Document:

ex_230528.htm

Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

by and among

 

TNHC COLORADO INC.,

as Buyer

 

CHRISTINA D. PRESLEY

and 

CDP HOLDINGS, LLC

as Sellers

 

and

 

CHRISTINA D. PRESLEY,

as Sellers’ Representative

 

 

Dated as of February 26, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table of Contents

 

	
			ARTICLE 1

				
			DEFINITIONS

				 
	 	
			1.1

				
			Definitions

				
			2

			
	
			ARTICLE 2

				
			Membership Interest Purchase

				
			10

			
	 	
			2.1

				
			Purchase and Sale

				
			10

			
	 	
			2.2

				
			Purchase Price

				
			10

			
	 	
			2.3

				
			Closing

				
			10

			
	 	
			2.4

				
			Closing Payments

				
			11

			
	 	
			2.5

				
			Estimated Closing Schedule

				
			11

			
	 	
			2.6

				
			Holdback Amount

				
			11

			
	 	
			2.7

				
			Post-Closing Purchase Price Adjustment

				
			11

			
	 	
			2.8

				
			Withholding

				
			12

			
	
			ARTICLE 3

				
			Representations And Warranties Of Buyer

				
			13

			
	 	
			3.1

				
			Organization and Authority of Buyer

				
			13

			
	 	
			3.2

				
			No Conflicts

				
			13

			
	 	
			3.3

				
			No Brokers

				
			13

			
	 	
			3.4

				
			Financing

				
			13

			
	 	
			3.5

				
			Litigation

				
			13

			
	
			ARTICLE 4

				
			Representations and Warranties of Sellers

				
			13

			
	 	
			4.1

				
			Organization and Authority of Sellers; Title to Membership Interests

				
			14

			
	 	
			4.2

				
			Organization, Authority and Qualification of the Epic Companies

				
			14

			
	 	
			4.3

				
			No Conflicts; Consents

				
			14

			
	 	
			4.4

				
			Capitalization

				
			15

			
	 	
			4.5

				
			No Subsidiaries

				
			15

			
	 	
			4.6

				
			Financial Statements and Books and Records

				
			15

			
	 	
			4.7

				
			Undisclosed Liabilities

				
			16

			
	 	
			4.8

				
			Absence of Certain Changes or Events

				
			16

			
	 	
			4.9

				
			Compliance with Law; Permits

				
			16

			
	 	
			4.10

				
			Litigation

				
			16

			
	 	
			4.11

				
			Employees

				
			17

			
	 	
			4.12

				
			Employee Benefit Plans

				
			17

			
	 	
			4.13

				
			Title to, Sufficiency and Condition of Assets Other Than Real Property

				
			20

			

 

i

 

 

 

Table of Contents

 

	 	
			4.14

				
			Real Property

				
			20

			
	 	
			4.15

				
			Intellectual Property

				
			22

			
	 	
			4.16

				
			Taxes

				
			22

			
	 	
			4.17

				
			Environmental Matters

				
			26

			
	 	
			4.18

				
			Material Contracts

				
			27

			
	 	
			4.19

				
			Insurance

				
			29

			
	 	
			4.20

				
			Warranties

				
			29

			
	 	
			4.21

				
			No Brokers

				
			29

			
	 	
			4.22

				
			PPP Loan

				
			30

			
	 	
			4.23

				
			Disclosure

				
			30

			
	
			ARTICLE 5

				
			Covenants And Other Agreements

				
			30

			
	 	
			5.1

				
			Conduct of Business Prior to the Closing

				
			30

			
	 	
			5.2

				
			Access to Information

				
			31

			
	 	
			5.3

				
			Notification of Certain Matters

				
			31

			
	 	
			5.4

				
			Disclosure Schedule Supplements

				
			31

			
	 	
			5.5

				
			Required Actions

				
			31

			
	 	
			5.6

				
			Confidentiality

				
			32

			
	 	
			5.7

				
			Public Announcements

				
			32

			
	 	
			5.8

				
			PPP Loan

				
			32

			
	 	
			5.9

				
			Sellers’ Representative

				
			34

			
	
			ARTICLE 6

				
			Tax Matters

				
			34

			
	 	
			6.1

				
			Tax Indemnification

				
			34

			
	 	
			6.2

				
			Timing and Treatment of Payments

				
			35

			
	 	
			6.3

				
			Straddle Period

				
			35

			
	 	
			6.4

				
			Tax Returns

				
			36

			
	 	
			6.5

				
			Tax Audits, Claims and Contests

				
			36

			
	 	
			6.6

				
			Cooperation on Tax Matters

				
			37

			
	 	
			6.7

				
			Transfer and Similar Taxes

				
			37

			
	 	
			6.8

				
			Overlap

				
			38

			
	 	
			6.9

				
			Section 338(h)(10)

				
			38

			
	 	
			6.10

				
			Survival

				
			39

			

 

ii

 

 

 

Table of Contents

 

	 	
			6.11

				
			Retention of Records

				
			39

			
	
			ARTICLE 7

				
			Conditions to Closing

				
			39

			
	 	
			7.1

				
			Conditions to Obligation of Sellers

				
			39

			
	 	
			7.2

				
			Conditions to Obligations of Buyer

				
			40

			
	
			ARTICLE 8

				
			Indemnification

				
			41

			
	 	
			8.1

				
			Survival

				
			41

			
	 	
			8.2

				
			Indemnification By Sellers

				
			42

			
	 	
			8.3

				
			Indemnification By Buyer

				
			44

			
	 	
			8.4

				
			Certain Limitations

				
			44

			
	 	
			8.5

				
			Indemnification Procedures

				
			45

			
	 	
			8.6

				
			Payments; Holdback Amount

				
			46

			
	 	
			8.7

				
			Tax Treatment of Indemnification Payments

				
			46

			
	 	
			8.8

				
			Effect of Investigation

				
			46

			
	 	
			8.9

				
			Other Rights and Remedies Not Affected

				
			46

			
	
			ARTICLE 9

				
			Termination/Remedies

				
			47

			
	 	
			9.1

				
			Termination

				
			47

			
	 	
			9.2

				
			Effect of Termination

				
			47

			
	
			ARTICLE 10

				
			General Provisions

				
			48

			
	 	
			10.1

				
			Expenses

				
			48

			
	 	
			10.2

				
			Notices

				
			48

			
	 	
			10.3

				
			Interpretation

				
			49

			
	 	
			10.4

				
			Made Available

				
			49

			
	 	
			10.5

				
			Headings

				
			49

			
	 	
			10.6

				
			Severability

				
			49

			
	 	
			10.7

				
			Entire Agreement

				
			49

			
	 	
			10.8

				
			Successors and Assigns

				
			49

			
	 	
			10.9

				
			No Third-party Beneficiaries

				
			49

			
	 	
			10.10

				
			Amendment and Modification; Waiver

				
			50

			
	 	
			10.11

				
			Governing Law; Submission to Jurisdiction; Waiver of Jury Trial

				
			50

			
	 	
			10.12

				
			Specific Performance

				
			51

			
	 	
			10.13

				
			Counterparts

				
			51

			

 

 

 

iii

 

 

Table of Contents

 

Exhibits

Exhibit A      Presley Employment Agreement

Exhibit B      Presley Non-Competition Agreement

Exhibit C     Trails Scheduled Construction Starts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

iv

 

 

 

 

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

This Membership Interest Purchase Agreement (this “Agreement”) is made as of February 26, 2021 (the “Signing Date”) between TNHC Colorado Inc., a Delaware corporation (“Buyer”), Christina D. Presley, an individual (“Presley”), and CDP Holdings, LLC, a Colorado limited liability company (“CDP Holdings”) (each of Presley and CDP Holdings are a “Seller” and collectively, “Sellers”), and Christina D. Presley (together with any successor appointed in accordance with Section 5.9) as the “Sellers’ Representative”. Each of Buyer, Sellers and the Sellers’ Representative are a “Party” and collectively, the “Parties”.

 

Recitals

 

	 	
			1.

				
			Presley owns 100% of the membership interests (the “Orchard Group Membership Interests”) of The Orchard Group, LLC, a Colorado limited liability company (“The Orchard Group”).

			

 

	 	
			2.

				
			CDP Holdings owns 100% of the membership interests (the “Homebuilder Company Membership Interests” and, together with The Orchard Group Membership Interests, the “Epic Companies Membership Interests”) of each of EHWP, LLC, a Colorado limited liability company (“Epic Wild Plum”), Epic Homes at Anthem Highlands, LLC, a Colorado limited liability company (“Epic Anthem Highlands”), EHPP, LLC, a Colorado limited liability company (“Epic Painted Prairie”), and EHTCV, LLC (“Epic Trails”). The Orchard Group, Epic Wild Plum, Epic Anthem Highlands, Epic Painted Prairie and Epic Trails are each an “Epic Company” and collectively, the “Epic Companies”.

			

 

	 	
			3.

				
			The Epic Companies are engaged in the residential homebuilding business, which includes the purchase and sale of residential real estate and the construction, marketing and sale of homes within certain markets in Colorado (the “Epic Homebuilding Business”). For the avoidance of doubt, the Parties acknowledge and agree that the Epic Homebuilding Business does not include Epic Homes at Leyden Rock, LLC or any operations related thereto.

			

 

	 	
			4.

				
			Subject to the terms and conditions of this Agreement, Sellers have agreed to sell to Buyer, and Buyer has agreed to purchase from Sellers, the Epic Companies Membership Interests.

			

 

AGREEMENT

 

In consideration of the covenants and mutual agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1

 

 

 

ARTICLE 1

Definitions

 

1.1     Definitions. For purposes of this Agreement:

 

“§338 Forms” means all returns, documents, statements, and other forms that are required to be submitted to any federal, state, or local taxing authority in connection with a §338(h)(10) Election, including, without limitation, any "statement of §338 election", IRS Form 8023, and IRS Form 8883 (together with any schedules or attachments thereto) that are required pursuant to the Treasury Regulations.

 

“338(h)(10) Election” is defined in Section 6.9(a).

 

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, review, examination, request for information, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

 

“Adjustment Period” is defined in Section 2.7(a).

 

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Affordable Care Act” defined in Section 4.12(k).

 

“Annual Financial Statements” is defined in Section 4.6.

 

“Basket” is defined in Section 8.4(a)(i).

 

“Benefit Plans” is defined in Section 4.12(a).

 

“Building Permit Condition” is defined in Section 8.6(c).

 

“Building Permit Delay” is defined in Section 8.2(f).

 

“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Denver, Colorado are authorized or required by Law to be closed for business.

 

“Buyer” is defined in the preamble.

 

“Buyer Indemnitees” is defined in Section 8.2.

 

2

 

 

“Cap” is defined in Section 8.4(a)(ii).

 

“CARES Act” means the Coronavirus, Aid, Relief and Economic Security Act (H.R. 748), together with all amendments thereto and the statutes, rules and regulations promulgated thereunder and any successor to such statutes, rules or regulations, as in effect on the Signing Date.

 

“CDP Holdings” is defined in the preamble.

 

“Closing” is defined in Section 2.3.

 

“Closing Cash Payment” is defined in Section 2.4.

 

“Closing Date” is defined in Section 2.3.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Confidentiality Agreement” is defined in Section 5.6.

 

“Consent” means, with respect to any Person, any consent, estoppel, approval, authorization, permission or waiver of, or registration, declaration or other action or filing with or exemption by such Person.

 

“Contract” means any contract, lease, deed, mortgage, license, instrument, note, commitment, undertaking, indenture, joint venture or any other agreement, commitment or legally binding arrangement, whether written or oral.

 

“Designated Courts” is defined in Section 10.11(b).

 

“Disclosure Schedule Supplement” is defined in Section 5.4.

 

“Encumbrance” means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

 

“Enforceability Exceptions” is defined in Section 3.1.

 

“Entitlements” is defined in Section 4.14(e).

 

“Environmental Laws” means: any Laws of any Governmental Authority relating to (a) releases or threatened releases of Hazardous Substances or materials containing Hazardous Substances; (b) the manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Substances or materials containing Hazardous Substances; or (c) pollution or protection of the environment, health, safety or natural resources.

 

3

 

 

“Environmental Permits” means all Permits under any Environmental Law.

 

“Epic Anthem Highlands” is defined in the recitals.

 

“Epic Companies” is defined in the recitals.

 

“Epic Homebuilding Business” is defined in the recitals.

 

“Epic Companies Membership Interests” is defined in the recitals.

 

“Epic Painted Prairie” is defined in the recitals.

 

“Epic Trails” is defined in the recitals.

 

“Epic Wild Plum” is defined in the recitals.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Estimated Closing Schedule” is defined in Section 2.5.

 

“Estimated Net Book Value” is defined in Section 2.5.

 

“Excluded Liabilities” means, in each case to the extent not accrued on the Estimated Closing Schedule or the Final Closing Schedule:

 

(a)     Pre-Closing Construction Claims;

 

(b)     the pre-Closing trade payables of the Epic Companies relating to closed homes; and

 

(c)     all Liabilities based upon, resulting from, or arising out of the business, operations, properties, assets or obligations of any of the Epic Companies conducted, existing or arising on or prior to the Closing Date.

 

“Final Closing Schedule” is defined in Section 2.7(a).

 

“Financial Statements” is defined in Section 4.6.

 

“Fundamental Representations” is defined in Section 8.1.

 

“Financial Books and Records” means all of the Epic Companies’ books, instruments, papers, and records of whatever nature and wherever located, whether in written form or another storage medium, including without limitation (1) copies of accounting and financial records; (2) property records and reports; (3) environmental records and reports; (4) personnel and labor relations records; and (5) property, sales, or transfer tax records and returns. Notwithstanding the foregoing, Seller shall have a right to keep a copy of all Financial Books and Records for Seller’s records.

 

4

 

 

“GAAP” means generally accepted accounting principles, including but not limited to, appropriate reserves or accruals for vacation, sick pay, severance obligations and other similar types of employment obligations.

 

“Governmental Authority” means any nation or government, any state or other political subdivision or quasi-governmental authority thereof (such as special districts, improvement districts or the like), any entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government, including, without limitation, any government authority, agency, department, board, commission, or instrumentality of the United States, any State of the United States, or any political subdivision thereof, and any tribunal or arbitrator(s) of competent jurisdiction, and any self-regulatory organizations.

 

“Grace Period” is defined in Section 8.2(f).

 

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

 

“Hazardous Substances” means: (A) those substances defined in or regulated under the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act, and their state counterparts, as each may be amended from time to time, and all regulations thereunder; (B) petroleum and petroleum products, including crude oil and any fractions thereof; (C) natural gas, synthetic gas, and any mixtures thereof; (D) polychlorinated biphenyls, asbestos and radon; (E) any other pollutant or contaminant; and (F) any substance, material or waste regulated by any Governmental Authority pursuant to any Environmental Law.

 

“Holdback Amount” is defined in Section 2.4(b).

 

“Homebuilder Company Membership Interests” is defined in the recitals.

 

“Indemnified Party” is defined in Section 8.5(a).

 

“Indemnifying Party” is defined in Section 8.5(a).

 

“Independent Accounting Firm” is defined in Section 2.7(c).

 

“Insurance Policies” is defined in Section 4.19.

 

“Intellectual Property” means all of the Epic Companies’ rights, title, and interest in and to (1) all of the intellectual property related to the Epic homebuilding business, including, without limitation, community and home plans, designs, names, (including “epic”, “epic homes” and all derivations thereof), marketing materials, brochures, advertisements, photography (whether in print, digital, electronic or other format), trademarks, service marks, trade dress, logos, slogans, trade names, internet domain names, uniform resource locators, social media accounts, and e-mail addresses; (2) all proprietary information or rights including any and all

 

5

 

 

plans, and other project related information of prior and currently active real estate projects; (3) copyrights, whether registered or not, patents, trademarks, whether registered or not, and applications, registrations, and renewals with respect thereto; (4) goodwill associated therewith; and (5) all agreements or licenses relating thereto; and

 

“Interim Financial Statements” is defined in Section 4.6.

 

“Interim Period” is defined in Section 5.1.

 

“Knowledge of Sellers” or any other similar knowledge qualification, means the actual knowledge of Presley after due inquiry.

 

“Law” means all federal, state, regional, local, or other governmental or quasi-governmental statutes, laws, rules, regulations, codes, ordinances, orders, plans, injunctions, decrees, rulings, or judicial or administrative interpretations thereof.

 

“Leased Real Property” means all real property leased, subleased or licensed to the Epic Companies or which the Epic Companies otherwise have a right or option to use or occupy, together with all structures, facilities, fixtures, systems, improvements and items of property previously or hereafter located thereon, or attached or appurtenant thereto, and all easements, rights and appurtenances relating to the foregoing, in each case only to the extent provided for under the applicable governing documents.

 

“Liabilities” means liabilities, obligations or commitments of any nature whatsoever (including but not limited to any Tax), asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise.

 

“Losses” means actual losses, damages, Liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, Taxes (including any loss of Tax assets, attributes, or benefits), costs or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers; provided, however, that “Losses” does not include punitive damages, except to the extent actually awarded to a Governmental Authority or other third party. Losses shall also mean the Trails Delay Liquidated Damages.

 

“Material Adverse Effect” means any event, occurrence, fact, condition or change that is, materially adverse to the business, results of operations, condition (financial or otherwise) or assets of the Epic Companies.

 

“Material Contracts” is defined in Section 4.18(a).

 

“Net Book Value” means the net book value of the Epic Companies’ assets (assets minus liabilities) as of the Closing Date. Net Book Value will be calculated in accordance with GAAP, but as modified to (i) include actual capitalized general and administrative costs listed in the management fee general ledger account as reflected on the balance sheet in the Interim Financial Statements that are included in inventory or other assets, provided that such costs will not exceed $1.35 million; (ii) include the warranty reserves relating to homes closed by

 

6

 

 

Epic Homes at Leyden Rock, LLC, which Buyer will administer on behalf of Epic Homes at Leyden Rock following the Closing; and (iii) include a reserve for the estimated cancellation penalty, or additional premium amounts due, relating to the insurance premium financing obligations of the Epic Companies, which the Epic Companies acknowledge Buyer intends to cancel at or after the Closing Date. For the avoidance of doubt, to the extent any refund is received following the Closing relating to such insurance premiums and financing arrangements, such refund will not be treated as an asset in the Final Closing Schedule. Net Book Value will be calculated both for purposes of calculating the Estimated Net Book Value and the final determination of Net Book Value pursuant to Section 2.7.

 

“Notice of Disagreement” is defined in Section 2.7(b).

 

“Notified Party” is defined in Section 6.5(a).

 

“Orchard Group Membership Interests” is defined in the recitals.

 

“Organizational Documents” means (a) with respect to a corporation, the certificate or articles of incorporation and bylaws; (b) with respect to any other entity, any charter or similar document adopted or filed in connection with the creation, formation or organization of such entity; and (c) any amendment to any of the foregoing.

 

“Outside Date” is defined in Section 9.1(b)(ii).

 

“Owned Real Property” means all real property owned by the Epic Companies, together with all structures, facilities, fixtures, systems, improvements and items of property previously or hereafter located thereon, or attached or appurtenant thereto, and all easements, rights and appurtenances relating to the foregoing.

 

“Party” is defined in the preamble.

 

“Permits” means permits, licenses, franchises, approvals, certificates, consents, waivers, concessions, exemptions, orders, registrations, notices or other authorizations of any Governmental Authority.

 

“Permitted Encumbrances” means: (i) liens for Taxes or assessments, standby fees, charges, or claims not yet due and payable; (ii) mechanics’, materialmen’s, carriers’, warehousemen’s, landlords’, workmen’s, repairmen’s, or other like liens and other liens imposed by Law arising or incurred in the ordinary course of business consistent with past practice and not yet due and payable; (iii) zoning and building rules, regulations, and ordinances, minor defects or irregularities in title and other similar encumbrances that do not, individually or in the aggregate, materially impair the continued ownership, use, operation or sale of the assets to which they relate in the Epic Home Business and (iv) all liens under existing mortgages or deeds of trust or financing agreements to the extent relating to indebtedness reflected on the Estimated Closing Schedule or the Final Closing Schedule.

 

“Per Month Amount” is defined in Section 8.2(f).

 

7

 

 

“Person” means any natural person, corporation, general or limited partnership, limited liability company, trust, sole proprietorship, or other entity, organization or association of any kind.

 

“PPP Blocked Account” is defined in Section 5.8(c).

 

“PPP Lender” means Zions Bancorporation, N.A. dba Vectra Bank Colorado.

 

“PPP Loan” means collectively the Loan Agreement and/or Promissory Note, dated as of April 19, 2020, in the original principal amount of $287,800.00, issued by The Orchard Group to the PPP Lender, and all loan documents ancillary thereto.

