Exhibit 4.11
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CAPITAL SECURITIES GUARANTEE AGREEMENT
M.D.C. HOLDINGS, INC.
Dated as of
Relating to Capital Securities of
MDC CAPITAL FUNDING TRUST [ ]
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.......................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.....................................................6
SECTION 2.2 Lists of Holders of Securities.......................................................6
SECTION 2.3 Reports by the Capital Securities Guarantee Trustee..................................6
SECTION 2.4 Periodic Reports to Capital Securities Guarantee Trustee.............................7
SECTION 2.5 Evidence of Compliance with Conditions Precedent.....................................7
SECTION 2.6 Events of Default; Waiver............................................................7
SECTION 2.7 Events of Default; Notice............................................................7
SECTION 2.8 Conflicting Interests................................................................8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities Guarantee Trustee........................8
SECTION 3.2 Certain Rights of Capital Securities Guarantee Trustee..............................10
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee...............................13
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility...................................13
SECTION 4.2 Appointment, Removal and Resignation of Capital Securities Guarantee Trustees.......14
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ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...........................................................................15
SECTION 5.2 Waiver of Notice and Demand.........................................................15
SECTION 5.3 Obligations Not Affected............................................................16
SECTION 5.4 Rights of Holders...................................................................17
SECTION 5.5 Guarantee of Payment................................................................17
SECTION 5.6 Subrogation.........................................................................17
SECTION 5.7 Independent Obligations.............................................................18
ARTICLE VI
LIMITATION OF TRANSACTIONS
SECTION 6.1 Limitation of Transactions..........................................................18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.........................................................................18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.........................................................................19
SECTION 8.2 Indemnification.....................................................................19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns..............................................................21
SECTION 9.2 Amendments..........................................................................21
SECTION 9.3 Notices.............................................................................21
SECTION 9.4 Benefit.............................................................................22
SECTION 9.5 Governing Law.......................................................................22
SECTION 9.6 No Recourse Against Certain Persons.................................................22
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CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Capital Securities Guarantee"), dated
as [ ], is executed and delivered by M.D.C. Holdings, Inc., a Delaware
corporation (the "Guarantor"), and , a banking corporation, as
trustee (the "Capital Securities Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of MDC Capital Funding Trust [ ], a Delaware statutory
business trust (the "Issuer").
WITNESSETH:
WHEREAS, pursuant to an amended and restated Declaration of Trust
(the "Declaration"), dated as of , [ ], among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from
time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing on the date hereof Capital Securities having an
aggregate liquidation amount of $[ ]designated the [ % ] (" " or
the "Capital Securities");
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Capital Securities Guarantee, to pay to the Holders
of the Capital Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") with substantially identical terms
as this Capital Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Indenture Event of
Default (as defined herein), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Capital
Securities to receive Guarantee Payments under this Capital Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes
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and delivers this Capital Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS AND INTERPRETATION
In this Capital Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Capital Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Capital Securities Guarantee
has the same meaning throughout;
(c) all references to "the Capital Securities Guarantee" or "this
Capital Securities Guarantee" are to this Capital Securities
Guarantee as modified, supplemented or amended from time to
time;
(d) all references in this Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Capital Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Capital Securities Guarantee, unless
otherwise defined in this Capital Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in New
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York, New York or Denver, Colorado are authorized or required by law to close.
"CAPITAL SECURITIES GUARANTEE TRUSTEE" means , until a
Successor Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Capital Securities
Guarantee and thereafter means each such Successor Capital Securities
Guarantee Trustee.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"COVERED PERSON" means any Holder or beneficial owner of Capital
Securities.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Capital Securities Guarantee after
giving effect to all applicable cure periods.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Capital Securities to
the extent the Issuer has funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), to the extent the Issuer has funds available therefor, with
respect to any Capital Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Subordinated Notes to
the Holders in exchange for Capital Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Capital Securities to the date of payment, to the
extent the Issuer shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution"). If
an Indenture Event of Default has occurred and is continuing, the rights of
holders of the Common Securities to receive payments under the Common Securities
Guarantee are subordinated to the rights of Holders of Capital Securities to
receive Guarantee Payments.
