (including interest thereon accruing before or in respect of periods subsequent to the commencement of any such proceedings as set forth above), to the extent necessary to make payment in full of all Senior Indebtedness of the Company remaining unpaid, after giving effect to any concurrent payment or distribution, or provision therefor, to or for the holders of such Senior Indebtedness of the Company. (b) Unless specified otherwise in the related Series Supplement and except as otherwise provided in Section 3.09, no payment on account of principal of, or premium, if any, or interest on, the Subordinated Debt Securities shall be made by the Company or received by any holder of the Subordinated Debt Securities, and no redemption, retirement, purchase or other acquisition of the Subordinated Debt Securities shall be made by the Company, (i) unless full payment of amounts then due for principal of, premium and prepayment charge, if any, and interest on, and sinking funds for, Senior Indebtedness of the Company has been made or duly provided for in money or money's worth and (ii) if, at the time thereof or immediately after giving effect thereto, there exists (and has not been waived) an event of default or an event which with lapse of time or notice or both would be an event of default under the provisions of any Senior Indebtedness of the Company or any agreement under which such Senior Indebtedness of the Company is then outstanding. As used in this subparagraph (b), the term "Senior Indebtedness of the Company" shall not include (x) Senior Indebtedness of the Company of the kind described in clause (a)(iii) or (a)(iv) of the definition of Senior Indebtedness of the Company in Section 1.01, or (y) any refundings, renewals or extensions of any Senior Indebtedness of the Company of the kind described in clause (x) above. (c) In the event that any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, shall be received by the holders of the Subordinated Debt Securities which such holders are not entitled to receive under these subparagraphs (a)-(h), such payment or distribution shall be held in trust by such holders of the Subordinated Debt Securities for, and immediately paid over to, the holders of Senior (17) 21 Indebtedness of the Company remaining unpaid or not provided for or their representative or representatives, ratably according to the aggregate amounts remaining unpaid on account of the principal of, and premium or prepayment charge, if any, and interest on, such Senior Indebtedness of the Company, until all such Senior Indebtedness of the Company shall have been paid in full, after giving effect to any concurrent payment or distribution or provision therefor, to the holders of such Senior Indebtedness of the Company. (d) Upon the payment in full of all Senior Indebtedness of the Company, the holders of the Subordinated Debt Securities, ratably according to the aggregate amounts owing thereon for principal, premium or prepayment charge, if any, and interest, shall be subrogated to the rights of holders of Senior Indebtedness of the Company to receive payments or distributions of assets of the Company applicable to Senior Indebtedness of the Company until the principal of, premium or prepayment charge, if any, and interest on the Subordinated Debt Securities shall be paid in full. No such payments or distributions applicable to Senior Indebtedness of the Company shall, as between the Company, its creditors other than holders of Senior Indebtedness of the Company and holders of the Subordinated Debt Securities, be deemed to be a payment by the Company on account of the Subordinated Debt Securities; it being understood that the provisions of these subparagraphs (a)-(h) are and are intended solely for the purpose of defining the relative rights of the holders of the Subordinated Debt Securities, on the one hand, and the holders of Senior Indebtedness of the Company, on the other hand. (e) Unless specified otherwise in the related Series Supplement and except as otherwise provided in Section 3.09, in the event the Subordinated Debt Securities are declared due and payable by the holders thereof prior to their final expressed maturity date (under circumstances when the foregoing provisions of these subparagraphs relative to bankruptcy, insolvency, receivership, liquidation, reorganization or similar proceedings for dissolution or winding up of the Company shall not be applicable) no payment of the principal of, or interest on, the Subordinated Debt Securities which is due solely by reason of such declaration shall be made, nor shall any application be made of any property or assets of the Company to the purchase or other acquisition or retirement of the Subordinated Debt Securities, unless, in either case, all principal of, and premium or prepayment charge, if any, and interest on, Senior Indebtedness of the Company shall be paid in full. (f) The holders of Senior Indebtedness of the Company may, at any time and from time to time, without the consent of or notice to the holders of the Subordinated Debt Securities, without incurring responsibility to the holders of the Subordinated Debt Securities and without impairing or releasing the obligations of the holders of the Subordinated Debt Securities hereunder to the holders of Senior Indebtedness of the Company: (i) change the manner, place or terms of payment or change or extend the time of payment of, or renew or alter Senior Indebtedness of the Company, or otherwise amend in any manner Senior Indebtedness of the Company or any instrument evidencing the same or any agreement under which Senior Indebtedness of the Company is outstanding; (ii) sell, exchange, release or otherwise deal with any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, Senior Indebtedness of the Company; (iii) release anyone liable in any manner for the collection of Senior Indebtedness of the Company; (iv) exercise or refrain from (18) 22 exercising any rights against the Company and others; and (v) apply any sums by whomsoever paid or howsoever realized to Senior Indebtedness of the Company. (g) Unless specified otherwise in the related Series Supplement and except as otherwise provided in Section 3.09, so long as any Senior Indebtedness of the Company shall remain outstanding, the holders of the Subordinated Debt Securities will not declare the Subordinated Debt Securities due and payable by reason of any default arising solely from the nonperformance or nonobservance of any provision in any instrument evidencing Senior Indebtedness of the Company or in any agreement under which any Senior Indebtedness of the Company is outstanding, and the holders of the Subordinated Debt Securities will not bring or join with any creditor (unless the holders of a majority in principal amount of outstanding Senior Indebtedness of the Company shall also join) in bringing any proceeding against the Company under any bankruptcy, reorganization, readjustment of debt, arrangement of debt, receivership, liquidation or insolvency law or statute now or hereafter in effect. (h) The foregoing provisions regarding subordination are and are intended solely for the purpose of defining the relative rights of the holders of Senior Indebtedness of the Company on the one hand and the holders of the Subordinated Debt Securities on the other hand. Such provisions are for the benefit of the holders of Senior Indebtedness of the Company and shall be enforceable by them directly against the holders of the Subordinated Debt Securities, and no holder of Senior Indebtedness of the Company shall be prejudiced in his right to enforce subordination of the Subordinated Debt Securities by any act or failure to act by the Company or anyone in custody of its assets or property. Nothing contained in the Subordinated Debt Securities, this Indenture or any other agreement under which the Subordinated Debt Securities are outstanding is intended to or shall impair, as between the Company and the holders of the Subordinated Debt Securities, the obligations of the Company, which are unconditional and absolute, to pay to the holders of the Subordinated Debt Securities the principal of, and interest on, the Subordinated Debt Securities as and when the same shall become due in accordance with their terms, nor shall anything herein prevent the holders of the Subordinated Debt Securities from exercising all remedies otherwise permitted by applicable law upon default under the Subordinated Debt Securities, this Indenture or any other agreement under which the Subordinated Debt Securities are outstanding, subject, however, to the rights under the foregoing subparagraphs of the holders of Senior Indebtedness of the Company. It is hereby expressly provided that the indebtedness evidenced by the Subordinated Debt Securities ranks on a parity with the Company's $2,100,000 convertible subordinated debenture due 1995, is entitled to like rights of subrogation and is otherwise not superior in right of payment to such debenture. Nothing in this Section 3.02 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 8.06. Section 3.03. No right of any present or future holder of any Senior Indebtedness of the Company to enforce subordination, as herein provided, shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or (19) 23 failure to act, in good faith, by any such holder, or by any non-compliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. Section 3.04. Nothing contained in this Article Three or elsewhere in this Indenture, or in any of the Subordinated Debt Securities, shall, however, (a) affect the obligation of the Company to make, or prevent the Company from making, at any time, except as provided in Section 3.02, payments of principal of, or premium, if any, or interest on, the Subordinated Debt Securities or as a Sinking Fund for the Subordinated Debt Securities, or (b) prevent the application by the Trustee or any paying agent of any moneys deposited with it hereunder by the Company to the payment of or on account of the principal of, or the premium, if any, or interest on, the Subordinated Debt Securities or as a Sinking Fund for the Subordinated Debt Securities, if the Trustee or such paying agent, as the case may be, did not have the written notice provided for in Section 3.06 on or prior to the second business day preceding the date such payment is due; provided, however, that, unless prior to the date on which the notice of redemption of any Subordinated Debt Securities is mailed pursuant to Article Four the Trustee or any paying agent shall have received such notice, the Trustee or any paying agent shall have full power and authority to receive any moneys which may be paid to it for such purpose and to apply the same, to the redemption of such Subordinated Debt Securities. Section 3.05. Each holder of Subordinated Debt Securities by his acceptance thereof authorizes and directs the Trustee in his behalf to take such action as may be necessary or appropriate to effectuates between the holders of Subordinated Debt Securities and the holders of Senior Indebtedness of the Company the subordination provided in this Article Three and appoints the Trustee his attorney-in-fact for such purpose. Section 3.06. Notwithstanding the provisions of this Article Three or any other provisions of this Indenture, neither the Trustee nor any paying agent shall be charged with knowledge of the existence of any Senior Indebtedness of the Company, or of any default in the payment of the principal of, or premium, if any, or interest on, or the existence of, or failure to comply with, any covenant of or condition in, any Senior Indebtedness of the Company, or of the maturity thereof by lapse of time, acceleration or otherwise, or of the existence of any other fact which would prohibit the making of any payment provided for hereunder to or by the Trustee, unless and until the Trustee or such paying agent shall have received written notice thereof from the Company or a holder, or a trustee or similar representative of any class, of Senior Indebtedness of the Company; and, prior to the receipt of any such written notice, the Trustee or any paying agent shall be entitled to assume that no such default or other failure exists; provided, however, that, unless on the second business day prior to the date upon which by the terms hereof any such moneys may become payable for any purpose (including, without limitation, the payment of either the principal of, or premium, if any, or interest on, any Subordinated Debt Security) the Trustee or any paying agent shall have received the notice provided for in this Section 3.06, then, anything herein contained to the contrary notwithstanding, the Trustee or any paying agent shall have full power and authority to receive such moneys and to apply the same to the purpose for which they were received, and shall not have any liability for any such application notwithstanding any notice to (20) 24 the contrary which may be received by it on or after such date; and provided, further, that, unless prior to the date on which the notice of redemption of any Subordinated Debt Securities of a Series is mailed pursuant to Article Four the Trustee or any paying agent shall have received such notice, then, anything herein contained to the contrary notwithstanding, the Trustee or any paying agent shall have full power and authority to receive any moneys which may be paid to it for such purpose and to apply the same to the redemption of such Subordinated Debt Securities, and shall not be affected by any notice to the contrary which may be received by it on or after such date. Section 3.07. Notwithstanding anything herein contained to the contrary, all the provisions of this Indenture shall, except as otherwise provided in Sections 3.09, 8.04, 8.06, 13.02 and 15.09, be subject to the provisions of this Article Three, so far as the same may be applicable thereto. Section 3.08. In case at any time any paying agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article Three shall in such case (unless the context shall otherwise require) be construed as extending to and including such paying agent within its meaning as fully for all intents and purposes as if such paying agent were named in this Article Three in place of the Trustee. Section 3.09. Money or securities deposited in trust with the Trustee pursuant to and in accordance with Section 13.01 shall be for the sole benefit of holders of Subordinated Debt Securities of such Series and, to the extent allocated for the payment of such Subordinated Debt Securities, shall not be subject to the subordination provisions of this Article Three. Otherwise, any deposit of moneys by the Company with the Trustee (whether or not in trust) for the payment of the principal of, or premium, if any, or interest or sinking funds on, any Subordinated Debt Securities of such Series shall be subject to the provisions of Sections 3.01 and 3.02 except that, if two business days prior to the date. on which by the terms of this Indenture any such moneys may become payable for any purpose (including, without limitation, the payment of either the principal of, or premium, if any, or interest on, any Subordinated Debt Security of such Series), the Trustee shall not have received with respect to such moneys the notice provided for in Section 3.06, then the Trustee or the paying agent shall have full power and authority to receive such moneys and to apply the same to the purpose for which they were received, and shall not have any liability for any such application notwithstanding any notice to the contrary which may be received by it during or after such two business days. This Section shall be construed solely for the benefit of the Trustee and paying agent and shall not otherwise affect the rights of holders of the Senior Indebtedness of the Company. (21) 25 ARTICLE FOUR. REDEMPTION OF SUBORDINATED DEBT SECURITIES - SINKING FUND. Section 4.01. Subject to the provisions of Article Three and to any contrary provisions set forth in the related Series Supplement, the Company may, at its option, at any time prior to maturity, redeem all, or from time to time any part, of the Subordinated Debt Securities of a Series, otherwise than through the operation of the Sinking Fund provided for in this Article Four, at the redemption prices and upon the conditions, if any, applicable thereto, as permitted by the related Series Supplement for redemption otherwise than through the operation of the Sinking Fund. The election of the Company to exercise such option shall be evidenced by an Officers' Certificate. Unless otherwise specified in the related Series Supplement, the Company may not, however, redeem any of the Subordinated Debt Securities of a Series pursuant to such option prior to the time prescribed by the terms of the Series Supplement creating the particular Series, directly or indirectly from or in anticipation of money borrowed having an interest cost to the Company of less than the interest rate applicable to the Subordinated Debt Securities of such Series. In the event the Company shall optionally redeem any Subordinated Debt Securities of a Series prior to such time, the Company shall deliver to the Trustee an Officers' Certificate stating that such redemption will comply with this requirement. Section 4.02. In case the Company shall desire to exercise such right to redeem all or, as the case may be, any part of the Subordinated Debt Securities in accordance with the right reserved so to