 

“PPP Shortfall” is defined in Section 5.8(c).

 

“Pre-Closing Construction Claims” means, to the extent not reimbursed under an applicable insurance policy, all claims, including, without limitation, claims for breach of contract, claims for breach of express or implied warranty, and construction defect claims relating to any work required to be done by the Epic Companies, or any corrective work required to be done by the Epic Companies, on a completed home (including, without limitation, claims related to mold) or on streets, gradings, landscaping and homeowners’ association improvements and all other similar subdivision work with respect to homes closed prior to the Closing Date and home warranty claims relating to homes closed by Epic Homes at Leyden Rock, LLC.

 

“Pre-Closing Income Tax Returns” is defined in Section 6.4(a).

 

“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any Straddle Period, the portion of such Straddle Period ending on and including the Closing Date.

 

“Pre-Closing Taxes” means Taxes of any Epic Company for any Pre-Closing Tax Period.

 

“Presley” is defined in the preamble.

 

“Presley Employment Agreement” is defined in Section 7.1(c).

 

“Presley Non-Competition Agreement” is defined in Section 7.1(d).

 

“Purchase Price” is defined in Section 2.2.

 

“Purchase Price Allocation Schedule” is defined in Section 6.9(a).

 

“Real Property” is defined in Section 4.14(a).

 

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants, representatives and other agents of such Person.

 

8

 

 

“RESPA” means the Real Estate Settlement and Procedures Act and any rules or regulations promulgated thereunder.

 

“Resolution Period” is defined in Section 2.7(c).

 

“Review Period” is defined in Section 2.7(b).

 

“SBA” is defined in Section 4.22.

 

“Seller” is defined in the preamble.

 

“Seller Indemnitees” is defined in Section 8.3.

 

“Sellers’ Representative” is defined in the preamble.

 

“Signing Date” is defined in the preamble.

 

“Straddle Period” means any taxable period which commences on or before the Closing Date, and ends after the Closing Date.

 

“Subdivision Agreement” is defined in Section 8.6(c).

 

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, joint venture or other entity of which such Person (either alone or through or together with any other subsidiary), owns, directly or indirectly, securities or other interests the holders of which are generally entitled to at least 50% of the vote for the election of the board of directors or other similar governing body of such corporation or other legal entity, or otherwise having the power to direct the business and policies of that Person.

 

“Tax Claim” is defined in Section 6.5(a).

 

“Taxes” means any and all (i) federal, state, local or foreign assessment, charge, fee, levy, impost, or tax of any kind whatsoever, including, without limitation, any tax on, for, or with respect to income, gross receipts or income, license, payroll, employment, excise, severance, stamp, documentation, registration, occupation, premium, windfall profits, environmental (including taxes under Code Section 59A), customs, duties, capital stock, franchise, profits, withholding, backup withholding, social security (or similar), unemployment, payroll, employment, recapture, disability, worker’s compensation, real property, personal property, sales, use, transfer, service, service use, transaction privilege, registration, value-added, ad valorem, alternative or add-on minimum, estimated, “roll-back”, escheat, gains, good, services, inventory, lease, rent, mortgage recording, value, production, capital, conveyance, transfer, unclaimed property, any other taxes, assessments, or government charges of any kind whatsoever, together with any interest, penalty, fine, or addition thereto, whether disputed or not, with respect thereto or in respect of any failure to comply with an requirement regarding any Tax Return (or filing thereof), and any interest, penalty, fine, or addition in respect of such interest, penalties, fines, or additions, and including any transferee liability in respect of any and all of the above, in each instance whether computed on a separate or consolidated, unitary

 

9

 

 

or combined basis, or in any other manner, (ii) liability for any items contemplated in clause (i) of this definition as a result of being (or ceasing to be) a member of any affiliated, consolidated, combined or unitary group for any period (or being included (or required to be included) in any Tax Return relating thereto); and (iii) liability for the payment of any amounts of the type described in clause (i) of this definition as a result of any express or implied obligation, tax sharing or tax allocation agreement, arrangement, commitment or understanding, by contract or pursuant to Law, whether as a transferee or successor, to indemnify or otherwise assume or succeed to the liability of any other person.

 

“Tax Return” means any return, declaration, report, election, designation, declaration, claim to refund, or information return or statement relating to Taxes (or required to be filed in connection with the determination, assessment, or collection of Taxes or in connection with the administration of any Laws), including any schedule or attachment thereto, and including any amendment thereof.

 

“The Orchard Group” is defined in the recitals.

 

“Trails Delay Additional Holdback” is defined in Section 2.4(b).

 

“Trails Delay Liquidated Damages” is defined in Section 8.2(f).

 

“Transaction Expenses” means all fees and expenses, regardless of when paid, payable by the Epic Companies in connection with the transactions contemplated by this Agreement, including fees and expenses payable to all attorneys, accountants, financial advisors and other professionals and bankers’, brokers’ or finders’ fees for persons not engaged by Buyer.

 

“Transfer Taxes” is defined in Section 6.7.

 

“Unforgiven Amount” is defined in Section 5.8(c).

 

ARTICLE 2

Membership Interest Purchase

 

2.1     Purchase and Sale. Subject to the terms and conditions set forth herein, at the Closing, Sellers will sell to Buyer, and Buyer will purchase from Sellers, all of Sellers’ right, title, and interest in the Epic Companies Membership Interests, free and clear of all Encumbrances for the consideration specified in Section 2.2.

 

2.2     Purchase Price. The aggregate purchase price for the Epic Companies Membership Interests will be an amount (the “Purchase Price”) equal to $8,386,850, subject to adjustment pursuant to Section 2.7.

 

2.3     Closing. The consummation of the transactions contemplated by this Agreement (the “Closing”) will occur no later than two Business Days after the last of the conditions to Closing set forth in Article 7 have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date) via the remote exchange of documents and signatures. The

 

10

 

 

date on which the Closing occurs is the “Closing Date”. The Closing will be deemed to occur as of 12:00 a.m. Mountain Standard Time on the Closing Date.

 

2.4     Closing Payments. At Closing, Buyer will purchase the Epic Companies Membership Interests by making the following payments (the “Closing Cash Payment”) to or for the benefit of Sellers:

 

(a)     Buyer will pay to Sellers an amount equal to:

 

(i)     the Purchase Price, less

 

(ii)     the Holdback Amount and the Trails Delay Additional Holdback Amount.

 

(b)     Buyer will retain $1,000,000 (the “Holdback Amount”) to satisfy the indemnity obligations of Sellers described in Article 8 and any adjustment to the Purchase Price pursuant to Section 2.7. The Holdback Amount will be paid to Sellers as provided in Section 8.6. Buyer will also retain an additional $500,000 (the “Trails Delay Additional Holdback Amount”) to satisfy the Trails Delay Liquidated Damages described in Section 8.2(f) and will be paid to Sellers as provided in Section 8.6.

 

2.5     Estimated Closing Schedule. Sellers’ Representative has prepared and delivered to Buyer a statement (the “Estimated Closing Schedule”) containing an estimated balance sheet of the Epic Companies as of the Closing Date and, based thereon, an estimate of the estimated Net Book Value on the Closing Date (the “Estimated Net Book Value”), including the Sellers’ calculation of the components thereof including, but not limited to the amounts of all outstanding indebtedness, trade payables relating to current projects and warranty reserves, as well as the calculation of the Purchase Price.

 

2.6     Holdback Amount. The Holdback Amount will be held by Buyer out of the Purchase Price to satisfy indemnification claims of Buyer that arise under this Agreement and adjustments pursuant to Section 2.7.

 

2.7     Post-Closing Purchase Price Adjustment.

 

(a)     Within 180 days following the Closing (the “Adjustment Period”), Buyer will prepare and deliver to Sellers’ Representative a statement (the “Final Closing Schedule”) setting forth Buyer’s calculation of the Net Book Value and the components thereof. The Final Closing Schedule will be prepared on the same basis as the Estimated Closing Schedule. Subject to customary review, upon final determination of the amounts set forth in Final Closing Schedule, the Purchase Price will be adjusted upwards or downwards to reflect any changes in the Net Book Value in the Final Closing Schedule, but in no event will any premium component in the Purchase Price be adjusted pursuant to such procedure.

 

(b)     During the 20 Business Day period following receipt of the Final Closing Schedule (the “Review Period”), Buyer will provide Sellers’ Representative with access to the working papers relating to the Final Closing Schedule. The Final Closing Schedule

 

11

 

 

will become final and binding at the end of the Review Period unless prior to the end of the Review Period Sellers’ Representative delivers to Buyer written notice of its disagreement (a “Notice of Disagreement”) specifying the nature and amount of any disputed item. Sellers will be deemed to have agreed with all items and amounts in the Final Closing Schedule not specifically referenced in the Notice of Disagreement, and such items and amounts will not be subject to review pursuant to Section 2.7(c). A Notice of Disagreement may reference only disagreements based on miscoding of expenses, mathematical errors or based on amounts reflected on the Final Closing Schedule not being calculated in accordance with this Section 2.7.

 

(c)     During the 10 Business Day period following receipt of a Notice of Disagreement (the “Resolution Period”), the Parties will work in good faith to resolve any differences that they may have with respect to the matters specified in the Notice of Disagreement, including providing the other Parties with reasonable access to the working papers and information relating to the calculations subject to the Notice of Disagreement reasonably requested the other Parties. Any disputed items resolved in writing between Buyer and Sellers’ Representative during the Resolution Period will be final and binding with respect to such items, and if Buyer and Sellers’ Representative agree in writing on the resolution of each disputed item specified in the Notice of Disagreement, the amounts so determined will be final and binding on the Parties. If Buyer and Sellers’ Representative have not resolved all such differences by the end of the Resolution Period, Buyer and Sellers’ Representative will submit, in writing, to an independent accounting firm of national or regional standing agreed upon in writing by Buyer and Sellers’ Representative (the “Independent Accounting Firm”), their briefs detailing their views as to the correct nature and amount of each item remaining in dispute and the amount of the Purchase Price, and Buyer and Sellers’ Representative will require the Independent Accounting Firm to make a written determination as to each such disputed item and the amount of the Purchase Price, which determination will be final and binding on the Parties. The Parties will authorize the Independent Accounting Firm to resolve only those items remaining in dispute in a Notice of Disagreement within the range of the difference between Buyer’s position and Sellers’ Representative’s position with respect thereto. Buyer and Seller’s Representative will require the Independent Accounting Firm to render a written decision resolving the matters submitted to it within 20 Business Days following engagement. Judgment may be entered upon the written determination of the Independent Accounting Firm in any court in accordance with Section 10.11.

 

(d)     If the Net Book Value, as determined pursuant to this Section 2.7, is adjusted upwards, Buyer will pay such adjustment amount to Sellers’ Representative within five days of final determination. If the Net Book Value is adjusted downwards, Buyer will deduct such amount from the Holdback Amount and, if the amount of such downward adjustment is in excess of the Holdback Amount, Sellers will pay such excess amount to Buyer within five days of final determination.

 

2.8     Withholding. Buyer is entitled to deduct and withhold from any payment contemplated in this Agreement, any Tax required by applicable Law to be withheld, and all such withheld amounts will be treated for all purposes as having been paid to the Person in respect of which such

 

12

 

 

withholding was made; provided, however that prior to any such withholding Buyer shall provide notice of such intended withholding to Seller so as to afford Seller an opportunity to provide any documentation reasonably acceptable to Buyer so as to reduce any such withholding obligation.

 

ARTICLE 3

Representations And Warranties Of Buyer

 

Except as set forth in the schedules to this Article 3 Buyer hereby represents and warrants to Sellers as of the Signing Date as follows:

 

3.1     Organization and Authority of Buyer. Buyer is a corporation duly organized, validly existing and in good standing under the Laws of Delaware. Buyer has full power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by Buyer of this Agreement, the performance by Buyer of its obligations hereunder and the consummation by Buyer of the transactions contemplated hereby have been duly authorized by all requisite action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution, and delivery by the other Parties) this Agreement constitutes a legal, valid, and binding obligation of Buyer enforceable against Buyer in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general equitable principles (collectively, the “Enforceability Exceptions”).

 

3.2     No Conflicts. The execution, delivery and performance by Buyer of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not (a) conflict with or violate the Organizational Documents of Buyer, or (b) conflict with or violate any Law or Governmental Order applicable to Buyer or by which any property or asset of Buyer is bound or affected.

 

3.3     No Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of Buyer.

 

3.4     Financing. Buyer has all funds and financing necessary and has obtained all necessary approvals to consummate all the transactions contemplated herein.

 

3.5     Litigation. No action by or against Buyer is pending or, to the knowledge of Buyer after due inquiry, threatened, which could affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby or thereby.

 

ARTICLE 4

Representations and Warranties of Sellers

 

Except as set forth in the schedules to this Article 4, each Seller represents and warrants to the Buyer jointly and severally that, as of the Signing Date as follows:

 

13

 

 

4.1     Organization and Authority of Sellers; Title to Membership Interests. 

 

(a)     CDP Holdings is a limited liability company duly organized, validly existing and in good standing under the Laws of Colorado. CDP Holdings has full power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by CDP Holdings of this Agreement, the performance by CDP Holdings of its obligations hereunder, and the consummation by CDP Holdings of the transactions contemplated hereby have been duly authorized by all requisite action on the part of CDP Holdings. This Agreement has been duly executed and delivered by CDP Holdings, and (assuming due authorization, execution, and delivery by Buyer) this Agreement constitutes a legal, valid and binding obligation of CDP Holdings enforceable against CDP Holdings in accordance with its terms, except for the Enforceability Exceptions.

 

(b)     Each Seller is the record and beneficial owner of, and has good and valid title to and unrestricted power to vote the number of Epic Companies Membership Interests set forth opposite such owners name on Schedule 4.1(b), and such Epic Companies Membership Interests are owned by such Seller free and clear of all Encumbrances, including claims of members, spouses, former spouses and other family members. At the Closing, such Seller will convey to Buyer all legal and beneficial right, title and interest in and to such Epic Companies Membership Interests, free and clear of any and all Encumbrances including claims of members, spouses, former spouses and other family members. Such Seller is not a party to any option, warrant, purchase right or other Contract (other than this Agreement) that requires such Seller to sell, transfer or otherwise dispose of any of its Epic Companies Membership Interests. Such Seller is not entitled to, and by signing below hereby waives, any preemptive rights to acquire additional membership interests such Seller has or, at any time had, whether pursuant to the Epic Companies’ articles of organization, current or prior operating agreements, contract, or any other arrangement, whether oral or written.

 

4.2     Organization, Authority and Qualification of the Epic Companies. Each Epic Company is a limited liability company duly organized, validly existing and in good standing under the Laws of Colorado and has full limited liability company power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it has been and is currently conducted. Schedule 4.2 sets forth each jurisdiction in which each Company is licensed or qualified to do business, and each Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary.

 

4.3     No Conflicts; Consents. Except as set forth on Schedule 4.3, the execution, delivery and performance by Sellers of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the Organizational Documents of any Epic Company; (b) conflict with or result in a violation or breach of any Law or Governmental Order applicable to Sellers or the Epic Companies; or (c) result in any breach of, constitute a default (or an event that, with notice

 

14

 

 

or lapse of time or both, would become a default) under, require any consent of any Person pursuant to, give to others any right of termination, amendment, modification, acceleration or cancellation of, allow the imposition of any fees or penalties, require the offering or making of any payment or redemption, give rise to any increased, guaranteed, accelerated or additional rights or entitlements of any Person or otherwise adversely affect any rights of any Seller or Epic Company under, or result in the creation of any Encumbrance on any property, asset or right of any Seller or Epic Company pursuant to, any note, bond, mortgage, indenture, agreement, lease, license, permit, franchise, instrument, obligation or other Contract to which any Seller or Epic Company is a party or by which any Seller or Epic Company or any Seller’s or Epic Company’s properties, assets or rights are bound or affected.

 

4.4     Capitalization. Schedule 4.1(b) sets forth all of the outstanding equity interests of each Epic Company and the record and beneficial owners thereof. None of the Epic Companies has issued or agreed to issue any: (a) membership interest or other equity or ownership interest; (b) option, warrant or interest convertible into or exchangeable or exercisable for the purchase of any equity, economic, or ownership interests; (c) interest in the ownership or earnings or other equity equivalent or equity-based award or right; or (d) bond, debenture or other indebtedness having the right to vote or convertible or exchangeable for interests having the right to vote. All of the Epic Companies Membership Interests are duly authorized, validly issued and fully paid. All of the Epic Companies Membership Interests have been offered, sold and delivered in compliance with the Law. There are no outstanding obligations of any Epic Companies to issue, sell or transfer or repurchase, redeem or otherwise acquire, or that relate to the holding, voting or disposition of, or that restrict the transfer of, the issued or unissued equity or ownership interests in the Epic Companies. No Epic Companies Membership Interests or other equity or ownership interests of the Epic Companies have been issued in violation of any rights, agreements, arrangements or commitments under any provision of applicable Law, the Organizational Documents of the Epic Companies or any Contract to which any Epic Company is a party or by which any Epic Company is bound.

 

4.5     No Subsidiaries. No Epic Company has owned, or had any interest in any shares or has an ownership interest in any other Person.

 

4.6     Financial Statements and Books and Records. Complete copies of the Epic Companies’ financial statements consisting of a balance sheet as of December 31, 2020 and 2019 and the related profit and loss statements for the years then ended (collectively, the “Annual Financial Statements”), and financial statements consisting of a balance sheet as of January 31, 2021 and the related profit and loss statements for the one-month period then ended (the “Interim Financial Statements” and together with the Annual Financial Statements, the “Financial Statements”) have been delivered to Buyer. Each of the Financial Statements (i) are correct and complete in all material respects and have been prepared in accordance with the books and records of the Epic Companies; and (ii) fairly present, in all material respects, the consolidated financial position, results of operations and cash flows of the Epic Companies as at the respective dates thereof and for the respective periods indicated therein, except as otherwise noted therein. The books of account and financial records of the Epic Companies are true and correct and have been prepared and are maintained in accordance with sound accounting practice. The Sellers have provided to

 

15

 

 

the Buyer complete and accurate copies of all of the Financial Books and Records of the Epic Companies, whether in written or electronic format.

 

4.7     Undisclosed Liabilities. No Epic Company has any Liabilities whether or not required by GAAP to be reflected in the balance sheet of the Epic Companies or disclosed in the notes thereto, except liabilities which are adequately reflected or reserved against.

 

4.8     Absence of Certain Changes or Events. Since December 31, 2020 (a) each Epic Company has conducted its business only in the ordinary course consistent with past practice; (b) to the Knowledge of Sellers, there has not been any change, event or development or prospective change, event or development that, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect; (c) no Epic Company has suffered any loss, damage, destruction or other casualty affecting any of its material properties or assets, whether or not covered by insurance; and (d) no Epic Company has taken any action that, if taken after the Signing Date, would constitute a breach of any of the covenants set forth in Section 5.1.

 

4.9     Compliance with Law; Permits.

 

(a)     Each Epic Company is and has been in compliance in all material respects with all Laws applicable to it or any of its properties or assets is subject and all non-governmental restrictions as to property or asset use. No Epic Company or any of its officers has received during the past five years, nor to the Knowledge of Sellers is there any basis for, any notice, order, complaint or other communication from any Governmental Authority or any other Person that the Epic Company is not in compliance in any material respect with any Law applicable to it.

 

(b)     Each Epic Company is in possession of all Permits necessary for it to own, lease and operate its properties and to carry on its business in all material respects as currently conducted. Sellers have provided Buyer with true, accurate and complete copies of all Permits (other than Permits relating to individual homes). Each Epic Company is and has been in compliance in all material respects with all such Permits. No suspension, cancellation, modification, revocation or nonrenewal of any Permit is pending or, to the Knowledge of Sellers, threatened. To the Knowledge of Sellers, each Epic Company will continue to have the use and benefit of all Permits following consummation of the transactions contemplated hereby.

 

(c)     The Epic Companies’ relationship with its lenders and other business partners, do not violate and have not violated RESPA, and no such lender or their affiliates or related Persons has compensated, directly or indirectly, including by way of offset, below market, gift, compensation, or otherwise, Sellers or the Epic Companies in violation of RESPA.

 

4.10     Litigation. There is no Action pending or, to the Knowledge of Sellers, threatened against any Epic Companies, or any material property or assets of any Epic Companies, nor is there any basis for any such Action. There is no outstanding order, writ, judgment, injunction, decree, determination or award of, or pending or, to the Knowledge of Sellers, threatened investigation by, any Governmental Authority relating to any Epic Companies, any of their

 

16

 

 

respective properties or assets or the transactions contemplated by this Agreement. There is no Action by any Epic Companies pending, or which any Epic Companies have commenced preparations to initiate, against any other Person.