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"HOLDER" shall mean any holder, as registered on the books and records
of the Issuer, of any Capital Securities; PROVIDED, HOWEVER, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"INDEMNIFIED PERSON" means the Capital Securities Guarantee Trustee,
any Affiliate of the Capital Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives or agents
of the Capital Securities Guarantee Trustee.
"INDENTURE" means the Indenture dated as of , [ ], between
the Guarantor and , as trustee, pursuant to which certain
subordinated debt securities of the Guarantor are to be issued to the
Property Trustee (as defined in the Declaration), as from time to time
amended.
"INDENTURE EVENT OF DEFAULT" has the same meaning as that given to the
term "Event of Default" in the Indenture.
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Capital Securities,
voting separately as a class, of more than 50% of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Capital Securities outstanding as of
the date of determination.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers (as defined in the Declaration) of
such Person. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Capital Securities Guarantee shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed
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opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PROPERTY TRUSTEE" shall have the meaning ascribed to such term in the
Declaration.
"RESPONSIBLE OFFICER" means, with respect to the Capital Securities
Guarantee Trustee, (a) any vice president, any assistant vice president, any
secretary or assistant secretary, the treasurer, any assistant treasurer, any
trust officer or assistant trust officer or any other officer of the corporate
trust department of the Capital Securities Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject and (b) who shall have
direct responsibility for the administration of this Agreement.
"SUCCESSOR CAPITAL SECURITIES GUARANTEE TRUSTEE" means a successor
Capital Securities Guarantee Trustee possessing the qualifications to act as
Capital Securities Guarantee Trustee under Section 4.1.
"TRUST DEBENTURES" means the series of subordinated debt securities of
the Guarantor designated the [ ] held by the Property Trustee.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION
(a) This Capital Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Capital Securities
Guarantee and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Capital Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES
(a) The Guarantor shall provide the Capital Securities Guarantee
Trustee with a list, in such form as the Capital Securities Guarantee Trustee
may reasonably require, of the names and addresses of the Holders of the Capital
Securities ("List of Holders") (i) as of January 1 and June 30 of each year,
within 10 Business Days thereafter, and (ii) at any other time within 30 days of
receipt by the Guarantor of a written request from the Capital Securities
Guarantee Trustee for a List of Holders, which shall be as of a date no more
than 14 days before such List of Holders is given to the Capital Securities
Guarantee Trustee; PROVIDED, HOWEVER, that the Guarantor shall not be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Capital Securities Guarantee
Trustee by the Guarantor. The Capital Securities Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The Capital Securities Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3. REPORTS BY THE CAPITAL SECURITIES GUARANTEE TRUSTEE
Within 60 days after each December 31 of each year, the Capital
Securities Guarantee Trustee shall provide to the Holders of the Capital
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form
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and in the manner provided by Section 313 of the Trust Indenture Act. The
Capital Securities Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO CAPITAL SECURITIES GUARANTEE TRUSTEE
The Guarantor shall provide to the Capital Securities Guarantee Trustee
such documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
The Guarantor shall provide to the Capital Securities Guarantee Trustee
with a certification of compliance with any conditions precedent, if any,
provided for in this Capital Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) of
the Trust Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER
The Holders of a Majority in liquidation amount of Capital Securities
may, by vote, on behalf of the Holders of all of the Capital Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Capital Securities
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 2.7. EVENTS OF DEFAULT; NOTICE
(a) The Capital Securities Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default that is actually known to the
Capital Securities Guarantee Trustee (or as soon as reasonably practical
thereafter), transmit by mail, first class postage prepaid, to the Holders of
the Capital Securities, notices of all Events of Default actually known to the
Capital Securities Guarantee Trustee, unless such defaults
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have been cured before the giving of such notice; PROVIDED, HOWEVER, that the
Capital Securities Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the Capital
Securities Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Capital Securities.