do, it shall so notify the Trustee in writing and it shall give notice of such redemption to holders of the Subordinated Debt Securities to be redeemed as hereinafter in this Section 4.02 provided. Notice of redemption shall be given to the holders of Subordinated Debt Securities to be redeemed as a whole or in part by mailing by first-class mail a notice of such redemption not less than 20 nor more than 60 days prior to the date fixed for redemption to their last addresses as they shall appear upon the Subordinated Debt Security Register, but failure to give such notice by mail to the holders of any Subordinated Debt Security, or any defect therein, shall not affect the validity of the proceedings for the redemption of any other Subordinated Debt Security. Each such notice of redemption shall specify the date fixed for redemption and the redemption price at which Subordinated Debt Securities are to be redeemed, and shall state that payment of the redemption price of the Subordinated Debt Securities to be redeemed will be made at the offices or agencies to be maintained by the Company in accordance with the provisions of Section 5.02, upon presentation and surrender of such Subordinated Debt Securities, that interest accrued to the date fixed for redemption will be paid as specified in said notice, and that on and after said date interest thereon will cease to accrue. If less than all the Subordinated Debt Securities are to be redeemed, the notice of redemption shall specify the Subordinated Debt Securities to be redeemed as a whole or in part. In case any Subordinated Debt Security is to be redeemed in part only, the notice which relates to such Subordinated Debt Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such Subordinated Debt Security, (22) 26 a new Subordinated Debt Security or Subordinated Debt Securities of a like Series in principal amount equal to the unredeemed portion thereof will be issued. If less than all the Subordinated Debt Securities of a Series are to be redeemed, the Company shall give the Trustee at least 30 days' written notice in advance of the date fixed for redemption as to the aggregate principal amount of Subordinated Debt Securities of such Series to be redeemed, and thereupon the Trustee shall select, by random lot, the particular Subordinated Debt Securities of such Series to be redeemed in whole or in part and shall thereafter promptly notify the Company in writing of the numbers of the Subordinated Debt Securities of such Series or portions thereof to be redeemed. The selection of Subordinated Debt Securities to be redeemed may provide for the selection of portions (equal to $1,000 (unless otherwise provided in the related Series Supplement) or a multiple thereof) of the principal of Subordinated Debt Securities of a denomination larger than $1,000 (unless otherwise provided in the related Series Supplement). The Subordinated Debt Securities (or portions thereof) so selected shall be deemed duly designated for redemption for all purposes of this Indenture. For the purposes of such selection, the Company will close the subordinated Debt Security Register with respect to such Series for the purposes of exchange and transfer of Subordinated Debt Securities of such Series, for a period not exceeding 15 days. Section 4.03. If the giving of notice of redemption shall have been completed as above provided, the Subordinated Debt Securities or portions of Subordinated Debt Securities specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after such date fixed for redemption (unless the Company shall default in the payment of such Subordinated Debt Securities at the redemption price, together with interest accrued to the date fixed for redemption) interest on the Subordinated Debt Securities or portions of Subordinated Debt Securities so called for redemption shall cease to accrue. On presentation and surrender of such Subordinated Debt Securities at the place stated in said notice, the said Subordinated Debt Securities shall be paid and redeemed by the Company at the applicable redemption price, together with interest accrued to the date fixed for redemption. Upon presentation of any Subordinated Debt Security which is redeemed in part only, the Company shall execute, and the Trustee shall authenticate and deliver, at the expense of the Company, a new Subordinated Debt Security or Subordinated Debt Securities of a like Series in principal amount equal to the unredeemed portion of the Subordinated Debt Security so presented. Prior to the date fixed for the redemption of any Subordinated Debt Securities as provided in this Article Four, the Company shall deposit in trust with the Trustee or with any paying agent, or if and to the extent that it shall be acting as its own paying agent, the Company shall set aside, segregate and hold in trust, funds sufficient to redeem the Subordinated Debt Securities or portions thereof to be redeemed on such date, at the applicable redemption price, together with interest accrued to the date fixed for redemption. Section 4.04. As and for a Sinking Fund for the retirement of Subordinated Debt Securities of a Series, if as set forth in the related Series Supplement the Company so elects to (23) 27 include a Sinking Fund obligation in the terms of the Subordinated Debt Securities of a particular Series, the Company covenants that on or before the applicable date or dates set forth in the Series Supplement, it will pay to the Trustee a sum in cash sufficient to retire by redemption at the Sinking Fund redemption price the principal amount of the Subordinated Debt Securities of such Series on the date as prescribed by the terms of the Series Supplement creating the particular Series; provided, however, that in any such year in which such day is not a business day, such payment shall be made to the Trustee on the last business day preceding such day. In any year, the Company may, at its sole option, increase the payment required to be made pursuant to this Section 4.04 for such year by an amount as prescribed by the terms of such Series Supplement; provided that such increase shall be an integral multiple of $1,000 (unless otherwise provided in the related Series Supplement). All cash paid to the Trustee pursuant to the provisions of this Section 4.04 shall be applied in accordance with the provisions of this Article Four. Section 4.05. In lieu of making all or any part of any mandatory Sinking Fund payment as required pursuant to Section 4.04 in cash, the Company may (a) deliver to the Trustee for cancellation Subordinated Debt Securities of such Series theretofore issued and acquired by the Company at any time prior to the first day of the month next preceding the due date of such payment and not theretofore made the basis for the reduction of a Sinking Fund payment, or (b) deliver to the Trustee an Officers' Certificate setting forth the principal amount of any Subordinated Debt Securities of such Series theretofore redeemed and paid pursuant to the provisions of this Article Four (otherwise than through the operation of the mandatory Sinking Fund), or which have been duly called for redemption (otherwise than through the operation of the mandatory Sinking Fund) and the redemption price of which, together with the accrued interest thereon, shall have been deposited in trust for that purpose, as in this Article Four provided, and in either case not theretofore made the basis of the reduction of a Sinking Fund payment; and in each such case the principal amount of Subordinated Debt Securities of such Series required by Section 4.04 to be redeemed shall be reduced to the extent of the principal amount of the Subordinated Debt Securities of such Series so delivered or referred to in such certificate. Section 4.06. On or before the applicable date specified in the Series Supplement of each year in which the Company is obligated to make a Sinking Fund payment, the Company shall deliver to the Trustee: (a) An Officer's Certificate stating: (i) the manner in which the Company will fulfill its Sinking Fund obligation under this Article Four for that year: (ii) the amount of cash, if any, which the Company will pay to the Trustee on or before the next succeeding Sinking Fund payment date; (24) 28 (iii) the principal amount of Subordinated Debt Securities of such Series, if any, which the Company will surrender to the Trustee for cancellation in lieu of the payment of cash, and that such Subordinated Debt Securities were theretofore issued and acquired by the Company prior to said Sinking Fund payment date and have not theretofore been made the basis for the reduction of a Sinking Fund payment; and (iv) the principal amount of any Subordinated Debt Securities of such Series set forth in a certificate of the character described in clause (b) of Section 4.05, if any such certificate is to be concurrently delivered to the Trustee; (b) The Subordinated Debt Securities, if any, referred to in Section 4.06(a)(iii); and (c) The certificate, if any, referred to in Section 4.06(a)(iv). Section 4.07. On or before the applicable date specified in the Series Supplement or, if such day is not a business day, on the last business day preceding such date of each year in which the Company is obligated to make a Sinking Fund payment, the Company shall pay to the Trustee the amount of cash, if any, payable on or before such Sinking Fund payment date, after giving credit for the principal amount of any Subordinated Debt Securities delivered pursuant to clause (a) of Section 4.05 or referred to in any certificate delivered pursuant to clause (b) of Section 4.05, in respect of such Sinking Fund payment date. Section 4.08. In the event that the amount of cash specified in the certificate given pursuant to Section 4.06, plus the amount, if any, of cash then held pursuant to Section 4.10, is in excess of one percent of the required sinking fund payment, the Trustee shall, as soon as practicable after the receipt of such certificate, take the action herein specified to call for redemption, at the Sinking Fund redemption price, on the next succeeding Sinking Fund payment date, an amount of Subordinated Debt Securities of such Series sufficient to exhaust such funds as nearly as may be. Section 4.09. The Subordinated Debt Securities to be redeemed from time to time as provided in Section 4.04 or Section 4.08 shall be selected by the Trustee for redemption in the manner provided in Section 4.02 and notice thereof shall be given by the Trustee to the Company, and the Company hereby irrevocably authorizes the Trustee, in the name of and at the expense of the Company, to give notice on behalf of the Company of the call of such Subordinated Debt Securities, all in the manner and with the effect in this Article Four specified, except that, in addition to the matters required to be included in such notice by Section 4.02, such notice shall also state that the Subordinated Debt Securities therein designated for redemption are to be redeemed through operation of the Sinking Fund. Such Subordinated Debt Securities shall be redeemed and paid in accordance with such notice in the manner and with the effect provided in Sections 4.02 and 4.03. Subordinated Debt Securities redeemed through operation of the Sinking Fund are to be redeemed at the redemption price prescribed by the terms of the Series Supplement creating the (25) 29 particular Series for redemption through operation of the Sinking Fund, such price being sometimes referred to herein as the Sinking Fund redemption price. Section 4.10. In the event that at the time of the receipt of the Officers' Certificate required by Section 4.06 the sum of the amount of cash required to be paid to the Trustee pursuant to Section 4.07 and the amount of cash then in the hands of the Trustee in the Sinking Fund and not required for payment of Subordinated Debt Securities previously called for redemption or purchased through operation of the Sinking Fund, is one percent of the amount of the required Sinking Fund payment or less, such moneys shall not, unless requested by the Company, in said Officers' Certificate, be applied to the redemption of Subordinated Debt Securities, but shall be retained by the Trustee in the manner directed by the Company in writing and added to the Sinking Fund payment to be made in cash on the next succeeding Sinking Fund payment date, or, upon request of the Company, shall be applied by the Trustee, to the extent practicable, prior to the next succeeding Sinking Fund payment date to the purchase of Subordinated Debt Securities of such Series, by public or private purchase in the open market or otherwise, at prices (excluding accrued interest and brokerage commissions) not exceeding the Sinking Fund redemption price. Section 4.11. All Subordinated Debt Securities surrendered to or purchased by the Trustee, pursuant to the provisions of this Article Four, shall be forthwith canceled by it, and at the written direction of the Company, such Subordinated Debt Securities shall be destroyed by the Trustee, which shall deliver its certificate of destruction thereof to the Company. Section 4.12. The Trustee shall not redeem any Subordinated Debt Securities with Sinking Fund moneys or mail any notice of redemption of Subordinated Debt Securities during the continuance of any Event of Default with respect to the Subordinated Debt Securities of such Series, except that where notice of redemption of any Subordinated Debt Securities shall have been mailed prior to the occurrence of such Event of Default, the Trustee shall redeem such Subordinated Debt Securities provided funds are deposited with it for such purpose. Except as aforesaid, any moneys in the Sinking Fund at such time, and any moneys thereafter paid into the Sinking Fund, shall during the continuance of an Event of Default be held as security for the payment of all the Subordinated Debt Securities; provided, however, that in case such Event of Default shall have been waived as permitted by this Indenture or otherwise cured, such moneys shall thereafter be held and applied in accordance with the provisions of this Article Four. ARTICLE FIVE. PARTICULAR COVENANTS OF THE COMPANY. Section 5.01. The Company will duly and punctually pay or cause to be paid the principal of and premium, if any, and interest on each of the Subordinated Debt Securities at the place, at the respective times and in the manner provided in the Subordinated Debt Securities. (26) 30 Section 5.02. As long as any of the Subordinated Debt Securities remain outstanding, the Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where the Subordinated Debt Securities may be presented for registration of transfer and exchange as in this Indenture provided, and where the Subordinated Debt Securities may be presented for payment, and where notices or demands to or upon the Company in respect of the Subordinated Debt Securities or of this Indenture may be served. Such an office or agency may also be maintained by the Company, at its option, in other locations. Until otherwise designated by the Company in a written notice to the Trustee, such office or agency for purposes of registration of transfer and exchange and presentation for payment shall be the corporate trust offices of the Trustee. In case the Company shall fail to maintain such office or agency or shall fail to give such notice of the location or of any change in the location thereof, notices or demands may be served at the corporate trust offices of the Trustee. Section 5.03. In order to prevent any accumulation of claims for interest after maturity thereof, the Company will not directly or indirectly extend or consent to the extension of the time for the payment of any claim for interest on any of the Subordinated Debt Securities of a Series and will not directly or indirectly be a party to or approve any such arrangement by the purchase or funding of said claims for interest or in any other manner. No claim for interest, the time of payment of which shall have been so extended or which shall have been so purchased or funded, shall be entitled in case of an Event of Default with respect to the Subordinated Debt Securities of such Series hereunder to the benefit of this Indenture except after the prior payment in full of the principal of all the Subordinated Debt Securities of such Series and premiums, if any, and of all claims for interest not so extended, purchased or funded; provided, however, that this Section 5.03 shall not apply in any case where an extension shall be made pursuant to a plan proposed by the Company to the holders of all the Subordinated Debt Securities of such Series then outstanding. Section 5.04. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 8.10, a Trustee, so that there shall at all times be a Trustee hereunder. Section 5.05. (a) The Trustee is appointed the initial paying agent. If the Company shall appoint a paying agent other than the Trustee, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 5.05, (1) that it will hold all sums held by it as such agent for the payment of the principal of and premium, if any, and interest on the Subordinated Debt Securities of a Series (whether such sums have been paid to it by the Company or by any other obligor on the Subordinated Debt Securities) in trust for the benefit of the holders of the Subordinated Debt Securities of such Series, (2) that it will give the Trustee written notice of any default by the Company (or by any other obligor on the Subordinated Debt Securities of any Series) in making (27) 31 any payment of the principal of or premium, if any, or interest on the Subordinated Debt Securities of a Series when the same shall be due and payable, and (3) that it will, 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. (b) If the Company shall act as its own paying agent, it will, on or before each due date of the principal of and premium, if any, or interest on the Subordinated Debt Securities of a Series, set aside, segregate and hold in trust for the benefit of the holders of the Subordinated Debt Securities of such Series a sum sufficient to pay such principal and premium, if any, or interest so becoming due. The Company will promptly notify the Trustee in writing of any failure by it to take such action or the failure by any other obligor on the Subordinated Debt Securities of such Series to make any payment of the principal of or premium, if any, or interest on the Subordinated Debt Securities of such Series when the same shall be due and payable. (c) Anything in this Section 5.05 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by it or any paying agent hereunder, as required by this Section 5.05, such sums to be held by the Trustee upon the trusts herein contained. (d) Anything in this Section 5.05 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 5.05 is subject to the provisions of Section 13.03 and 13.04. Section 5.06. On or before the 90th day after the end of the Company's fiscal year beginning with the year 1987, the Company will file with the Trustee an Officers' Certificate (which, however, need not comply with Section 15.07) stating that in the course of the performance of their duties as such officers they would normally obtain knowledge of any action or failure to act on the part of the Company in violation of any covenant, agreement, provision or condition contained in this Indenture, stating whether or not they have obtained knowledge of any action or failure to act on the part of the Company during the preceding fiscal year, in violation of any covenant, agreement, provision or condition contained in this Indenture and, if so, specifying each such default of which-the signers may have knowledge and the nature thereof. ARTICLE SIX. LISTS OF HOLDERS OF SUBORDINATED DEBT SECURITIES AND REPORTS BY THE COMPANY AND THE TRUSTEE. Section 6.01. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee within 60 days after each interest payment date and at such other times (28) 32 as the Trustee may request in writing, within 30 days after receipt by the Company of any such request, a list in such form as the Trustee may reasonably require containing all information in the possession or control of the Company, or any of its paying agents, other than the Trustee, as to the names and addresses of the holders of the Subordinated Debt Securities of any Series obtained since the date as of which the next previous list, if any, was furnished with respect to such Series; but so long as the Trustee is the Subordinated Debt Security Registrar no such list shall be required to be furnished. Any such list may be dated as of a date not more than 15 days prior to the time such information is furnished or caused to be furnished, and need not include information received after such date. Section 6.02. (a) The Trustee shall preserve, in as current a form as reasonably practicable, all information as to the names and addresses of the holders of Subordinated Debt Securities (1) contained in the most recent list furnished to it as provided in Section 6.01 and (2) received by it in the capacity of Subordinated Debt Security Registrar or of paying agent (if so acting) hereunder. The Trustee may destroy any list furnished to it pursuant to Section 6.01 upon receipt of a new list so furnished. (b) In case three or more holders of Subordinated Debt Securities (hereinafter referred to as "applicants') apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Subordinated Debt Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other holders of Subordinated Debt Securities of a particular Series (in which case the applicants must all hold Subordinated Debt Securities of such Series) or with holders of all Subordinated Debt Securities with respect to their rights under this Indenture or under the Subordinated Debt Securities, and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either, (1) afford such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 6.02, or (2) inform such applicants as to the approximate number of holders of Subordinated Debt Securities of such Series or all Subordinated Debt Securities, as the case may be, whose names and addresses appear in the information preserved at the time by the Trustee, in accordance with the provisions of subsection (a) of this Section 6.02, and as to the approximate cost of mailing to such holders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information the Trustee shall, upon the written request of such applicants, mail to each holder of such Series or all Subordinated Debt Securities, as the case may be, whose name and address appears in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 6.02, a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the (29) 33 material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Securities and Exchange Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the holders of Subordinated Debt Securities of such Series or all Subordinated Debt Securities, as the case may be, or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If said Commission, after opportunity for a hearing upon the objections specified in the written statements so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, said Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all holders of Subordinated Debt Securities of such Series or all Subordinated Debt Securities, as the case may be, with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (c) Each and every holder of the Subordinated Debt Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any paying agent nor any Subordinated Debt Security Registrar should be held accountable by reason of the disclosure of any such information as to the names and addresses of the holders of Subordinated Debt Securities in accordance with the provisions of subsection (b) of this Section 6.02, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under said subsection (b) or for taking any action in good faith under said subsection (b). Section 6.03. (a) The Company covenants and agrees to file with the Trustee, within 15 days after the Company is required to file the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as said Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with said Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of such sections, then to file with the Trustee and said Commission, in accordance with rules and regulations prescribed from time to time by said Commission, such supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. (b) The Company covenants and agrees to file with the Trustee and the Securities and Exchange Commission, in accordance with the rules and regulations prescribed from time to time by said Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in the Indenture as may be required from time to time by such rules and regulations. (30) 34 (c) The Company covenants and agrees to transmit by mail to the holders of Subordinated Debt Securities as their names and addresses appear on the Subordinated Debt Security Register for each Series of Subordinated Debt Securities, (1) within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section 6.03 as may be required by rules and regulations prescribed from time to time by the Securities and Exchange Commission, and (2) within 120 days after the end of each fiscal year of the Company, copies of audited financial statements, on a consolidated basis if applicable, including balance sheets, statements of operations, statements of shareholders' equity and statements of changes in financial position, together with the respective reports of independent certified public accountants relating thereto. Section 6.04. (a) Within 60 days after May 15 of each year commencing with the year 1987, so long as any Subordinated Debt Securities of a particular Series are outstanding hereunder, the Trustee shall transmit to the holders of each such Series as hereinafter in this Section 6.04 provided, a brief report dated as of such May 15, with respect to: (1) its eligibility under Section 8.09, and its qualifications under Section 8.08, or in lieu thereof, if to the best of its knowledge it has continued to be eligible and qualified under such Sections, a written statement to such effect; (2) The character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Subordinated Debt Securities of such Series, on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to report such advances if such advances so remaining unpaid aggregate not more than one-half of one percent of the principal amount of the Subordinated Debt Securities of such Series outstanding on the date of such report; (3) the amount, interest rate and maturity date of all other indebtedness owing by the Company (or by any other obligor on the Subordinated Debt Securities) to the Trustee in its individual capacity, on the date of such report, with a brief description of any property held as collateral security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in paragraphs (2), (3), (4) or (6) of subsection (b) of Section 8.13; (4) the property and funds, if any, physically in the possession of the Trustee as such on the date of such report; (5) any release, or release and substitution, of property subject to the lien of this Indenture (and consideration therefor, if any) not previously reported; (31) 35 (6) any additional issue of Subordinated Debt Securities not previously reported; and (7) any action taken by the Trustee in the performance of its duties under this Indenture which it has not previously reported and which in its opinion materially affects the Subordinated Debt Securities except action in respect of a default, notice of which has been or is to be withheld by it in accordance with the provisions of Section 7.07. (b) The Trustee shall transmit to the holders of a Series, as hereinafter provided, a brief report with respect to the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee as such since the date of the last report transmitted pursuant to the provisions of subsection (a) of this Section 6.04 (or if no such report has yet been so transmitted, since the date of execution of this Indenture), for the reimbursement of which it claims or may claim a lien or charge prior to that of the Subordinated Debt Securities of such Series, on property or funds held or collected by it as Trustee, and which it has not previously reported pursuant to this subsection (b), except that the Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate 10 percent or less of the principal amount of Subordinated Debt Securities of such Series outstanding at such time, such report to be transmitted within 90 days after such time. (c) Reports pursuant to this Section 6.04 shall be transmitted by mail to all holders of Subordinated Debt Securities of a Series, as the names and addresses of such holders appear upon the Subordinated Debt Security Register. (d) A copy of each such report shall, at the time of such transmission to holders, be filed by the Trustee with each stock exchange upon which the Subordinated Debt Securities are listed and also with the Securities and Exchange Commission. The Company agrees to notify the Trustee when and as the Subordinated Debt Securities of any Series become listed on any stock exchange. ARTICLE SEVEN. REMEDIES OF THE TRUSTEE AND HOLDERS OF SUBORDINATED DEBT SECURITIES IN EVENT OF DEFAULT. Section 7.01. In case one or more of the following Events of Default with respect to the Subordinated Debt Securities of a Series shall have occurred and be continuing, that is to say: (a) default in the payment (whether or not prohibited by the provisions of Article Three) of any installment of interest upon any of the Subordinated Debt Securities of such Series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or (32) 36 (b) default in the payment (whether or not prohibited by the provisions of Article Three) of the principal of or premium, if any, on any of the Subordinated Debt Securities of such Series or of any Sinking Fund payment as and when the same shall become due and payable either at maturity, upon redemption, by declaration or otherwise; or (c) failure on the part of the Company duly to observe or perform any other of the covenants or agreements on the part of the Company in the Subordinated Debt Securities or in this Indenture contained for a period of 60 days after the date on which written notice (such written notice to state it is a "Notice of Default" hereunder) of such failure, requiring the Company to remedy the same, shall have been given to the Company by the Trustee, or to the Company and the Trustee by the holders of at least 25 percent in principal amount of the Subordinated Debt Securities of such Series at the time outstanding; or (d) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (e) the Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or for any substantial part of its property, or make any general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or corporate action shall be taken by the Company in furtherance of any such action; then, and in each and every such case, unless the principal of all the Subordinated Debt Securities of such Series shall have already become due and payable, either the Trustee or the holders of not less than 25 per cent in aggregate principal amount of the Subordinated Debt Securities of such Series then outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by holders of Subordinated Debt Securities), may, and at the request of the holders of not less than 25 per cent in aggregate principal amount of the Subordinated Debt Securities of such Series then outstanding hereunder, the Trustee by notice in writing to the Company shall, declare the principal of all the Subordinated Debt Securities of such Series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the said Subordinated Debt Securities of such Series contained to the contrary notwithstanding. This provision, however, is subject to the condition that if, at anytime after the principal of (33) 37 the Subordinated Debt Securities of such Series shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Subordinated Debt Securities of that Series and the principal of and premium, if any, on any and all such Subordinated Debt Securities which shall have become due otherwise than by acceleration (with interest upon such principal and premium, if any, and, to the extent that payment of such interest is enforceable under applicable law, upon overdue installments of interest, at the rate borne by the Subordinated Debt Securities of that Series to the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith, and any and all defaults under the Indenture, other than the nonpayment of the principal of Subordinated Debt Securities of that Series which shall have become due by acceleration, shall have been remedied -- then, and in every such case, the holders of a majority in aggregate principal amount of the Subordinated Debt Securities of such Series then outstanding, by written notice to the Company and to the Trustee, may waive all defaults and rescind and annul such declaration and its consequences; but no such waiver or rescission and annulment shall extend to or shall affect any subsegment default or shall impair any right consequent thereon. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then, and in every such case, the Company, the Trustee and the holders of the Subordinated Debt Securities of such Series shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee and the holders of the Subordinated Debt Securities of such Series shall continue as though no such proceedings had been taken. The Trustee shall not be charged with notice of any default or Event of Default under subsections (c), (d) or (e) of this Section 7.01 unless the Trustee shall have actually received written notice thereof from the Company or any holder of Subordinated Debt Securities describing said default or Event of Default or unless the Trustee shall have actually become aware thereof. Section 7.02. The Company covenants that (1) in case default shall be made in the payment of any installment of interest on any of the Subordinated Debt Securities of a Series, as and when the same shall become due and payable, and such default, shall have continued for a period of 60 days, or (2) in case default shall be made in the payment of the principal of or premium, if any, on any of the Subordinated Debt Securities of a Series or of any Sinking Fund payment when the same shall have become payable, whether upon maturity of the Subordinated Debt Securities of such Series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee, the Company will pay to the Trustee, for the (34) 38 benefit of the holders of the Subordinated Debt Securities of such Series, the whole amount that then shall have become due and payable on all such Subordinated Debt Securities of such Series for principal and premium, if any, or interest, or both, as the case may be, with interest upon the overdue principal and premium, if any, and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments of interest at the rate borne by the Subordinated Debt Securities of such Series; and, in addition thereto, such further amount as shall be sufficient to cover reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against the Company or any other obligor upon the Subordinated Debt Securities and collect in the manner provided by law out o(pound) the property of the Company or other obligor upon the Subordinated Debt Securities wherever situated the moneys adjudged or decreed to be payable. In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor upon the Subordinated Debt Securities under the Federal bankruptcy laws, as now or hereafter constituted, or any other Federal or State bankruptcy, insolvency or similar laws relative to the Company or to such other obligor, its creditors or its property, or in case a receiver or trustee shall have been appointed for its property, or in case of any other judicial proceedings relative to the Company or other obligor upon the Subordinated Debt Securities, its creditors or its property, the Trustee irrespective of whether the principal of any Subordinated Debt Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 7.02, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and premium, if any, and interest owing and unpaid in respect of the Subordinated Debt Securities, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the holders of Subordinated Debt Securities allowed in any judicial proceedings relative to the Company or other obligor upon the Subordinated Debt Securities, its creditors or its property, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the holders of Subordinated Debt Securities and of the Trustee on their behalf; and any receiver, assignee, liquidator, sequestrator or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Subordinated Debt Securities to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the holders of Subordinated Debt Securities, to pay to the Trustee such amount as shall be sufficient to cover reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 8.06. (35) 39 All rights of action and of asserting claims under this Indenture, or under any of the Subordinated Debt Securities, may be enforced by the Trustee without the possession of any of the Subordinated Debt Securities, or the production thereof in any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the holders of the Subordinated Debt Securities. In case of a default of which the Trustee has or is deemed to have notice hereunder occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specified enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the trustee by this Indenture or by law. Section 7.03. Subject to the provisions of Article Three, any moneys collected by the Trustee pursuant to Section 7.02 shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or premium, if any, or interest, upon presentation of the several Subordinated Debt Securities, and stamping thereon the payment, if only partially paid, and upon surrender thereof if fully paid: FIRST: To the payment of costs and expenses of collection, and reasonable compensation, expenses, disbursements and advances of the Trustee, it agents and counsel, and any other amounts due to the Trustee under this Indenture, including without limitation amounts due under Section 8.06; SECOND: In case the principal of the Subordinated Debt Securities of a Series shall not have become due, to the payment of interest on the Subordinated Debt Securities, in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the rate borne by the Subordinated Debt Securities of such Series, such payments to be made ratably to the persons entitled thereto, without discrimination or preference: THIRD: In case the principal of the Subordinated Debt Securities of a Series shall have become due, by declaration or otherwise, to the payment of the whole amount then owing and unpaid upon the Subordinated Debt Securities of such Series for principal, and premium, if any, and interest, with interest on the overdue principal, and premium, if any, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the rate borne by the Subordinated Debt Securities of such Series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid on the Subordinated Debt Securities of such Series, then to the payment of such principal, and premium, if any, and interest, without (36) 40 preference or priority of principal, and premium, if any, over interest, or of interest over principal, and premium, if any, or of any installment of interest over any other installment of interest, or of any Subordinated Debt Security of such Series over any other Subordinated Debt Security of such Series, ratably to the aggregate of such principal, and premium, if any, and accrued and unpaid interest. Section 7.04. No holder of any Subordinated Debt Security of a Series shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceedings at law or in equity or in bankruptcy or otherwise, upon or under or with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless such holder previously shall have given to the Trustee written notice of default in respect of such Series and of the continuance thereof, as hereinbefore provided, and unless also the holders of not less than 25 percent in aggregate principal amount of the Subordinated Debt Securities of such Series then outstanding shall have made written request upon the Trustee to institute such action or proceedings in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action or proceedings and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 7.06; it being understood and intended, and being expressly covenanted by the taker and holder of every Subordinated Debt Security of such Series with every other such taker and holder and the Trustee, that no one or more holders of Subordinated Debt Securities of a Series shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Subordinated Debt Securities of such Series, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Subordinated Debt Securities of such Series. For the protection and enforcement of the provisions of this Section 7.04, each and every holder of such Series and the Trustee shall be entitled to such relief as can be given either at law or in equity. Notwithstanding any other provisions in this Indenture, however, the right of any holder of any Subordinated Debt Security to receive payment of the principal of, and premium, if any, and interest on, such Subordinated Debt Security, on or after the respective due dates expressed in such Subordinated Debt Security, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder. Section 7.05. All powers and remedies given by this Article Seven to the Trustee or to the holders of Subordinated Debt Securities shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or such holders, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any holder of any of the Subordinated Debt Securities to exercise (37) 41 any right or power accruing upon any default occurring and continuing as aforesaid, shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 7.04, every power and remedy given by this Article Seven or by law to the Trustee or to the holders of Subordinated Debt Securities may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by such holders. Section 7.06. The holders of a majority in aggregate principal amount of the Subordinated Debt Securities of a Series at the time outstanding shall have the right to direct the time, method, and place of conducting any proceeding of any remedy available to the Trustee with respect to the Subordinated Debt Securities of such Series, or exercising any trust or power conferred on the Trustee with respect to such Series; provided, however, that the Trustee shall be entitled to receive indemnity or security reasonably satisfactory to it prior to following such direction or taking such action, and providing further that subject to the provisions of Section 8.01 the Trustee shall have the right to decline to follow any such direction if the Trustee being advised by counsel shall determine that the action so directed may not lawfully be taken, or if the Trustee in good faith shall, by a responsible officer or officers, determine that the action so directed would be unduly prejudicial to the holders of the Subordinated Debt Securities of such Series not taking part in such direction or would involve the Trustee in personal liability. Prior to the declaration of the maturity of the Subordinated Debt Securities of any Series as provided in Section 7.01, the holders of a majority in aggregate principal amount of the Subordinated Debt Securities of a Series at the time outstanding may on behalf of the holders of all of the Subordinated Debt Securities of such Series waive any past default hereunder and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the Subordinated Debt Securities of such Series or in respect of a covenant or provision hereof which under Section 11.02 cannot be modified or amended without the consent of the holder of each Subordinated Debt Security so affected. In the case of any such waiver, the Company, the Trustee and the holders of the Subordinated Debt Securities of such Series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 7.07. The Trustee shall, within 90 days after the occurrence of a default with respect to a Series of which the Trustee has or is deemed to have knowledge hereunder, give to the holders of such Series, in the manner and to the extent provided in subsection (c) of Section 6.04, notice of all such defaults, unless such default shall have been cured before the giving of such notice (the term "default" or "defaults" for the purposes of this Section 7.07 being hereby defined to be any event or events, as the case may be, specified in clause (a), (b), (c), (d) and (e) of Section 7.01, not including periods of grace, if any, provided for therein and irrespective of the giving of the written notice specified in clause (c) of Section 7.01); provided, however, that, except in the case of default in the payment of the principal of, or premium, if any, or interest on, any of the Subordinated Debt Securities, or in the payment of any Sinking Fund installment, the 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 (38) 42 responsible officers, of the Trustee in good faith determines that the withholding of such notice is in the interests of the holders of such Series. Section 7.08. All parties to this Indenture agree, and each holder of any Subordinated Debt Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys fees' against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 7.08 shall not apply to any suit instituted by the Trustee, to any suit instituted by any holder of Subordinated Debt Securities, or group of holders of Subordinated Debt Securities, holding in the aggregate more than 10 percent in aggregate principal amount of the Subordinated Debt Securities of a Series then outstanding, or to any suit instituted by any holder of Subordinated Debt Securities for the enforcement of the payment of the principal of, or premium, if any, or interest on, any Subordinated Debt Security, on or after the due date expressed in such Subordinated Debt Security. ARTICLE EIGHT. CONCERNING THE TRUSTEE. Section 8.01. The Trustee, prior to the occurrence of an Event of Default with respect to the Subordinated Debt Securities of a particular Series and after the curing or waiver of all Events of Default with respect to the Subordinated Debt Securities of a particular Series which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Subordinated Debt Securities of any Series has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that (a) prior to the occurrence of an Event of Default with respect to the Subordinated Debt Securities of a particular Series and after the curing of all Events of Default with respect to the Subordinated Debt Securities of any Series which may have occurred: (1) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (39) 43 (2) in the absence of bad faith on the part of the Trustee, the 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 Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; (b) the Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in aggregate principal amount of the Subordinated Debt Securities of a Series at the time outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture relating to such Series. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds is not reasonably assured to it or at the option of the Trustee indemnity reasonably satisfactory to the Trustee against such risk or liability has not been provided. Whether or not herein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability cf or affording protection to the Trustee shall be subject to the provisions of this Section. Section 8.02. Except as otherwise provided in Section 8.01: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent. direction, approval, order, bond, debenture, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an instrument signed in the name of the Company by the Chairman of the Board, President or any Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer (unless (40) 44 other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors of the Company may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company; (c) The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the holders of Subordinated Debt Securities, pursuant to the provisions of this Indenture, unless such holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; (e) The Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture: (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, discretion, approval, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney (other than an employee of the Trustee) appointed by it with due care hereunder. Section 8.03. The recitals contained herein and in the Subordinated Debt Securities (except in the Trustee's certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Subordinated Debt Securities. The Trustee shall not be accountable for the use or application by the Company of any of the Subordinated Debt Securities or of the proceeds thereof. Section 8.04. The Trustee or any paying agent or Subordinated Debt Security Registrar, in its individual or any other capacity, may become the owner or pledgee of Subordinated Debt Securities with the same rights it would have if it were not Trustee, paying agent or Subordinated Debt Security Registrar. (41) 45 Section 8.05. Subject to the provisions of Article Three and Section 13.04, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. Neither the Trustee nor any paying agent shall be under any liability for interest on any moneys received by it hereunder except such as it may agree in writing with the Company to pay thereon. So long as no Event of Default with respect to the Subordinated Debt Securities of any Series shall have occurred and be continuing, all interest allowed on any such moneys shall be paid from time to time upon the written order of the Company, signed by its President or any Vice President or its Treasurer or an Assistant Treasurer. Section 8.06. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it hereunder (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), and, except as otherwise expressly provided, the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. If any property other than cash shall at any time be subject to a lien in favor of the holders of Subordinated Debt Securities, the Trustee, if and to the extent authorized by a receivership or bankruptcy court of competent jurisdiction or by the supplemental instrument subjecting such property to such lien, shall be entitled to make advances for the purpose of preserving such property or of discharging tax liens or other prior liens or encumbrances thereon, provided that the Trustee shall be under no affirmative duty to make such advances. The Company also covenants to indemnify the Trustee, its directors, officers, employees or agents for, and to hold each of them harmless against, any loss, liability or expense incurred without negligence, intentional wrongdoing or bad faith on the part of the Trustee, its directors, officers, employees or agents, arising out of or in connection with the acceptance or administration of this trust, the offering, issuance or sale of the Debt Securities or any or all other transactions contemplated hereunder, including the reasonable cost and expenses of defending against any claim of liability in the premises. The obligations of the Company under this Section 8.06 to compensate the Trustee, its directors, officers, employees or agents and to pay or reimburse the Trustee, its directors, officers, employees or agents for expenses, disbursements and advances shall constitute additional indebtedness hereunder. The Trustee shall give the Company prompt notice of any action commenced against it in respect of which indemnity may be sought hereunder. The Trustees failure to so notify the Company shall relieve the Company from any liability under this Indenture with respect to such action. In any such action the Company, by written notice to the Trustee, may assume the defense thereof with counsel of the Trustee's choosing, who shall be subject to the approval of the Company; and such approval shall not be unreasonably withheld by the Company. In no event shall the Company be required to indemnify or reimburse the Trustee hereunder in respect of any claim settled or compromised without its consent. In no event shall the Company be liable for the (42) 46 fees and expenses, which in all cases must be reasonable under the circumstances, of more than one counsel in connection with any one action. Such additional indebtedness shall be secured by a lien prior to that of the Subordinated Debt Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Subordinated Debt Securities of any Series. Section 8.07. Except as otherwise provided in Section 8.