 

4.11     Employees. Schedule 4.11 sets forth a list of names, current annual rates of salary, bonus, employee benefits, accrued vacation and sick time, sick pay, and other compensation and benefits and perquisites, including the provision of company owned automobiles, of all the employees and agents of the Epic Companies whose work relates, directly or indirectly, to the Epic Companies’ business. To the Knowledge of Sellers, no key employee of the Epic Companies, and no group of the Epic Companies’ employees, have any plans to terminate his, her, or their employment. The Epic Companies are not a party to any collective bargaining agreement with any labor union or association. There are no discussions, negotiations, demands, or proposals that are pending or that have been conducted or made with or by any labor union or association, and there are no pending or, to the Knowledge of Sellers, threatened labor disputes, strikes, or work stoppages that may affect the Epic Companies, their respective assets and business. The Epic Companies are in compliance in all material respects with all federal and state laws respecting employment and employment practices, terms and conditions of employment, and wages and hours, and are not engaged in any unfair labor practices. The Epic Companies may terminate any employee, with or without cause, without liability or obligation, other than for salary, bonuses, vacation, sick time and similar obligations accrued through the date of any such termination and for the obligations of the Epic Companies under the Benefit Plans.

 

4.12     Employee Benefit Plans.

 

(a)     Section 4.12 of the Disclosure Schedule sets forth a true and complete list of each (i) “employee benefit plan” (as defined in Section 3(3) of ERISA, whether or not subject to ERISA) and (ii) each other profit-sharing, deferred compensation, bonus, stock option, stock purchase, equity or equity-based, incentive, commission, employment, consulting, independent contractor, severance, change-of-control, retention, paid time off, holiday pay, pension, retirement, medical, welfare, fringe and other compensation or benefit plan, program, policy, agreement, contract or arrangement (whether written or unwritten), in either case, maintained, contributed to, or required to be contributed to, by the Epic Companies for the benefit of any current or former employee, director, officer or independent contractor of the Epic Companies (and/or their beneficiaries) or with respect to which the Epic Companies has or would reasonably be expected to have any Liability (contingent or otherwise) (collectively, “Benefit Plans”). Section 4.12 of the Disclosure Schedule separately identifies the plan sponsor of each Benefit Plan.

 

(b)     As applicable with respect to each Benefit Plan, the Sellers have delivered or made available to the Buyer true and complete copies of (i) such Benefit Plan, including all amendments and other documents related thereto (including any summary plan description and summary of material modifications), and in the case of an unwritten Benefit Plan, a written description of all material terms thereof, (ii) any trust agreement, insurance contract or other funding agreement, (iii) the last three most recently filed annual reports on Form 5500 and all schedules and attachments thereto, (iv) the most recent IRS determination, opinion or advisory letter and any pending application for an IRS

 

17

 

 

determination letter and any correspondence with the IRS related thereto, and (v) all material correspondence (including any applications or submissions under any voluntary correction programs) relating to any audit or investigation by a Governmental Authority or any submission under any Governmental Authority’s voluntary compliance procedures during the last three (3) years.

 

(c)     Each Benefit Plan is and has been operated and administered in all material respects in compliance with its terms and all applicable Laws and each employee permitted to participate in a Benefit Plan is eligible to participate under the terms of such Benefit Plan. With respect to each Benefit Plan intended to be tax-qualified under Section 401(a) of the Code (i) each such Benefit Plan has a current favorable IRS determination letter (or, in the case of a pre-approved plan, a current IRS opinion or advisory letter on which it can rely) as to its tax-qualified status under the Code and nothing has occurred since the date of such favorable determination (or opinion or advisory) letter which would adversely affect the qualified status of such plan or result in material Liability to the Epic Companies, (ii) the trusts maintained thereunder have been determined to be exempt from taxation under Section 501(a) of the Code, and (iii) no event has occurred that would reasonably be expected to result in disqualification or adversely affect such exemption. No Benefit Plan is subject to the laws of a jurisdiction outside of the United States.

 

(d)     All benefits, contributions and premiums required by and due under the terms of each Benefit Plan or applicable Law have been timely paid or properly accrued in accordance with the terms of such Benefit Plan, the terms of all applicable Laws and GAAP. With respect to any Benefit Plan, no event has occurred that has resulted in any Taxes, fines, interest payments, penalties, or other Liabilities with respect to any Benefit Plan under any applicable Law including the Code and ERISA. Each Benefit Plan may be modified or terminated, in whole or in part, by the Epic Companies without Liability (other than standard administrative expenses incurred for such modification or termination).

 

(e)     No Benefit Plan provides health, life insurance or other welfare benefits to retired or other terminated employees, officers, independent contractors, or directors of the Epic Companies (or any spouse, beneficiary or dependent thereof), or to any other Person, other than “COBRA” continuation coverage required by Section 4980B of the Code or Sections 601-608 of ERISA or similar state Law at the participant’s sole cost. All Benefit Plans that are health and welfare plans are fully insured through insurance contracts.

 

(f)     No “prohibited transactions” (as defined in Section 4975(c)(1) of the Code) or breaches of fiduciary duty of the Sellers, the Epic Companies, or any director, officer or employee of the Epic Companies, have occurred with respect to any of the Benefit Plans.

 

(g)     There are no Actions, either currently in progress, or, to the Knowledge of Sellers, threatened or expected to be instituted in the future, relating to (i) any Benefit Plan, or (ii) any “fiduciary” of such plan (within the meaning of Section 3(21)(A) of ERISA) brought on behalf of any participant, beneficiary or fiduciary thereunder, or by any Governmental Authority and, to the Knowledge of Sellers, no fact or event exists that would reasonably be expected to give rise to any such Action. No Benefit Plan is currently

 

18

 

 

or, within the past six years has been, under investigation or audit by any Governmental Authority and, to the Knowledge of Sellers, no such investigation or audit is contemplated or under consideration. No Benefit Plan is, or within the past six years has been, the subject of an application or filing under, or a participant in, a government-sponsored amnesty, voluntary compliance, self-correction or similar program.

 

(h)     Neither the Epic Companies nor any Affiliate have ever sponsored, maintained, contributed to or been required to contribute to, or has any liability in respect of any Benefit Plan that is or was (i) subject to Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code, (ii) a “multiemployer plan,” as defined in Section 3(37) of ERISA, (iii) a “multiple employer plan,” as defined in Section 210(a) of ERISA or Section 413 of the Code, (iv) a “voluntary employees’ beneficiary association,” as defined in Section 501(c)(9) of the Code, or (v) a “multiple employer welfare arrangement,” as defined in Section 3(40) of ERISA.

 

(i)     Neither the execution of this Agreement nor the consummation of the transactions contemplated by this Agreement will (either alone or in combination with another event): (i) increase the amount of compensation or benefits otherwise payable under any Benefit Plan; (ii) result in the acceleration of the time of payment, exercisability, funding or vesting of any compensation or benefits due to, or result in the forgiveness of any indebtedness owed by, any Person or entity (or any beneficiary or permitted transferee of the foregoing) or result in any Liability to any current or former director, officer, employee or independent contractor of the Epic Companies; (iii) result in any compensatory payment or benefits (whether severance pay or otherwise) becoming due to, or with respect to, any current or former director, officer, employee or independent contractor of the Epic Companies; (iv) directly or indirectly cause the Epic Companies or any of its Affiliates to set aside any assets to fund any benefit under any Benefit Plan, or (v) limit or restrict the ability of the Buyer, the plan sponsor or the Epic Companies or any of its Affiliates, as applicable, to merge, amend or terminate any of the Benefit Plans. Neither the execution of this Agreement nor the consummation of the transactions contemplated by this Agreement will (either alone or in combination with another event) result in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code or in the imposition of an excise Tax under Section 4999 of the Code.

 

(j)     Each “nonqualified deferred compensation plan” under which any Epic Company makes, is obligated to make or promises to make, payments subject to Section 409A of the Code, if any, has since the inception of such Epic Company been operated in compliance with Section 409A of the Code, and the applicable Regulations and IRS guidance thereunder so as to avoid any Tax pursuant to Section 409A of the Code and the document or documents that evidence each such plan have, since the inception of such Epic Company, conformed to the provisions of Section 409A of the Code and the Regulations thereunder.

 

(k)     Each Benefit Plan that constitutes a “Epic health plan” has been operated and administered in compliance in all material respects with the applicable provisions of the Patient Protection and Affordable Care Act of 2010, as amended, and the Health Care and

 

19

 

 

Education Reconciliation Act of 2010, as amended (the “Affordable Care Act”) and the applicable regulations and guidance thereunder. Neither the Epic Companies nor any Affiliate owes any Taxes imposed by Section 4980H of the Code, and no condition exists with respect to any Benefit Plan that would reasonably be expected to subject the Epic Companies (or any Affiliate) to, any Tax, fine, interest or penalty or other Liability imposed by the Affordable Care Act.

 

Neither the Epic Companies nor any of its Affiliates have, nor could they reasonably be expected to have, any Losses for Taxes under Sections 4975 through 4980 or Sections 4980A through 4980I of the Code.

 

4.13     Title to, Sufficiency and Condition of Assets Other Than Real Property.

 

(a)     Each Epic Company has good and valid title to or a valid leasehold interest in or a valid license to all of its assets, other than Real Property (addressed in Section 4.14) and Intellectual Property (addressed in Section 4.15), including all of the assets reflected on the Financial Statements or acquired in the ordinary course of business since January 31, 2021, subject to Permitted Encumbrances and except those sold or otherwise disposed of for fair value since January 31, 2021 in the ordinary course of business consistent with past practice. The assets owned or leased by the Epic Companies constitute all assets of the Epic Companies used to carry on their respective businesses as currently conducted. None of the assets (other than Real Property) owned or leased by the Epic Companies is subject to any Encumbrance, other than Permitted Encumbrances.

 

(b)     All tangible assets, other than Real Property, owned or leased by the Epic Companies have been maintained in all material respects in accordance with generally accepted industry practice, are in all material respects in good operating condition and repair, ordinary wear and tear excepted.

 

4.14     Real Property.

 

(a)     Schedule 4.14(a) lists all Owned Real Property and all Leased Real Property (collectively, the “Real Property”). The Epic Companies have good and indefeasible title to the Real Property free and clear of all Encumbrances, except Permitted Encumbrances.

 

(b)     No Epic Company has been given or received any notice that a breach or an event of default exists, and no condition or event has occurred that with the giving of notice, the lapse of time, or both would constitute a breach or event of default, by any of the Epic Companies, or, to the Knowledge of Sellers, any other Person, with respect to any covenants, conditions, deeds, deeds of trust, rights-of-way, easements, mortgages, restrictions, surveys, title insurance policies, or other Contracts granting, constituting or evidencing a conveyance by or to the Epic Companies of title to or an interest in or otherwise affecting any Owned Real Property or the ownership thereof. No condemnation, eminent domain, or similar proceeding exists, is pending, or to the Knowledge of Sellers is threatened, with respect to, or that could affect, any Owned Real Property. No developer-related charges or assessments by proffers to any Government Authority or any other

 

20

 

 

Person for public improvements or otherwise made against any of the Owned Real Property are unpaid or incomplete (other than those reflected on the Interim Financial Statements or incurred since the Interim Financial Statement Date in the ordinary course of business consistent with past practices, and other than standard development agreements such as impact fee and water and sewer connection fee agreements paid on a per unit basis at the time of applying for a building permit or certificate of occupancy).

 

(c)     The Owned Real Property that the Epic Companies intend to use for homebuilding consists entirely of lots that conform in all respects to the appropriate Governmental Authority’s standards, such Owned Real Property has access to streets, and is or will in the future be serviced, in all respects, by all utilities, water and other services, as is necessary to construct homes on such Owned Real Property, and such utilities, water and other services are adequate for the current and intended use of such Owned Real Property. There are no (i) discrepancies or conflicts in boundary lines or shortages in area for any Owned Real Property (ii) encroachments on any Owned Real Property, or (iii) encroachments by improvements on any Owned Real Property onto any easements or any adjoining property or which would otherwise conflict with the property rights of any other Person with regard to adjoining property.

 

(d)     All work performed by the Epic Companies, or by contractors or subcontractors on behalf of the Epic Companies on any of the Owned Real Property has been performed in substantial accordance with the plans and specifications approved by all Governmental Authorities (including VA and FHA, as applicable), in substantial compliance with all applicable Laws, and in a good and workmanlike manner, free from any defect or Encumbrance, other than Permitted Encumbrances, and subject to normal warranty claims to the extent accrued on the Interim Financial Statements. To the Knowledge of Sellers, the Owned Real Property complies in all material respects with all applicable Laws, including, without limitation, applicable zoning, land use, subdivision, parking, traffic and fire safety laws and building codes.

 

(e)     All Consents, Permits, waivers or other authorizations of any Governmental Authority necessary or appropriate for the construction by the Epic Companies of homes on the Owned Real Property that the Epic Companies intend to use for homebuilding (collectively, the “Entitlements”) have been obtained with respect to the homes under construction on any Owned Real Property. No Epic Company is in default under, or has received any notice that any event has occurred which with the giving of notice or the passage of time, or both, would constitute a default under any Entitlements, transaction, covenant, condition, restriction, easement, Encumbrance or other Contract pertaining to any Owned Real Property. All subdivision improvement bonds and other sureties or assurances, if any, relating in any way to any Owned Real Property and required to be provided by the Epic Companies by any applicable Governmental Authority or pursuant to any Entitlements have been posted and are being maintained in accordance with the requirements of such applicable Governmental Authority or Entitlements and no claim has been made thereunder or thereto. No Epic Company is obligated to pay or is otherwise subject to any monetary charges, assessments or fees imposed by any Governmental Authority in connection with receipt by Epic Companies of the Entitlements or otherwise

 

21

 

 

relating to the development or improvement of any Owned Real Property, other than such amounts as are normal and customary. The Epic Companies do not have any outstanding development or improvement obligations with respect to any Owned Real Property except in the ordinary course of business or as is set forth in the Contracts pursuant to which the applicable Owned Real Property was purchased or under Contracts pursuant to which houses will be constructed or sold. Schedule 4.14(e) sets forth a list of all outstanding surety and performance bonds not released with respect to any Epic Company community or development.

 

(f)     No Epic Company has made any oral or, except for the Entitlements, written commitments or representations to, or understandings or Contracts with, any Person or any adjoining property owner that would interfere with the Epic Companies’ ability to construct homes on the Owned Real Property that the Epic Companies intend to use for homebuilding in accordance with the Entitlements. Other than in connection with its sales of homes to buyers in the ordinary course of business, no Epic Company has assigned to any Person any of its development or other rights with respect to the Owned Real Property.

 

(g)     No Epic Company has received any notice from its insurance carriers of any defects or inadequacies in any of the Owned Real Property, which would adversely affect the insurability of any Owned Real Property or the cost of any such insurance. There are no pending insurance claims with respect to any portion of any such Owned Real Property.

 

4.15     Intellectual Property. Schedule 4.15 sets forth a description of the material Intellectual Property which the Epic Companies have rights to use in the conduct of its Business. The conduct of the Epic Companies’ business and the use and exploitation of the Intellectual Property do not infringe or misappropriate any rights held or asserted by any person, and, to the Knowledge of Sellers, no person is infringing on the Intellectual Property. No payments are required for the continued use of the Intellectual Property. None of the Intellectual Property has been declared invalid or unenforceable by any Governmental Authority, or is the subject of any pending or threatened Action for opposition, cancellation, declaration, infringement, invalidity, unenforceability, or misappropriation or similar Action. Except as set forth on Schedule 4.15 all house plans used by the Epic Companies are owned outright by the Epic Companies or are licensed to the Epic Companies and will continue in full force in effect upon the Closing.

 

4.16     Taxes.

 

(a)     For income tax purposes CDP Holdings LLC is and has been disregarded from Christina D. Presley. Other than as set forth on Schedule 4.16(a) each Epic Company (and each of its predecessors) (i) has been a validly electing S corporation within the meaning of Code Sections 1361 and 1362, and state law counterparts thereof, and (ii) will be a validly electing S corporation up to the termination of such status as a result of the consummation of the transactions contemplated by this Agreement. No Epic Company or Seller has received any notice, or otherwise become aware, of any Action by any taxing authority or otherwise, that would call into question, disallow, jeopardize, or terminate (inadvertently or otherwise) an Epic Company’ election to be, or status as, an S corporation. Each Seller is the type which is permissible to own stock in an S corporation, as

 

22

 

 

contemplated in Code Section 1361(b). A §338(h)(10) Election is able to be properly made with respect to each Epic Company in connection with the closing of the transactions contemplated in this Agreement. No Epic Company has, in the past six years, (1) acquired assets from another corporation in a transaction in which the Epic Company’s Tax basis for the acquired assets was determined, in whole or in part, by reference to the Tax basis of the acquired assets (or any other property) in the hands of the transferor or (2) acquired the stock of any corporation that is a qualified subchapter S subsidiary. No Epic Company owns an equity interest in any Person, including but not limited to any Person that is a “qualified subchapter S subsidiary” within the meaning of Code Section 1361(b)(3)(B).

 

(b)     There are no Encumbrances, other than Permitted Encumbrances, for Taxes upon any assets of any Epic Company; no such Encumbrance is pending or, to the Knowledge of Sellers, threatened; and, to the Knowledge of Sellers, there is no reasonable basis for the assertion of any claim relating or attributable to Taxes which, if adversely determined, would result in any such Encumbrance. None of the assets of any Epic Company is, or is required to be, treated for Tax purposes as being owned by any other Person.

 

(c)     Except for filings, the due dates of which are after the Closing Date, (i) all Tax Returns required to be filed by, or with respect to, each Epic Company have been properly completed and timely filed (including after taking into account timely filed extensions), and (ii) all such Tax Returns are true, correct, and complete in all material respects and were prepared in compliance with all applicable Laws. All Taxes due, owing or payable by, with respect to, or attributable to each Epic Company (whether or not shown on any Tax Return) for any period preceding the Closing Date have been timely paid. No claim has ever been made by an authority in a jurisdiction where an Epic Company (or Seller or ultimate beneficial owner of an Epic Company) does not file Tax Returns that such Epic Company (or Person) is or may be subject to taxation in that jurisdiction or by that authority.

 

(d)     No material deficiencies for Taxes have been asserted or assessed by any Governmental Authority in writing against any Epic Company that has not been fully satisfied by payment, settled in full, or fully withdrawn, and there is no pending Action with respect to Taxes of any Epic Company. No Epic Company or Seller has received any notice of deficiency or proposed adjustment or assessment for any amount of Tax, and, to the Knowledge of Seller, no reasonable basis exists for any adjustment, assessment or deficiency. To the Knowledge of Sellers, no Epic Company or employee of any Epic Company reasonably expects any authority to assess any additional Tax for any period prior to the Closing with respect to any Epic Company.

 

(e)     There is no Tax-related Action concerning or respecting any Epic Company; and no Epic Company or Seller has been notified in writing of any intent of any Governmental Authority to commence any such Action. Schedule 4.16(e) lists all federal, state, local, and non-U.S. income Tax Returns filed with respect to the Epic Companies that have been subject to an Action, and indicates those Tax Returns that currently are the subject of an Action. Sellers have delivered to Buyer correct and complete copies of all

 

23

 

 

income Tax Returns and other material Tax Returns for at least the 2015-2019 Tax years, examination reports, and statements of deficiencies assessed against or agreed to by, or with respect to, each Epic Company. To the Knowledge of Sellers, no issue previously raised by any taxing authority reasonably could be expected to result in a proposed deficiency, assessment or other claim for any Taxes, and to the Knowledge of Seller no assessment by any taxing authority for any Taxes for any period for which Tax Returns have been filed is expected.

 

(f)     Each Epic Company has not consummated or participated in, is not consummating or currently participating in, and has not been a party and is not a party, in or to any listed transactions or reportable transactions within the meaning of Treasury Regulations Section 1.6011-4(b) or 6707A(c)(1) or any transaction that is substantially similar to any of those transactions, or any “tax shelter” transaction as defined in Sections 6011, 6012, 6111, or 6662 of the Code or the Treasury Regulations promulgated thereunder.

 

(g)     No Epic Company is currently the beneficiary of any extension of time within which to file Tax Returns, and there has been no waiver of any statute of limitations in respect of Taxes or agreement to any extension of time with respect to a Tax assessment or deficiency, in each instance respecting or relating to any Epic Company. Other than as set forth on Schedule 4.16(g), no Epic Company has any power of attorney currently in force with respect to any Epic Company-related Tax matters. No Epic Company is the beneficiary of any Tax exemption or Tax holiday.