(b) The Capital Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received actual knowledge, or a Responsible Officer charged
with the administration of the Declaration shall have obtained written notice,
of such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS
The Declaration shall be deemed to be specifically described in this
Capital Securities Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE CAPITAL SECURITIES GUARANTEE TRUSTEE
(a) This Capital Securities Guarantee shall be held by the Capital
Securities Guarantee Trustee for the benefit of the Holders of the Capital
Securities, and the Capital Securities Guarantee Trustee shall not transfer this
Capital Securities Guarantee to any Person except a Holder of Capital Securities
exercising his or her rights pursuant to Section 5.4(b) or to a Successor
Capital Securities Guarantee Trustee on acceptance by such Successor Capital
Securities Guarantee Trustee of its appointment to act as Successor Capital
Securities Guarantee Trustee. The right, title and interest of the Capital
Securities Guarantee Trustee shall automatically vest in any Successor Capital
Securities Guarantee Trustee, and such vesting (and cessation as to the Capital
Securities Guarantee Trustee) of title shall be effective whether or not
conveyancing documents
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have been executed and delivered pursuant to the appointment of such Successor
Capital Securities Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Capital
Securities Guarantee Trustee shall enforce this Capital Securities Guarantee for
the benefit of the Holders of the Capital Securities.
(c) The Capital Securities Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Capital Securities Guarantee, and no implied covenants shall be
read into this Capital Securities Guarantee against the Capital Securities
Guarantee Trustee. In case an Event of Default has occurred (that has not been
cured or waived pursuant to Section 2.6), the Capital Securities Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Capital Securities Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Capital Securities Guarantee shall be
construed to relieve the Capital Securities Guarantee Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Capital
Securities Guarantee Trustee shall be determined solely by the
express provisions of this Capital Securities Guarantee, and
the Capital Securities Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Capital Securities
Guarantee, and no implied covenants or obligations shall be
read into this Capital Securities Guarantee against the
Capital Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Capital Securities Guarantee Trustee, the Capital Securities
Guarantee Trustee may conclusively rely, as to the truth of
the statements and the correctness
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of the opinions expressed therein, upon any certificates or
opinions furnished to the Capital Securities Guarantee Trustee
and conforming to the requirements of this Capital Securities
Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Capital Securities Guarantee
Trustee, the Capital Securities Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Capital Securities
Guarantee (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein);
(ii) the Capital Securities Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer of the Capital Securities Guarantee Trustee, unless it shall be
proved that the Capital Securities Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Capital Securities Guarantee 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 liquidation amount of the Capital Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Capital Securities Guarantee Trustee, or
exercising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Capital Securities Guarantee; and
(iv) no provision of this Capital Securities Guarantee shall
require the Capital Securities Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if the Capital Securities Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Capital Securities Guarantee or adequate indemnity against such risk or
liability is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF CAPITAL SECURITIES GUARANTEE TRUSTEE
(a) Subject to the provisions of Section 3.1:
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(i) The Capital Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or
refraining from acting upon, any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed, sent or presented
by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Capital Securities Guarantee shall be
sufficiently evidenced by a Direction (as defined in the
Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Capital
Securities Guarantee, the Capital Securities Guarantee Trustee
shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the
Capital Securities Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Capital Securities Guarantee Trustee shall
have no duty to see to any recording, filing or registration
of any instrument (or any rerecording, refiling or
reregistration thereof).
(v) The Capital Securities Guarantee Trustee may
consult with counsel of its selection, and the advice or
opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Capital
Securities Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this
Capital Securities Guarantee from any court of competent
jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall
be under no obligation to exercise any of the rights or powers
vested in it by this Capital Securities Guarantee at the
request or direction of any Holder, unless such Holder shall
have provided to the Capital Securities Guarantee
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Trustee such adequate security and indemnity as would satisfy
a reasonable person in the position of the Capital Securities
Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Capital Securities Guarantee Trustee; PROVIDED, HOWEVER, that
nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Capital Securities Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Capital
Securities Guarantee.