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee and such Officers' Certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof. Section 8.08. (a) If the Trustee has or shall acquire any conflicting interest, as defined in this Section 8.08, it shall, within 90 days after ascertaining that it has such conflicting interest, either eliminate such conflicting interest or resign in the manner and with the effect specified in Section 8.10, such resignation to become effective upon the appointment of a successor trustee and such successor's acceptance of such appointment, and the Company shall take prompt steps to have a successor appointed in the manner provided in Section 8.10. (b) In the event that the Trustee shall fail to comply with the provisions of subsection (a) of this Section 8.08, the Trustee shall, within 10 days after the expiration of such 90 day period, transmit notice of such failure to the holders of Subordinated Debt Securities in the manner and to the extent provided in subsection (c) of Section 6.04. (c) For the purposes of this Section 8.08 the Trustee shall be deemed to have a conflicting interest if (1) the Trustee is trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the Company, are outstanding unless such other indenture is a collateral trust indenture under which the only collateral consists of Subordinated Debt Securities issued under this Indenture, provided that there shall be excluded from the operation of this paragraph any other indenture or indentures under which other securities, or certificates of interest or participation in other securities of the Company are outstanding if (i) this Indenture and such other indenture or indentures are wholly unsecured and such other indenture or indentures are hereafter qualified under the Trust Indenture Act of 1939, unless the Securities and Exchange Commission shall have found and declared by order pursuant to subsection (b) of Section 305 or subsection (c) of Section 307 of the Trust Indenture Act of 1939 that differences exist between the provisions of this Indenture and the provisions of such other indenture or indentures which are so likely to involve a material conflict of interest as to make it necessary in the public interest or for the (43) 47 protection of investors to disqualify the Trustee from acting as such under this Indenture or such other indenture or indentures, or (ii) the Company shall have sustained the burden of proving, on application to the Securities and Exchange Commission and after opportunity for hearing thereon that the trusteeship under this Indenture and such other indenture or indentures is not so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as such under one of such indentures; (2) the Trustee or any of its directors or executive officers is an obligor upon the Subordinated Debt Securities or an underwriter for the Company; (3) the Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with the Company or an underwriter for the Company; (4) the Trustee or any of its directors or executive officers is a director, officer, partner, employee, appointee, or representative of the Company, or of an underwriter (other than the Trustee itself) for the Company who is currently engaged in the business of underwriting, except that (A) one individual may be a director and/or an executive officer of the Trustee and a director and/or an executive officer of the Company, but may not be at the same time an executive officer of both the Trustee and the Company; (B) if and so long as the number of directors of the Trustee in office is more than nine, one additional individual may be a director and/or an executive officer of the Trustee and a director of the Company; and (C) the Trustee may be designated by the Company, or by any underwriter for the Company, to act in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent, or depositary, or in any other similar capacity, or, subject to the provisions of paragraph (1) of this subsection (c), to act as trustee whether under an indenture or otherwise; (5) 10 percent or more of the voting securities of the Trustee is beneficially owned either by the Company or by any director, partner, or executive officer thereof, or 20 percent or more of such voting securities is beneficially owned, collectively, by any two or more of such persons; or 10 percent or more of the voting securities of the Trustee is beneficially owned either by an underwriter for the Company or by any director, partner, or executive officer thereof, or is beneficially owned, collectively, by any two or more such persons; (6) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this subsection (c) defined), (A) 5 percent or more of the voting securities, or 10 per cent or more of any other class of security, of the Company, not including the Subordinated Debt Securities issued under this Indenture and securities issued under any other indenture under which the Trustee is also trustee, or (B) 10 percent or more of any class of security of an underwriter for the Company; (44) 48 (7) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this subsection (c) defined), 5 per cent or more of the voting securities of any person who, to the knowledge of the Trustee, owns 10 percent or more of the voting securities of, or controls directly or indirectly, or is under direct or indirect common control with, the Company; (8) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this subsection (c) defined), 10 per cent or more of any class of security of any person who, to the knowledge of the Trustee, owns 50 per cent or more of the voting securities of the Company; or (9) the Trustee owns on May 15 in any calendar year, in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of 25 per cent or more of the voting securities, or of any class of security, of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under paragraph (6), (7) or (8) of this subsection (c). As to any such securities of which the Trustee acquired ownership through becoming executor, administrator, or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply, for a period of two years from the date of such acquisition, to the extent that such securities do not exceed 25 percent of such voting securities or 25 per cent of any such class of security. Promptly after May 15, in each calendar year, the Trustee shall make a check of its holdings of such securities in any of the above-mentioned capacities as of such May 15. If the Company fails to make payment in full of principal of or interest on any of the Subordinated Debt Securities when and as the same become due and payable, and such failure continues for 30 days thereafter, the Trustee shall make a prompt check of its holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such 30 day period, and after such date, notwithstanding the foregoing provisions of this paragraph (9), all such securities so held by the Trustee, with sole or joint control over such securities vested in it, shall, but only so long as such failure shall continue, be considered as though beneficially owned by the Trustee for the purposes of paragraphs (6), (7) and (8) of this subsection (c). The specifications of percentages in paragraphs (5) to (9), inclusive, of this subsection (c) shall not be construed as indicating that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purposes of paragraph (3) or (7) of this subsection (c). For the purposes of paragraphs (6), (7), (8) and (9) of this subsection (c) only, (A) the terms "security" and "securities" shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an obligation to repay moneys lent to a person by one or more banks, trust companies or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness; (8) an obligation shall be deemed to be "in default" when a default in payment of (45) 49 principal shall have continued for 30 days or more and shall not have been cured; and (C) the Trustee shall not be deemed to be the owner or holder of (i) any security which it holds as collateral security (as trustee or otherwise) for an obligation which is not in default as defined in clause (B) above, or (ii) any security which it holds as collateral security under this Indenture, irrespective of any default hereunder, or (iii) any security which it holds as agent for collection, or as custodian, escrow agent, or depositary, or in any similar representative capacity. Except as above provided, the word "security" or "securities" as used in this Indenture shall mean any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of or warrant or right to subscribe to or purchase, any of the foregoing. (d) For the purposes of this Section 8.08: (1) The term "underwriter" when used with reference to the Company shall mean every person who, within three years prior to the time as of which the determination is made, has purchased from the Company with a view to, or has offered for sale or has sold for the Company in connection with, the distribution of any security of the Company outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission. (2) The term "director" shall mean any director of a corporation or any individual performing similar functions with respect to any organization whether incorporated or unincorporated. (3) The term "person" shall mean an individual, a corporation, a partnership, an association, a joint-stock company, a trust, an unincorporated organization, or a government or political subdivision thereof. As used in this paragraph, the term "trust" shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security. (4) The term "voting security" shall mean any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a person, or any security issued under or pursuant to any trust, agreement or arrangement (46) 50 whereby a trustee or trustees or agent or agents for the owner or holder of such security are presently entitled to vote in the direction or management of the affairs of a person. (5) The term "Company" shall mean any obligor upon the Subordinated Debt Securities. (6) The term "executive officer" shall mean the president, every vice president, every trust officer, the cashier, the secretary and the treasurer of a corporation, and any individual customarily performing similar functions with respect to any organization whether incorporated or unincorporated, but shall not include the chairman of the board of directors. The percentage of voting securities and other securities specified in this Section 8.08 shall be calculated in accordance with the following provisions: (A) A specified percentage of the voting securities of the Trustee, the Company or any other person referred to in this Section 8.08 (each of whom is referred to as a "person" in this paragraph) means such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person. (B) A specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding. (C) The term "amount", when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares, and the number of units if relating to any other kind of security. (D) The term "outstanding" means issued and not held by or for the account of the issuer. The following securities shall not be deemed outstanding within the meaning of this definition: (i) Securities of an issuer held in a sinking fund relating to another class of securities of the issuer of the same class. (ii) Securities of an issuer held in a sinking funds relating to another class of securities of the issuer, if the obligation evidenced by such other class of securities is not in default as to principal or interest or otherwise. (iii) Securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise. (47) 51 (iv) Securities held in escrow if placed in escrow by the issuer thereof; provided, however, that any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof. (E) A security shall be deemed to be of the same class as another if both securities confer upon the holder or holders thereof substantially the same rights and privileges; provided, however, that, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series different classes; and provided, further, that, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture. Section 8.09. The Trustee hereunder shall at all times be a corporation organized and doing business under the laws of the United States or of any State or of the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $10,000,000, subject to supervision or examination by Federal, State or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 8.09, 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. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 8.09, the Trustee shall resign immediately in the manner and with the effect specified in Section 8.10. Section 8.10. (a) The Trustee may at any time resign with respect to one or more or all Series of Subordinated Debt Securities by giving written notice by first-class mail of such resignation to the Company. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument in duplicate executed by order of the Board of Directors of the Company, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any holder who has been a bona fide holder of a Subordinated Debt Security or Subordinated Debt Securities of the applicable Series for at least six months may, subject to the provisions of Section 8.08, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. Any resignation of the Trustee shall be subject to the provisions of subparagraph (d) hereof. (48) 52 (b) In case at any time any of the following shall occur - (1) the Trustee shall fail to comply with the provisions of subsection (a) of Section 8.08 with respect to any Series of Subordinated Debt Securities after written request therefor by the Company or by any holder who has been a bona fide holder of a Subordinated Debt Security or Subordinated Debt Securities for at least six months, or (2) the Trustee shall cease to be eligible in accordance with the provisions of Section 8.09 and shall fail to resign after written request therefor by the Company or by any such holder, or (3) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Company may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors of the Company, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, subject to the provisions of Section 7.08, any holder who has been a bona fide holder of a Subordinated Debt Security or Subordinated Debt Securities of such Series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to the applicable Series and the appointment of a successor trustee. Such court may thereupon. after such notice, if any. as it may deem proper and prescribe, remove the Trustee with respect to the applicable Series and appoint a successor trustee. (c) The Company may also remove the Trustee, pursuant to the procedures set forth in Section 8.10(b) hereof, if the Company has given 60 days written notice to the Trustee and the holders of the applicable Series of Subordinated Debt Securities and has delivered to the Trustee and such holders of Subordinated Debt Securities an Officers' Certificate stating: (l) the reasons for such removal; (2) that such removal will in no way be detrimental to the interests of such holders of Subordinated Debt Securities; and (3) the identity of the successor trustee to be appointed; provided that (i) such successor trustee shall have a combined capital and surplus of at least $20,000,000, (ii) the rating assigned to the debt obligations of such successor trustee by the rating agency or agencies rating any such debt obligations shall be no lower than the rating assigned, at the time of appointment of the Trustee being replaced, to the debt obligations of the Trustee being replaced, and (iii) such successor trustee shall be independent and shall be eligible to act as Trustee pursuant to Sections 8.08 and 8.09 hereof; and, provided further that if after receiving such notice, the holders of a majority in principal amount of the outstanding Subordinated Debt Securities of the applicable Series shall notify the Trustee that they are (49) 53 opposed to such removal, the Company shall not be entitled to remove the Trustee pursuant to this Section 8.10(c) and the Company shall not be entitled to exercise its rights pursuant to this Section 8.10(c) for six months after such notice by the holders of Subordinated Debt Securities. (d) The holders of a majority in aggregate principal amount of the Subordinated Debt Securities of any Series at the time outstanding may at any time remove the Trustee with respect to the Subordinated Debt Securities of such Series and appoint a successor trustee of the applicable Series of Subordinated Debt Securities by delivery to the Trustee so removed, to the successor trustee so appointed and to the Company, the evidence provided for in Section 9.01 of the action taken by the holders of the Subordinated Debt Securities. (e) Any resignation or removal of the Trustee and any appointment of a successor trustee pursuant to any of the provisions of this Section 8.