 

(h)     Each Epic Company has timely complied with all requirements relating to the withholding of Taxes (including withholding and reporting requirements under Code Sections 1441 through 1464, 3401 through 3406, 6041, 6049, and any state laws), and has within the times and in the manner prescribed by law timely paid over such amounts to the proper taxing authorities in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder or third party, and all Forms W-2, 1099 and 941 (and state law counterparts thereof) required with respect thereto have been properly completed and timely filed.

 

(i)     Other than with respect to the PPP Loan, if applicable, no Epic Company will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending on or after the Closing Date as a result of any (i) change in method of accounting for a period (or portion thereof) ending on or prior to the Closing Date, (ii) closing agreement or offer in compromise with any Governmental Authority entered into on or prior to the Closing Date, (iii) installment sale or open transaction made on or prior to the Closing Date, (iv) prepaid amount received on or prior to the Closing Date, (v) intercompany or intracompany transaction occurring on or prior to the Closing Date, or (vi) election made pursuant to the Code or Treasury Regulations.

 

24

 

 

(j)     There are no Tax rulings specifically applicable to any Epic Company which would impact, following the Closing, any Epic Company or, directly or indirectly, Buyer. No Epic Company is party to or bound by any tax indemnity, tax sharing or tax allocation agreement.

 

(k)     No Epic Company is a party to any Contract or plan that (i) has resulted or, after the Closing, would result, separately or in the aggregate, in connection with this Agreement or any change of control of any Epic Company, in the payment of any “excess parachute payments” within the meaning of Code Section 280G or (ii) could obligate such Epic Company (either before or after the Closing) to make any payments that will not be fully deductible (including after taking into consideration Code Section 162(m)).

 

(l)     Each Epic Company (and, to the extent related to any Epic Company, each Seller) has disclosed on each Tax Return filed by such Person all positions taken thereon that could give rise to a substantial understatement of federal income Taxes within the meaning of Code Section 6662 or 6662A or any similar provisions of any other Tax law.

 

(m)     All Taxes payable by, with respect to, or attributable to each Epic Company which are not yet due and payable, including but not limited to any Tax arising out of the transactions contemplated by this Agreement (whether or not a Tax Return is due by the Closing Date) have been paid, properly accrued or otherwise adequately reserved on the Financial Statements, including but not limited to the Interim Financial Statement, and will be accrued on the books and records of the Epic Companies through the Closing Date with statements thereof made available to Buyer on the Closing Date.

 

(n)     Each Epic Company has properly requested, received and retained all necessary exemption certificates and other documentation supporting any claimed exemption or waiver of Taxes on sales or other transactions as to which it otherwise would have been obligated to collect or withhold Taxes.

 

(o)     No Seller, and no Epic Company, is a foreign person within the meaning of Code Section 1445.

 

(p)     No Epic Company has distributed stock of another Person or had its stock distributed by another Person in a transaction that was purported or intended to be governed in whole or in part by Code Sections 355 or 361. No Epic Company was acquired in a qualified stock purchase under Code §338(d)(3) and no elections under Code §338(g), protective carryover basis elections, or offset prohibition elections are applicable to any Epic Company.

 

(q)     No Epic Company (i) is now, or has never been, a member of an affiliated, combined, consolidated, unitary or aggregate group filing a consolidated federal income Tax Return, (ii) has any liability for the Taxes of any other Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or non-U.S. law), as

 

25

 

 

a transferee or successor, by contract, or otherwise, or (iii) is a party to, or bound by, any Tax allocation, indemnity, sharing or similar agreement or arrangement.

 

(r)     No Epic Company has any elections in effect under Code Sections 108, 441, 472, 1017, or 1033 (or any similar or other provision of state, local or foreign Tax law).

 

(s)     No Epic Company has been at any time a member of a limited liability company, partner of a partnership, shareholder of a corporation, participant in a joint venture or other arrangement that would likely be treated as a partnership, holder of a beneficial interest in any trust, of holder of any stock or securities in any Person for which the statute of limitations for any Tax respecting such investment or such Person has not expired.

 

(t)     No income under any arrangement or understanding to which an Epic Company is a party will be attributed to any Epic Company which is not represented by income to which such Epic Company is legally entitled.

 

(u)     The organization chart set forth on Schedule 4.16(u) accurately depicts the federal income tax treatment and ownership of the entities identified thereon.

 

4.17     Environmental Matters.

 

(a)     Each Epic Company is and has been in compliance with all applicable Environmental Laws, and neither Sellers nor the Epic Companies have received, nor is there any basis for, any communication or complaint from a Governmental Authority or other Person alleging that any Epic Company has any liability under any Environmental Law or is not in compliance with any Environmental Law.

 

(b)     Each Epic Company holds all Environmental Permits, if any, required to be held by that Each Epic Company, and is and has been in compliance therewith. Neither the execution, delivery or performance of this Agreement nor the consummation of the transactions contemplated hereby will (i) require any notice to or consent of any Governmental Authority or other Person pursuant to any applicable Environmental Law applicable to any Epic Company or Environmental Permit of any Epic Company or (ii) subject any Environmental Permit of the Epic Companies to suspension, cancellation, modification, revocation or nonrenewal.

 

(c)     Seller has provided to Buyer all “Phase I,” “Phase II” or other environmental assessment reports in its possession: (i) addressing locations currently owned, operated, or leased; or (ii) covering Real Property under Contract to purchase by the Epic Companies; or (iii) covering Real Property at which the Epic Companies actually, potentially or allegedly may have liability under any Environmental Law.

 

26

 

 

4.18     Material Contracts.

 

(a)     The following Contracts to which any Epic Company is party constitute all the Contracts that are material to the Epic Companies’ business, operations and prospects (collectively, the “Material Contracts”):

 

(i)     Real Property purchase, sale or option Contracts.

 

(ii)     Real property sale Contracts for sales of completed homes or homes under construction to individual homebuyers in the ordinary course of business.

 

(iii)     Performance or other bonds.

 

(iv)     Broker, distributor, dealer, manufacturer’s representative, franchise, agency, continuing sales or purchase, sales promotion, market research, marketing, consulting or advertising Contracts, in each case that involve consideration or payments in excess of $25,000.

 

(v)     Contracts relating to or evidencing indebtedness of the Epic Companies, including mortgages, other grants of security interests, guarantees or notes.

 

(vi)     Contracts under which any Epic Companies are directly or indirectly guaranteeing or directly or indirectly assuming debt or other obligations of any Person.

 

(vii)     Contracts to which any Epic Companies are currently providing funds to, making an advance, making any loan or extension of credit, capital contribution or other investment in, or assuming any liability or obligation of, any Person, including take-or-pay contracts or keepwell agreements.

 

(viii)     Contracts with any Governmental Authority, including development agreements.

 

(ix)     Contracts with any related party other than CDP Holdings’ Organizational Documents;

 

(x)     Employment or consulting Contracts.

 

(xi)     Contracts that limit, or purport to limit, the ability of any Epic Company to compete in any line of business or with any Person or in any geographic area or during any period of time, or that restricts the right of any Epic Company to sell to or purchase from any Person or to hire any Person, or that grants the other party or any third person “most favored nation” status or any type of special discount rights.

 

27

 

 

(xii)     Contracts pursuant to which any Epic Company is the lessee or lessor, or sublessee or sublessor, of or holds, uses, or makes available for use to any Person, (A) any Real Property or (B) any tangible personal property and, in the case of (B), that involve an aggregate future or potential liability or receivable, as the case may be, in excess of $50,000.

 

(xiii)     Contracts for the sale or purchase of any tangible personal property in an amount in excess of $50,000.

 

(xiv)     Except for Contracts described in Section 4.18(a)(viii), Contracts providing for indemnification to or from any Person with respect to liabilities relating to any current or former business of any Seller or any predecessor Person.

 

(xv)     Contracts for the future purchase of labor, materials, supplies or equipment for the construction of homes (A) with a future Liability in excess of $50,000, or (B) which obligates Sellers to use the services of the supplier or subcontractor of such labor, materials, supplies or equipment for future projects that have not yet been bid.

 

(xvi)     Management, consulting, financial advisory or other similar Contracts with Liability in excess of $50,000 (other than Contracts for architectural, geotechnical, land planners, design and engineering and other similar services, in each case relating to a single project).

 

(xvii)     Contracts for architectural, geotechnical, and engineering relating to the Epic Homebuilding Business.

 

(xviii)     Contracts relating in whole or in part to any Intellectual Property other than licenses to off-the-shelf software.

 

(xix)     Joint venture or partnership, merger, asset or stock purchase or divestiture Contracts relating to Sellers.

 

(xx)     Tax sharing or tax allocation agreements.

 

(xxi)     Contracts with any labor union or providing for benefits under any Benefit Plan.

 

(xxii)     Contracts relating to settlement of any administrative or judicial Actions within the past five years or that still impact, restrict or otherwise limit the Epic Companies in any material respect.

 

(xxiii)     Other Contracts that are material to the business, operations, assets, financial condition, results of operations or prospects of the Epic Companies.

 

(b)     Schedule 4.18(a) lists each of the Material Contracts under Section 4.18(a) (i), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi),

 

28

 

 

(xxii), and (xxiii) and indicates pursuant to which subsection of Section 4.18(a) such Material Contract relates.

 

(c)     Enforceability of Contracts. Each Material Contract is a legal, valid, binding and enforceable agreement in accordance with its respective terms, except for the Enforceability Exceptions, and is in full force and effect. None of the Epic Companies or, to the Knowledge of Sellers, any other party thereto is in breach or (with or without notice or lapse of time or both) default under, any Material Contract, nor has any Epic Company received any claim of any such breach or default. Sellers have made available to Buyer true and complete copies of all Material Contracts, including any amendments thereto.

 

(d)     Form Contracts. Sellers have provided Buyer with true, complete and accurate copies of the standard form home sales contracts and master subcontractor contracts currently used by the Epic Companies. Such standard form contracts are generally used by Sellers in the ordinary course of business to sell homes and secure subcontractor services. All recorded home sales related to homes under contract or closed during 2021 have an executed home sale contract using the standard form home sales contract, in certain cases with amendments or addendums, and Sellers have provided Buyer with true, complete and accurate copies of any such contracts.

 

4.19     Insurance. Schedule 4.19 sets forth (i) a list of all general liability insurance policies that provide coverage or did provide coverage to the Epic Companies for the last 5 years; and (ii) a true and complete list of all other current liability (including errors and omissions and directors and officers insurance), property, builder’s risk, worker’s compensation, and all other types of insurance that insure the Epic Companies (collectively, the “Insurance Policies”). Sellers have provided Buyer with true, accurate and complete copies of each Insurance Policy. All such policies are in full force and effect and no application therefor included a material misstatement or omission. All premiums with respect thereto have been paid, but remain subject to a premium financing obligation. No notice of cancellation, termination or reduction of coverage has been received with respect to any such policy.

 

4.20     Warranties. Sellers have delivered to Buyer complete and accurate copies of all written warranties and guaranties by the Epic Companies currently in effect with respect to its respective products. There have not been any material deviations from such warranties and guaranties, and neither the Epic Companies nor any of their respective salespersons, employees or agents is authorized to undertake obligations to any customer or to other third parties in excess of such warranties or guaranties. Neither the Epic Companies nor, to the Knowledge of Sellers, any of their respective salespersons, employees and agents has made any oral warranty or guaranty with respect to the products of the Epic Companies. The reserve for warranty costs included in the Balance Sheet and the Interim Financial Statements sets forth in the reasonable judgment of management of the Epic Companies of the estimate of the aggregate Liability of the Epic Companies in respect of warranty obligations.

 

4.21     No Brokers. No Seller or Epic Company has incurred or become liable for any broker’s commission or finder’s fee relating to or in connection with the transactions contemplated by this Agreement.

 

29

 

 

4.22     PPP Loan. The application submitted by The Orchard Group, and all representations and certifications made by The Orchard Group or Sellers to lenders or any Governmental Authority, in connection with the PPP Loan were accurate, true and correct in all respects when made and did not contain any inaccuracies or omissions. The Orchard Group complied with all applicable Laws and were permitted by applicable Law to apply for, receive, and use the proceeds of the PPP Loan. The Orchard Group used the proceeds of the PPP Loan solely for the allowable uses set forth in the Paycheck Protection Program under the CARES Act and solely for the purposes permitted under the loan forgiveness guidelines issued by the Small Business Administration (the “SBA”), and The Orchard Group has not taken any action which to the Knowledge of Seller would preclude, or failed to take such action as is required for, the full forgiveness of the PPP Loan, including any failure to properly maintain appropriate documentations and records in connection therewith. In the event the PPP Loan is forgiven, such forgiveness will to the Knowledge of Sellers, comply with the applicable Law in all respects. Without limiting the generality of the forgoing, in accordance with the SBA guidelines, prior to the Closing, Sellers and the Epic Companies have:

 

(a)     Notified the PPP Lender in writing of the transactions contemplated by this Agreement and provided the PPP Lender with a copy of this Agreement and the other documents that would effectuate the transactions contemplated by this Agreement;

 

(b)     Procured the PPP Lender’s written approval of the change of control and transactions contemplated by this Agreement (a copy of which has been provided to Buyer);

 

(c)     Completed a forgiveness application reflecting the Epic Companies’ use of all PPP Loan proceeds, and submitted the application, along with all required supporting documentation, to the PPP Lender, and a true and correct and complete copy of such application and supporting materials has been provided to Buyer; and

 

(d)     Established an interest-bearing PPP Blocked Account controlled by the PPP Lender. Schedule 4.22(d) sets forth the outstanding balance of the PPP Loan as of the Closing and the PPP Escrow Amount to be deposited by Buyer with the PPP Lender equal the amount of outstanding PPP Indebtedness under the PPP Loan as of the Closing.

 

4.23     Disclosure. None of the representations or warranties of Sellers in this Agreement and none of the information contained in any schedule delivered pursuant hereto contains any untrue statement of a material fact necessary to make the statements herein not misleading.

 

ARTICLE 5

Covenants And Other Agreements

 

5.1     Conduct of Business Prior to the Closing. Between the Signing Date and the Closing Date or the earlier termination of this Agreement (the “Interim Period”), unless Buyer otherwise agrees in writing, Epic Homebuilding Business will be conducted only in the ordinary course of business consistent with past practice, and Sellers will use commercially reasonable efforts to (i) preserve substantially intact the business organization and assets of the Epic Companies, (ii) keep

 

30

 

 

available the services of the current officers, employees and consultants of the Epic Companies and (iii) preserve the current relationships of the Epic Companies with customers, suppliers and other persons with which the Epic Companies have significant business relations.

 

5.2     Access to Information. During the Interim Period Sellers will and will cause the Epic Companies to, upon not less than 48 hours prior written notice, afford Buyer and Buyer’s Representatives access at mutually agreeable reasonable times to the Epic Companies’ facilities, properties (including Owned Real Property) and officers for investigations, inspections and meetings (including environmental studies) during normal business hours (or at such other times as are approved by Presley or her designee). Buyer will not contact any of Sellers’ or the Epic Companies’ bankers, land purchase agreement counterparties, suppliers, customers, employees or Governmental Authorities with respect to the Epic Companies or the proposed transaction without the prior written consent of and coordination with Presley or her designee.

 

5.3     Notification of Certain Matters. Sellers will:

 

(a)     Confer on a regular basis with representatives of Buyer and report operational matters and the general status of the Epic Companies’ business and ongoing operations.

 

(b)     Notify Buyer of any material adverse change in the normal course of the Epic Companies’ business or assets and of any Governmental Authority or third party Actions that affect the Epic Companies or the Epic Companies’ assets or business or the consummations of the transactions contemplated by this Agreement (or communications indicating that the same may be contemplated).

 

(c)     Promptly notify Buyer in writing of (i) the occurrence or non-occurrence of any change, condition or event, which would render any representation or warranty of Sellers in this Agreement untrue or inaccurate.

 

5.4     Disclosure Schedule Supplements. Prior to the Closing, Sellers may supplement the information in the schedules to Article 4 with respect to any matter now existing or hereafter arising that, if existing or occurring at or prior to the Signing Date, would have been required to be set forth in the Disclosure Schedules or that is necessary to correct any information in the Schedules to Article 4 or in any representation or warranty of Sellers rendered inaccurate thereby promptly following discovery thereof (each, a “Disclosure Schedule Supplement”). Any disclosure in a Disclosure Schedule Supplement will not be deemed to have cured any inaccuracy in or breach of any representation or warranty in this Agreement, including for purposes of the indemnification or termination rights contained in this Agreement or of determining whether or not the conditions set forth in Section 7.2 have been satisfied.   

 

5.5     Required Actions. Each Party will use commercially reasonable efforts to take, or cause to be taken, all appropriate action to do, or cause to be done, all things necessary, proper or advisable under Law or otherwise to consummate and make effective the transactions contemplated by this Agreement as promptly as practicable, including to obtain from Governmental Authorities and other Persons all Permits and estoppel certificates necessary for the consummation of the transactions contemplated by this Agreement. In the event that at any time

 

31

 

 

after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, including obtaining Permits from Governmental Authorities necessary to operate the Epic Homebuilding Business, each Party will take such further action (including the execution and delivery of such further instruments and documents) as any other Party may reasonably request.

 

Sellers will cause the Epic Companies to take such appropriate action to terminate the Epic Retirement Plan as of the day immediately preceding the Closing Date.

 

Following the Closing, Buyer will provide the Sellers reasonable access to the Financial Books and Records of the Epic Companies in connection with any of the agreements or matters contemplated hereby, including without limitation Article 6.

 

5.6     Confidentiality. Except as otherwise required by Law, each of the Parties will, and will cause their respective Representatives to, hold in confidence all documents and information furnished to that Party by or on behalf of any other Party in connection with the transactions contemplated hereby pursuant to the terms of the letter agreement dated January 29, 2021 between Buyer, Presley and the Epic Companies (the “Confidentiality Agreement”), which will continue in full force and effect until the Closing Date. If for any reason this Agreement is terminated prior to the Closing Date, the Confidentiality Agreements will nonetheless continue in full force and effect in accordance with its terms.

 

5.7     Public Announcements. During the Interim Period the Parties will consult with each other before issuing any press release or otherwise making any public statements with respect to this Agreement or the transactions contemplated hereby, and none of the Parties will issue any press release or make any public statement prior to obtaining the other Parties’ written approval, which approval may be withheld in the reasonable discretion of the Parties, except that no such approval is necessary to the extent disclosure is required by Law.

 

5.8     PPP Loan.

 

(a)     The PPP Loan will not be paid off at Closing and will remain outstanding until it is either forgiven in accordance with the provisions of the CARES Act and/or paid in full after Closing pursuant to this Section 5.8.

 

(b)     Prior to and after Closing, Buyer and the Epic Companies, on the one hand, and Sellers’ Representative, on the other hand, will reasonably cooperate in good faith with respect to all communications and proceedings with the PPP Lender and the SBA regarding the PPP Loan and Epic Companies’ loan forgiveness application, including the SBA’s and PPP Lender’s review of the PPP Loan application and the certifications made in connection therewith; the Epic Companies’ eligibility to participate in the Paycheck Protection Program under the CARES Act, together with any regulations and guidance promulgated thereunder; the amounts borrowed under the PPP Loan; the use of the PPP Loan proceeds; and the forgiveness of any PPP Loan proceeds.  Such cooperation and assistance will include, without limitation, (i) the retention of any documentation related to the PPP Loan for at least six years after the date the PPP Loan is forgiven or repaid in full, (ii) the delivery of any such documentation, upon request, and (iii) the cooperation and assistance with

 

32

 

 

responses to the SBA’s and the PPP Lender’s questions and document requests in connection with the PPP Loan.  The Epic Companies will engage in good faith efforts to obtain forgiveness of all principal and interest owed to the PPP Lender under the PPP Loan, if and to the extent that such forgiveness is permitted by the CARES Act.

 

(c)     If any amount of the principal or interest owed to the PPP Lender under the PPP Loan is not forgiven (the “Unforgiven Amount”) after the Epic Companies have made commercially reasonable efforts permitted by the CARES Act to obtain forgiveness of the PPP Loan in accordance with the CARES Act, then (i) Buyer and, to the extent necessary, Sellers’ Representative, will cause to be released to the PPP Lender from the Epic Companies PPP blocked account with the PPP Lender (the “PPP Blocked Account”) an amount of cash equal to the Unforgiven Amount and (ii) any remaining amount deposited in the PPP Blocked Account will be released to the Epic Companies; provided that if the remaining amount deposited in the PPP Blocked Account is insufficient to cover the Unforgiven Amount (the remaining outstanding amount, the “PPP Shortfall”), then Buyer may withhold from the Holdback Amount an amount equal to the PPP Shortfall, and Buyer will pay the PPP Shortfall to the PPP Lender to satisfy and discharge the PPP Loan. If the remaining portion of the Holdback Amount is for any reason insufficient to pay the PPP Shortfall, Buyer will be entitled to indemnification for such insufficient amount pursuant to Section 8.2(e).