(vii) The Capital Securities Guarantee Trustee shall
not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital
Securities Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as
it may see fit.
(viii) The Capital Securities Guarantee 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 Capital Securities Guarantee Trustee shall
not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it
hereunder.
(ix) Any action taken by the Capital Securities
Guarantee Trustee or its agents hereunder shall bind the
Holders of the Capital Securities, and the signature of the
Capital Securities Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No
third party shall be required to inquire as to the authority
of the Capital Securities Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this
Capital Securities Guarantee, both of which shall be
conclusively evidenced by the Capital Securities Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Capital
Securities Guarantee the Capital Securities Guarantee Trustee
shall deem it desirable to receive instructions
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with respect to enforcing any remedy or right or taking any
other action hereunder, the Capital Securities Guarantee
Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Capital Securities, (ii)
may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii)
shall be protected in acting in accordance with such
instructions.
(b) No provision of this Capital Securities Guarantee shall be
deemed to impose any duty or obligation on the Capital Securities
Guarantee Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Capital
Securities Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power
or authority available to the Capital Securities Guarantee Trustee
shall be construed to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE
The recitals contained in this Capital Securities Guarantee shall be
taken as the statements of the Guarantor, and the Capital Securities Guarantee
Trustee does not assume any responsibility for their correctness. The Capital
Securities Guarantee Trustee makes no representation as to the validity or
sufficiency of this Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1. CAPITAL SECURITIES GUARANTEE TRUSTEE; ELIGIBILITY
(a) There shall at all times be a Capital Securities Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia,
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or a corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii),
the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Capital Securities Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the Capital
Securities Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Capital Securities Guarantee Trustee
and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF CAPITAL SECURITIES
GUARANTEE TRUSTEES
(a) Subject to Section 4.2(b), the Capital Securities Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
(b) The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Capital Securities Guarantee Trustee and
delivered to the Guarantor.
(c) The Capital Securities Guarantee Trustee appointed to office shall
hold office until a Successor Capital Securities Guarantee Trustee shall have
been appointed or until its removal or resignation. The Capital Securities
Guarantee Trustee may resign from office (without need for prior or subsequent
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accounting) by an instrument in writing executed by the Capital Securities
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Capital Securities Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Capital Securities Guarantee Trustee and delivered to the
Guarantor and the resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
30 days after delivery of an instrument of resignation or removal, the Capital
Securities Guarantee Trustee resigning or being removed may (at the expense of
the Guarantor) petition any court of competent jurisdiction for appointment of a
Successor Capital Securities Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Capital Securities Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. GUARANTEE
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND
The Guarantor hereby waives notice of acceptance of this Capital
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
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SECTION 5.3. OBLIGATIONS NOT AFFECTED
The obligations, covenants, agreements and duties of the Guarantor
under this Capital Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Capital
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Capital
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Capital
Securities (other than an extension of time for payment of
Distributions or other sum payable that results from the extension of
any interest payment period on the Subordinated Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Capital Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor;
17
it being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. RIGHTS OF HOLDERS
(a) The Holders of a Majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Capital Securities Guarantee
Trustee in respect of this Capital Securities Guarantee or exercising any trust
or power conferred upon the Capital Securities Guarantee Trustee under this
Capital Securities Guarantee.
(b) If the Capital Securities Guarantee Trustee fails to enforce this
Capital Securities Guarantee, any Holder of Capital Securities may institute a
legal proceeding directly against the Guarantor to enforce its rights under this
Capital Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Capital Securities Guarantee Trustee or any other
Person.
(c) Notwithstanding subsection 5.4(b), any Holder of Capital Securities
may directly institute proceedings against the Guarantor to obtain Guarantee
Payments in respect of the Capital Securities owned by such Holder, without
first waiting to determine if the Capital Securities Guarantee Trustee has
enforced this Capital Securities Guarantee or first instituting a legal
proceeding against the Issuer, the Capital Securities Guarantee Trustee or any
other Person.