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 8.11. (f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor trustee by mailing written notice of such event by first-class mail, postage prepaid, to the holders o(pound) the applicable Series of Subordinated Debt Securities as their names and addresses appear in the Subordinated Debt Security Register. Each notice shall include the name of the successor trustee and the address of its principal corporate trust office. If the Company fails to mail such notice within 10 days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company. Section 8.11. Any successor trustee appointed as provided in Section 8.10 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment, and thereupon the resignation or removal of the predecessor trustee with respect to all or any applicable Series shall become effective and such successor trustee without any further act, deed or conveyance shall become vested with all the rights, powers, duties and obligations of its predecessor, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the Trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 8.06, execute and deliver an instrument transferring to such successor trustee all the right and powers of the Trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 8.06. If a successor trustee is appointed with respect to the Subordinated Debt Securities of one or more (but not all) Series, the Company, the predecessor trustee and each successor trustee with respect to the Subordinated Debt Securities of any applicable Series shall execute and deliver an agreement supplemental hereto which shall contain such provisions as shall be (50) 54 deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor trustee with respect to the Subordinated Debt Securities of any Series as to which the predecessor trustee is not retiring shall continue to be vested in the predecessor trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such supplemental agreement shall constitute such trustees co-trustees of the same trust and that each such trustee shall be a trustee of a trust or trusts under separate Indentures. No successor trustee shall accept appointment as provided in this Section 8.11 unless at the time of such acceptance such successor trustee shall be qualified under the provisions of Section 8.08 and eligible under the provisions of Section 8.09. Section 8.12. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger or conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be qualified under the provisions of Section 8.08 and eligible under the provisions of Section 8.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Subordinated Debt Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee, and deliver such Subordinated Debt Securities so authenticated; and in case at that time any of the Subordinated Debt Securities shall not have been authenticated, any successor to the Trustee may authenticate such Subordinated Debt Securities either in the name of any predecessor hereunder or in the name of the successor trustee; and in all such cases such certificate shall have the full force which it is anywhere in the Subordinated Debt Securities or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Subordinated Debt Securities in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. Section 8.13. (a) Subject to the provisions of subsection (b) of this Section 8.13, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company on the Subordinated Debt Securities within four months prior to a default, as defined in subsection (c) of this Section 8.13, or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the holders of the Subordinated Debt Securities and the holders of other indenture securities (as defined in subsection (c) of this Section 8.13): (1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the (51) 55 beginning of such four months' period and valid as against the Company and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in paragraph (2) of this subsection, or from the exercise of any right of set-off which the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Company upon the date of such default; and (2) all property received by the Trustee in respect of any claim as such creditor, either as security therefor, or in satisfaction or composition thereof, or otherwise, after the beginning of such four months' period, or an amount equal to the proceeds of any such property, if disposed of, subject, however, to the rights, if any, of the Company and its other creditors in such property or such proceeds. Nothing herein contained, however, shall affect the right of the Trustee (A) to retain for its own account (i) payments made on account of any such claim by any person (other than the Company) who is liable thereon, and (ii) the proceeds of the bona fide sale of any such claim by the Trustee to a third person, and (iii) distributions made in cash, securities or other property in respect of claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal bankruptcy laws, as now or hereafter constituted, or any other Federal or State bankruptcy, insolvency or similar law; (B) to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such four months' period; (C) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such four months' period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe that a default as defined in subsection (c) of this Section 8.13 would occur within four months; or (D) to receive payment on any claim referred to in paragraph (B) or (C), against the release of any property held as security for such claim as provided in such paragraph (B) or (C), as the case may be, to the extent of the fair value of such property, For the purposes of paragraphs (B), (C) and (D), property substituted after the beginning of such four months' period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any claim referred to in any of such paragraphs is created in renewal of or in substitution for or for the purpose of repaying or refunding any preexisting claim of the Trustee as such creditor, such claim shall have the same status as such (52) 56 preexisting claim. If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned between the Trustee, the holders of Subordinated Debt Securities and the holders of other indenture securities in such manner that the Trustee, the holders of Subordinated Debt Securities and the holders of other indenture securities realize, as a result of payments from such special account and payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal bankruptcy laws, as now or hereafter constituted, or any other Federal or State bankruptcy, insolvency or similar law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Company of the funds and property in such special account and before crediting to the respective claims of the Trustee. the holders of Subordinated Debt Securities and the holders of other indenture securities dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal bankruptcy laws, as now or hereafter constituted, or any other Federal or State bankruptcy, insolvency or similar law, but after crediting thereon receipts on account of the indebtedness represented by heir respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" shall include any distribution with respect to such claim, in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal bankruptcy laws, as now or hereafter constituted, or any other Federal or State bankruptcy, insolvency or similar law, whether such distribution is made in cash, securities, or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which said bankruptcy, receivership, or proceeding for reorganization is pending shall have jurisdiction (i) to apportion between the Trustee, the holders of Subordinated Debt Securities and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such special account and the proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee, the holders of Subordinated Debt Securities and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula. Any Trustee which has resigned or been removed after the beginning of such four months' period shall be subject to the provisions of this subsection (a) as though such resignation or removal had not occurred. If any Trustee has resigned or been removed prior to the beginning of such four months' period, it shall be subject to the provisions of this subsection (a) if and only if the following conditions exist: (i) the receipt of property or reduction of claim which would have given rise to the obligation to account, if such Trustee had continued as trustee, occurred after the beginning of such four months' period; and (53) 57 (ii) such receipt of property or reduction of claim occurred within four months after such resignation or removal. (b) There shall be excluded from the operation of subsection (a) of this Section 8.13 a creditor relationship arising from (1) the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee; (2) advances authorized by a receivership or bankruptcy court of competent jurisdiction, or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereof, if notice of such advance and of the circumstances surrounding the making thereof is given to the holders of Subordinated Debt Securities at the time and in the manner provided in this Indenture; (3) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity; (4) an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction as defined in subsection (c) of this Section 8.13; (5) the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company; or (6) the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations which fall within the classification of self-liquidating paper as defined in subsection (c) of this Section 8.13. (c) As used in this Section 8.13: (1) The term "default" shall mean any failure to make payment in full of the principal of or interest on any of the Subordinated Debt Securities or upon the other indenture securities when and as such principal or interest becomes due and payable. (2) The term "other indenture securities" shall mean securities upon which the Company is an obligor (as defined in the Trust Indenture Act of 1939) outstanding under any other indenture (A) under which the Trustee is also trustee, (B) which contains provisions substantially similar to the provisions of subsection (a) of this Section 8.13, and (C) under which a default exists at the time of the apportionment of the funds and property held in said special account. (54) 58 (3) The term "cash transaction" shall mean any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand. (4) The term "self-liquidating paper" shall mean any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacture, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising form the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation. (5) The term "Company" shall mean any obligor upon the Subordinated Debt Securities. ARTICLE NINE. CONCERNING THE HOLDERS OF SUBORDINATED DEBT SECURITIES. Section 9.01. Whenever in this Indenture it is provided that the holders of a specified percentage in aggregate principal amount of the Subordinated Debt Securities of a Series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by holders in person or by agent or proxy appointed in writing, or (b) by the record of the holders of the Subordinated Debt Securities of such Series voting in favor thereof at any meeting of holders duly called and held in accordance with the provisions of Article Ten, or (c) by a combination of such instrument or instruments and any such record of such a meeting of holders. Section 9.02. Subject to the provisions of Section 9.01 and Section 9.05, proof of the execution of any instrument by a holder or his agent or proxy and proof of the holding by any person of any of the Subordinated Debt Securities of a Series shall be sufficient if made in the following manner: The fact and date of the execution by any such person of any instrument may be proved by the certificate of any notary public or other officer of any jurisdiction within the United States of America authorized to take acknowledgments of deeds to be recorded in such jurisdiction, that the person executing such instrument acknowledged to him the execution thereof, by an affidavit of a witness to such execution sworn to before any such notary or other such officer or by any other method or in any other manner as shall be acceptable to the Trustee. If such execution is by an officer of a corporation or association or a member of a (55) 59 partnership on behalf of such corporation, association or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. The ownership of Subordinated Debt Securities of a Series shall be proved by the Subordinated Debt Security Register or by a certificate of the Subordinated Debt Security Registrar thereof. The Trustee shall not be bound to recognize any person as a holder unless and until his title to the Subordinated Debt Securities held by him is proved in the manner in this Article Nine provided. The Trustee may require such additional proof of any matter referred to in this Section 9.02 as it shall deem necessary. The record of any holders' meeting shall be proved in the manner provided in Section 10.06. Section 9.03. The Company, the Trustee, any paying agent and any Subordinated Debt Security Registrar may deem and treat the person in whose name any Subordinated Debt Security shall be registered in the Subordinated Debt Security Register as the absolute owner of such Subordinated Debt Security (whether or not such Subordinated Debt Security shall be overdue and notwithstanding any notation of ownership or other writing thereon made by anyone other than the Company or any Subordinated Debt Security Registrar) for the purpose of receiving payment thereof or on account thereof and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any Subordinated Debt Security Registrar shall be affected by any notice to the contrary. All such payments so made to any such registered holder for the time being, or upon his order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for monies payable upon any such Subordinated Debt Security. Section 9.04. In determining whether the holders of the requisite aggregate principal amount of Subordinated Debt Securities of a Series have concurred in any direction, consent or waiver under this Indenture, Subordinated Debt Securities of such Series which are owned by the Company, or any other obligor on the Subordinated Debt Securities of such Series or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, or any other obligor on the Subordinated Debt Securities of such Series shall be disregarded and deemed not to be outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver only Subordinated Debt Securities of such Series which the Trustee knows are so owned shall be so disregarded. Subordinated Debt Securities of such Series so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section 9.04, if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Subordinated Debt Securities and that the pledgee is not a person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, or any such other obligor. (56) 60 Upon request of the Trustee, the Company shall furnish to the Trustee promptly an Officers' Certificate listing and identifying all Subordinated Debt Securities of such Series, if any, known by the Company to be owned or held by or for the account of any of the above described persons; and, subject to the provisions of Section 8.01, the Trustee shall be entitled to accept such Officers' Certificate as conclusive evidence of the facts therein set forth and of the fact that all Subordinated Debt Securities of such Series not listed therein are outstanding for the purposes of any such determination; Section 9.05. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 9.01, of the taking of any action by the holders of the percentage in aggregate principal amount of the Subordinated Debt Securities of a Series specified in this Indenture in connection with such action, any holder of a Subordinated Debt Security of such Series the serial number of which is shown by the evidence co be included in the Subordinated Debt Securities of such Series the holders of which have consented to such action may, by filing written notice with the Trustee at its office and upon proof of holding as provided in Section 9.02, revoke such action so far as concerns such Subordinated Debt Security. Except as aforesaid, any such action taken by the holder of any Subordinated Debt Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Subordinated Debt Security, and of any Subordinated Debt Security issued in exchange or substitution therefor, irrespective of whether or not any notation in regard thereto is made upon such Subordinated Debt Security. Any action taken by the holders of the percentage in aggregate principal amount of the Subordinated Debt Securities of a Series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Subordinated Debt Securities of such Series. ARTICLE TEN. MEETINGS OF HOLDERS OF SUBORDINATED DEBT SECURITIES. Section 10.01. A meeting of holders of Subordinated Debt Securities of any or all Series may be called at any time and from time to time pursuant to the provisions of this Article Ten for any of the following purposes: (1) to give any notice to the Company or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any default hereunder and its consequences, or to take any other action authorized to be taken by holders pursuant to any of the provisions of Article Seven; (2) to remove the Trustee with respect to one or more or all Series and appoint a successor trustee pursuant to the provisions of Article Eight; (3) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 11.02; or (57) 61 (4) to take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of the Subordinated Debt Securities of any or all Series under any other provision of this Indenture or under applicable law. Section 10.02. The Trustee may at any time call a meeting of holders of Subordinated Debt Securities to take any action specified in Section 10.01, to be held at such time and at such place as the Trustee shall determine. Notice of every meeting of the holders of any or all Series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting shall be mailed to such holders of Subordinated Debt Securities at that addresses as shown by the Subordinated Debt Security Register not less than 20 nor more than 60 days prior to the date fixed for the meeting. Section 10.03. In case at any time the Company, pursuant to a resolution of its Board of Directors, shall have requested the Trustee to call a meeting of holders of any or all Series, or the holders of at least 10 per cent in aggregate principal amount of the Subordinated Debt Securities of the Series then outstanding with respect to which a meeting is proposed to be called shall have requested the Trustee to call a meeting of the holders of the applicable Series, to take any action authorized in Section 10.01 by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within 20 days after receipt of such request, then the Company or the holders of Subordinated Debt Securities of the applicable Series in the amount above specified may determine the time and the place for such meeting and may call such meeting by mailing notice thereof as provided in Section 10.02. Section 10.04. To be entitled to vote at any meeting of holders of Subordinated Debt Securities of any or all Series a person shall (a) be a holder of one or more Subordinated Debt Securities with respect to which such meeting was called, or (b) be a person appointed by an instrument in writing as proxy by a holder of one or more Subordinated Debt Securities with respect to which such meeting was called. The only persons who shall be entitled to be present or to speak at any meeting of holders of Subordinated Debt Securities of any or all Series shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. Section 10.05. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of holders of Subordinated Debt Securities, in regard to proof of the holding of Subordinated Debt Securities and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Subordinated Debt Securities shall be proved in the manner specified in Section 9.02 and the appointment of any proxy shall be proved in the manner specified in said Section 9.02 or by having the signature of the person executing the proxy witnessed or guaranteed by any bank, banker or trust company. The Trustee shall, by an instrument in writing, appoint a (58) 62 temporary chairman of the meeting, unless the meeting shall have been called by the Company or by holders as provided in Section 10.03, in which case the Company or the holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the holders of a majority in aggregate principal amount of the Subordinated Debt Securities represented at the meeting and entitled to vote. Subject to the provisions of Section 9.04, at any meeting each holder or proxy shall be entitled to one vote for each $1,000 (unless otherwise provided in the related Series Supplement) principal amount of Subordinated Debt Securities of the Series entitled to vote held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Subordinated Debt Security challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Subordinated Debt Securities of the Series entitled to vote held by him or instruments in writing as aforesaid duly designating him as the person to vote on behalf of other holders. Any meeting of holders duly called pursuant to the provisions of Section 10.02 or 10.03 may be adjourned from time to time, and the meeting may be held as so adjourned without further notice. At any meeting of holders of Subordinated Debt Securities of any or all Series, the presence of persons holding or representing Subordinated Debt Securities of the applicable Series in an aggregate principal amount sufficient to take action upon the business for the transaction of which such meeting was called shall be necessary to constitute a quorum; but, if less than a quorum be present, the persons holding or representing a majority of the Subordinated Debt Securities of the applicable Series represented at the meeting may adjourn such meeting with the same effect as though a quorum had been present. Section 10.06. The vote upon any resolution submitted to any meeting of holders shall be by written ballots on which shall be subscribed the signatures of the holders or proxies and the serial number or numbers of the Subordinated Debt Securities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 10.02. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. (59) 63 ARTICLE ELEVEN. SUPPLEMENTAL INDENTURES. Section 11.01. The Company, when authorized by resolutions of its Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act of 1939 as in force at the date of the execution thereof) for one or more of the following purposes: (a) to evidence the succession of another corporation to the Company or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Company pursuant to Article Twelve; (b) to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider to be for the protection of the holders of any Series of Subordinated Debt Securities, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions, conditions or provisions a default or an event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default or may limit the right of the holders of a majority in aggregate principal amount of the Subordinated Debt Securities of a Series to waive such default; (c) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture; to convey, transfer, assign, mortgage or pledge any property to or with the Trustee, or to make such other provisions in regard to matters or questions arising under this Indenture which shall not be inconsistent with the provisions of this Indenture, provided that such action shall not adversely affect the interests of the holders of the Subordinated Debt Securities; and (d) to set forth the terms of any Series that has not theretofore been authorized by a Series Supplement. The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. (60) 64 Any supplemental indenture authorized by the provisions of this Section 11.01 may be executed by the Company and the Trustee without the consent of the holders of any of the Subordinated Debt Securities at the time outstanding, notwithstanding any of the provisions of Section 11.02. Section 11.02. With the consent (evidenced as provided in Section 9.01) of the holders of not less than a majority in aggregate principal amount of the Subordinated Debt Securities of each Series to be affected at the time outstanding, the Company, when authorized by resolutions of its Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act of 1939 as in force at the date of the execution thereof) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Subordinated Debt Securities of such Series; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Subordinated Debt Securities, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the holder of each Subordinated Debt Security so affected, (ii) reduce the aforesaid percentage of Subordinated Debt Securities of any Series, the consent of the holders of which is required for any such supplemental indenture, without the consent of the holders of all Subordinated Debt Securities of such Series then outstanding, or (iii) modify any of the provisions of this Section or Section 7.06, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the holder of each Subordinated Debt Security affected thereby. Upon the request of the Company, accompanied by a copy of resolutions of its Board of Directors certified by the Secretary or an Assistant Secretary of the Company authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of the holders as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. It shall not be necessary for the consent of the holders under this Section 11.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section 11.02, the Company shall mail to the holders to which such supplemental indenture relates a notice, setting forth in general terms the substance of such supplemental indenture. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. (61) 65 Section 11.03. Upon the execution of any supplemental indenture pursuant to the provisions of this Article Eleven, this Indenture shall be and be deemed to be modified and amended in accordance therewith with respect to each Series of Subordinated Debt Securities affected thereby or all Subordinated Debt Securities, as the case may be, and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Subordinated Debt Securities of each Series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. The Trustee, subject to the provisions of Section 8.01, may receive an Opinion of Counsel as conclusive evidence that any such supplemental indenture complies with the provisions of this Article Eleven and that all conditions precedent thereto have been met. Section 11.04. Subordinated Debt Securities authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article Eleven or after any action taken at a meeting of holders of Subordinated Debt Securities pursuant to Article Ten, may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture or as to any such action. New Subordinated Debt Securities so modified as to conform, in the opinion of the Trustee and the Board of Directors of the Company, to any modification of this Indenture contained in any such supplemental indenture or reflecting such action may be prepared by the Company, and such Subordinated Debt Securities may be authenticated by the Trustee and delivered in exchange for the Subordinated Debt Securities then outstanding. ARTICLE TWELVE. CONSOLIDATION, MERGER, SALE OR CONVEYANCE. Section 12.01. (a) Nothing contained in this Indenture or in any of the Subordinated Debt Securities shall prevent any consolidation or merger of the Company with or into any other corporation or corporations or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale or conveyance of the property of the Company as an entirety or substantially as an entirety to any other corporation authorized to acquire and operate the same; provided, however, and the Company hereby covenants and agrees, that any such consolidation, merger, sale or conveyance shall be upon the condition that (a) immediately after such consolidation, merger, sale or conveyance, the corporation (whether the Company or such other corporation) formed by or surviving any such consolidation or merger, or to which such sale or conveyance shall have been made, shall not be in default in the performance or observance of any of the terms' covenants and conditions of this Indenture to be kept or performed by the Company; (b) the corporation (if other than the Company) formed by or surviving any such consolidation or merger, or to which such sale or conveyance shall have been made, shall be a corporation organized under the laws of the United States of America or any state thereof; and (c) the due (62) 66 and punctual payment of the principal of (and premium, if any) and interest on all of the Subordinated Debt Securities, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of this Indenture to be performed, or observed by the Company, shall be expressly assumed by the corporation formed by such consolidation, or into which the Company shall have been merged, or by the corporation which shall have acquired such property, by supplemental indenture, satisfactory in form to the Trustee, executed and delivered to the Trustee by the corporation formed by such consolidation, or into which the Company shall have been merged, or by the corporation which shall have acquired such property. Section 12.02. In case of any such consolidation, merger, sale or conveyance in accordance with Section 12.01, such successor corporation shall succeed to and be substituted for the Company with the same effect as if it had been named herein as a party, and the Company (including any intervening successor to either hereunder) shall be relieved of any further obligation under this Indenture and the Subordinated Debt Securities; provided, however, that in the case of a sale or conveyance of the property of the Company (including any such intervening successor), in connection with which there is no plan providing for the complete liquidation of the Company (including any such intervening successor), the Company (including any such intervening successor) shall continue to be liable on its obligations under this Indenture and the Subordinated Debt Securities to the extent, but only to the extent, of liability to pay the principal of and premium, if any, and interest on the Subordinated Debt Securities at the time, places and rate, and in the coin or currency, prescribed in this Indenture and the Subordinated Debt Securities. Any such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of the Company any or all of the Subordinated Debt Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of any such successor corporation, and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Subordinated Debt Securities which previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Subordinated Debt Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Subordinated Debt Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Subordinated Debt Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Subordinated Debt Securities had been issued at the date of the execution hereof. In case of any such consolidation, merger, sale or conveyance, such changes in phraseology and form (but not in substance) may be made in the Subordinated Debt Securities thereafter to be issued as may be appropriate. Section 12.03. The Trustee, subject to the provisions of Sections 8.01 and 8.02, may receive an Officer's Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale or conveyance complies with the provisions of this Article Twelve and that all conditions precedent herein provided relating to such transaction have been complied with. (63) 67 ARTICLE THIRTEEN. SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS. Section 13.01. The Company may terminate its obligation under the Subordinated Debt Securities of a Series and this Indenture with respect to such Subordinated Debt Securities (including without limitation the provisions of Article Three), except those obligations referred to in the immediately succeeding paragraph, if at any time (a) the Company shall have delivered to the Trustee for cancellation all Subordinated Debt Securities of any Series theretofore authenticated and delivered (other than any Subordinated Debt Securities which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.08) and the Company shall have paid or caused to be paid all sums payable by it hereunder, or (b) if the Company has irrevocably deposited or caused to be deposited with the Trustee under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, as trust funds in trust solely for the benefit of the holders of the Subordinated Debt Securities of such Series for that purpose, money or direct non-callable obligations of, or non-callable obligations guaranteed by, the United States of America for the payment of which guarantee or obligation the full faith and credit of the United States is pledged ("U.S. Government Obligations") maturing as to principal and interest in such amounts and at such times as are sufficient, as verified in a Certificate of a Firm of Independent Public Accountants, without consideration of any reinvestment of such interest, to pay principal of and interest or sinking funds on the outstanding Subordinated Debt Securities of such Series to maturity or redemption as the case may be, provided that the Trustee or any paying agent shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to the payment of said principal and interest and said sinking fund with respect to the Subordinated Debt Securities of such Series. The Company may make an irrevocable deposit pursuant to this Section 13.01 only if at such time it is not prohibited from doing so under the provisions of Article Three and the Company shall have delivered to the Trustee and any such paying agent an Officers' Certificate and an Opinion of Counsel, each stating that all conditions herein precedent to the satisfaction and discharge of this Indenture have been complied with and the Opinion of Counsel further states that the making of such deposit (i) does not contravene or violate any provision of any indenture, mortgage, loan agreement or other similar agreement known to such counsel to which the Company is a party or by which it or any of its property is bound, and (ii) does not require registration by the deposit referred to above under the Investment Company Act of 1940, as amended. Notwithstanding the foregoing paragraph, the Company's obligations in Sections 2.06, 2.08, 5.01, 5.02, 5.05, 6.01, 8.06, 8.10, 13.04 and 13.05 shall survive until the Subordinated Debt Securities of such Series are no longer outstanding. Thereafter, the Company's obligations in Section 8.06, 13.04 and 13.05 shall survive. After any such irrevocable deposit, the Trustee upon request shall (i) acknowledge in writing the discharge of the Company's obligations under the Subordinated Debt Securities of (64) 68 such Series and this Indenture except for those surviving obligations specified above, (ii) execute, deliver and file termination statements, releases and other instruments of satisfaction, release and discharge with respect to such released security interest and (iii) assign, transfer and deliver to the Company all the Trustee's rights and interest in and to that portion of the trust estate so released. Section 13.02. Subject to the provisions of Section 13.04, all moneys or U.S. Government Obligations deposited with the Trustee pursuant to Section 13.01 shall be held in trust and, notwithstanding the provisions of Article Three, applied by it to the payment, either directly or through any paying agent, (including the Company acting as its own paying agent), to the holders of the particular Subordinated Debt Securities of the applicable Series, for the payment or redemption of which such moneys or U.S. Government Obligations have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest and premium, if any, and Sinking Fund payments. Moneys and securities so held in trust, to the extent allocated for the payment of Subordinated Debt Securities of any applicable Series, are not subject to the provisions of Article Three. Section 13.03. In connection with the satisfaction and discharge of this Indenture with respect to the Subordinated Debt Securities of any Series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such Series of Subordinated Debt Securities shall, upon demand of the Company, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys. Section 13.04. Any moneys deposited with the Trustee or any paying agent for the payment of the principal of and premium, if any, or interest on Subordinated Debt Securities of any Series and not applied but remaining unclaimed by the holders of Subordinated Debt Securities of such Series for three years after the date upon which such payment shall have become due, shall be held uninvested and without liability for interest and shall be repaid to the Company by the Trustee or by such paying agent on demand; and the holder of any of the Subordinated Debt Securities of the applicable Series entitled to receive such payment shall thereafter look only to the Company for the payment thereof and all liability of the Trustee or any paying agent with respect to such moneys shall thereupon cease; provided, however, that the Trustee or such paying agent, before being required to make any such repayment, may at the expense of the Company cause to be published once a week for two successive weeks (in each case on any day of the week) in an authorized newspaper a notice that said moneys have not been so applied and that after a date named therein any unclaimed balance of said moneys then remaining will be returned to the Company. Section 13.05. If the Trustee is unable to apply any money or U.S. Government Obligations in accordance with Section 13.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Subordinated Debt Securities of any Series affected thereby shall be revived and reinstated as though no deposit had occurred pursuant to Section 13.01, until such time as the Trustee is (65) 69 permitted to apply all such money or U.S. Government Obligations in accordance with Section 13.01; provided, however, that if the Company has made any payment of interest on or principal of any subordinated Debt Securities of such Series because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the holders of such Subordinated Debt Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee. ARTICLE FOURTEEN. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS. Section 14.01. No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Subordinated Debt Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors, as such, of the Company or of any successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in the Subordinated Debt Securities of any Series or implied therefrom; and that any and all such personal liability, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director, as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in the Subordinated Debt Securities of any Series or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of such Subordinated Debt Securities. ARTICLE FIFTEEN. MISCELLANEOUS PROVISIONS. Section 15.01. All the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not. Section 15.02. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation that shall at that time be the successor of the Company. (66) 70 Section 15.03. The Company by instrument in writing executed by authority of its Board of Directors and delivered to the Trustee may surrender any of the powers or right reserved to the Company and thereupon such power or right so surrendered shall terminate both as to the Company and as to any successor corporation. Section 15.04. Any notice or demand which by any provisions of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Subordinated Debt Securities to or on the Company shall be delivered by hand or sent by first-class mail, postage prepaid, addressed (until another address is filed by the Company with the Trustee), as follows: Centex Corporation, 4600 RepublicBank Tower, Dallas, Texas 75201, Attention: Corporate Secretary. Any notice, direction, request or demand by any holder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made at any corporate trust office of the Trustee. Section 15.05. Where this Indenture provides for notice to holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid, to each holder affected by such event, at his address as it appears on the Subordinated Debt Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular holder shall affect the sufficiency of such notice with respect to other holders, and any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given. When this Indenture provides for notice in any manner, such notice may be waived in writing by the person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case, by reason of the suspension of, regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to holders of Subordinated Debt Securities when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. Section 15.06. This Indenture, each indenture supplemental thereto and each Subordinated Debt Security shall be deemed to be a contract made under the laws of the State of Texas, and for all purposes shall be construed in accordance with the laws of said State. Section 15.07. Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent (including any covenant compliance with which constitutes a condition precedent) provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the (67) 71 opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such document is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished. Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based: (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. Section 15.08. In any case where the date of maturity of interest on or principal of the Subordinated Debt Securities or the date fixed for redemption of any Subordinated Debt Security shall not be a business day then payment of interest or principal and premium, if any, to the holders need not be made on such date, but may be made on the next succeeding business day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date. Section 15.09. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture which is required to be included in this Indenture by any of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939, such required provision shall control. Section 15.10. In case any provision in this Indenture or in the Subordinated Debt Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 15.11. This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 15.12. Unless specified otherwise in the Series Supplement, interest on the Subordinated Debt Securities shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Section 15.13. Texas Commerce Bank-Dallas, N.A., thereby accepts the trusts in this Indenture declared and provided, upon the terms and conditions hereinabove set forth. (68) 72 IN WITNESS WHEREOF, CENTEX CORPORATION has caused this Indenture to be signed by its President or one of its Vice Presidents, and its corporate seal to be affixed hereunto, and the same to be attested by its Secretary or an Assistant Secretary, and TEXAS COMMERCE BANK-DALLAS, N.A., has caused this Indenture to be signed by one of its duly authorized trust officers and its corporate seal to be affixed hereunto, and the same to be duly attested, all as of the day and year first above written. CENTEX CORPORATION By: /s/ JEFFERY W. SEEL --------------------------------------------- Jeffery W. Seel, Vice President ATTEST: /s/ JOHN G. JONES - ----------------------------------- John G. Jones, Vice President General Counsel and Secretary TEXAS COMMERCE BANK-DALLAS, N.A., as Trustee By: /s/ MARTIN J. WEILAND --------------------------------------------- Martin J. Weiland, Senior Vice President and Senior Trust Officer ATTEST: /s/ PATTY A. STREETY - ----------------------------------- Patty A. Streety, Vice President and Trust Officer (69) 73 STATE OF TEXAS ) ) COUNTY OF DALLAS ) BEFORE ME, the undersigned authority, a Notary Public in and for said state, on this day personally appeared Jeffery W. Seel and John G. Jones, known to me to be the persons and officers whose names are subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said CENTEX CORPORATION, a Nevada corporation, and that they executed the same as the act of said corporation for the purposes and consideration therein expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 11 day of March, 1987. /s/ ELIZABETH S. BOOHER --------------------------------------------- Notary Public in and for the State of Texas My commission expires: - ----------------------- STATE OF TEXAS ) ) COUNTY OF DALLAS ) BEFORE ME, the undersigned authority, a Notary Public in and for said state, on this day personally appeared Martin J. Weiland and Patty A. Streety, known to me to be the persons and officers whose names are subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said TEXAS COMMERCE BANK- DALLAS, N.A., a national banking association, and that they executed the same as the act of said national banking association for the purposes and consideration therein expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 11 day of March, 1987. /s/ ELIZABETH S. BOOHER --------------------------------------------- Notary Public in and for the State of Texas My commission expires: - ----------------------- (70) EX-5.1 3 OPINION AND CONSENT OF RAYMOND G. SMERGE, ESQ. 1 Exhibit 5.1 May 14, 1999 Centex Corporation 2728 North Harwood Dallas, Texas 75201 Re: SENIOR AND SUBORDINATED DEBT SECURITIES Gentlemen: I am Executive Vice President, Chief Legal Officer and Secretary of Centex Corporation, a Nevada corporation (the "Company"), and have acted in such capacities in connection with the proposed issuance and sale by the Company of up to $250,000,000 aggregate principal amount of various series of debt securities, which may be senior debt securities or subordinated debt securities (collectively, "Debt Securities"), to certain underwriters to be named later (the "Underwriters"), such sales to be made in accordance with the terms of an Underwriting Agreement (the "Underwriting Agreement") to be entered into by the Company and a representative or representatives of the Underwriters (the "Representative"), in substantially the form filed as an Exhibit to the Registration Statement (as such term is hereinafter defined), and a Pricing Agreement (the "Pricing Agreement") with respect to each series of Debt Securities to be entered into by the Company and the Representative, on behalf of itself and the other Underwriters, if any, named therein, in substantially the form filed as an Exhibit to the Registration Statement. Each series of Debt Securities will be issued under: (i) an indenture (the "Senior Indenture") dated as of October 1, 1998, by and between the Company and Chase Bank of Texas, National Association, as trustee (the "Senior Trustee"), relating to the Company's senior debt securities, various series (the "Senior Debt Securities"), which Senior Indenture is incorporated by reference as an Exhibit to the Registration Statement, or (ii) an Indenture (the "Subordinated Indenture") dated as of March 12, 1987, by and between the Company and Texas Commerce Bank National Association, as trustee (the "Subordinated Trustee"), relating to the Company's subordinated debt securities, various series (the "Subordinated Debt Securities"), which Subordinated Indenture is incorporated by reference as an Exhibit to the Registration Statement, and in either case a Supplemental Indenture (the "Supplemental Indenture") with respect to each series of Senior or Subordinated Debt Securities to be entered into by the Company and the Senior Trustee or the Subordinated Trustee, as applicable, in substantially the forms filed or incorporated by reference as Exhibits to the Registration Statement. As Executive Vice President, Chief Legal Officer and Secretary of the Company, I have participated in and am familiar with the corporate proceedings of the Company relating to the preparation of the Company's Registration Statement on Form S-3 filed with the Securities and 2 Centex Corporation May 14, 1999 Page 2 Exchange Commission (the "Commission") on this date (the "Registration Statement"), providing for the registration of the Debt Securities for sale to the Underwriters from time to time under the Securities Act of 1933, as amended (the "1933 Act"), and Rule 415 promulgated thereunder. In connection with the foregoing, I have researched such questions of law and examined the originals or copies of the Registration Statement, the Subordinated Indenture, and the forms of Underwriting Agreement, Pricing Agreement, Senior Indenture and Supplemental Indentures filed or incorporated by reference as Exhibits to the Registration Statement, and such corporate records, agreements or other instruments of the Company and other instruments and documents as I have deemed relevant and necessary to require as a basis for the opinion hereinafter expressed. As to various questions of fact material to such opinion, I have, where relevant facts were not independently established, relied upon statements of other officers of the Company, who I believe to be responsible. Based upon the foregoing and in reliance thereon, I advise you that in my opinion when (i) the series designation with respect to a series of Debt Securities to be sold by the Company to the Underwriters and the other matters relating thereto shall have been approved by the Board of Directors of the Company (or a duly appointed committee thereof), (ii) the Registration Statement shall have become effective under the 1933 Act, (iii) the Underwriting Agreement, Pricing Agreement, and Supplemental Indenture with respect to such series of Debt Securities shall have been authorized, executed and delivered by the parties thereto in substantially the forms filed or incorporated by reference, as the case may be, as Exhibits to the Registration Statement, and (iv) the Debt Securities of such series shall have been issued, executed, authenticated, delivered and sold in accordance with the provisions of the Senior Indenture or the Subordinated Indenture, as applicable, and the Underwriting Agreement and Supplemental Indenture relating to the Debt Securities of such series, the Debt Securities of such series will be validly issued and will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances and applicable bankruptcy, insolvency, reorganization, moratorium or similar laws related to or affecting creditors' rights generally. The opinion expressed above is subject to the qualification that I am a member of the Bar of the State of Texas and such opinion is limited to the laws of the Sate of Texas, the United States of America and, to the extent relevant to the opinion expressed above, Nevada corporate law. 3 Centex Corporation May 14, 1999 Page 3 I hereby consent to the reference to myself under the caption "Legal Opinions" in the Prospectus included in the Registration Statement and to the filing of this opinion as Exhibit 5.1 to the Registration Statement. The foregoing, however, shall not constitute an admission by me that I am an expert as provided for in Sections 7 and 11 of the 1933 Act. Very truly yours, /s/ Raymond G. Smerge Raymond G. Smerge Executive Vice President, Chief Legal Officer and Secretary EX-23.1 4 CONSENT OF ARTHUR ANDERSEN LLP 1 EXHIBIT 23.1 [ARTHUR ANDERSEN LLP] CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Amendment No. 1 to Registration Statement on Form S-3 of our report dated May 8, 1998, which appears at page 43 of Centex Corporation's 1998 Annual Report to Stockholders, which is incorporated by reference in the Joint Annual Report on Form 10-K of Centex Corporation, 3333 Holding Corporation, and Centex Development Company, L.P. for the year ended March 31, 1998, and to all references to our firm included in this Amendment No. 1 to Registration Statement on Form S-3. /s/ ARTHUR ANDERSEN LLP Dallas, Texas May 11, 1999 -----END PRIVACY-ENHANCED MESSAGE-----