 

(d)     If all principal and interest owed to the PPP Lender under the PPP Loan is forgiven in its entirety, then the entire amount deposited in the PPP Blocked Account will be released to the Epic Companies within 72 hours of the Epic Companies providing Buyer written notice of loan forgiveness.

 

(e)     Any amount deposited in the PPP Blocked Account remaining following forgiveness of the PPP Loan and/or payment of the Unforgiven Amount in accordance with this Section 5.8 will be promptly released to the Epic Companies within 72 hours of the Epic Companies providing Buyer written notice of loan forgiveness.

 

(f)     With respect to any remaining amount deposited in the PPP Blocked Account that is released to Buyer / the Epic Companies under Section 5.8(c)(ii), such amount shall be used to pay bonuses to employees of the Epic Companies and Presley may, in her sole discretion, designate bonuses to be paid to employees of the Epic Companies employed on the Closing Date and that remain employed by the Epic Companies, or Buyer or Buyer’s Affiliates, on the date the PPP Loan forgiveness is finally determined. The aggregate amount of any bonuses to be paid, including the employer’s share of payroll and similar taxes, shall not exceed the amount of such remaining amount that is released to Buyer / the Epic Companies. Presley may recommend the specific individuals and specific amounts to be paid to such employees, which at her discretion may include Presley herself. Presley agrees to consult with Buyer about such determinations and consider in good faith any recommendations or requests from Buyer concerning the bonuses.

 

33

 

 

5.9     Sellers’ Representative. Sellers will at all times maintain a Sellers’ Representative for purposes of taking certain actions and giving certain consents on behalf of Sellers as specified herein. Each Seller hereby appoints Presley as the Sellers’ Representative. Sellers may select a replacement to be the Sellers’ Representative appointed to written notice to Buyer. The actions, consents and representations by Sellers’ Representative on behalf of Sellers pursuant hereto are binding upon Sellers.

 

ARTICLE 6

Tax Matters

 

6.1     Tax Indemnification.

 

(a)     Sellers will, jointly and severally, indemnify and hold harmless the Buyer Indemnitees from and against, without duplication, all Losses incurred by it or them directly and indirectly with respect to, in connection with, or arising from, or attributable to any and all:

 

(i)     Taxes (or the non-payment thereof) of Sellers and each Epic Company, and Taxes for which each Seller and each Epic Company are liable, in each instance for all Pre-Closing Tax Periods, and the portion of any Straddle Period (determined below) which portion ends on the Closing Date, including any Taxes arising as a result of the transactions contemplated in this Agreement;

 

(ii)     breaches of any representation, warranty, or covenant relating to or with respect to Taxes which includes but is not limited to the provisions set forth in Section 4.16 and this Article 6;

 

(iii)     Taxes (or the non-payment thereof) of any Person (other than the Epic Companies) imposed on any Seller or any Epic Company as a transferee or successor by contract or pursuant to any Law, rule or regulation, which Taxes relate to an event or transaction occurring on or before the Closing Date;

 

(iv)     Taxes of any member of an affiliated, consolidated, combined or unitary group of which any Epic Company (or any predecessor) is or was a member on or prior to the Closing Date, including pursuant to Treas. Reg. §1.1502-6 or any analogous or similar state, local or foreign law or regulation;

 

(v)     reductions of Tax assets, attributes, or benefits of any Epic Company as a result of any action or inaction involving any Seller or, prior to the Closing, any Epic Company; and

 

(vi)     (1) any Taxes (including but not limited to those arising under Code §1374) resulting from a §338(h)(10) Election; and (2) any Taxes (e.g., any reduction of Tax asset, attribution, or benefit) if a §338(h)(10) Election is unable to be made for or with respect to any Epic Company in connection with the transactions contemplated in this Agreement.

 

34

 

 

Notwithstanding anything in this Agreement to the contrary, the amount of any indemnification payment made pursuant to this Agreement will be increased such that after the payee of such payment pays or is subject to tax on or respecting the total amount of the indemnification payment, the amount of the indemnification payment remaining after the payment or withholding of such tax is equal to the amount of the Losses for which the indemnification payment is made.

 

6.2     Timing and Treatment of Payments. Payments by any Seller of any amounts due under this Article 6 will be made upon reasonable request by Buyer. Any indemnification payments made under this Article 6 will be treated by the Parties on their Tax Returns, and for all Tax purposes, as an adjustment to the Purchase Price.

 

6.3     Straddle Period. Whenever it is necessary to determine the amount of Taxes (or the non-payment thereof) of any Epic Company for a Straddle Period, the determination of Taxes for the portion of the Straddle Period (1) beginning prior to the Closing Date and ending on or before the Closing Date, and (2) beginning the day after the Closing Date, will be determined:

 

(a)     in the case of Taxes that are either (i) based upon or related to income, receipts, sales, use, payroll, or similar matters, (ii) imposed in connection with any distribution, sale or other transfer or assignment of property, or (iii) imposed in connection with any other transaction or deemed transaction, by assuming that the applicable Epic Company had a taxable year or period which ended at the end of the Closing Date and there was a closing of the books of such Epic Company as of such date, except that exemptions, allowances or deductions that are calculated on an annual basis (e.g., depreciation deductions), shall be apportioned on a time basis as contemplated in subsection (b) below; and

 

(b)     in the case of Taxes not described in subsection (a) that are imposed on a periodic basis and measured by the level of any item, shall be deemed to be the amount of such Taxes (including any minimum) for the entire period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period) multiplied by a fraction the numerator of which is the number of calendar days in the period determined in subsection (a) above and the denominator of which is the number of calendar days in the entire Straddle Period. In the case of any Tax based upon or measured by capital (including net worth or long-term debt) or intangibles, any amount thereof required to be allocated under this subsection shall be computed by reference to the level of such items on the Closing Date. All determinations necessary to effect the foregoing allocations will be made in a manner reasonably determined by Buyer. The Parties will, to the extent permitted by applicable Law, elect to close, as of the end of the Closing Date, any taxable period of each Epic Company that would otherwise be a Straddle Period. Any exemption or credit that is calculated on an annual basis shall be allocated to the portion of the Straddle Period in the same manner as that set forth in this subsection (b).

 

(c)     For the avoidance of doubt, any Taxes (including but not limited to those arising under Code §1374) resulting from a §338(h)(10) Election will be treated as arising during the Pre-Closing Tax Period and the responsibility of Sellers; and neither Buyer nor any Epic Company will be directly or indirectly liable for any such Tax.

 

35

 

 

6.4     Tax Returns.

 

(a)     To the extent an Epic Company is an S corporation until the closing of the transactions contemplated in this Agreement, Sellers will prepare and timely file all income Tax Returns (“Pre-Closing Income Tax Returns”) of each such Epic Company for all taxable periods ending on or before the closing of such transactions, and the Pre-Closing Income Tax Return for each Epic Company’s 2021 tax year will be filed as, and constitute, a final S corporation federal and state income Tax Return for the short-period commencing January 1, 2021 and ending on the Closing Date. Each Pre-Closing Income Tax Return shall be prepared in a manner consistent with such Epic Company’s historic practice. Sellers will provide Buyer with a copy of each Pre-Closing Income Tax Return at least 30 days prior to the due date and filing of such Tax Return for Buyer’s review and comment, and Seller will accept and incorporate any reasonable comments of Buyer into such Tax Return prior to such Tax Return being filed. All Tax Returns for each Epic Company, other than Pre-Closing Income Tax Returns, will be prepared and filed by Buyer.

 

(b)     Sellers will not (directly or indirectly), without the prior written consent of Buyer, (i) make, change, or rescind any Tax election, (ii), other than as contemplated in Section 6.4(a), file, amend, or refile any Tax Return for any Epic Company, or (iii) take any position in any Tax Return, take any action, omit to take any action, or enter into any transaction, in each instance, that would have the effect of increasing the Taxes or Tax liability of Buyer (or, after the Closing, any Epic Company), or reduce the Tax assets, attributes, or benefits of Buyer (or, after the Closing, any Epic Company), in each instance when compared to the Taxes and Tax assets, attributes, and benefits that Buyer reasonably anticipates following the closing of the transactions contemplated in this Agreement, including the making of a §338(h)(10) Election respecting the acquisitions contemplated in this Agreement (as more fully addressed in Section 6.9). Buyer (and, after the Closing, each Epic Company) will have no Liability for any Tax resulting from any action of any Seller (or, prior to the Closing, any Epic Company), and Sellers agree to indemnify and hold harmless Buyer (and, after the Closing Date, each Epic Company) against any such Tax or reduction of any Tax asset, attribute, or benefit as contemplated in this Section 6.4. In addition, Sellers’ Representative will consider in good faith any request by Buyer to amend or extend the statute of limitations with respect to any Tax Returns of any Epic Company relating to a Pre-Closing Tax Period if Buyer believes it would be reasonable or prudent to so amend or extend. Sellers will not, without the prior written consent of Buyer, amend, or cause any Epic Company to amend, any Tax Return of any Epic Company relating to a Pre-Closing Tax Period or Straddle Period, or take any action that would have the effect of extending the statute of limitations with respect to any Tax Returns of any Epic Company relating to a Pre-Closing Tax Period or Straddle Period.

 

6.5     Tax Audits, Claims and Contests.

 

(a)     If notice of any Action with respect to Taxes of the Company (a “Tax Claim”) is received by any Party (the “Notified Party”) for which another Party may reasonably be expected to be liable pursuant to this Agreement then the Notified Party will promptly notify such other Party in writing of such Tax Claim; provided that the failure of the

 

36

 

 

Notified Party to give the other party such prompt notice as provided herein shall not relieve such party of its obligations under this Section 6.5 or otherwise except to the extent that the other Party is materially prejudiced thereby.

 

(b)     With respect to a Tax Claim relating to a Pre-Closing Income Tax Return (defined above), Sellers’ Representative will control such Tax Claim, provided that if such Tax Claim, or the resolution thereof, could reasonably be expected to impact Buyer or any Epic Company after the Closing, then Sellers’s Representative will (i) reasonably, diligently and actively pursue the defense or settlement of such Tax Claim, (ii) permit Buyer to participate at its expense in all aspects of such Tax Claim, (iii) keep Buyer fully informed regarding the status and progress of such Tax Claim, (iv) provide to Buyer any written communications with any Tax Authority to the extent related to such Tax Claim, (v) not settle such claim without the prior written consent of Buyer, which consent may not be unreasonably withheld, conditioned, or delayed, and (vi) attest in writing to Buyer that Sellers are obligated to indemnify Buyer (and, after the Closing, each Epic Company) for all Losses resulting from such Tax Claim. If Sellers’ Representative does not assume the defense of any such Tax Claim, then Buyer may defend the same in such manner as it may deem appropriate. Buyer shall control all other Tax Claims and the settlement and resolution thereof.

 

6.6     Cooperation on Tax Matters. Buyer, each Epic Company, and Sellers will cooperate fully, as and to the extent reasonably requested by the other Parties, in connection with the filing of Tax Returns and any audit, litigation, or other proceeding with respect to Taxes. Such cooperation will include the retention and (upon any other Party’s request) the provision of records and information reasonably relevant to any such audit, litigation, or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Buyer, each Epic Company, and Sellers will retain all books and records with respect to Tax matters pertinent to each Epic Company relating to any taxable period beginning before the Closing Date until expiration of the statute of limitations (and, to the extent notified by any Party, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority; and Sellers’ Representative will give Buyer reasonable written notice prior to transferring, destroying, or discarding any such books and records and, if Buyer so requests, will allow Buyer to take possession of such books and records. Notwithstanding the foregoing or any other provision in this Agreement to the contrary, in no event will Sellers’ Representative or any Seller be entitled to review or otherwise have access to any Tax Return, or information related thereto, of any Epic Company for any period commencing after the Closing Date, or of Buyer for any period.

 

6.7     Transfer and Similar Taxes. All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees, together with all conveyance fees, recording charges and other fees and charges, and including any penalties and interest thereon (collectively the “Transfer Taxes”), whether imposed on the Buyer, Sellers, or any Epic Company, incurred in connection with the consummation of the transactions contemplated by this Agreement will be paid by Sellers when due. To the extent customarily, or required to be, filed by Seller, Buyer, or an Epic Company then such Party will file, or cause to be filed, all necessary Tax Returns and other documentation with respect to all such Transfer Taxes, and, if required by applicable law, the other Parties will, and

 

37

 

 

shall cause their respective Affiliates to, join in the execution of any such Tax Returns and other documentation. The Party preparing and filing such Tax Returns will permit the other Parties to review and comment on such Tax Returns prior to filing. All Taxes contemplated in this Section 6.7 will be treated as arising on or prior to the Closing Date, and in each instance during the Pre-Closing Tax Period.

 

6.8     Overlap. Notwithstanding anything to the contrary in this Agreement, the Tax indemnification obligations of Sellers are not subject to any threshold requirement relating to the amount to be reimbursed or any ceiling on the maximum amount subject to indemnification, and Buyer (and any Affiliate of Buyer) will not be treated as having assumed the risk of any Taxes by reason of the closing of the transaction or by reason of any knowledge that Buyer had or should have had about Sellers’ or any Epic Company’s Tax obligations, notwithstanding any other provision of this Agreement to the contrary.

 

6.9     Section 338(h)(10).

 

(a)     At Buyer’s option, Sellers and each Epic Company will join with Buyer in making a timely election pursuant to Code Section 338(h)(10) (such election together with any corresponding or similar election under state or local law, collectively referred to as a “§338(h)(10) Election”) with respect to the purchase and sale of each Epic Companies Membership Interests, in each instance as determined by Buyer. Sellers will pay any Tax attributable to the making of the §338(h)(10) Election and Sellers will indemnify Buyer and the Epic Companies against any adverse consequences arising out of any failure to pay any such Taxes. For the avoidance of doubt, any Taxes (including but not limited to those arising under Code §1374) resulting from a §338(h)(10) Election will be the responsibility of Sellers; and neither Buyer nor any Epic Company will be liable for any such Tax, and if, and to the extent that, any such Tax is paid by an Epic Company or Buyer, then Sellers will pay an amount to Buyer (or such Epic Company) so as to make Buyer and such Epic Company whole.

 

(b)     If a §338(h)(10) Election is made, then Buyer, Sellers, Sellers’ Representative and each applicable Epic Company will cooperate with Buyer with respect to the timely filing of any §338 Forms. In such a case, within 90 days following the Closing Date, Buyer will prepare IRS Form 8023 and submit the form to the applicable Seller for such Seller’s execution, which shall not be unreasonably conditioned, delayed, or withheld. Except as required by a final determination with any tax authority, the Parties will report, and will cause their respective Affiliates and Representatives to report, the transfers under this Agreement consistent with the §338(h)(10) Election and will not take, or cause to be taken, any action in connection with the filing of any Tax Return on behalf of the Parties or their Affiliates or otherwise that would be inconsistent with or prejudice the §338(h)(10) Elections, and will take all steps necessary to obtain comparable treatment, where applicable, for state income Tax purposes.

 

(c)     No later than 30 days after the determination the Purchase Price in accordance with Section 2.7, Buyer will provide Sellers’ Representative a schedule (the “Purchase Price Allocation Schedule”) setting forth Buyer’s proposed allocation of the Purchase

 

38

 

 

Price among each Epic Company’s assets as of the Closing (and covenants contemplated in this Agreement), grouped in a manner as contemplated in Code Sections 338 and 1060, and the Treasury Regulations promulgated under each. Sellers’ Representative shall review and either confirm agreement to the Purchase Price Allocation Schedule in writing, or otherwise provide a written response detailing any disagreement with the Purchase Price Allocation Schedule. Buyer, Sellers, and each Epic Company, shall work in good faith to achieve a mutually agreeable Purchase Price Allocation Schedule that conforms to the requirements set forth herein; provided, however that if such parties cannot so agree, then each party may file such party’s Tax Returns (including any §338 Form) in a manner as reasonably determined by such party. If the Parties agree, in writing as to the detail of the Purchase Price Allocation Schedule, Sellers, Buyer, and each Epic Company covenant to the other that (i) such Party shall not, absent mutual written agreement of the other, challenge or dispute the allocations set forth in the Purchase Price Allocation Schedule, (ii) such Party will file all Tax Returns in a manner consistent with the Purchase Price Allocation Schedule, and (iii) such Party will not take any position inconsistent therewith in any Tax Return, refund claim, litigation, or otherwise. If pursuant to this Agreement, the amount allocated to any asset or asset class is increased or decreased after the filing of any applicable §338 Form, then the Parties shall timely file a supplement to the applicable §338 Form in a manner consistent with this Agreement, Code §§338 and 1060, and the Treasury Regulations thereunder.

 

6.10     Survival. Notwithstanding anything to the contrary in this Agreement, the obligations of the Parties under this Article 6 are unconditional and absolute, are not limited, are not subject to a deductible, threshold, cap, or similar concept, and will remain in effect until 90 days after the expiration of all applicable statutes of limitation, and shall survive any death, corporate reorganization, dissolution, or liquidation of the Sellers, Buyer, or any Epic Company.

 

6.11     Retention of Records. The Parties will and will cause the Epic Companies and their respective Representatives to preserve all information, records or documents relating to liabilities for Taxes of the Epic Companies until six months after the expiration of any applicable statute of limitations (including extensions thereof) with respect to the assessment of such Taxes, provided that no Party may dispose of any of the foregoing items without first offering such items to the other Parties.

 

ARTICLE 7

Conditions to Closing

 

7.1     Conditions to Obligation of Sellers. The obligations of Sellers to consummate the transactions contemplated by this Agreement are subject to their reasonable satisfaction or waiver of the following conditions:

 

(a)     Truthfulness of Representations and Warranties. The representations and warranties of Buyer in Article 3 must be true and correct in all respects (for representations and warranties qualified by materiality or Material Adverse Effect) or in all material respects (for representations and warranties not qualified by materiality or Material Adverse Effect) as of the Closing Date (except representations and warranties that address

 

39

 

 

matters as of a specified date, the accuracy of which will be determined as of that specified date).

 

(b)     Compliance. Buyer will in all material respects have performed each obligation and agreement and complied with each covenant to be performed and complied with by it hereunder at or prior to the Closing.

 

(c)     Presley Employment Agreement. Buyer having delivered to Presley an executed copy of the employment agreement between Buyer and Presley, substantially in the form of Exhibit A (the “Presley Employment Agreement”).

 

(d)     Presley Non-Competition Agreement. Buyer having delivered to Presley an executed copy of the non-competition agreement between Buyer and Presley, substantially in the form of Exhibit B (the “Presley Non-Competition Agreement”).

 

(e)     Tail Policy. Buyer shall procure a policy providing insurance coverage for the completed operations tail for home closings of the Epic Companies that closed prior to the Closing Date.

 

7.2     Conditions to Obligations of Buyer. Buyer’s obligations to consummate the transactions contemplated by this Agreement are subject to its reasonable satisfaction or waiver of the following conditions:

 

(a)     Truthfulness of Representations and Warranties. The representations and warranties of Sellers in Article 4 must be true and correct in all respects (for representations and warranties qualified by materiality or Material Adverse Effect) or in all material respects (for representations and warranties not qualified by materiality or Material Adverse Effect) as of the Closing Date (except representations and warranties that address matters as of a specified date, the accuracy of which will be determined as of that specified date).

 

(b)     Compliance. Sellers will in all material respects have performed each obligation and agreement and complied with each covenant to be performed and complied with by them hereunder at or prior to the Closing.

 

(c)     Approval by Buyer Board. The transactions contemplated by this Agreement must have been approved by Buyer’s board of directors.

 

(d)     Consents and Approvals. The Epic Companies will have obtained and delivered to Buyer all Consents set forth in Schedule 4.3.

 

(e)     Absence of Material Adverse Developments. Since the Signing Date no Material Adverse Effect has occurred or other events occurred that, individually or in the aggregate, with or without the lapse of time, result in a Material Adverse Effect.

 

(f)     No Damage or Destruction. During the Interim Period there has been no damage, destruction, or loss of or to any of the Epic Companies’ assets, whether or not

 

40

 

 

covered by insurance, which is reasonably likely, individually or in the aggregate, to have a Material Adverse Effect.

 

(g)     [Intentionally Omitted].

 

(h)     FIRPTA Certificate. Each Seller and each Epic Company has delivered to Buyer a certificate pursuant to Treasury Regulations Section 1.1445-2(b) certifying that such Person is not a foreign person within the meaning of Section 1445 of the Code.

 

(i)     Evidence of Title. (i) Buyer has received one or more Colorado standard forms of owner’s policies of title insurance for the Owned Real Property, in form and substance reasonably satisfactory to Buyer, together with the following endorsements to the extent commercially available in Colorado: non-imputation, reverter, tax parcel, tie-in, water rights and such other endorsements and affirmative coverages reasonably requested by Buyer as are usual and customary with respect to similar transactions in Colorado; and (ii) appropriate officers of the Epic Companies have executed and delivered on behalf of the Epic Companies to the title companies such reasonable affidavits, indemnification agreements and bonds, at Buyer’s expense, as may be necessary to cause the title companies to issue the endorsements and affirmative coverages reasonably requested by Buyer, including, without limitation, a non-imputation endorsement to the extent commercially available, with respect to the above referenced owner’s policies of title insurance.

 

(j)     Presley Employment Agreement. Presley having delivered to Buyer an executed copy of the Presley Employment Agreement.

 

(k)     Presley Non-Competition Agreement. Presley having delivered to Buyer an executed copy of the Presley Non-Competition Agreement.

 

(l)     Termination of Epic Retirement Plan. The Epic Companies shall have taken such actions and provided any required notices to terminate the Epic Retirement plan in each case in form reasonably acceptable to Buyer.

 

(m)     Other Closing Documents. Seller has delivered to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

 

ARTICLE 8

Indemnification

 

8.1     Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein will survive the Closing and remain in full force and effect until the date that is 15 months from the Closing Date; provided, that the representations and warranties in (a) Sections 3.1 (Organization and Authority of Buyer), 3.3 (No Brokers), 4.1 (Organization and Authority of Sellers; Title to Membership Interests), 4.2 (Organization, Authority and Qualification of the Epic Companies), 4.4 (Capitalization), 4.16 (Taxes), and 4.21 (No Brokers) (the “Fundamental Representations”) will survive the Closing until 90 days

 

41

 

 

following the expiration of the applicable statute of limitations. All covenants and agreements of the Parties herein (other than those in Article 6, which are subject to Article 6, and this Article 8, which will survive indefinitely) will survive the Closing for a period of 60 months or for the period explicitly specified therein. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period will not be barred by the expiration of the relevant representation or warranty and such claims will survive until finally resolved.

 

8.2     Indemnification By Sellers. Subject to the remainder of this Article 8, Sellers and, solely for purposes of this Article 8, Epic Homes at Leyden Rock, LLC, will, subject to the Basket and the Cap, jointly and severally indemnify and defend Buyer and Buyer’s Affiliates (including after Closing the Epic Companies) and their respective Representatives (collectively, the “Buyer Indemnitees”) against, and will hold each of them harmless from and against, and pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to or by reason of:

 

(a)     any inaccuracy in or breach of any of the representations or warranties of Sellers in this Agreement (other than in respect of 4.16 (Taxes), for which the sole remedy for any such inaccuracy in or breach thereof is pursuant to Article 6), as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except representations and warranties that address matters as of a specified date, the breach of which will be determined as of that specified date);

 

(b)     any breach or non-fulfillment of any covenant, agreement or obligation of Seller under this Agreement (other than any breach or non-fulfillment of any covenant, agreement, undertaking or obligation in Article 6, for which the sole remedy for any such inaccuracy in or breach thereof is pursuant to Article 6) that is not cured within 15 days of Sellers’ receipt of written notice from Buyer detailing the nature of the breach, provided however, the cure period shall be extended for any curable breach that cannot be cured within such 15 day cure period, conditional upon Sellers’ making good faith effort to cure such breach;

 

(c)     any Excluded Liabilities;

 

(d)     any Transaction Expenses charged to the Epic Companies that were not paid on or before the Closing Date;

 

(e)     the existence of the PPP Loan (including without limitation any Losses of Buyer’s Tax credits) as of the Closing Date or any failure of Sellers or, prior to the Closing, the Epic Companies, to comply with the requirements of the CARES Act, the Small Business Act and other regulatory guidance applicable to the PPP Loan in applying for, calculating the permitted amount of, receiving and using the proceeds of the PPP Loan, and in applying for and receiving the forgiveness of the PPP Loan; and

 

42

 

 

(f)     Agreed liquidated damages arising from delays in the ability to obtain building permits for homes on lots within the Trails at Crowfoot community owned by Epic Trails (the “Trails Delay Liquidated Damages”).

 

(i)     The Trails Delay Liquidated Damages amount shall be calculated based on each month that each lot on the schedule shown on Exhibit C is delayed from starting construction as contemplated on Exhibit C as a result of Epic Trails inability to pull a building permit for such lot due to the Building Permit Condition not being satisfied (“Building Permit Delay”), and in such case, the Seller shall owe (i) $3,000 per delayed lot for each full calendar month such lot is delayed, and (ii) with respect to any delay over a partial calendar month, $100 per delayed lot for each calendar day during such partial calendar month (collectively, (the “Per Month Amount”).

 

(ii)     Notwithstanding Section 8.2(f)(i), for the first two months of a Building Permit Delay (the “Grace Period”) no Per Month Amounts shall be accrued by Buyer. If at any time during such Grace Period, the Building Permit Condition has been satisfied, no Trails Delay Liquidated Damages will be payable by Sellers. If at the end of such Grace Period the Building Permit Condition has not been satisfied, the Per Month Amounts for each delayed lot shall begin to accrue and be owed by Seller. The first payment of Per Month Amounts for delayed lots shall be paid by the tenth day of the fourth month following the initial existence of a Building Permit Delay and thereafter shall continue to be paid in accordance with Section 8.2(f)(i). For the avoidance of doubt, the Per Month Amount for all lots delayed during and after the Grace Period of a Building Permit Delay shall be calculated commencing with the beginning of the third month in accordance with Section 8.2(f)(i).

 

(iii)      The Per Month Amounts, if any, shall first be satisfied from the Trails Delay Additional Holdback Amount, next from any remaining Holdback Amount, and next payable in the same manner as any other indemnity obligation of Seller under Article 8. The parties hereto expressly agree and acknowledge that Buyer’s actual damages arising from Epic Trails’ inability to pull a building permit due to the Building Permit Condition not being satisfied would be extremely difficult or impracticable to ascertain, and that the Per Month Amounts represent the parties’ reasonable estimate of such damages. The parties also agree that the Per Month Amounts are a proper liquidated damages amount and not a penalty

 

In administering Pre-Closing Construction Claims, Buyer will use reasonable commercial efforts, generally consistent with the manner in which Buyer and its Affiliates have administered their own claims in the past, which includes out-of-pocket costs and expenses and in-house overhead allocation and in-house warranty costs, provided, however, Buyer will have no exposure to Sellers for the manner in which Buyer administers the Excluded Construction Claims. Pre-Closing Construction Claims that (i) exceed the warranty reserve reflected in the Final Closing Schedule and (ii) are not otherwise reimbursed under an applicable insurance policy will be indemnified by Sellers pursuant to Section 8.2(c).

 

43

 

 

8.3     Indemnification By Buyer. Subject to the remainder of this Article 8, Buyer will indemnify and defend each Seller and each of Seller’s Affiliates and their respective Representatives (collectively, the “Seller Indemnitees”) against, and hold each of them harmless from and against, and pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to or by reason of:

 

(a)     any inaccuracy in or breach of any of the representations or warranties of Buyer in this Agreement as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except representations and warranties that address matters as of a specified date, the breach of which will be determined as of that specified date); or

 

(b)     any breach or non-fulfillment of any covenant, agreement or obligation of Buyer under this Agreement (other than any breach or non-fulfillment of any covenant, agreement, undertaking or obligation in Article 6, for which the sole remedy for any such inaccuracy in or breach thereof is pursuant to Article 6) that is not cured within 15 days of Buyer’s receipt of written notice from Seller detailing the nature of the breach, provided however, the cure period shall be extended for any curable breach that cannot be cured within such 15 day cure period, conditional upon Buyer’s making good faith effort to cure such breach.

 

(c)     any transaction expenses charged to Buyer that were not paid on or before the Closing Date.

 

(d)     any Losses incurred by Seller Indemnitees in their capacity as a former equity holder of the Epic Companies to the extent arising solely from the post-Closing operations of Buyer and the Epic Companies; provided that this indemnity shall not extend to any Losses arising from or in connection with willful misconduct, fraud or gross negligence perpetrated by any Seller Indemnitee.

 

8.4     Certain Limitations. The indemnification provided for in Sections 8.2 and 8.3 are subject to the following limitations:

 

(a)     Seller Indemnification Limits.

 

(i)     Basket. Sellers (and Epic Homes at Leyden Rock, LLC) will not be liable to the Buyer Indemnitees under Section 8.2(a) until the aggregate amount of all Losses in respect of indemnification under Section 8.2(a) exceeds $50,000 (the “Basket”), in which event Sellers (and Epic Homes at Leyden Rock, LLC) will be required to pay or be liable for all such Losses in excess of the Basket.

 

(ii)     Cap. The aggregate amount of all Losses for which Sellers may be liable pursuant to Section 8.2(a) will not exceed $2,000,000 (the “Cap”).

 

44

 

 

(b)     Buyer Indemnification Limits.

 

(i)     Basket. Buyer will not be liable to the Seller Indemnitees under Section 8.3 until the aggregate amount of all Losses in respect of indemnification under Section 8.3 exceeds the Basket, in which event Buyer will be required to pay or be liable for all such Losses in excess of the Basket.

 

(ii)     Cap. The aggregate amount of all Losses for which Buyer may be liable pursuant to Section 8.3 will not exceed the Cap.

 

(c)     Inapplicability of Basket and Cap to Fundamental Representations and Excluded Liabilities. Notwithstanding the foregoing, the limitations in Sections 8.4(a) and (b) will not apply to Losses based upon, arising out of, with respect to or by reason of (a) any inaccuracy in or breach of any Fundamental Representations, (b) any Excluded Liabilities and (c) the matters provided for in Sections 8.2(d) – (g) (collectively, the “Uncapped Matters”); provided however, that the aggregate liability for the Uncapped Matters (other than any inaccuracy in or breach of any of the representations and warranties in Sections 4.1 and 4.4 which are uncapped) shall be limited to an amount equal to the Purchase Price.

 

8.5     Indemnification Procedures.

 

(a)     With respect to indemnification claims under this Agreement, the party entitled to indemnification (the “Indemnified Party”) will promptly provide written notice of such claim to the other party (the “Indemnifying Party”). In connection with any claim giving rise to indemnity in an Action by a Person not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party will be entitled to participate in the defense of the Action, with its counsel and at its own cost and expense. If the Indemnifying Party does not assume the defense of the Action, the Indemnified Party may, but is not obligated to, defend the Action as it may deem appropriate, including settling the Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party deems appropriate and no action taken by the Indemnified Party in accordance with such defense and settlement will relieve the Indemnifying Party of its indemnification obligations herein with respect to any damages resulting therefrom. The Indemnifying Party may not settle any Action without the Indemnified Party’s prior written consent (which consent may not be unreasonably withheld or delayed).

 

(b)     Tax Claims. Notwithstanding any other provision of this Agreement, the control of any Action in respect of Taxes of the Epic Companies (including, but not limited to, any such claim in respect of a breach of the representations and warranties in Section 4.16 (Taxes) or any breach or violation of or failure to fully perform any covenant, agreement, undertaking or obligation in Article 6 is governed exclusively by Article 6.

 

45

 

 

8.6     Payments; Holdback Amount. 

 

(a)     Once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable pursuant to this Article 8, the Indemnifying Party will satisfy its obligations within 15 Business Days of such final, non-appealable adjudication by wire transfer of immediately available funds.

 

(b)     One half of the then remaining Holdback Amount will be released to Sellers’ Representative on August 31, 2021 and any remainder of the Holdback Amount that has not been used to satisfy Seller’s indemnification obligations under this Article 8 or is the subject of a good faith claim for indemnification by a Buyer Indemnitee made in accordance with this Article 8 will be released to Sellers’ Representative on August 31, 2022.

 

(c)     The Trails Delay Additional Holdback Amount, less any Trails Delay Liquidated Damages previously retained by Buyer, will be released to Sellers’ Representative upon the earliest to occur of (i) the date that building permits have been obtained by Epic Trails for all homes on lots it owns within the Trails at Crowfoot master planned community, (ii) the date on which the completion of the community pool and recreational facility in the Trails at Crowfoot master planned community has occurred and the condition (the “Building Permit Condition”) set forth in Section 4(o) of that certain Subdivision Agreement (Trails at Crowfoot Filing No. 1) (and other similar subdivision agreements) by and between the Town of Park and HR935, LLC, dated October 3, 2018 (as may be amended from time to time, the “Subdivision Agreement”) has been fully and completely satisfied and there exists no restrictions on the total number of building permits that can be issued within the Trails at Crowfoot master planned community and (iii) the date on which the condition set forth in Section 4(o) of the Subdivision Agreement is eliminated or no longer applicable, as determined by Buyer in Buyer’s sole but reasonable determination.

 

Upon a change in control of Buyer, any remainder of the Holdback Amount and Trails Delay Additional Holdback Amount will accelerate and become due and payable to Sellers’ Representative upon the change in control of Buyer.

 

8.7     Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement will be treated as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

 

8.8     Effect of Investigation. The representations, warranties and covenants of an Indemnifying Party and the Indemnified Party’s right to indemnification with respect thereto will not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party (including by any of its Representatives).

 

8.9     Other Rights and Remedies Not Affected. The indemnification rights under this Article 8 are independent of, and in addition to, any other rights and remedies the Parties may have at Law or in equity or otherwise for any failure to fulfill any covenant, agreement or obligation hereunder

 

46

 

 

on the part of any Party, including the right to seek specific performance, rescission or restitution, none of which rights or remedies are affected or diminished hereby.

 

ARTICLE 9

Termination/Remedies

 

9.1     Termination. This Agreement may be terminated at any time prior to the Closing:

 

(a)     by the mutual written consent of Sellers’ Representative and Buyer;

 

(b)     by Buyer by written notice to Sellers’ Representative if:

 

(i)     Buyer is not then in material breach of any provision of this Agreement and there has been a breach of or failure to perform any representation, warranty, covenant or agreement made by Sellers pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Section 7.2 and such breach or failure has not been cured within 15 days of Sellers’ Representative’s receipt of notice of such breach from Buyer; or

 

(ii)     any of the conditions set forth in Section 7.2 have not have been fulfilled by March 31, 2021(the “Outside Date”) unless such failure is due to the failure of Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by Buyer prior to the Closing;

 

(c)     by Seller by written notice to Buyer if:

 

(i)     Seller is not then in material breach of any provision of this Agreement and there has been a breach of or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Section 7.1 and such breach or failure has not been cured within 10 days of Buyer’s receipt of written notice of such breach from Seller; or

 

(ii)     any of the conditions set forth in Section 7.1 have not been, or if it becomes apparent that any of such conditions will not be, fulfilled by the Outside Date, unless such failure is due to the failure of Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing; or

 

(d)     by Buyer or Seller in the event that (i) there is any Law that makes consummation of the transactions contemplated by this Agreement illegal or (ii) a final and non-appealable Governmental Order is issued which restrains or enjoins the transactions contemplated by this Agreement.

 

9.2     Effect of Termination. If this Agreement is terminated in accordance with this Article 9, this Agreement will become void and there will be no liability on the part of any Party except:

 

47

 

 

(a)     as set forth in this Article 9; and

(b)     nothing herein will relieve any Party from liability for any willful breach of this Agreement.

 

ARTICLE 10

General Provisions

 

10.1     Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the party incurring such costs and expenses, whether or not the Closing occurs.

 

10.2     Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder must be in writing and will be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by e-mail (with confirmation of transmission) or (d) on the third day after the date mailed by certified or registered mail, return receipt requested. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as specified in a notice given in accordance with this Section 10.2):

 

	
			If to Sellers or the Sellers’ Representative:

				 	
			Christina Presley

			c/o Epic Homes

			1101 W. Mineral Ave., Suite 105

			Littleton, CO 80120

			Email: cpresley@liveepichomes.com

			
	 	 	 
	
			With a copy (which will not constitute notice) to:

				 	
			Goodspeed & Merrill

			7800 E. Union Avenue, Suite 600

			Denver, CO 80237

			Attention: Nick Rudden, Esq.

			Email: nrudden@goodspeedmerrill.com

			
	 	 	 
	
			If to Buyer:

				 	
			TNHC Colorado Inc.

			c/o The New Home Company Inc.

			15231 Laguna Canyon Road, Suite 250

			Irvine, CA 92618

			Attention: Miek Harbur

			Email: mharbur@nwhm.com

			
	 	 	 
	
			With a copy (which will not constitute notice) to:

				 	
			Snell & Wilmer L.L.P.

			One Arizona Center

			400 East Van Buren Street, Suite 1900

			Phoenix, AZ 85004-2202

			Attention: Jeff Beck, Esq.

			Email: jbeck@swlaw.com

			

 

48

 

 

10.3     Interpretation. For purposes of this Agreement, (a) the words “include,” “includes” and “including” will be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to articles, sections, schedules and exhibits mean the articles and sections of, and schedules and exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement will be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

 

10.4     Made Available. To the extent this Agreement refers to information or documents having been made available (or delivered or provided) to Buyer, Sellers will have satisfied such obligation if Sellers or any of their Representatives provided such information or documents to Buyer prior to the Signing Date.

 

10.5     Headings. The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement.

 

10.6     Severability. The unenforceability or invalidity of any provision of this Agreement do not affect the enforceability or validity of any other provision.

 

10.7     Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to their subject matter, and supersede all prior agreements (both written and oral) between the Parties with respect to such subject matter, other than the Confidentiality Agreement. In the event of any inconsistency between the statements in the body of this Agreement and those in the exhibits and schedules hereto (other than an exception expressly set forth as such in the schedules hereto), the statements in the body of this Agreement will control. The schedules, exhibits, annexes and schedules hereto constitute a part of this Agreement.

 

10.8     Successors and Assigns. This Agreement is binding upon and will inure to the benefit of the Parties and their respective successors and permitted assigns. No Party may assign its rights or obligations hereunder without the other Parties’ prior written consent, which consent may not be unreasonably withheld, conditioned or delayed. No assignment will relieve the assigning Party of any of its obligations hereunder.

 

10.9     No Third-party Beneficiaries. Except as provided in Article 8, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied, confers upon any other Person or entity any legal or equitable right, benefit or remedy of any nature under this Agreement.

 

10.10     Amendment and Modification; Waiver. This Agreement may only be amended, modified, or supplemented by a written agreement by the Parties. No waiver by any Party of any of the provisions hereof will be effective unless set forth in writing and signed by the Party so

 

49

 

 

waiving. No waiver by any Party will operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement will operate or be construed as a waiver thereof, and no single or partial exercise of any right, remedy, power, or privilege hereunder will preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.

 

10.11     Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)     This Agreement is governed by and will be construed in accordance with the laws of the State of Colorado without giving effect to any choice or conflict of law provision or rule (whether of the State of Colorado or any other jurisdiction).

 

(b)     ANY PROCEEDING ARISING OUT OF, OR WITH RESPECT TO, THIS AGREEMENT OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF SHALL BE BROUGHT EXCLUSIVELY IN THE FEDERAL OR STATE COURTS LOCATED IN DENVER COUNTY, COLORADO (THE “DESIGNATED COURTS”), AND THE PARTIES ACCEPT THE EXCLUSIVE JURISDICTION OF THE DESIGNATED COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY JUDGMENT ENTERED BY ANY OF THE DESIGNATED COURTS AND FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE DESIGNATED COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(c)     EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DESCRIBED IN THIS SECTION 10.11. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11. A COPY OF THIS SECTION 10.11 MAY BE SUBMITTED TO ANY COURT AS EVIDENCE OF THE CONTENT THEREOF.

 

10.12     Specific Performance. In addition to any other remedy to which a non-breaching Party may be expressly entitled under this Agreement, a non-breaching Party will be entitled to seek injunctive relief, in a Designated Court, without the posting of any bond to prevent breaches of this Agreement and to specifically enforce the terms and provisions hereof. Each Party further

 

50

 

 

waives any defense that a remedy at Law would be adequate in any action for specific performance or injunctive relief hereunder.

 

10.13     Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together are one and the same agreement. A signed copy of this Agreement delivered by facsimile, email or other means of electronic transmission has the same legal effect as an original signed copy.

 

[Signature page follows.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

51

 

 

 

IN WITNESS WHEREOF, the Parties have signed this Agreement as of the Signing Date.

 

	 	
			Buyer:

				 
	 	 	 
	 	
			TNHC COLORADO INC.

				 
	 	 	 
	 	 	 
	 	
			By:

				/s/ Leonard S. Miller	 
	 	Name:   Leonard S. Miller	 
	 	Title:   President/CEO	 
	 	 	 
	 	 	 
	 	
			By:

				/s/ John M. Stephens	 
	 	Name:   John M. Stephens	 
	 	Title:   EVP & CFO	 
	 	 	 
	 	 	 
	 	
			Sellers:

				 
	 	 	 
	 	/s/ Christina D. Presley	 
	 	
			Christina D. Presley, an individual

				 
	 	 	 
	 	 	 
	 	
			CDP HOLDINGS, LLC

				 
	 	 	 
	 	 	 
	 	
			By:

				/s/ Christina D. Presley	 
	 	Name:   Christina D. Presley	 
	 	Title:   Manager	 
	 	 	 
	 	 	 
	 	Sellers’ Representative:	 
	 	 	 
	 	/s/ Christina D. Presley	 
	 	Christina D. Presley	 
	 	 	 
	 	 	 

 

 

 

 

 

	 	Solely with respect to Article 8, by signing below Epic Homes at Leyden Rock LLC acknowledges and agrees to the terms and conditions set forth in Article 8 and joins this Agreement solely for that purpose.	 
	 	 	 
	 	Epic Homes at Leyden Rock, LLC, a Colorado limited liability company:	 
	 	 	 
	 	CDP Management, LLC, Its Manager	 
	 	 	 
	 	/s/ Christina D. Presley	 
	 	By: Christina D. Presley	 
	 	Its: Manager	 
	 	 

 

iiDocument

Exhibit 4.10

GUARANTY BANCORP ISSUER
Wells Fargo Bank, National Association, as Trustee

Indenture

Dated as of July 18, 2016

SUBORDINATED DEBT SECURITIES

Trust Indenture Act Section                                                                                                                             Indenture Section

									
	§ 310	(a)	609
		(b)	608, 610
	§ 311	(a)	613
		(b)	605, 613
	§ 312	(a)	701
		(b)	702
		(c)	702
	§ 313	(a)	703
		(b)	703
		(c)	703
		(d)	703
	§ 314	(a)	704, 1004
		(c)	102
		(e)	102
	§ 315	(a)	601, 603
		(b)	602, 703
		(c)	601
		(d)	601
		(e)	514
	§ 316	(a)	101
		(a)(1)	502, 512, 513
		(b)	507, 508
		(c)	104
	§ 317	(a)(1)	503
		(a)(2)	504
		(b)	1003
	§ 318	(a)	107

NOTE: This table of contents shall not, for any purpose, be deemed to be a part of the Indenture.

TABLE OF CONTENTS

ARTICLE ONE—DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION                                                                                 1

									
	SECTION 101.	Definitions	1
	SECTION 102.	Compliance Certificates and Opinions	4
	SECTION 103.	Form of Documents Delivered to Trustee	4
	SECTION 104.	Acts of Holders; Record Dates	4
	SECTION 105.	Notices, Etc., to Trustee and Company	5
	SECTION 106.	Notice to Holders; Waiver	5
	SECTION 107.	Conflict with Trust Indenture Act	5
	SECTION 108.	Effect of Headings and Table of Contents	5
	SECTION 109.	Successors and Assigns	6
	SECTION 110.	Separability Clause	6
	SECTION 111.	Benefits of Indenture	6
	SECTION 112.	Governing Law	6
	SECTION 113.	Legal Holidays	6
	SECTION 114	Language of Notices; Etc.	6
	SECTION 115	Force Majeure	6
	SECTION 116	U.S.A. PATRIOT Act	6
	SECTION 117	Consent to Jurisdiction	6

ARTICLE TWO—SECURITY FORMS                                                                                                                                                                                 7
									
	SECTION 201.	Forms Generally	7
	SECTION 202.	Form of Face of Security	7
	SECTION 203.	Form of Reverse of Security	9
	SECTION 204.	Form of Legend for Global Securities	10
	SECTION 205.	Form of Trustee’s Certificate of Authentication	11

ARTICLE THREE—THE SECURITIES                                                                                                                                                                               12

									
	SECTION 301.	Amount Unlimited; Issuable in Series	12
	SECTION 302.	Denominations	13
	SECTION 303.	Execution, Authentication, Delivery and Dating	13
	SECTION 304.	Temporary Securities	14
	SECTION 305.	Registration, Registration of Transfer and Exchange	14
	SECTION 306.	Mutilated, Destroyed, Lost and Stolen Securities	15
	SECTION 307.	Payment of Interest, Interest Rights Preserved	15
	SECTION 308.	Persons Deemed Owners	15
	SECTION 309.	Cancellation	16
	SECTION 310.	Computation of Interest	16
	SECTION 311.	CUSIP	16

ARTICLE FOUR—SATISFACTION AND DISCHARGE                                                                                                                                                 16

									
	SECTION 401.	Satisfaction and Discharge of Indenture	16
	SECTION 402.	Application of Trust Money	16

ARTICLE FIVE—REMEDIES                                                                                                                                                                                             17

												
	SECTION 501.	Events of Default	17
	SECTION 502.	Acceleration of Maturity; Rescission and Annulment	17
	SECTION 503.	Collection of Indebtedness and Suits for Enforcement by Trustee	18
	SECTION 504.	Trustee May File Proofs of Claim	18
	SECTION 505.	Trustee May Enforce Claims Without Possession of Securities	18
	SECTION 506.	Application of Money Collected	18
	SECTION 507.	Limitation on Suits	18
	SECTION 508.	Unconditional Right of Holders to Receive Principal, Premium and Interest	19
	SECTION 509.	Restoration of Rights and Remedies	19
	SECTION 510.	Rights and Remedies Cumulative	19
	SECTION 511.	Delay or Omission Not Waiver	19
	SECTION 512.	Control by Holders	19
	SECTION 513.	Waiver of Past Defaults	19
	SECTION 514.	Undertaking for Costs	19
	SECTION 515.	Waiver of Usury, Stay or Extension Laws	20

ARTICLE SIX—THE TRUSTEE                                                                                                                                                                                         20

									
	SECTION 601.
	Certain Duties and Responsibilities
	20
	SECTION 602.
	Notice of Defaults
	20
	SECTION 603.
	Certain Rights of Trustee
	20
	SECTION 604.
	Not Responsible for Recitals or Issuance of Securities
	21
	SECTION 605.
	May Hold Securities
	21
	SECTION 606.
	Money Held in Trust
	21
	SECTION 607.
	Compensation and Reimbursement
	21
	SECTION 608.
	Conflicting Interests

	22
	SECTION 609.
	Corporate Trustee Required; Eligibility
	22
	SECTION 610.
	Resignation and Removal; Appointment of Successor
	22
	SECTION 611.
	Acceptance of Appointment by Successor
	22
	SECTION 612.
	Merger, Conversion, Consolidation or Succession to Business
	23
	SECTION 613.
	Preferential Collection of Claims Against Company
	23
	SECTION 614.
	Appointment of Authenticating Agent
	23

ARTICLE SEVEN—HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY                                                                                          24

									
	SECTION 701.	Company to Furnish Trustee Names and Addresses of Holders	24
	SECTION 702.	Preservation of Information; Communications to Holders	24
	SECTION 703.	Reports by Trustee	24
	SECTION 704.	Reports by Company	24

ARTICLE EIGHT—CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE                                                                                  25
												
	SECTION 801.	Company May Consolidate, Etc., Only on Certain Terms	25	
	SECTION 802.	Successor Substituted	25	

ARTICLE NINE—SUPPLEMENTAL INDENTURES                                                                                                                                                      25

									
	SECTION 901.	Supplemental Indentures Without Consent of Holders	25
	SECTION 902.	Supplemental Indentures With Consent of Holders	26
	SECTION 903.	Execution of Supplemental Indentures	26
	SECTION 904.	Effect of Supplemental Indentures	26
	SECTION 905.	Conformity with Trust Indenture Act	26
	SECTION 906.	Reference in Securities to Supplemental Indentures	26

ARTICLE TEN—COVENANTS                                                                                                                                                                                         27

															
	SECTION 1001.	Payment of Principal, Premium and Interest	27
	SECTION 1002.	Maintenance of Office or Agency	27
	SECTION 1003.	Money for Securities Payments to Be Held in Trust	27
	SECTION 1004.	Statement by Officers as to Default	27
	SECTION 1005.
	Existence
	27

	SECTION 1006.
	Maintenance of Properties
	27

	SECTION 1007.
	Payment of Taxes and Other Claims
	28

	SECTION 1008.
	Waiver of Certain Covenants
	28

ARTICLE ELEVEN—REDEMPTION OF SECURITIES                                                                                                                                                    28
									
	SECTION 1101.
	Applicability of Article
	28

	SECTION 1102
	Election to Redeem; Notice to Trustee
	28

	SECTION 1103.
	Selection by Trustee of Securities to Be Redeemed
	42

	SECTION 1104.
	Notice of Redemption
	43

	SECTION 1105.
	Deposit of Redemption Price
	43

	SECTION 1106.
	Securities Payable on Redemption Date
	44

	SECTION 1107.
	Securities Redeemed in Part
	44

ARTICLE TWELVE—SINKING FUNDS                                                                                                                                                                            44

									
	SECTION 1201.	Applicability of Article	44
	SECTION 1202.	Satisfaction of Sinking Fund Payments with Securities	44
	SECTION 1203.	Redemption of Securities for Sinking Fund	45

ARTICLE THIRTEEN—DEFEASANCE AND COVENANT DEFEASANCE                                                                                                                    45

									
	SECTION 1301.	Company Option to Effect Defeasance or Covenant Defeasance	45
	SECTION 1302.	Defeasance and Discharge	45
	SECTION 1303.	Covenant Defeasance	45
	SECTION 1304.	Conditions to Defeasance or Covenant Defeasance	46
	SECTION 1305.	Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions	46
	SECTION 1306.	Reinstatement	48
	SECTION 1307.	Effect on Subordination Provisions	48

INDENTURE, dated as of July 18, 2016, between Guaranty Bancorp, a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), and Wells Fargo Bank, National Association, a national banking association organized under the laws of the United States, as Trustee (herein called the “Trustee”).
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act that are required to be a part of this Indenture and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE ONE 
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; 
(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles in the United States as are generally accepted in the United States at the date of such computation;
(4) unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Indenture; and
(5) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.
“1940 Act” means the Investment Company Act of 1940 and any statute successor thereto, in each case as amended from time to time. “Act” when used with respect to any Holder, has the meaning specified in Section 104.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities of one or more series.
“Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Business Day” when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.
“Commission” means the Securities and Exchange Commission, from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.
1

“Company Request” or “Company Order” means a written request or order signed in the name of the Company by its Chairman of the Board, its President or any Executive or Senior Vice President, and by its Chief Financial Officer, Treasurer, an Assistant Treasurer, Controller, its Secretary or an Assistant Secretary, and delivered to the Trustee.
“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered and which at the date hereof is located at 333 S. Grand Avenue, 5th Floor, Suite 5A, Los Angeles, CA 90071, attention: Corporate, Municipal and Escrow Services. With respect to presentation at maturity, redemption or otherwise and registration of transfer or exchange such address shall be 608 2nd Avenue South, 12th Floor, Minneapolis, MN 55402, attention: Bondholder Communications.
“corporation” means a corporation, association, company, joint-stock company or business trust. “Covenant Defeasance” has the meaning specified in Section 1303.
“Defaulted Interest” has the meaning specified in Section 307. “Defeasance” has the meaning specified in Section 1302.
“Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 301.
 “Dollar” or “$” means the 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.
“Event of Default” has the meaning specified in Section 501.
“Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time. “Expiration Date” has the meaning specified in Section 104.
“Global Security” means a Security in a global form that evidences all or part of the Securities of any series and bears the legend set forth in Section 204 (or such legend as may be specified as contemplated by Section 301 for such Securities).
“Holder” means a Person in whose name a Security is registered in the Security Register.
“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 301.
“Individual Securities” has the meaning specified in Section 301(17).
“interest” when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.
“Interest Payment Date” when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security. “Maturity” when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
“Notice of Default” means a written notice of the kind specified in Section 501(4).
“Officers’ Certificate” means a certificate signed by the Chairman of the Board, its President or any Executive or Senior Vice President, and by its Chief Financial Officer, Treasurer, an Assistant Treasurer, Controller, its Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers’ Certificate given pursuant to Section 1004 shall be the principal executive, financial or accounting officer of the Company.
“Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company, and who shall be acceptable to the
“Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.
“Outstanding” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to Section 1302; and
(4) Securities which have been paid pursuant to Section 401 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee 
2

proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 502, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 301, (C) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 301, of the principal amount of such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.
“Paying Agent” means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.
“Person” means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Place of Payment” when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 301.
“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.
“Redemption Date” when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.
“Redemption Price” when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.
“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301.
“Responsible Officer”, when used with respect to the Trustee, means any officer within the corporate trust department or any other successor group of the Trustee, including any vice president, assistant vice president, assistant secretary or any other officer of the 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 of the Trustee to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.
“Securities Act” means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time. “Security Register” and “Security Registrar” have the respective meanings specified in Section 305.
“Senior Indebtedness” when used with respect to the Securities of any series, shall have the meaning established pursuant to Section 301(21) with respect to the Securities of such series.
“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.
“Stated Maturity” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
“Subordination Provisions” when used with respect to the Securities of any series, shall have the meaning established pursuant to Section 301(21) with respect to Securities of such series.
“Subsidiary” means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.
“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.
3

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.
“U.S. Government Obligation” has the meaning specified in Section 1304.
SECTION 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided in this Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall, if requested by the Trustee, furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided for in Section 1004) shall include,
(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(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 each such individual, 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, in the opinion of each such individual, such condition or covenant has been complied with. 
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed (either physically or by means of a facsimile or an electronic transmission, provided that such electronic transmission is transmitted through the facilities of a Depositary) by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered (either physically or by means of a facsimile or an electronic transmission, provided that such electronic transmission is transmitted through the facilities of a Depositary) to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.
The ownership, principal amount and serial numbers of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof 
4

in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.
The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section 512, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party hereto which sets such record dates may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto which set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Guaranty Bancorp Corporate Trust Administrator, or
(2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
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 (or, if international, by air mail), to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), 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. Where 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 or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made shall constitute a sufficient notification for every purpose hereunder.
SECTION 107.Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act which is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture 
5

Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. 
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. 
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the 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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the holders of Senior Indebtedness and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law and Waiver of Jury Trial.
This Indenture and the Securities shall be governed by and construed in accordance with the law of the State of New York. THE ISSUER, THE TRUSTEE AND THE HOLDERS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity and no additional interest shall accrue.
SECTION 114. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent, waiver or Act required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.
SECTION 115. Force Majeure.
In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or third party computer (software and hardware) services.
SECTION 116. U.S.A. PATRIOT Act.
The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. PATRIOT Act, the Trustee is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
SECTION 117. Consent to Jurisdiction.
Any legal suit, action or proceeding arising out of or based upon this Indenture or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the City of New York or the courts of the State of New York in each case located in the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the non- exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail (to the extent allowed under any applicable statute or rule of court) to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim any such suit, action or other proceeding has been brought in an inconvenient forum.
6

ARTICLE TWO 
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, 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 applicable laws or the rules of any securities exchange or automated quotation system on which the Securities of such series may be listed or traded or any Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities.  
The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.  
SECTION 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the regulations thereunder.]

7

Guaranty Bancorp 
[Insert title of the Securities]
Guaranty Bancorp, a corporation duly organized and existing under the laws of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the principal sum of Dollars on [if the Security is to bear interest prior to Maturity, insert—, and to pay interest thereon from or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on and in each year, commencing , at the rate of % per annum, until the principal hereof is paid or made available for payment [if applicable, insert—, provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the or (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Securities of this series may be listed or traded, and upon such notice as may be required by such exchange or automated quotation system, all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert—The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment. Interest on any overdue principal or premium shall be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable, insert—any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in , in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts [if applicable, insert—; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register]. 
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated:
Dated:                      
By:                         

By:                         

Attest:                      

8

SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of (herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument), between the Company and , as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Indebtedness and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [if applicable, insert—, limited in aggregate principal amount to $ ]. 
[If applicable, insert—The Securities of this series are subject to redemption upon not less than 30 days’ nor more than 60 days’ notice by mail, at any time [if applicable, insert—on or after , 20 ], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert—on or before , %, and if redeemed] during the 12-month period beginning of the years indicated,

			
	Year                        Redemption                Redemption
                            Price            Year            Price

and thereafter at a Redemption Price equal to % of the principal amount, together in the case of any such redemption with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] 
    [If applicable, insert—The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, (1) on in any year commencing with the year and ending with the year through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert—on or after ], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12- month period beginning of the years indicated,
			
	                         Redemption Price                  Redemption Price For
                          For Redemption                  Redemption Otherwise
                        Through Operation                Than Through Operation
Year                        of the Sinking Fund                     of the Sinking Fund

and thereafter at a Redemption Price equal to % of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] 
    [If applicable, insert—Notwithstanding the foregoing, the Company may not, prior to , redeem any Securities of this series as contemplated by [if applicable, insert—Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than % per annum.] 
    [If applicable, insert—The sinking fund for this series provides for the redemption on in each year beginning with the year and ending with the year of [if applicable, insert—not less than $ (“mandatory sinking fund”) and not more than] $ aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Company otherwise than through [if applicable, insert—mandatory] sinking fund payments may be credited against subsequent [if applicable, insert—mandatory] sinking fund payments otherwise required to be made [if applicable, insert—, in the inverse order in which they become due].] 
    [If the Security is subject to redemption of any kind, insert—In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]  
    [Insert paragraph regarding subordination of the Security.]  
    [If applicable, insert—The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default with respect to this Security] [, in each case] upon compliance with certain conditions set forth in the Indenture.] 
    [If the Security is not an Original Issue Discount Security, insert—If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.] 
    [If the Security is an Original Issue Discount Security, insert—If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the 
9

Indenture. Such amount shall be equal to—insert formula for determining the amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.] 
    The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.  
    As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee security and indemnity satisfactory to the Trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. 
    No reference herein to the Indenture and no provision of this 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 any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. 
    [If a Global Security, insert—This Global Security or portion hereof may not be exchanged for definitive Securities of this series except in the limited circumstances provided in the Indenture. 
    The holders of beneficial interests in this Global Security will not be entitled to receive physical delivery of definitive Securities except as described in the Indenture and will not be considered the Holders thereof for any purpose under the Indenture.] 
    [If a definitive Security, insert—As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.]  
    The Securities of this series are issuable only in registered form without coupons in denominations of $ and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 
    No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
    Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 
    This Security shall be governed by and construed in accordance with the laws of the state of New York. 
    All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 
SECTION 204. Form of Legend for Global Securities. 
    Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form: 
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE THEREOF, OR BY A NOMINEE OF A DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE THEREOF OR BY THE DEPOSITARY OR ANY NOMINEE THEREOF TO A SUCCESSOR OF THE DEPOSITARY, OR A NOMINEE OF THE SUCCESSOR DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
10

SECTION 205. Form of Trustee’s Certificate of Authentication. 
    The Trustee’s certificates of authentication shall be in substantially the following form: 
    This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

Wells Fargo Bank, National Association
                        
As Trustee

By:                         
Authorized Signatory

11

ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. 
The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. 
The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided, in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series:
(1) the form and title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series); 
(2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder); 
(3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; 
(4) the date or dates on which the principal of any Securities of the series is payable; 
(5)the rate or rates (which may be fixed or variable or a combination thereof) at which any Securities of the series shall bear interest, if any, the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable on any Interest Payment Date; 
(6)the place or places where the principal of and any premium and interest on any Securities of the series shall be payable, Securities of the series may be surrendered for registration of transfer, Securities of the series may be surrendered for exchange and notices, and demands to or upon the Company in respect of the Securities of the series and this Indenture may be served; 
(7) the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced; 
(8) the obligation, if any, of the Company to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous provisions or at the option of the Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; 
(9) whether the Securities will be convertible or exchangeable into or for shares of common stock or other securities of the Company and, if so, the terms and conditions upon which such Securities will be so convertible or exchangeable, including the conversion price or exchange ratio and the conversion or exchange period; 
(10) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which any Securities of the series shall be issuable; 
(11) if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts shall be determined; 
(12) if other than the currency of the United States of America, the currency, currencies or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the United States of America for any purpose, including for purposes of the definition of “Outstanding” in Section 101; 
(13) if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder thereof, in one or more currencies or currency units other than that or those in which such Securities are stated to be payable, the currency, currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined); 
(14) if other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502; 
(15) if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined); 
(16) if applicable, that the Securities of the series, in whole or any specified part, shall be defeasible pursuant to Section 1302 or Section 1303 or both such Sections and, if other than by a Board Resolution, the manner in which any election by the Company to defease such Securities shall be evidenced; 
12

(17) if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 204 and any circumstances in addition to or in lieu of those set forth in Clause (2) of the last paragraph of Section 305 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof (“Individual Securities”); 
(18) any addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 502; (19)any addition to or change in the covenants set forth in Article Ten which applies to Securities of the series; and 
(20) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 901(5)); and
(21) the terms pursuant to which the Securities of such series will be made subordinate in right of payment to Senior Indebtedness and the definition of such Senior Indebtedness with respect to such series; and, such Board Resolution, Officers’ Certificate or supplemental indenture, as the case may be, establishing the terms of such series shall expressly state which articles, sections or other provisions thereof constitute the “Subordination Provisions” with respect to the Securities of such series. 
All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officers’ Certificate referred to above or in any such indenture supplemental hereto. 
If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of the series. 
The Securities of each series shall be subordinated in right of payment to Senior Indebtedness as provided in the Subordination Provisions for such series. 
SECTION 302. Denominations. 
The Securities of each series shall be issuable only in registered form without coupons and only in such denominations as shall be specified as contemplated by Section 301. In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple in excess thereof.
SECTION 303. Execution, Authentication, Delivery and Dating. 
The Securities shall be executed on behalf of the Company by its Chairman of the Board, its President or one of its Executive or Senior Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. 
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. 
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall receive, and (subject to Section 601) shall be fully protected in conclusively relying upon, an Opinion of Counsel stating, 
(1) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture; 
(2) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and 
(3) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles. 
If the authentication and delivery relates to a new series of Securities created by an indenture supplemental hereto, such Opinion of Counsel shall, in addition to opinions (1) through (3) described in the immediately preceding paragraph, also state that all conditions precedent to the execution of the supplemental indenture with respect to that series of Securities have been complied with, the Company has the power to execute and deliver such supplemental indenture and has taken all necessary action for those purposes and any such supplemental indenture has been executed and delivered and constitutes the legal, valid and binding obligation of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles. 
13

If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture. 
Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers’ Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued. 
Each Security shall be dated the date of its authentication. 
No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. 
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. 
If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor. 
SECTION 305. Registration, Registration of Transfer and Exchange. 
The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided. 
Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount. 
At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. 
All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. 
Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. 
No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer. 
If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, or (B) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. 
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities: 
(1) Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture. 
(2) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than a transfer of this Security as a whole by 
14

the Depositary to a nominee thereof, or by a nominee of the Depositary to the Depositary or another nominee thereof or by the Depositary or any nominee thereof to a successor of the Depositary or a nominee of the successor Depositary, unless (A) such Depositary (i) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security or (C) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 301. 
(3) Subject to Clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct. 
(4) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. 
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. 
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. 
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.  
Upon the issuance of any new Security under this Section, 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 (including the fees and expenses of the Trustee) connected therewith. 
Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder. 
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. 
SECTION 307. Payment of Interest; Interest Rights Preserved. 
Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. 
Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: 
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such series in the manner set forth in Section 106, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). 
(2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee. 
Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. 
SECTION 308. Persons Deemed Owners.  
15

Prior to due presentment of a Security at maturity, redemption or for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309.Cancellation.
All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of in accordance with the Trustee’s customary procedures. 
SECTION 310. Computation of Interest. 
Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 311. CUSIP
The Company in issuing the Securities may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders, provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Securities. Any such redemption shall not be affected by any defect in or omission of such numbers. 
ARTICLE FOUR 
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. 
This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when 
(1) either 
(A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or 
(B) all such Securities not theretofore delivered to the Trustee for cancellation 
(i) have become due and payable, or 
(ii)will become due and payable at their Stated Maturity within one year, or 
(iii)are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient (as determined by the Company) to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; 
(2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and 
(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. 
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money. 
Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent 
16

(including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee. 
ARTICLE FIVE 
REMEDIES
SECTION 501.Events of Default. 
“Event of Default”, wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be occasioned by the Subordination Provisions of a Security of such series or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): 
(1) default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or 
(2) default in the payment of the principal of or any premium on any Security of that series at its Maturity; or 
(3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or 
(4) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or 
(5) 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 appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or orders the winding up or liquidation of its affairs and such decree, appointment or order shall remain unstayed and in effect for a period of 90 consecutive days; or 
(6) the Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Company or of any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or 
(7) any other Event of Default provided with respect to Securities of that series. 
SECTION 502. Acceleration of Maturity; Rescission and Annulment. 
If an Event of Default (other than an Event of Default specified in Section 501(5) or 501(6)) with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. 
If an Event of Default described (other than an Event of Default specified in Section 501(5) or 501(6)) occurs and is continuing, which Event of Default is with respect to less than all series of Securities then Outstanding, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Securities of each such affected series then Outstanding (each such series voting as a separate class) may declare the principal amount of all Securities of such series (or, if the Securities of such series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon such declaration such principal amount (or specified amount) shall become immediately due and payable. 
If an Event of Default specified in Section 501(5) or 501(6) with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable. 
At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if 
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay: 
(A) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; 
(B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities; 
17

(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and 
(D) all overdue interest on all Securities of that series; and
(2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513. 
No such rescission shall affect any subsequent default or impair any right consequent thereon. 
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if 
(1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or 
(2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof, 
the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 504. Trustee May File Proofs of Claim. 
In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607. 
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee. The Trustee shall have a lien prior to the Securities for any amount owing to the Trustee. In case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607; 
SECOND: Subject to the Subordination Provisions with respect to such Securities, to the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively; and 
THIRD: To the payment of the remainder, if any, to the Company or to such party as a court of competent jurisdiction shall direct. 
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless series; 
(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that 
18

(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; 
(3) such Holder or Holders have offered to the Trustee indemnity satisfactory to it against the costs, losses, expenses and liabilities to be incurred in compliance with such request; 
(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and 
(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 307) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. 
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. 
SECTION 512. Control by Holders.
If an Event of Default shall have occurred and be continuing in respect of a series of Securities, the Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that 
(1) such direction shall not be in conflict with any rule of law or with this Indenture, and 
(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. 
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default: 
(1) in the payment of the principal of or any premium or interest on any Security of such series, or 
(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
19

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, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company.
SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided in this Indenture and by the Trust Indenture Act. 
(1) Except during the continuance of an Event of Default with respect to Securities of any series, 
(a) the Trustee undertakes to perform, with respect to Securities of such series, such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and 
(b) in the absence of bad faith on its part, the Trustee may, with respect to Securities of such series, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; 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.
(2) If an Event of Default with respect to Securities of any series has occurred and is continuing, the Trustee shall exercise, with respect to Securities of such series, 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 person would exercise or use under the circumstances in the conduct of his own affairs. 
(3) 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 willful misconduct, except that 
(a) this subsection shall not be construed to limit the effect of sub-section (1) of this Section; 
(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 a majority in aggregate principal amount of the Outstanding Securities of any one or more series, as provided herein, 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 with respect to the Securities of such series; and 
(d) no provision of 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.. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.
(4) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. 
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series and is actually known to the Trustee, the Trustee shall within 90 days give the Holders of Securities of such series notice of such default; provided, however, that, except in the case of a default in the payment of the principal of or any premium or interest on any Security of such series or in the payment of any sinking fund installment with respect to Securities of such series, the Trustee shall be protected in withholding such notice if and so long as Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holders of Securities of such series. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. 
SECTION 603.Certain Rights of Trustee.
Subject to the provisions of Section 601: 
20

(1) the Trustee may rely and shall be 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 or presented by the proper party or parties; 
(2) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution; 
(3) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate; 
(4) the Trustee may consult with counsel and the oral or 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; 
(5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; 
(6) 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, direction, consent, order, bond, debenture, note, other evidence of indebtedness 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; 
(7) 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 appointed with due care by it hereunder; 
(8) the Trustee must not be deemed to have knowledge of, or be required to act (including the sending of any notice), based on any event unless a Responsible Officer of the Trustee (a) receives written notice of such an event or (b) has obtained actual knowledge of such an event; 
(9) the Trustee is not liable for any special, indirect, punitive or consequential losses or damages of any kind whatsoever (including without limitation loss profits), even if the Trustee has been advised of the possibility of such losses or damages and regardless of the form of action; 
(10) the permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty; 
(11) the Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers or otherwise in respect of this Indenture; 
(12) under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Securities; and facts. 
(13) the Trustee shall not be liable for actions taken or errors of judgment made, in good faith, unless negligent in ascertaining the pertinent facts. 
SECTION 604. Not Responsible for Recitals or Issuance of Securities. 
    The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof. 
SECTION 605. May Hold Securities. 
    The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. 
SECTION 606. Money Held in Trust. 
    Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed to in writing with the Company. 
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation 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); 
(2) 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 Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses 
21

and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct; and 
(3) to indemnify the Trustee for, protect and to hold it harmless against, any fees, damages, loss, liability or expense incurred without negligence or willful misconduct on its part, as finally adjudicated by a court of competent jurisdiction, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder (whether brought by or against the Company or any other person). The Company’s obligation under this section 607 shall survive termination of this Indenture or the resignation or removal of the Trustee. 
As security for the performance of the obligations of the Company under this Section, the Trustee shall have a claim prior to the Securities and upon all property and funds held or collected by the Trustee as such, except property and funds held in trust for the payment of principal of and any premium and interest on particular Securities. 
SECTION 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series. 
SECTION 609. Corporate Trustee Required; Eligibility. 
There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, has a combined capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611. 
The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee 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 with respect to the Securities of such series. 
The Trustee may be removed with 30 days’ notice with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. 
If at any time: 
(1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or 
(2) the Trustee shall cease to be eligible under Section 609 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, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a Security 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 all Securities and the appointment of a successor Trustee or Trustees. 
If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security 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 appointment of a successor Trustee with respect to the Securities of such series. 
The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in 
22

Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. 
SECTION 611. Acceptance of Appointment by Successor. 
In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. 
In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) 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 indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. 
Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be. 
No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. 
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
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, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. 
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). 
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. 
Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. 
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon 
23

receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 106 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. 
The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607. 
If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form: 
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.****

                        
As Authorized Agent

By:                          
Authorized Officer

ARTICLE SEVEN
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee 
(1) within 15 days after each record date, but in any event not less frequently than semi-annually, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities to which such record date applies, as of such record date, and 
(2) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; 
excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar. 
SECTION 702. Preservation of Information; Communications to Holders. 
The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. 
The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act. 
Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. 
SECTION 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. 
Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than August 1 in each calendar year, commencing after the first issuance of Securities pursuant to this Indenture. 
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 any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company. 
24

The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. 
Delivery of reports, information and documents to the Trustee pursuant to this Section 704 is for informational purposes only and its receipt of such reports shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including our compliance with any of our covenants under the Indenture or the Securities (as to which the trustee is entitled to rely exclusively on Officers’ Certificates). The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, our compliance with the covenants or with respect to any reports or other documents filed with the Commission or EDGAR or any website under the Indenture, or participate in any conference calls.

ARTICLE EIGHT 
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE 
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated with the Company, as the case may be), or successive consolidations or mergers in which the Company or its successor or successors, as the case may be, shall be a party or parties, or shall prevent any sale, conveyance, transfer, lease or other disposition of the property of the Company, or its successor or successors as the case may be, as an entirety, or substantially as an entirety, to any other Person (whether or not affiliated with the Company, or its successor or successors, as the case may be) authorized to acquire and operate the same; provided that 
(1) the Company is the surviving Person, or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, conveyance, transfer, lease or other disposition of property is made is a Person organized and existing under the laws of the United States or any State thereof or the District of Columbia, and such Person expressly assumes, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all of the obligations of the Company under the Securities and this Indenture; 
(2) after giving effect to, any such consolidation, merger, sale, conveyance, transfer, lease or other disposition, no Default or Event of Default shall have occurred and be continuing; and 
(3) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been met. 
SECTION 802. Successor Substituted.
In case of any such consolidation, merger, sale, conveyance, transfer, lease or other disposition, and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and reasonably satisfactory in form to the Trustee, of the obligation of due and punctual payment of the principal of and premium, if any, and interest, if any, on all of the Securities and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed by the Company, such successor Person shall succeed to and be substituted for the Company, with the same effect as if it had been named herein as the Company, and the Company thereupon shall be relieved of any further liability or obligation hereunder or upon the Securities. Such successor Person 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 Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor Person instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate and deliver any Securities which previously shall have been signed and delivered by any officer of the Company to the Trustee or the Authenticating Agent for authentication, and any Securities which such successor Person thereafter shall cause to be signed and delivered to the Trustee or the Authenticating Agent for that purpose. All the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof. 
ARTICLE NINE SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders. 
The Company, when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto, without the consent of any Holders, in form satisfactory to the Trustee, for one or more of the following purposes: 
(1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or 
(2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or 
(3) to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or 
25

(4) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Securities in uncertificated form; or 
(5) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (A) shall neither (i) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such Security with respect to such provision or (B) shall become effective only when there is no such Security Outstanding; or 
(6) to secure the Securities; or 
(7) to establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or 
(8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to 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, pursuant to the requirements of Section 611; or 
(9) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this Clause (9) shall not adversely affect the interests of the Holders of Securities of any series in any material respect, as evidenced by an Officer’s certificate; or 
(10) to comply with the requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act; or 
(11) to conform this Indenture or the terms of Securities to any terms set forth in a prospectus supplement or the accompanying prospectus.
SECTION 902. Supplemental Indentures With Consent of Holders. 
With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture (voting as one class), by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, 
(1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, alter the method of computation of interest, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or modify the provisions of this Indenture with respect to the subordination of the Securities in a manner adverse to the Holders, or 
(2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or 
(3) modify any of the provisions of this Section, Section 513 or Section 1008, 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 Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1008, or the deletion of this proviso, in accordance with the requirements of Sections 611 and 901(8), or 
(4) waive any event of default or event which, after notice of lapse of time, or both, would become an event of default, in respect of the payment of the principal of or interest on Securities. 
A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. 
It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall receive, and (subject to Section 601) shall be fully protected in conclusively relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and constitutes the legal, valid and binding obligation of the Company enforceable against it in accordance with its terms. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which adversely affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
26

SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act. 
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article 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. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. Failure to make a notation or issue a new Security shall not affect the validity and effect of any amendment, supplement or waiver. 
ARTICLE TEN COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. 
The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. SECTION 1003. Money for Securities Payments to Be Held in Trust. 
If the Company or any of its Subsidiaries shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. 
Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. 
The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent, (2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of such series) in the making of any payment of principal, any premium or interest with respect to the Securities of such series and (3) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series. 
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. 
Subject to applicable escheatment laws, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease. 
SECTION 1004. Statement by Officers as to Default. 
27

The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. 
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders.
SECTION 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of its business or the business of any Subsidiary to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary and not disadvantageous in any material respect to the Holders. 
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company or any Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.
SECTION 1008. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Section 301(19), 901(2) or 901(7) for the benefit of the Holders of such series or in Article Eight if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. 
ARTICLE ELEVEN REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for such Securities) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities. In case of any redemption at the election of the Company of less than all the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method in accordance with DTC’s applicable procedures and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.  
The Trustee shall promptly notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed. 
28

The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. 
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, electronic transmission, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. 
All notices of redemption shall state: 
(1) the Redemption Date, 
(2) the Redemption Price, 
(3) if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed, 
(4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, 
(5) the place or places where each such Security is to be surrendered for payment of the Redemption Price, and 
(6) that the redemption is for a sinking fund, if such is the case. 
Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company and shall be irrevocable. 
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient (as determined by the Company) to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 301, installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307. 
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. 
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 301 for such Securities. 
The minimum amount of any sinking fund payment provided for by the terms of any Securities is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional 
29

sinking fund payment”. If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. 
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 90 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 60 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section 1302 or Section 1303 applied to any Securities or any series of Securities, as the case may be, designated pursuant to Section 301 as being defeasible pursuant to such Section 1302 or 1303, in accordance with any applicable requirements provided pursuant to Section 301 and upon compliance with the conditions set forth below in this Article. Any such election shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities.
SECTION 1302. Defeasance and Discharge.
Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations and the Subordination Provisions shall cease to be effective, with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder: (1) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 1304 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due, (2) the Company’s obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article. Subject to compliance with this Article, the Company may exercise its option (if any) to have this Section applied to any Securities notwithstanding the prior exercise of its option (if any) to have Section 1303 applied to such Securities. 
SECTION 1303. Covenant Defeasance. 
Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, (1) the Company shall be released from its obligations under Sections 1006 through 1008, inclusive, and any covenants provided pursuant to Section 301(19), 901(2) or 901(7) for the benefit of the Holders of such Securities, (2) the occurrence of any event specified in Sections 501(4) (with respect to any of Sections 1006 through 1008, inclusive, and any such covenants provided pursuant to Section 301(19), 901(2) or 901(7)) and 501(7) shall be deemed not to be or result in an Event of Default and (3) the Subordination Provisions shall cease to be effective, in each case with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter called “Covenant Defeasance”). For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 501(4)), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby. 
SECTION 1304. Conditions to Defeasance or Covenant Defeasance. 
The following shall be the conditions to the application of Section 1302 or Section 1303 to any Securities or any series of Securities, as the case may be: 
(1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 609 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities. As used herein, “U.S. Government Obligation” means (x) any security which is (i) a direct obligation of the United States of America for the payment of 
30

which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in Clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt. 
(2) In the event of an election to have Section 1302 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur. 
(3) In the event of an election to have Section 1303 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur. 
(4) The Company shall have delivered to the Trustee an Officers’ Certificate to the effect that neither such Securities nor any other Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit. 
(5) No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 501(5) and (6), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day). 
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act). 
(7) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which it is bound. 
(8) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the 1940 Act unless such trust shall be registered under such Act or exempt from registration thereunder. 
(9) At the time of such deposit, (A) no default in the payment of any principal of or premium or interest on any Senior Indebtedness shall have occurred and be continuing, (B) no event of default with respect to any Senior Indebtedness shall have resulted in such Senior Indebtedness becoming, and continuing to be, due and payable prior to the date on which it would otherwise have become due and payable (unless payment of such Senior Indebtedness has been made or duly provided for), and (C) no other event of default with respect to any Senior Indebtedness shall have occurred and be continuing permitting (after notice or lapse of time or both) the holders of such Senior Indebtedness (or a trustee on behalf of such holders) to declare such Senior Indebtedness due and payable prior to the date on which it would otherwise have become due and payable. 
(10) The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with. 
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions. 
Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 1306, the Trustee and any such other trustee are referred to collectively as the “Trustee”) pursuant to Section 1304 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust need not be segregated from other funds except to the extent required by law. 
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities. 
Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 1304 with respect to any Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities. 
SECTION 1306. Reinstatement. 
If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture and such Securities from which the Company has been discharged or released pursuant to Section 1302 or 1303 shall be revived and 
31

reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 1305 with respect to such Securities in accordance with this Article; provided, however, that if the Company makes any payment of principal of or any premium or interest on any such Security following such reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust. 
SECTION 1307. Effect on Subordination Provisions.
Unless otherwise expressly provided pursuant to Section 301(21) with respect to the Securities of any series, the Subordination Provisions established pursuant to Section 301(21) with respect to such series are hereby expressly made subject to the provisions for satisfaction and discharge and defeasance and covenant defeasance set forth in Section 1302 and Section 1303 and, anything herein to the contrary notwithstanding, upon the effectiveness of such satisfaction and discharge and defeasance and covenant defeasance pursuant to Section 1302 and Section 1303 with respect to the Securities of such series, such Securities shall thereupon cease to be so subordinated and shall no longer be subject to the Subordination Provisions established pursuant to Section 301(21) with respect to such series and, without limitation to the foregoing, all moneys, U.S. Government Obligations and other securities or property deposited with the Trustee (or other qualifying trustee) in trust in connection with such satisfaction and discharge, defeasance or covenant defeasance, as the case may be, and all proceeds therefrom may be applied to pay the principal of, premium, if any, and interest, if any, with respect to the Securities of such series as and when the same shall become due and payable notwithstanding such Subordination Provisions. 
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 
[Signature page follows] 

32

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.

GUARANTY BANCORP, AS ISSUER
[CORPORATE SEAL]
By     /s/ Christopher G. Treece                
Name:     Christopher G. Treece            
Title:    Executive Vice President, Chief Financial Officer and Secretary

WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE

By     /s/ Maddy Hughes                
Name:     Maddy Hughes            
Title:    Vice President
33

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00322-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00322-of-00352.parquet"}]]