SECTION 5.5. GUARANTEE OF PAYMENT
This Capital Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6. SUBROGATION
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Capital Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Capital Securities Guarantee; PROVIDED,
HOWEVER, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise
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any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Capital Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Capital Securities Guarantee. If any amount shall
be paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Capital
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS
SECTION 6.1. LIMITATION OF TRANSACTIONS
[RESERVED]
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION
This Capital Securities Guarantee shall terminate upon the earliest to
occur of (i) the full payment of the Redemption Price of all Capital Securities,
(ii) the distribution of Trust Debentures to the Holder(s) of all of the Capital
Securities or (iii) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Capital Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Capital Securities
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must restore payment of any sums paid under the Capital Securities or under this
Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. EXCULPATION
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Capital
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Capital Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omission.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions, the Redemption Price or the Liquidation Distribution to
Holders of Capital Securities might properly be paid.
(c) The provisions of this Section 8.1 shall survive the termination of
this Capital Securities Guarantee.
SECTION 8.2. INDEMNIFICATION
(a) The Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Capital Securities Guarantee and in
a manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified
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Person in accordance with this Capital Securities Guarantee, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
(b) Expenses (including legal fees and expenses) incurred by an
Indemnified Person in defending any claim, demand, action, suit or proceeding
(whether such claim, demand, action, suit or proceeding arises between the
parties hereto or results from suits involving third parties) shall, from time
to time, be advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).
(c) The Guarantor agrees
(i) to pay to the Capital Securities Guarantee Trustee from
time to time such compensation as the Guarantor and the Capital
Securities Guarantee Trustee shall from time to time agree in writing
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Capital Securities
Guarantee Trustee in accordance with any provision of this Agreement
(including the reasonable compensation and expenses and disbursements
of its agents and counsel).
(d) The provisions of this Section 8.2 shall survive the termination of
this Capital Securities Guarantee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS
All guarantees and agreements contained in this Capital Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding.
SECTION 9.2. AMENDMENTS
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Capital Securities Guarantee may only be amended with the prior approval of the
Holders of at least a Majority in liquidation amount of the Capital Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
In executing, or accepting the additional trusts created by, and
amendment permitted by this Section or the modification thereby of the trust
created by this Agreement, the Capital Securities Guarantee Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement. The Capital Securities Guarantee Trustee may, but shall not
be obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement or otherwise.
SECTION 9.3. NOTICES
All notices provided for in this Capital Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Capital Securities Guarantee Trustee, at the
Capital Securities Guarantee Trustee's mailing address set forth below (or such
other address as the Capital Securities Guarantee Trustee may give notice of to
the Holders of the Capital Securities):
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Attention:
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Capital Securities):
M.D.C. Holdings, Inc.
ββββ β. ββββββββ ββββββ
βββββ βββ
ββββββ, ββββββββ βββββ
Attention:
(c) If given to any Holder of Capital Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid.
SECTION 9.4. BENEFIT
This Capital Securities Guarantee is solely for the benefit of the
Holders of the Capital Securities and, subject to Section 3.1(a), is not
separately transferable from the Capital Securities.
SECTION 9.5. GOVERNING LAW
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 9.6. NO RECOURSE AGAINST CERTAIN PERSONS
No past, present or future director, officer, employee or stockholder,
as such, of the Guarantor or any successor thereof shall have any liability for
any obligations of the Guarantor under this Capital Securities Guarantee or for
any claim based on, in respect of, or by reason of, such obligations or their
creation and all such liability is hereby waived and released. Such waiver and
release are part of the consideration for the issue of this Capital Securities
Guarantee and the Capital Securities.
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THIS CAPITAL SECURITIES GUARANTEE AGREEMENT is executed as of the day
and year first above written.
M.D.C. HOLDINGS, INC.,
as Guarantor
By:
------------------------------------------
Name:
Title:
[ ],
as Capital Securities Guarantee Trustee
By:
------------------------------------------
Name:
Title: