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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 1999.
REGISTRATION NO.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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ANTHRACITE CAPITAL, INC.
(Exact name of Registrant as specified in its charter)
MARYLAND
(State or other jurisdiction of
incorporation or organization)
13-3978906
(I.R.S. Employer Identification No.)
--------------------------
345 PARK AVENUE, 29TH FLOOR
NEW YORK, NY 10154
(212) 754-5560
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of each Registrant's Principal Executive Offices)
--------------------------
HUGH R. FRATER
PRESIDENT
ANTHRACITE CAPITAL, INC.
345 Park Avenue, 29th Floor
New York, NY 10154
(212) 754-5560
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
COPY TO:
VINCENT J. PISANO, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT TO BE AGGREGATE AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES REGISTERED PRICE PER OFFERING REGISTRATION
TO BE REGISTERED (1) UNIT(1)(2) PRICE(1)(2) FEE
<S> <C> <C> <C> <C>
Common Stock, $.001 par value........
Preferred Stock, $.001 par value.....
Senior Notes.........................
Subordinated Notes...................
Warrants to purchase Common Stock,
$.001 par value....................
Warrants to purchase Preferred Stock,
$.001 par value....................
Total................................ $200,000,000 $ 55,600
</TABLE>
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(1) Such indeterminate number of shares of common stock and preferred stock and
such indeterminate principal amount of senior notes and subordinated notes
as may from time to time be issued at indeterminate prices.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The aggregate public offering price of the securities
registered hereby will not exceed $200,000,000.
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PROSPECTUS
$200,000,000
ANTHRACITE CAPITAL, INC.
COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES AND WARRANTS
------------------
Anthracite Capital, Inc. may sell to the public:
- common stock
- preferred stock
- debt securities
- warrants to purchase common stock
- warrants to purchase preferred stock
REFERENCES IN THIS PROSPECTUS TO "ANTHRACITE," "WE," "US," OR "OUR" REFER TO
ANTHRACITE CAPITAL INC., AND FOR ANY PERIOD BEFORE JANUARY 1998 TO ANTHRACITE
MORTGAGE CAPITAL, INC., THE PREDECESSOR OF ANTHRACITE.
WE URGE YOU TO READ THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS
SUPPLEMENT, WHICH WILL DESCRIBE THE SPECIFIC TERMS OF THE COMMON STOCK, THE
PREFERRED STOCK, THE DEBT SECURITIES AND THE WARRANTS, CAREFULLY BEFORE YOU MAKE
YOUR INVESTMENT DECISION.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THIS PROSPECTUS MAY NOT BE USED TO SELL SECURITIES UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
The date of this prospectus is , 1999
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, we may sell any combination of the securities described in
this prospectus in one of more offerings up to a total dollar amount of proceeds
of $200,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
under the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements, and other information with the SEC. Such
reports, proxy statements, and other information concerning us can be read and
copied at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
Public Reference Room. The SEC maintains an internet site at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC, including ours. Our
common stock is listed and traded on the New York Stock Exchange. These reports,
proxy statements and other information are also available for inspection at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
This prospectus is part of a registration statement filed with the SEC by
us. The full registration statement can be obtained from the SEC as indicated
above, or from us.
The SEC allows us to "incorporate by reference" the information we file with
the SEC. This permits us to disclose important information to you by referencing
these filed documents. Any information referenced this way is considered part of
this prospectus, and any information filed with the SEC subsequent to this
prospectus will automatically be deemed to update and supersede this
information. We incorporate by reference the following documents which have been
filed with the SEC:
- Annual Report on Form 10-K for the fiscal year ended December 31, 1998 and
- the description of our common stock contained in our registration
statement on Form 8-A dated March 5, 1998.
We incorporate by reference the documents listed above and any future
filings made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act of 1934 from the date of this prospectus until we file a
post-effective amendment which indicates the termination of the offering of the
securities made by this prospectus.
Any statement contained in a document incorporated or considered to be
incorporated by reference in this registration statement shall be considered to
be modified or superseded for purposes of this prospectus to the extent that a
statement contained in this registration statement or in any subsequently filed
document that is or is considered to be incorporated by reference modifies or
supersedes the statement. Any statement that is so modified or superseded shall
not be deemed, except as so modified or superseded, constitute a part of this
prospectus.
We will provide without charge upon written or oral request, a copy of any
or all of the documents which are incorporated by reference to this prospectus,
other than exhibits which are specifically incorporated by reference into such
documents. You may direct your requests to Investor Relations, Anthracite
Capital, Inc., 345 Park Avenue, 29th Floor, New York, New York 10154 (telephone
number (212) 409-3333).
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Some statements contained or incorporated by reference in this registration
statement constitute forward-looking statements as such term is defined in
Section 27A of the Securities Act and Section 21E of the Exchange Act. Some
factors could cause actual results to differ materially from those in the
forward-looking statements. Factors that might cause such a material difference
include, but are not limited to:
(a) changes in the general economic climate,
(b) termination of the management agreement,
(c) interest rate fluctuations,
(d) our failure to qualify as a REIT and
(e) general competitive factors.
ANTHRACITE CAPITAL, INC. AND THE MANAGER
Anthracite Capital, Inc., a Maryland corporation, was formed in November
1997 to invest in multifamily, commercial and residential mortgage loans,
mortgage-backed securities and other real estate related assets in both U.S. and
non-U.S. markets. We intend to elect to be taxed as a real estate investment
trust under the Internal Revenue Code of 1986, as amended, and generally will
not be subject to Federal income tax to the extent that we distribute our net
income to stockholders and qualify for taxation as a REIT. Our operations are
managed by BlackRock Financial Management, Inc. which is referred to in this
prospectus as the Manager. We have no ownership interest in the Manager.
The Manager is a subsidiary of PNC Bank, National Association, which is
itself a wholly owned subsidiary of PNC Bank Corp. Established in 1988, the
Manager is a registered investment adviser under the Investment Advisers Act of
1940 and is one of the largest fixed-income investment management firms in the
United States. The Manager engages in investment and risk management as its sole
businesses and specializes in the management of domestic and offshore
fixed-income assets for pension and profit sharing plans, financial institutions
such as banking and insurance companies and mutual funds for retail and
institutional investors.
The address of the Manager is 345 Park Avenue, 29(th) Floor, New York, New
York 10154.
USE OF PROCEEDS
Unless otherwise specified in a prospectus supplement, we intend to use the
proceeds of any securities sold for general corporate purposes, including
acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table displays our ratio of earnings to fixed charges.
Earnings are inadequate to cover fixed charges (loss of $1.4 million) for
the fiscal year ended December 31, 1998. The loss includes a non-recurring
realized loss of $18.44 million. Excluding the non-recurring loss, the ratio of
earnings to fixed charges is 1.69x.
DESCRIPTION OF SECURITIES
This prospectus contains a summary of the common stock, preferred stock,
debt securities and warrants to purchase our common stock or preferred stock.
These summaries are not meant to be a complete description of each security.
However, this prospectus and the accompanying prospectus supplement contain the
material terms and conditions for each security.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 500,000,000 shares of capital
stock, 400,000,000 of such shares being common stock, par value $.001 per share,
and 100,000,000 shares being preferred stock, par value $.001 per share,
issuable in one or more series. 20,478,891 shares of common stock were issued
and outstanding as of March 29, 1999. No shares of preferred stock were issued
or outstanding as of March 29, 1999. No warrants to purchase common stock or
preferred stock were issued or outstanding as of March 29, 1999.
COMMON STOCK
VOTING RIGHTS. Each holder of common stock is entitled to one vote for each
share held on all matters to be voted upon by our stockholders, subject to the
provisions of our articles of amendment and restatement regarding the ownership
of shares of common stock in excess of the ownership limitations described below
under "Repurchase of Shares and Restrictions on Transfer".
DIVIDENDS. The holders of outstanding shares of common stock, subject to
any preferences that may be applicable to any outstanding series of preferred
stock, are entitled to receive ratably such dividends out of assets legally
available for that purpose at such times and in such amounts as the board of
directors may from time to time determine.
LIQUIDATION AND DISSOLUTION. Upon liquidation or dissolution of Anthracite,
the holders of the common stock will be entitled to share ratably in our assets
legally available for distribution to stockholders after payment of, or
provision for, all known debts and liabilities and subject to the prior rights
of any holders of any preferred stock then outstanding.
OTHER RIGHTS. Holders of the common stock generally have equal dividend,
distribution, liquidation and other rights, and shall have no preference,
conversion, exchange, appraisal, preemptive or cumulative voting rights. All
outstanding shares of the common stock are, and any common shares offered by a
prospectus supplement, when issued, will be, duly authorized, fully paid and
non-assessable by Anthracite.
TRANSFER AGENT AND REGISTRAR
The Bank of New York acts as transfer agent and registrar for the common
stock.
PREFERRED STOCK
GENERAL. We are authorized to issue 100,000,000 shares of preferred stock,
none of which currently is issued or outstanding. Our board of directors has the
authority, without further action by the stockholders, to issue shares of
preferred stock in one or more series and to fix the number of shares, dividend
rights, conversion rights, voting rights, redemption rights, liquidation
preferences, sinking funds, and any other rights, preferences, privileges and
restrictions applicable to each such series of preferred stock. The issuance of
preferred stock could have the effect of making an attempt to gain control of us
more difficult by means of a merger, tender offer, proxy contest or otherwise.
The preferred stock, if issued, would have a preference on dividend payments
that could affect our ability to make dividend distributions to the common
stockholders. The preferred stock will, when issued, be fully paid and non
assessable.
A prospectus supplement relating to any series of preferred stock being
offered will include specific terms relating to the offering. They will include:
- the title and stated value of the preferred stock;
- the number of shares of the preferred stock offered, the liquidation
preference per share and the offering price of the preferred stock;
- the dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to the preferred stock;
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- whether dividends shall be cumulative or non cumulative and, if
cumulative, the date from which dividends on the preferred stock shall
accumulate;
- the procedures for an auction and remarketing, if any, for the preferred
stock;
- the provisions for a sinking fund, if any, for the preferred stock;
- any voting rights of the preferred stock;
- the provisions for redemption, if applicable, of the preferred stock;
- any listing of the preferred stock on any securities exchange;
- the terms and conditions, if applicable, upon which the preferred stock
will be convertible into our common stock, including the conversion price
or the manner of calculating the conversion price and conversion period;
- if appropriate, a discussion of United States federal income tax
consequences applicable to the preferred stock;
- any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to assist us in qualifying as
a REIT;
- all series of preferred stock will rank on a parity with each other and
will rank senior to common stock with respect payment of dividends and
distribution of assets upon liquidation; and
- any other specific terms, preferences, rights, limitations or restrictions
of the preferred stock.
CONVERSION OR EXCHANGE. The terms, if any, on which the preferred stock may
be convertible into or exchangeable for our common stock or other securities
will be stated in the preferred stock prospectus supplement. The terms will
include provisions as to whether conversion or exchange is mandatory, at the
option of the holder or at our option, and may include provisions pursuant to
which the number of shares of our common stock or other securities to be
received by the holders of preferred stock would be subject to adjustment.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of preferred stock or common stock.
Warrants may be issued independently or together with any offered securities and
may be attached to or separate from such securities. Each series of warrants
will be issued under a separate warrant agreement to be entered into between a
warrant agent specified in the agreement and us. The warrant agent will act
solely as our agent in connection with the warrants of that series and will not
assume any obligation or relationship of agency or trust for or with any holders
or beneficial owners of warrants.
The applicable prospectus supplement will describe the following terms,
where applicable, of the warrants in respect of which this prospectus is being
delivered:
- the title of the warrants;
- the aggregate number of the warrants;
- the price or prices at which the warrants will be issued;
- the currencies in which the price or prices of the warrants may be
payable;
- the designation, amount and terms of the offered securities purchasable
upon exercise of the warrants;
- the designation and terms of the other offered securities, if any, with
which the warrants are issued and the number of the warrants issued with
the security;
- if applicable, the date on and after which the warrants and the offered
securities purchasable upon exercise of the warrants will be separately
transferable;
- the price or prices at which and currency or currencies in which the
offered securities purchasable upon exercise of the warrants may be
purchased;
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- the date on which the right to exercise the warrants shall commence and
the date on which the right shall expire;
- the minimum or maximum amount of the warrants which may be exercised at
any one time;
- information with respect to book-entry procedures, if any;
- if appropriate, a discussion of any United States federal income tax
consequences; and
- any other material terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
REPURCHASE OF SHARES AND RESTRICTIONS ON TRANSFER
Two of the requirements for qualification as a real estate investment trust
are that
(1) during the last half of each taxable year for which a REIT election is made,
other than the first taxable year for which a REIT election is made, not
more than 50% in value of the outstanding shares may be owned directly or
indirectly by five or fewer individuals. This requirement is known as the
"5/50 Rule"; and
(2) there must be at least 100 stockholders on 335 days of each taxable year of
12 months, other than the first taxable year for which a REIT election is
made.
To assist us in meeting these requirements, the articles of amendment and
restatement prohibit any person from acquiring or holding, directly or
indirectly, in excess of 9.8%, in value or in number of shares, whichever is
more restrictive, of the number of our outstanding shares of common stock or any
class of preferred stock. For this purpose, the term "ownership" is defined in
accordance with the REIT Provisions of the Internal Revenue Code and the
constructive ownership provisions of Section 544 of the Internal Revenue Code,
as modified by Section 856(h)(1)(B) of the Internal Revenue Code. Subject to
certain limitations, our board of directors may modify the ownership limitations
provided such action does not affect our qualification as a REIT.
For purposes of the 5/50 Rule, the constructive ownership provisions
applicable under Section 544 of the Internal Revenue Code
(1) attribute ownership of securities owned by a corporation, partnership,
estate or trust proportionately to its stockholders, partners or
beneficiaries,
(2) attribute ownership of securities owned by certain family members to other
members of the same family, and
(3) treat securities with respect to which a person has an option to purchase as
actually owned by that person.
These rules will be applied in determining whether a person holds shares of
common stock in violation of the ownership limitations specified in the articles
of amendment and restatement. Accordingly, under certain circumstances, shares
of common stock owned by a person who individually owns less than 9.8% of the
shares outstanding may nevertheless be in violation of the ownership limitations
specified in the articles of amendment and restatement. Ownership of shares of
common stock through such attribution is generally referred to as constructive
ownership. The 100 stockholder test is determined by actual, and not
constructive, ownership.
The articles of amendment and restatement further provide that if any
transfer of shares of common stock which, if effective, would
(1) result in any person beneficially or constructively owning shares of common
stock in excess or in violation of the 9.8% ownership limitations described
above,
(2) result in our stock being beneficially owned by fewer than 100 persons,
determined without reference to any rules of attribution, or
(3) result in us being "closely held" under Section 856(h) of the Internal
Revenue Code,
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then that number of shares of common or preferred stock the beneficial or
constructive ownership of which otherwise would cause such person to violate
such limitations, rounded to the nearest whole shares, shall be automatically
transferred to a trustee as trustee of a trust for the exclusive benefit of one
or more charitable beneficiaries, and the intended transferee shall not acquire
any rights in such shares. Shares of common or preferred stock held by the
trustee shall be issued and outstanding shares of common or preferred stock. The
intended transferee shall not benefit economically from owning any shares held
in the trust, shall have no rights to dividends, and shall possess no rights to
vote or other rights attributable to the shares held in the trust. The trustee
shall have all voting rights and rights to dividends or other distributions with
respect to shares held in the trust, which will be exercised for the exclusive
benefit of the charitable beneficiary. Any dividend or other distribution paid
to the intended transferee before our discovery that shares of common or
preferred stock have been transferred to the trustee shall be paid with respect
to such shares to the trustee by the intended transferee upon demand and any
dividend or other distribution authorized but unpaid shall be paid to the
trustee. Our board of directors may, in its discretion, modify these
restrictions on owning shares in excess of the ownership limitations, to the
extent such modifications do not affect our qualification as a REIT.
Within 20 days of receiving notice from us that shares of common or
preferred stock have been transferred to the trust, the trustee shall sell the
shares held in the trust to a person, designated by the trustee, whose ownership
of the shares will not violate the ownership limitations specified in the
articles of amendment and restatement. Upon such sale, the interest of the
charitable beneficiary in the shares sold shall terminate and the trustee shall
distribute the net proceeds of the sale to the intended transferee and to the
charitable beneficiary as follows: The intended transferee shall receive the
lesser of (1) the price paid by the intended transferee for the shares or, if
the intended transferee did not give value for the shares in connection with the
event causing the shares to be held in the trust, e.g., in the case of a gift,
devise or other such transaction, the market price, as defined below, of the
shares on the day of the event causing the shares to be held in the trust, and
(2) the price per share received by the trustee from the sale or other
disposition of the shares held in the trust. Any net sales proceeds in excess of
the amount payable to the intended transferee shall be immediately paid to the
charitable beneficiary. In addition, shares of common or preferred stock
transferred to the trustee shall be deemed to have been offered for sale to us,
or our designee, at a price per share equal to the lesser of (1) the price per
share in the transaction that resulted in such transfer to the trust or, in the
case of a devise or gift, the market price at the time of such devise or gift,
and (2) the market price on the date we, or our designee, accept such offer. We
shall have the right to accept such offer until the trustee has sold shares held
in the trust. Upon such a sale to us, the interest of the charitable beneficiary
in the shares sold shall terminate and the trustee shall distribute the net
proceeds of the sale to the intended transferee.
The term "market price" on any date shall mean, with respect to any class or
series of outstanding shares of our stock, the closing price, as defined below,
for such shares on such date. The "closing price" on any date shall mean the
last sale price for such shares, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
for such shares, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if such shares are not listed or
admitted to trading on the New York Stock Exchange, as reported on the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such shares are listed or
admitted to trading or, if such shares are not listed or admitted to trading on
any national securities exchange, the last quoted price, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc., Automated
Quotation Systems, or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if such shares are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in such shares
selected by our board of
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directors or, in the event that no trading price is available for such shares,
the fair market value of the shares, as determined in good faith by our board of
directors.
Every owner of more than 5%, or such lower percentage as required by the
Internal Revenue Code or the regulations promulgated under the Internal Revenue
Code, of the outstanding shares or any class or series of our stock, within 30
days after the end of each taxable year, is required to give written notice to
us stating the name and address of such owner, the number of shares of each
class and series of our stock beneficially owned and a description of the manner
in which such shares are held. Each owner of more than 5% shall provide to us
additional information as we may request in order to determine the effect, if
any, of such beneficial ownership on our qualification as a REIT and to ensure
compliance with the ownership limitations.
MATERIAL PROVISIONS OF MARYLAND LAW AND OF OUR ARTICLES OF AMENDMENT AND
RESTATEMENT AND BYLAWS
The following is a summary of the material provisions of the Maryland
General Corporation Law, as amended from time to time, and of our articles of
amendment and restatement and the bylaws. It does not restate the material
provisions completely. We urge you to read our articles of amendment and
restatement and the bylaws, copies of which are incorporated by reference into
the registration statement of which this prospectus is a part. See "Where You
Can Find More Information." For a description of additional restrictions on
transfer of the common stock, see "Description of Capital Stock--Repurchase of
Shares and Restrictions on Transfer."
REMOVAL OF DIRECTORS
The articles of amendment and restatement provide that a director may be
removed from office at any time for cause by the affirmative vote of the holders
of at least two-thirds of the votes of the shares entitled to be cast in the
election of directors.
STAGGERED BOARD
The articles of amendment and restatement and the bylaws divide the board of
directors into three classes of directors, each class constituting approximately
one-third of the total number of directors, with the classes serving staggered
three-year terms. The classification of the board of directors will make it more
difficult for stockholders to change the composition of the board of directors
because only a minority of the directors can be elected at once. The
classification provisions could also discourage a third party from accumulating
our stock or attempting to obtain control of us, even though this attempt might
be beneficial to us and some, or a majority, of our stockholders. Accordingly,
under certain circumstances stockholders could be deprived of opportunities to
sell their shares of common stock at a higher price than might otherwise be
available.
BUSINESS COMBINATIONS
Under the MGCL, certain "business combinations" including a merger,
consolidation, share exchange or, in some circumstances, an asset transfer or
issuance or reclassification of equity securities, between a Maryland
corporation and an "interested stockholder" or an affiliate of an interested
stockholder are prohibited for five years after the most recent date on which
the interested stockholder becomes an interested stockholder. An interested
stockholder is defined in the MGCL as any person who beneficially owns 10% or
more of the voting power of the corporation's shares or an affiliate of the
corporation who, at any time within the two-year period prior to the date in
question, was the beneficial owner of 10% or more of the voting power of the
then outstanding voting stock of the corporation. After the five year period,
any applicable business combination must be recommended by the board of
directors of that corporation and approved by the affirmative vote of at least
(a) 80% of the votes entitled to be cast by holders of outstanding shares of
voting stock of the corporation and
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(b) two-thirds of the votes entitled to be cast by holders of voting Stock
of the corporation other than shares held by the interested stockholder
with whom, or with whose affiliate, the business combination is to be
effected, unless, among other conditions, the corporation's common
stockholders receive a minimum price, as defined in the MGCL, for their
shares and the consideration is received in cash or in the same form as
previously paid by the interested stockholder for its shares. The MGCL
does not apply, however, to business combinations that are approved or
exempted by the board of directors of the corporation before the
interested stockholder becomes an interested stockholder.
CONTROL SHARE ACQUISITIONS
The MGCL provides that "control shares" of a Maryland corporation acquired
in a "control share acquisition" have no voting rights except to the extent
approved by a vote of two-thirds of the votes entitled to be cast on the matter,
excluding shares of stock owned by the acquirer, by officers or by directors who
are employees of the corporation. "Control shares" are voting shares of stock
which, if aggregated with all other such shares of stock previously acquired by
the acquirer or in respect of which the acquirer is able to exercise or direct
the exercise of voting power, except solely by virtue of a revocable proxy,
would entitle the acquirer to exercise voting power in electing directors within
one of the following ranges of voting power:
(1) one-fifth or more but less than one-third,
(2) one-third or more but less than a majority or
(3) a majority or more of all voting power. Control shares do not include
shares the acquiring person is then entitled to vote as a result of
having previously obtained stockholder approval. A "control share
acquisition" means the acquisition of control shares, subject to certain
exceptions.
A person who has made or proposes to make a control share acquisition, upon
satisfaction of certain conditions, including an undertaking to pay expenses,
may compel the board of directors of the corporation to call a special meeting
of stockholders to be held within 50 days of demand to consider the voting
rights of the shares. If no request for a meeting is made, the corporation may
itself present the question at any stockholders meeting.
If voting rights are not approved at the meeting or if the acquiring person
does not deliver an acquiring person statement as required by the statute, then,
subject to certain conditions and limitations, the corporation may redeem any or
all of the control shares, except those for which voting rights have previously
been approved, for fair value determined, without regard to the absence of
voting rights for the control shares, as of the date of the last control share
acquisition by the acquirer or of any meeting of stockholders at which the
voting rights of such shares are considered and not approved. If voting rights
for control shares are approved at a stockholders meeting and the acquirer
becomes entitled to vote a majority of the shares entitled to vote, all other
stockholders may exercise appraisal rights. The fair value of the shares as
determined for purposes of such appraisal rights may not be less than the
highest price per share paid by the acquirer in the control share acquisition.
The control share acquisition statute does not apply
- to shares acquired in a merger, consolidation or share exchange if the
corporation is a party to the transaction, or
- to acquisitions approved or exempted by the articles of amendment and
restatement or bylaws of the corporation.
Our bylaws contain a provision exempting from the control share acquisition
statute any and all acquisitions by any person of our shares of common stock. We
cannot give any assurance that such provision will not be amended or eliminated
at any time in the future.
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AMENDMENT TO THE ARTICLES OF AMENDMENT AND RESTATEMENT
We reserve the right from time to time to make any amendment to our articles
of amendment and restatement that is authorized by law at present or in future,
including any amendment which alters the contract rights as expressly stated in
the articles of amendment and restatement, of any shares of outstanding stock.
The articles of amendment and restatement may be amended only by the affirmative
vote of holders of shares entitled to cast at least a majority of all the votes
entitled to be cast on the matter; provided, however, that provisions relating
to the indemnification of our present and former directors and officers, our
election to be taxed as a REIT, the removal of directors and dissolution of
Anthracite may be amended only by the affirmative vote of two thirds of the
board of directors and the holders of shares entitled to cast at least
two-thirds of all the votes entitled to be cast in the election of directors.
DISSOLUTION OF ANTHRACITE
The dissolution of Anthracite must be approved by the affirmative vote of at
least two-thirds of all of the votes ordinarily entitled to be cast in the
election of directors, voting together as a single class, and the affirmative
vote of holders of atleast two-thirds of any series or class of stock expressly
granted a series or class vote on the dissolution of Anthracite in the
resolutions providing for such series or class. Before such vote, the
dissolution must be approved by a majority of the board of directors.
ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS
The bylaws provide that
(a) with respect to an annual meeting of stockholders, nominations of
persons for election to the board of directors and the proposal of
business to be considered by stockholders may be made only
(1) pursuant to our notice of the meeting,
(2) by the board of directors or,
(3) by a stockholder who is entitled to vote at the meeting and has
complied with the advance notice procedures specified in the bylaws,
and
(b) with respect to special meetings of stockholders, only the business
specified in our notice of meeting may be brought before the meeting of
stockholders and nominations of persons for election to the board of
directors or
(c) provided that the board of directors has determined that directors shall
be elected at such meeting, by a stockholder who is entitled to vote at
the meeting and has complied with the advance notice provisions specified
in the bylaws.
POSSIBLE ANTI-TAKEOVER EFFECT OF MATERIAL PROVISIONS OF MARYLAND LAW AND OF THE
ARTICLES OF
AMENDMENT AND RESTATEMENT AND BYLAWS
The business combination provisions and, if the applicable provision in the
bylaws is rescinded, the control share acquisition provisions of the MGCL, the
provisions of the articles of amendment and restatement creating a staggered
board and the advance notice provisions of the bylaws could delay, defer or
prevent a change in control of Anthracite or other transaction that might
involve a premium price for holders of our common stock or otherwise be in their
best interest.
REPORTS TO STOCKHOLDERS
We will furnish our stockholders with annual reports containing audited
financial statements and such other periodic reports as we may determine to
furnish or as may be required by law.
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DESCRIPTION OF DEBT SECURITIES
The following description contains general terms and provisions of the debt
securities to which any prospectus supplement may relate. The particular terms
of the debt securities offered by any prospectus supplement and the extent, if
any, to which such general provisions may not apply to the debt securities so
offered will be described in the prospectus supplement relating to such debt
securities. For more information please refer to the senior indenture among a
trustee to be selected and us, relating to the issuance of the senior notes, and
the subordinated indenture among a trustee to be selected and us, relating to
issuance of the subordinated notes. Forms of these documents are filed as
exhibits to the registration statement, which includes this prospectus.
As used in this prospectus, the term indentures refers to both the senior
indenture and the subordinated indenture. The indentures will be qualified under
the Trust Indenture Act. As used in this prospectus, the term trustee refers to
either the senior trustee or the subordinated trustee, as applicable.
The following are summaries of material provisions of the senior indenture
and the subordinated indenture. They do not restate the indentures in their
entirety. We urge you to read the indentures applicable to a particular series
of debt securities because they, and not this description, define your rights as
the holders of the debt securities. Except as otherwise indicated, the terms of
the senior indenture and the subordinated indenture are identical.
GENERAL
Each prospectus supplement will describe the following terms relating to a
series of notes:
- the title;
- any limit on the amount that may be issued;
- whether or not such series of notes will be issued in global form, the
terms and who the depository will be;
- the maturity date(s);
- the annual interest rate(s) (which may be fixed or variable) or the method
for determining the rate(s) and the date(s) interest will begin to accrue,
the date(s) interest will be payable and the regular record dates for
interest payment dates or the method for determining such date(s);
- the place(s) where payments shall be payable;
- our right, if any, to defer payment of interest and the maximum length of
any such deferral period;
- the date, if any, after which, and the price(s) at which, such series of
notes may, pursuant to any optional redemption provisions, be redeemed at
our option, and other related terms and provisions;
- the date(s), if any, on which, and the price(s) at which we are obligated,
pursuant to any mandatory sinking fund provisions or otherwise, to redeem,
or at the Holder's option to purchase, such series of notes and other
related terms and provisions;
- the denominations in which such series of notes will be issued, if other
than denominations of $1,000 and any integral multiple thereof; and
- any mandatory or optional sinking fund or similar provisions;
- the currency or currency units of payment of the principal of, premium, if
any, and interest on the notes;
- any index used to determine the amount of payments of the principal of,
premium, if any, and interest on the notes and the manner in which such
amounts shall be determined;
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- the terms pursuant to which such notes are subject to defeasance;
- the terms and conditions, if any, pursuant to which such notes are
secured;
- any other terms (which terms shall not be inconsistent with the
Indenture).
The notes may be issued as original issue discount securities. An original
issue discount security is a note, including any zero-coupon note, which:
- is issued at a price lower than the amount payable upon its stated
maturity and
- provides that upon redemption or acceleration of the maturity, an amount
less than the amount payable upon the stated maturity, shall become due
and payable.
United States federal income tax consequences applicable to notes sold at an
original issue discount will be described in the applicable prospectus
supplement. In addition, United States federal income tax or other consequences
applicable to any notes which are denominated in a currency or currency unit
other than United States dollars may be described in the applicable prospectus
supplement.
Under the indentures, we will have the ability, in addition to the ability
to issue notes with terms different from those of notes previously issued,
without the consent of the holders, to reopen a previous issue of a series of
notes and issue additional notes of that series, unless the reopening was
restricted when the series was created, in an aggregate principal amount
determined by us.
CONVERSION OR EXCHANGE RIGHTS
The terms, if any, on which a series of notes may be convertible into or
exchangeable for our common stock or other securities will be described in the
prospectus supplement relating to that series of notes. The terms will include
provisions as to whether conversion or exchange is mandatory, at the option of
the holder or at our option, and may include provisions pursuant to which the
number of shares of our common stock or other securities to be received by the
holders of the series of notes would be subject to adjustment.
CONSOLIDATION, MERGER OR SALE
The indentures do not contain any covenant which restricts our ability to
merge or consolidate, or sell, convey, transfer or otherwise dispose of all or
substantially all of their assets. However, any successor or acquirer of such
assets must assume all of our obligations under the indentures or the notes, as
appropriate.
EVENTS OF DEFAULT UNDER THE INDENTURE
The following are events of default under the indentures with respect to any
series of notes issued:
- failure to pay interest when due and such failure continues for 30 days
and the time for payment has not been extended or deferred;
- failure to pay the principal (or premium, if any) when due;
- failure to observe or perform any other covenant contained in the notes or
the indentures (other than a covenant specifically relating to another
series of notes), and such failure continues for 90 days after we receive
notice from the trustee or holders of at least 25% in aggregate principal
amount of the outstanding notes of that series; and
- certain events of bankruptcy, insolvency or reorganization of Anthracite.
If an event of default with respect to notes of any series occurs and is
continuing, the trustee or the holders of at least 25% in aggregate principal
amount of the outstanding notes of that series, by
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notice in writing to us (and to the trustee if notice is given by such holders),
may declare the unpaid principal of, premium, if any, and accrued interest, if
any, due and payable immediately.
The holders of a majority in principal amount of the outstanding notes of an
affected series may waive any default or event of default with respect to such
series and its consequences, except defaults or events of default regarding:
- payment of principal, premium, if any, or interest; or
- certain covenants containing limitations on our ability to pay dividends
and make payments on debt securities in certain circumstances.
Any such waiver shall cure such default or event of default.
Subject to the terms of the indentures, if an event of default under an
indenture shall occur and be continuing, the trustee will be under no obligation
to exercise any of its rights or powers under such indenture at the request or
direction of any of the holders of the applicable series of notes, unless such
holders have offered the trustee reasonable indemnity. The holders of a majority
in principal amount of the outstanding notes of any series will 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 notes of that series, provided that:
- it is not in conflict with any law or the applicable indenture;
- the trustee may take any other action deemed proper by it which is not
inconsistent with such direction; and
- subject to its duties under the Trust Indenture Act, the trustee need not
take any action that might involve it in personal liability or might be
unduly prejudicial to the holders not involved in the proceeding.
A holder of the notes of any series will only have the right to institute a
proceeding under the indentures or to appoint a receiver or trustee, or to seek
other remedies if:
- the holder has given written notice to the trustee of a continuing event
of default with respect to that series;
- the holders of at least 25% in aggregate principal amount of the
outstanding notes of that series have made written request, and such
holders have offered reasonable indemnity to the trustee to institute such
proceedings as trustee; and
- the trustee does not institute such proceeding, and does not receive from
the holders of a majority in aggregate principal amount of the outstanding
notes of that series other conflicting directions within 60 days after
such notice, request and offer.
These limitations do not apply to a suit instituted by a holder of notes if
we default in the payment of the principal, premium, if any, or interest on, the
notes.
We will periodically file statements with the trustee regarding our
compliance with certain of the covenants in the indentures.
MODIFICATION OF INDENTURE; WAIVER
Anthracite and the trustee may change an indenture without the consent of
any holders with respect to certain matters, including:
- to fix any ambiguity, defect or inconsistency in such indenture; and
- to change anything that does not materially adversely affect the interests
of any holder of notes of any series.
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In addition, under the indentures, the rights of holders of a series of
notes may be changed by us and the trustee with the written consent of the
holders of at least a majority in aggregate principal amount of the outstanding
notes of each series that is affected. However, we can make the following
changes only with the consent of each holder of any outstanding notes affected:
- extending the fixed maturity of such series of notes;
- change any of our obligations to pay additional amounts;
- reducing the principal amount, reducing the rate of or extending the time
of payment of interest, or any premium payable upon the redemption of any
such notes;
- reducing the percentage of notes, the holders of which are required to
consent to any amendment.
- reduce the amount of principal of an original issue discount security or
any other note payable upon acceleration of the maturity thereof,
- change currency in which any note or any premium or interest is payable,
- impair the right to enforce any payment on or with respect to any note,
- adversely change the right to convert or exchange, including decreasing
the conversion rate or increasing the conversion price of, such note, if
applicable,
- in the case of the subordinated indenture, modify the subordination
provisions in a manner adverse to the holders of the subordinated notes,
- if the notes are secured, change the terms and conditions pursuant to
which the notes are secured in a manner adverse to the holders of the
secured notes,
- reduce the percentage in principal amount of outstanding notes of any
series, the consent of whose holders is required for modification or
amendment of the applicable indenture or for waiver of compliance with
certain provisions of the applicable indenture or for waiver of certain
defaults,
- reduce the requirements contained in the applicable indenture for quorum
or voting,
- change any of our obligations to maintain an office or agency in the
places and for the purposes required by the indentures, or
- modify any of the above provisions.
FORM, EXCHANGE, AND TRANSFER
The notes of each series will be issuable only in fully registered form
without coupons and, unless otherwise specified in the applicable prospectus
supplement, in denominations of $1,000 and any integral multiple thereof. The
indentures will provide that notes of a series may be issuable in temporary or
permanent global form and may be issued as book-entry securities that will be
deposited with, or on behalf of, The Depository Trust Company or another
depository named by us and identified in a prospectus supplement with respect to
such series.
At the option of the holder, subject to the terms of the indentures and the
limitations applicable to global securities described in the applicable
prospectus supplement, notes of any series will be exchangeable for other notes
of the same series, in any authorized denomination and of like tenor and
aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to
global securities described in the applicable prospectus supplement, notes may
be presented for exchange or for registration of transfer, duly endorsed or with
the form of transfer endorsed, duly executed if so required by us or the
security registrar, at the office of the security registrar or at the office of
any transfer agent designated by us for such purpose. Unless otherwise provided
in the notes to be transferred or exchanged, we will not require a service
charge for any registration of transfer or exchange, but we may require payment
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of any taxes or other governmental charges. The security registrar and any
transfer agent initially designated by us for any notes will be named in the
applicable prospectus supplement. We may at any time designate additional
transfer agents or rescind the designation of any transfer agent or approve a
change in the office through which any transfer agent acts, except that we will
be required to maintain a transfer agent in each place of payment for the notes
of each series.
If the notes of any series are to be redeemed, we will not be required to:
- issue, register the transfer of, or exchange any notes of that series
during a period beginning at the opening of business 15 days before the
day of mailing of a notice of redemption of any such notes that may be
selected for redemption and ending at the close of business on the day of
such mailing; or
- register the transfer of or exchange any notes so selected for redemption,
in whole or in part, except the unredeemed portion of any such notes being
redeemed in part.
INFORMATION CONCERNING THE TRUSTEE
The trustee, other than during the occurrence and continuance of an event of
default under an indenture, undertakes to perform only such duties as are
specifically described in the indentures and, upon an event of default under an
indenture, must use the same degree of care as a prudent person would exercise
or use in the conduct of his or her own affairs. Subject to this provision, the
trustee is under no obligation to exercise any of the powers given it by the
indentures at the request of any holder of notes unless it is offered reasonable
security and indemnity against the costs, expenses and liabilities that it might
incur. The trustee is not required to spend or risk its own money or otherwise
become financially liable while performing its duties unless it reasonably
believes that it will be repaid or receive adequate indemnity.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement, payment
of the interest on any notes on any interest payment date will be made to the
person in whose name such notes or one or more predecessor securities are
registered at the close of business on the regular record date for such
interest.
Principal of and any premium and interest on the notes of a particular
series will be payable at the office of the paying agents designated by us,
except that unless otherwise indicated in the applicable prospectus supplement,
interest payments may be made by check mailed to the holder. Unless otherwise
indicated in such prospectus supplement, the corporate trust office of the
trustee in The City of New York will be designated as our sole paying agent for
payments with respect to notes of each series. Any other paying agents initially
designated by us for the notes of a particular series will be named in the
applicable prospectus supplement. We will be required to maintain a paying agent
in each place of payment for the notes of a particular series.
All moneys paid by us to a paying agent or the trustee for the payment of
the principal of or any premium or interest on any notes which remains unclaimed
at the end of two years after the principal, premium or interest has become due
and payable will be repaid to us, and the holder of the security may then look
only to us for payment.
GOVERNING LAW
The indentures and the notes will be governed by and construed in accordance
with the laws of the State of New York except to the extent that the Trust
Indenture Act shall be applicable.
SUBORDINATION OF SUBORDINATED NOTES
The subordinated notes will be unsecured and will be subordinate and junior
in priority of payment to certain of our other indebtedness to the extent
described in a prospectus supplement. The subordinated indenture does not limit
the amount of subordinated notes which we may issue, nor does it limit us from
issuing any other secured or unsecured debt.
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MATERIAL FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING IS A SUMMARY OF THE FEDERAL INCOME TAX CONSEQUENCES
ANTICIPATED TO BE MATERIAL TO AN INVESTOR IN ANTHRACITE. THIS SUMMARY IS BASED
ON CURRENT LAW, IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. YOUR TAX
CONSEQUENCES RELATED TO AN INVESTMENT IN ANTHRACITE MAY VARY DEPENDING ON YOUR
PARTICULAR SITUATION AND THIS DISCUSSION DOES NOT PURPORT TO DISCUSS ALL ASPECTS
OF TAXATION THAT MAY BE RELEVANT TO A HOLDER OF OUR SECURITIES IN LIGHT OF HIS
OR HER PERSONAL INVESTMENT OR TAX CIRCUMSTANCES, OR TO HOLDERS OF OUR SECURITIES
WHO RECEIVE SPECIAL TREATMENT UNDER THE FEDERAL INCOME TAX LAWS EXCEPT TO THE
EXTENT DISCUSSED UNDER THE HEADINGS "--TAXATION OF TAX-EXEMPT STOCKHOLDERS" AND
"--TAXATION OF NON-U.S. STOCKHOLDERS." INVESTORS RECEIVING SPECIAL TREATMENT
INCLUDE, WITHOUT LIMITATION, INSURANCE COMPANIES, FINANCIAL INSTITUTIONS,
BROKER-DEALERS, TAX-EXEMPT ORGANIZATIONS, INVESTORS HOLDING SECURITIES AS PART
OF A CONVERSION TRANSACTION, OR A HEDGE OR HEDGING TRANSACTION OR AS A POSITION
IN A STRADDLE FOR TAX PURPOSES, FOREIGN CORPORATIONS OR PARTNERSHIPS, AND
PERSONS WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES. IN ADDITION, THE
SUMMARY BELOW DOES NOT CONSIDER THE EFFECT OF ANY FOREIGN, STATE, LOCAL OR OTHER
TAX LAWS THAT MAY BE APPLICABLE TO YOU AS A HOLDER OF OUR SECURITIES.
The information in this summary is based on the Internal Revenue Code of
1986, as amended, current, temporary and proposed Treasury regulations
promulgated under the Internal Revenue Code, the legislative history of the
Internal Revenue Code, current administrative interpretations and practices of
the Internal Revenue Service, and court decisions, all as of the date of this
prospectus. The administrative interpretations and practices of the Internal
Revenue Service upon which this summary is based include its practices and
policies as expressed in private letter rulings which are not binding on the
Internal Revenue Service, except with respect to the taxpayers who requested and
received such rulings. Future legislation, Treasury regulations, administrative
interpretations and practices, and court decisions may affect the tax
consequences contained in this summary, possibly on a retroactive basis. We have
not requested, and do not plan to request, any rulings from the Internal Revenue
Service concerning our tax treatment, and the statements in this prospectus are
not binding on the Internal Revenue Service or a court. Thus, we can provide no
assurance that the tax consequences contained in this summary will not be
challenged by the Internal Revenue Service or sustained by a court if challenged
by the Internal Revenue Service.
YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE SPECIFIC TAX
CONSEQUENCES TO YOU OF (1) THE ACQUISITION, OWNERSHIP AND SALE OR OTHER
DISPOSITION OF OUR SECURITIES, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND
OTHER TAX CONSEQUENCES, (2) OUR ELECTION TO BE TAXED AS A REAL ESTATE INVESTMENT
TRUST FOR FEDERAL INCOME TAX PURPOSES AND (3) POTENTIAL CHANGES IN APPLICABLE
TAX LAWS.
TAXATION OF ANTHRACITE
GENERAL
We intend to elect to be taxed as a REIT under Sections 856 through 860 of
the Internal Revenue Code, commencing with our taxable year ended December 31,
1998. We believe we have been organized and have operated in a manner which
allows us to qualify for taxation as a REIT under the Internal Revenue Code, and
we intend to continue to operate in this manner. Our qualification and taxation
as a REIT, however, depend upon our ability to meet, through actual annual
operating results, asset requirements, distribution levels, diversity of stock
ownership, and the various other qualification tests imposed under the Internal
Revenue Code. Accordingly, there can be no assurance that we have operated or
will continue to operate in a manner so as to qualify or remain qualified as a
REIT. See "--Failure to Qualify."
The sections of the Internal Revenue Code that relate to the qualification
and taxation of REITs are highly technical and complex. The following describes
the material aspects of the sections of the
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Internal Revenue Code that govern the Federal income tax treatment of a REIT and
its stockholders. This summary is qualified in its entirety by the applicable
Internal Revenue Code provisions, rules and regulations promulgated under the
Internal Revenue Code, and administrative and judicial interpretations of the
Internal Revenue Code.
Provided we qualify for taxation as a REIT, we generally will not be subject
to Federal corporate income tax on our net income that is currently distributed
to our stockholders. This treatment substantially eliminates the "double
taxation" that generally results from an investment in a corporation. Double
taxation means taxation once at the corporate level when income is earned and
once again at the stockholder level when such income is distributed. Even if we
qualify for taxation as a REIT, however, we will be subject to Federal income
taxation as follows:
- We will be required to pay tax at regular corporate rates on any
undistributed REIT taxable income, including undistributed net capital
gains.
- We may be required to pay the "alternative minimum tax" on items of tax
preference, if any.
- If we have (a) net income from the sale or other disposition of
"foreclosure property" which is held primarily for sale to customers in
the ordinary course of business or (b) other nonqualifying income from
foreclosure property, we will be required to pay tax at the highest
corporate rate on this income. In general, foreclosure property is
property acquired through foreclosure after a default on a loan secured by
the property or on a lease of the property.
- We will be required to pay a 100% tax on any net income from prohibited
transactions. In general, prohibited transactions are sales or other
taxable dispositions of property, other than foreclosure property, held
for sale to customers in the ordinary course of business.
- If we fail to satisfy the 75% or 95% gross income tests, as described
below, but have maintained our qualification as a REIT, we will be
required to pay a 100% tax on an amount equal to (a) the gross income
attributable to the greater of the amount by which we fail the 75% or 95%
gross income test multiplied by (b) a fraction intended to reflect our
profitability.
- We will be required to pay a 4% excise tax on the amount by which our
annual distributions to our stockholders is less than the sum of (1) 85%
of our ordinary income for the year, (2) 95% of our real estate investment
trust capital gain net income for the year, and (3) any undistributed
taxable income from prior periods.
- If we acquire an asset from a corporation which is not a REIT in a
transaction in which the basis of the asset in our hands is determined by
reference to the basis of the asset in the hands of the transferor
corporation, and we subsequently sell the asset within ten years, then
under Treasury regulations not yet issued, we would be required to pay tax
at the highest regular corporate tax rate on this gain to the extent (a)
the fair market value of the asset exceeds (b) our adjusted tax basis in
the asset, in each case, determined as of the date on which we acquired
the asset. The results described in this paragraph assume that we will
elect this treatment in lieu of an immediate tax when the asset is
acquired.
- We will generally be subject to tax on the portion of any "excess
inclusion" income derived from an investment in residual interests in real
estate mortgage investment conduits to the extent our stock is held by
specified tax exempt organizations not subject to tax on unrelated
business taxable income.
REQUIREMENTS FOR QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST
The Internal Revenue Code defines a REIT as a corporation, trust or
association:
(1) that is managed by one or more trustees or directors;
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(2) that issues transferable shares or transferable certificates to its
owners;
(3) that would be taxable as a regular corporation, but for its election to
be taxed as a REIT;
(4) that is not a financial institution or an insurance company under the
Internal Revenue Code;
(5) that is owned by 100 or more persons;
(6) not more than 50% in value of the outstanding stock of which is owned,
actually or constructively, by five or fewer individuals, as defined in
the Internal Revenue Code to include some entities, during the last half
of each year; and
(7) that meets other tests, described below, regarding the nature of its
income and assets, and the amount of its distributions.
The Internal Revenue Code provides that conditions (1) to (4) must be met
during the entire year and that condition (5) must be met during at least 335
days of a year of twelve months, or during a proportionate part of a shorter
taxable year. Conditions (5) and (6) do not apply to the first taxable year for
which an election is made to be taxed as a REIT. For purposes of condition (6),
tax-exempt entities are generally treated as individuals, subject to a
"look-through" exception for pension funds.
Our charter provides for restrictions regarding ownership and transfer of
our stock. These restrictions are intended to assist us in satisfying the share
ownership requirements described in (5) and (6) above. These stock ownership and
transfer restrictions are described in "Description of Capital
Stock--Restrictions on Ownership and Transfer." These restrictions, however, may
not ensure that we will, in all cases, be able to satisfy the share ownership
requirements described in (5) and (6) above. If we fail to satisfy these share
ownership requirements, our status as a REIT would terminate. If, however, we
comply with the rules contained in applicable Treasury regulations that require
us to determine the actual ownership of our shares and we do not know, or would
not have known through the exercise of reasonable diligence, that we failed to
meet the requirement described in condition (6) above, we would not be
disqualified as a REIT.
In addition, a corporation may not qualify as a REIT unless its taxable year
is the calendar year. We have and will continue to have a calendar taxable year.
OWNERSHIP OF A PARTNERSHIP INTEREST
The Treasury regulations provide that if we are a partner in a partnership,
we will be deemed to own our proportionate share of the assets of the
partnership, and we will be deemed to be entitled to our proportionate share of
the gross income of the partnership. The character of the assets and gross
income of the partnership generally retains the same character in our hands for
purposes of satisfying the gross income and asset tests described below.
QUALIFED REIT SUBSIDIARIES
A "qualified REIT subsidiary" is a corporation, all of the stock of which is
owned by a REIT. Under the Internal Revenue Code, a qualified REIT subsidiary is
not treated as a separate corporation from the REIT. Rather, all of the assets,
liabilities, and items of income, deduction, and credit of the qualified REIT
subsidiary are treated as the assets, liabilities, and items of income,
deduction, and credit of the REIT for purposes of the REIT income and asset
tests described below.
INCOME TESTS
We must meet two annual gross income requirements to qualify as a REIT.
First, each year we must derive, directly or indirectly, at least 75% of our
gross income, excluding gross income from prohibited transactions, from
investments relating to real property or mortgages on real property,
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including "rents from real property" and mortgage interest, or from specified
temporary investments. Second, each year we must derive at least 95% of our
gross income, excluding gross income from prohibited transactions, from
investments meeting the 75% test described above, or from dividends, interest
and gain from the sale or disposition of stock or securities. For these
purposes, the term "interest" generally does not include any interest of which
the amount received depends on the income or profits of any person. An amount
will generally not be excluded from the term "interest," however, if such amount
is based on a fixed percentage of receipts or sales.
Any amount includable in gross income by us with respect to a regular or
residual interest in a real estate mortgage investment conduit is generally
treated as interest on an obligation secured by a mortgage on real property for
purposes of the 75% gross income test. If, however, less than 95% of the assets
of a real estate mortgage investment conduit consist of real estate assets, we
will be treated as receiving directly our proportionate share of the income of
the real estate mortgage investment conduit, which would generally include
non-qualifying income for purposes of the 75% gross income test. In addition, if
we receive interest income with respect to a mortgage loan that is secured by
both real property and other property and the principal amount of the loan
exceeds the fair market value of the real property on the date we purchased the
mortgage loan, interest income on the loan will be apportioned between the real
property and the other property, which apportionment would cause us to recognize
income that is not qualifying income for purposes of the 75% gross income test.
In general, and subject to the exceptions in the preceding paragraph, the
interest, original issue discount, and market discount income that we derive
from investments in mortgage backed securities, and mortgage loans will be
qualifying interest income for purposes of both the 75% and the 95% gross income
tests. It is possible, however, that interest income from a mortgage loan may be
based in part on the borrower's profits or net income, which would generally
disqualify such interest income for purposes of both the 75% and the 95% gross
income tests.
We may acquire construction loans or mezzanine loans that have shared
appreciation provisions. To the extent interest on a loan is based on the cash
proceeds from the sale or value of property, income attributable to such
provision would be treated as gain from the sale of the secured property, which
generally should qualify for purposes of the 75% and 95% gross income tests.
We may employ, to the extent consistent with the REIT Provisions of the
Code, forms of securitization of our assets under which a "sale" of an interest
in a mortgage loan occurs, and a resulting gain or loss is recorded on our
balance sheet for accounting purposes at the time of sale. In a "sale"
securitization, only the net retained interest in the securitized mortgage loans
would remain on our balance sheet. We may elect to conduct certain of its
securitization activities, including such sales, through one or more taxable
subsidiaries, or through qualified REIT subsidiaries, formed for such purpose.
To the extent consistent with the REIT Provisions of the Code, such entities
could elect to be taxed as real estate mortgage investment conduits or financial
asset securitization investment trusts.
Rents we receive will qualify as "rents from real property" only if the
following conditions are met:
- the amount of rent may not be based in whole or in part on the income or
profits of any person. "Rents from real property" may, however, include
rent based on a fixed percentage of receipts or sales;
- rents received from a tenant will not qualify as "rents from real
property" if the REIT, or an actual or constructive owner of 10% or more
of the REIT, actually or constructively owns 10% or more of such tenant;
- if rent attributable to personal property leased in connection with a
lease of real property is greater than 15% of the total rent received
under the lease, then the portion of rent attributable to personal
property will not qualify as "rents from real property"; and
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- to qualify as "rents from real property," the REIT generally may not
render services to tenants of the property, other than through an
independent contractor from whom the REIT derives no revenue. The REIT
may, however, provide services that are "usually or customarily rendered"
in connection with the rental of space for occupancy only and are not
otherwise considered "rendered to the occupant" of the property. In
addition, a REIT may provide a DE MINIMUS amount of non-customary
services.
If we fail to satisfy one or both of the 75% or 95% gross income tests for
any year, we may still qualify as a REIT if we are entitled to relief under the
Internal Revenue Code. Generally, we may be entitled to relief if:
- our failure to meet the gross income tests was due to reasonable cause and
not due to willful neglect;
- we attach a schedule of the sources of our income to our Federal income
tax return; and
- any incorrect information on the schedule was not due to fraud with the
intent to evade tax.
It is not possible to state whether in all circumstances we would be
entitled to rely on these relief provisions. If these relief provisions do not
apply to a particular set of circumstances, we would not qualify as a REIT. As
discussed above in "--Taxation of Anthracite--General", even if these relief
provisions apply, and we retain our status as a REIT, a tax would be imposed
with respect to our income that does not meet the gross income tests. We may not
always be able to maintain compliance with the gross income tests for REIT
qualification despite periodically monitoring our income.
FORECLOSURE PROPERTY
Net income realized by us from foreclosure property would generally be
subject to tax at the maximum Federal corporate tax rate. Foreclosure property
means real property and related personal property that (1) is acquired by us
through foreclosure following a default on a lease of such property or a default
on indebtedness owed to us that is secured by the property and (2) for which we
make an election to treat the property as foreclosure property.
PROHIBITED TRANSACTION INCOME
Any gain realized by us on the sale of any property, other than foreclosure
property, held as inventory or otherwise held primarily for sale to customers in
the ordinary course of business will be prohibited transaction income, and
subject to a 100% penalty tax. This prohibited transaction income may also
adversely affect our ability to satisfy the gross income tests for qualification
as a REIT. Whether property is held as inventory or primarily for sale to
customers in the ordinary course of a trade or business depends on all the facts
and circumstances surrounding the particular transaction. While the Treasury
regulations provide standards which, if met, would not result in prohibited
transaction income, we may not be able to meet these standards in all
circumstances.
HEDGING TRANSACTIONS
We may enter into hedging transactions with respect to one or more of our
assets or liabilities. Our hedging transactions could take a variety of forms,
including interest rate swaps or cap agreements, options, futures contracts,
forward rate agreements, or similar financial instruments. To the extent that we
enter into hedging transactions to reduce our interest rate risk on indebtedness
incurred to acquire or carry real estate assets, any income, or gain from the
disposition of hedging transactions should be qualifying income for purposes of
the 95% gross income test, but not the 75% gross income test.
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ASSET TESTS
At the close of each quarter of each year, we also must satisfy three tests
relating to our assets. First, at least 75% of the value of our total assets
must be real estate assets, cash, cash items and government securities. For
purposes of this test, real estate assets include real estate mortgages, real
property, interests in other REITs and stock or debt instruments held for one
year or less that are purchased with the proceeds of a stock offering or a
long-term public debt offering. Second, not more than 25% of our total assets
may be represented by securities, other than those securities includable in the
75% asset class. Third, of the investments included in the 25% asset class, the
value of any one issuer's securities that we hold may not exceed 5% of the value
of our total assets, and we may not own more than 10% of the voting stock of a
corporation.
We expect that any mortgage backed securities, real property, and temporary
investments that we acquire will generally be qualifying assets for purposes of
the 75% asset test, except to the extent that less than 95% of the assets of a
real estate mortgage investment conduit in which we own an interest consists of
"real estate assets." Mortgage loans, including distressed mortgage loans,
construction loans, bridge loans, and mezzanine loans also will generally be
qualifying assets for purposes of the 75% asset test to the extent that the
principal balance of each mortgage loan does not exceed the value of the
associated real property.
We anticipate that we may securitize all or a portion of the mortgage loans
which we acquire, in which event we will likely retain certain of the
subordinated and interest only classes of mortgage backed securities which may
be created as a result of such securitization. The securitization of mortgage
loans may be accomplished through one or more real estate mortgage investment
conduits established by us or, if a non-real estate mortgage investment conduit
securitization is desired, through one or more qualified REIT subsidiaries or
taxable subsidiaries established by us. The securitization of the mortgage loans
through either one or more real estate mortgage investment conduits or one or
more qualified REIT subsidiaries or taxable subsidiaries should not affect our
qualification as a REIT or result in the imposition of corporate income tax
under the taxable mortgage pool rules. Income realized by us from a real estate
mortgage investment conduit securitization could, however, be subject to a 100%
tax as a "prohibited transaction." See "--Prohibited Transaction Income."
After meeting the asset tests at the close of any quarter, we will not lose
our status as a REIT if we fail to satisfy the asset tests at the end of a later
quarter solely by reason of changes in asset values. In addition, if we fail to
satisfy the asset tests because we acquire securities or other property during a
quarter, we can cure this failure by disposing of sufficient nonqualifying
assets within 30 days after the close of that quarter.
We will monitor the status of the assets that we acquire for purposes of the
various asset tests and we will manage our portfolio in order to comply with
such tests.
ANNUAL DISTRIBUTION REQUIREMENTS
To qualify as a REIT, we are required to distribute dividends, other than
capital gain dividends, to our stockholders in an amount at least equal to the
sum of (1) 95% of our "REIT taxable income" and (2) 95% of our after tax net
income, if any, from foreclosure property, minus (3) the sum of certain items of
noncash income. In general,"REIT taxable income" means taxable ordinary income
without regard to the dividends paid deduction.
We are required to distribute income in the taxable year which it is earned,
or in the following taxable year before we timely file our tax return if such
dividend distributions are declared and paid on or before our first regular
dividend payment. Except as provided in "--Taxation of Taxable U.S.
Stockholders" below, these distributions are taxable to holders of common stock
in the year in which paid, even though these distributions relate to our prior
year for purposes of our 95% distribution
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requirement. To the extent that we do not distribute all of our net capital gain
or distribute at least 95%, but less than 100% or our "REIT taxable income," we
will be subject to tax at regular corporate tax rates.
From time to time we may not have sufficient cash or other liquid assets to
meet the above distribution requirements due to timing differences between the
actual receipt of cash and payment of expenses, and the inclusion of income and
deduction of expenses in arriving at our taxable income. If these timing
differences occur, in order to meet the REIT distribution requirements, we may
need to arrange for short-term, or possibly long-term, borrowings, or to pay
dividends in the form of taxable stock dividends.
Under certain circumstances, we may be able to rectify a failure to meet a
distribution requirement for a year by paying "deficiency dividends" to our
stockholders in a later year, which may be included in our deduction for
dividends paid for the earlier year. Thus, we may be able to avoid being subject
to tax on amounts distributed as deficiency dividends. We will be required,
however, to pay interest based upon the amount of any deduction claimed for
deficiency dividends. In addition, we will be subject to a 4% excise tax on the
excess of the required distribution over the amounts actually distributed if we
should fail to distribute each year at least the sum of 85% of our ordinary
income for the year, 95% of our capital gain income for the year, and any
undistributed taxable income from prior periods.
RECORDKEEPING REQUIREMENTS
We are required to maintain records and request on an annual basis
information from specified stockholders. This requirement is designed to
disclose the actual ownership of our outstanding stock.
FAILURE TO QUALIFY
If we fail to qualify for taxation as a REIT in any taxable year, and the
relief provisions of the Internal Revenue Code described above do not apply, we
will be subject to tax, including any applicable alternative minimum tax, and
possibly increased state and local taxes, on our taxable income at regular
corporate rates. Such taxation would reduce the cash available for distribution
by us to our stockholders. Distributions to stockholders in any year in which we
fail to qualify as a REIT will not be deductible by us and we will not be
required to distribute any amounts to our stockholders. If we fail to qualify as
a REIT, distributions to our stockholders will be subject to tax as ordinary
income to the extent of our current and accumulated earnings and profits and,
subject to certain limitations of the Internal Revenue Code, corporate
stockholders may be eligible for the dividends received deduction. Unless
entitled to relief under specific statutory provisions, we would also be
disqualified from taxation as a REIT for the four taxable years following the
year during which we lost our qualification. It is not possible to state whether
in all circumstances we would be entitled to statutory relief.
TAXATION OF TAXABLE U.S. STOCKHOLDERS
When we use the term "U.S. stockholders," we mean a holder of shares of our
stock who is, for United States federal income tax purposes:
- a citizen or resident of the United States;
- a corporation, partnership, or other entity created or organized in or
under the laws of the United States or of any state thereof or in the
District of Columbia, unless Treasury regulations provide otherwise;
- an estate the income of which is subject to United States federal income
taxation regardless of its source; or
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- a trust whose administration is subject to the primary supervision of a
United States court and which has one or more United States persons who
have the authority to control all substantial decisions of the trust.
DISTRIBUTIONS GENERALLY
Distributions out of our current or accumulated earnings and profits, other
than capital gain dividends will be taxable to our U.S. stockholders as ordinary
income. Provided we qualify as a REIT, our dividends will not be eligible for
the dividends received deduction generally available to U.S. stockholders that
are corporations.
To the extent that we make distributions in excess of our current and
accumulated earnings and profits, our distributions will be treated as a
tax-free return of capital to each U.S. stockholder, and will reduce the
adjusted tax basis which each U.S. stockholder has in its shares of stock by the
amount of the distribution, but not below zero. Distributions in excess of a
U.S. stockholder's adjusted tax basis in its shares will be taxable as capital
gain, provided that the shares have been held as capital assets, and will be
taxable as long-term capital gain if the shares have been held for more than one
year. Dividends we declare in October, November, or December of any year and pay
to a stockholder of record on a specified date in any of those months will be
treated as both paid by us and received by the stockholder on December 31 of
that year, provided we actually pay the dividend in January of the following
year. Stockholders may not include in their own income tax returns any of our
net operating losses or capital losses.
CAPITAL GAIN DISTRIBUTIONS
Distributions designated as net capital gain dividends will be taxable to
our U.S. stockholders as capital gain income. Such capital gain income will be
taxable to non-corporate U.S. stockholders at a 20% or 25% rate based on the
characteristics of the asset we sold that produced the gain. U.S. stockholders
that are corporations may be required to treat up to 20% of certain capital gain
dividends as ordinary income.
RETENTION OF NET CAPITAL GAINS
We may elect to retain, rather than distribute as a capital gain dividend,
our net capital gains. If we make this election, we would pay tax on such
retained capital gains. In such a case, our stockholders would generally:
- include their proportionate share of our undistributed net capital gains
in their taxable income;
- receive a credit for their proportionate share of the tax paid by us; and
- increase the adjusted basis of their stock by the difference between the
amount of their capital gain and their share of the tax paid by us;
PASSIVE ACTIVITY LOSSES AND INVESTMENT INTEREST LIMITATIONS
Distributions we make and gain arising from the sale or exchange by a U.S.
stockholder of our shares will not be treated as passive activity income. As a
result, U.S. stockholders will not be able to apply any "passive losses" against
income or gain relating to our stock. Distributions we make, to the extent they
do not constitute a return of capital, generally will be treated as investment
income for purposes of computing the investment interest limitation.
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DISPOSITIONS OF STOCK
If you are a U.S. stockholder and you sell or dispose of your shares of
stock, you will recognize gain or loss for Federal income tax purposes in an
amount equal to the difference between the amount of cash and the fair market
value of any property you receive on the sale or other disposition and your
adjusted tax basis in the shares of stock. This gain or loss will be capital
gain or loss if you have held the stock as a capital asset, and will be
long-term capital gain or loss if you have held the stock for more than one
year. In general, if you are a U.S. stockholder and you recognize loss upon the
sale or other disposition of stock that you have held for six months or less,
the loss you recognize will be treated as a long-term capital loss to the extent
you received distributions from us which were required to be treated as
long-term capital gains.
BACKUP WITHHOLDING
We report to our U.S. stockholders and the Internal Revenue Service the
amount of dividends paid during each calendar year, and the amount of any tax
withheld. Under the backup withholding rules, a stockholder may be subject to
backup withholding at the rate of 31% with respect to dividends paid unless the
holder is a corporation or comes within other exempt categories and, when
required, demonstrates this fact, or provides a taxpayer identification number
or social security number, certifies as to no loss of exemption from backup
withholding, and otherwise complies with applicable requirements of the backup
withholding rules. A U.S. stockholder that does not provide us with his correct
taxpayer identification number or social security number may also be subject to
penalties imposed by the Internal Revenue Service. Backup withholding is not an
additional tax. Any amount paid as backup withholding will be creditable against
the stockholder's income tax liability. In addition, we may be required to
withhold a portion of capital gain distributions to any stockholders who fail to
certify their non-foreign status.
TAXATION OF TAX-EXEMPT STOCKHOLDERS
The Internal Revenue Service has ruled that amounts distributed as dividends
by a REIT do not constitute unrelated business taxable income when received by a
tax-exempt entity. Based on that ruling, provided that a tax-exempt stockholder,
has not held its shares as "debt financed property" within the meaning of the
Internal Revenue Code and the shares are not otherwise used in a unrelated trade
or business, dividend income on our stock and income from the sale of our stock
should not be unrelated business taxable income to a tax-exempt stockholder.
Generally, debt financed property is property, the acquisition or holding of
which was financed through a borrowing by the tax-exempt stockholder.
For tax-exempt stockholders which are social clubs, voluntary employee
benefit associations, supplemental unemployment benefit trusts, and qualified
group legal services plans exempt from Federal income taxation under Sections
501(c)(7), (c)(9), (c)(17) and (c)(20) of the Internal Revenue Code,
respectively, income from an investment in our shares will constitute unrelated
business taxable income unless the organization is able to properly claim a
deduction for amounts set aside or placed in reserve for certain purposes so as
to offset the income generated by its investment in our shares. These
prospective investors should consult their tax advisors concerning these "set
aside" and reserve requirements.
Notwithstanding the above, however, a portion of the dividends paid by a
"pension-held REIT" may be treated as unrelated business taxable income as to
any pension trust which:
- is described in Section 401(a) of the Internal Revenue Code;
- is tax-exempt under Section 501(a) of the Internal Revenue Code; and
- holds more than 10%, by value, of the interests in the REIT.
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Tax-exempt pension funds that are described in Section 401(a) of the
Internal Revenue Code are referred to below as "qualified trusts."
A REIT is a "pension held REIT" if:
- it would not have qualified as a REIT but for the fact that Section
856(h)(3) of the Internal Revenue Code provides that stock owned by
qualified trust shall be treated, for purposes of the 5/50 Rule, as owned
by the beneficiaries of the trust, rather than by the trust itself; and
- either at least one qualified trust holds more than 25%, by value, of the
interests in the REIT, or one or more qualified trusts, each of which owns
more than 10%, by value, of the interests in the REIT, holds in the
aggregate more than 50%, by value, of the interests in the REIT.
The percentage of any REIT dividend treated as unrelated business taxable
income is equal to the ratio of:
- the unrelated business taxable income earned by the REIT, treating the
REIT as if it were a qualified trust and therefore subject to tax on
unrelated business taxable income, to
- the total gross income of the REIT.
A DE MINIMIS exception applies where the percentage is less than 5% for any
year. As a result of the limitations on the transfer and ownership of stock
contained in the charter, we do not expect to be classified as a "pension-held
REIT."
TAXATION OF NON-U.S. STOCKHOLDERS
The rules governing Federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships, and other foreign
stockholders (collectively, "non-U.S. stockholders") are complex and no attempt
will be made herein to provide more than a summary of such rules.
PROSPECTIVE NON-U.S. STOCKHOLDERS SHOULD CONSULT THEIR TAX ADVISORS TO
DETERMINE THE IMPACT OF FOREIGN, FEDERAL, STATE, AND LOCAL INCOME TAX LAWS WITH
REGARD TO AN INVESTMENT IN OUR SECURITIES AND OF OUR ELECTION TO BE TAXED AS A
REAL ESTATE INVESTMENT TRUST INCLUDING ANY REPORTING REQUIREMENTS.
Distributions to non-U.S. stockholders that are not attributable to gain
from sales or exchanges by us of U.S. real property interests and are not
designated by us as capital gain dividends or retained capital gains will be
treated as dividends of ordinary income to the extent that they are made out of
our current or accumulated earnings and profits. Such distributions will
generally be subject to a withholding tax equal to 30% of the distribution
unless an applicable tax treaty reduces or eliminates that tax. However, if
income from an investment in our stock is treated as effectively connected with
the non-U.S. stockholder's conduct of a U.S. trade or business, the non-U.S.
stockholder generally will be subject to Federal income tax at graduated rates,
in the same manner as U.S. stockholders are taxed with respect to such
distributions (and also may be subject to the 30% branch profits tax in the case
of a non-U.S. stockholder that is a corporation). We expect to withhold U.S.
income tax at the rate of 30% on the gross amount of any distributions made to a
non-U.S. stockholder unless (i) a lower treaty rate applies and any required
form, such as IRS Form 1001 or IRS Form W-8BEN, evidencing eligibility for that
reduced rate is filed by the non-U.S. stockholder with us or (ii) the non-U.S.
stockholder files an IRS Form 4224 or IRS Form W-8ECI with us claiming that the
distribution is effectively connected income.
Any portion of the dividends paid to non-U.S. stockholders that is treated
as excess inclusion from a real estate mortgage investment conduit income will
not be eligible for exemption from the 30% withholding tax or a reduced treaty
rate. In addition, if Treasury regulations are issued allocating our
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excess inclusion income from non-real estate mortgage investment conduits among
our stockholders, some percentage of the our dividends would not be eligible for
exemption from the 30% withholding tax or a reduced treaty withholding tax rate
in the hands of non-U.S. stockholders.
Distributions in excess of our current and accumulated earnings and profits
will not be taxable to a stockholder to the extent that such distributions do
not exceed the adjusted basis of the stockholder's stock, but rather will reduce
the adjusted basis of such shares. To the extent that distributions in excess of
current and accumulated earnings and profits exceed the adjusted basis of a
non-U.S. stockholder's stock, such distributions will give rise to tax liability
if the non-U.S. stockholder would otherwise be subject to tax on any gain from
the sale or disposition of its stock, as described below. Because it generally
cannot be determined at the time a distribution is made whether or not such
distribution will be in excess of current and accumulated earnings and profits,
the entire amount of any distribution normally will be subject to withholding at
the same rate as a dividend. However, amounts so withheld are refundable to the
extent it is subsequently determined that such distribution was, in fact, in
excess of our current and accumulated earnings and profits. We are also required
to withhold 10% of any distribution in excess of our current and accumulated
earnings and profits. Consequently, although we intend to withhold at a rate of
30% on the entire amount of any distribution, to the extent that we do not do
so, any portion of a distribution not subject to withholding at a rate of 30%
will be subject to withholding at a rate of 10%.
For any year in which we qualify as a REIT, distributions that are
attributable to gain from sales or exchanges of a U.S. real property interest,
which includes certain interests in real property, but generally does not
include mortgage loans or mortgage backed securities, will be taxed to a
Non-U.S. stockholder under the provisions of the Foreign Investment in Real
Property Tax Act of 1980 ("FIRPTA"). Under FIRPTA, distributions attributable to
gain from sales of U.S. real property interests are taxed to a non-U.S.
stockholder as if such gain were effectively connected with a U.S. business.
Non-U.S. stockholders thus would be taxed at the normal capital gain rates
applicable to U.S. stockholders (subject to applicable alternative minimum tax
and a special alternative minimum tax in the case of nonresident alien
individuals). Distributions subject to FIRPTA also may be subject to the 30%
branch profits tax in the hands of a non-U.S. corporate stockholder. We are
required to withhold 35% of any distribution that is designated by us as a U.S.
real property capital gains dividend. The amount withheld is creditable against
the non-U.S. stockholder's FIRPTA tax liability.
Gain recognized by a non-U.S. stockholder upon a sale of our stock generally
will not be taxed under FIRPTA if we are a "domestically controlled REIT," which
is a REIT in which at all times during a specified testing period less than 50%
in value of the stock was held directly or indirectly by non-U.S. persons.
Because our stock is publicly traded, no assurance can be given that we are or
will remain a "domestically controlled REIT." In addition, a non-U.S.
stockholder that owns, actually or constructively, 5% or less of our stock
throughout a specified testing period will not recognize taxable gain on the
sale of his stock under FIRPTA if the shares are traded on an established
securities market.
Gain not subject to FIRPTA will be taxable to a non-U.S. stockholder if (i)
the non-U.S. stockholder's investment in the stock is effectively connected with
a U.S. trade or business, in which case the non-U.S. stockholder will be subject
to the same treatment as U.S. stockholders with respect to such gain, or (ii)
the non-U.S. stockholder is a nonresident alien individual who was present in
the U.S. for 183 days or more during the taxable year and other conditions are
met, in which case the nonresident alien individual will be subject to a 30% tax
on the individual's capital gains. If the gain on the sale of the stock were to
be subject to taxation under FIRPTA, the non-U.S. stockholder would be subject
to the same treatment as U.S. stockholders with respect to such gain (subject to
applicable alternative minimum tax, a special alternative minimum tax in the
case of nonresident alien individuals, and the possible application of the 30%
branch profits tax in the case of non-U.S. corporations).
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STATE, LOCAL AND FOREIGN TAXATION
We may be required to pay state, local and foreign taxes in various state,
local and foreign jurisdictions, including those in which we transact business
or make investments, and our stockholders may be required to pay state, local
and foreign taxes in various state, local and foreign jurisdictions, including
those in which they reside. Our state, local and foreign tax treatment may not
conform to the Federal income tax consequences summarized above. In addition,
your state, local and foreign tax treatment may not conform to the Federal
income tax consequences summarized above. Consequently, you should consult your
tax advisor regarding the effect of state, local and foreign tax laws on an
investment in our securities.
POSSIBLE LEGISLATIVE OR OTHER ACTIONS AFFECTING REITS.
The rules dealing with Federal income taxation are constantly under review
by persons involved in the legislative process and by the Internal Revenue
Service and the U.S. Treasury Department. Changes to the tax law, which may have
retroactive application, could adversely affect us and our investors. It cannot
be predicted whether, when, in what forms, or with what effective dates, the tax
law applicable to us or our investors will be changed.
PLAN OF DISTRIBUTION
We may sell common stock, preferred stock or any series of debt securities
being offered by this prospectus in one or more of the following ways from time
to time:
- to underwriters for resale to the public or to institutional investors;
- directly to institutional investors; or
- through agents to the public or to institutional investors.
The prospectus supplements will describe the terms of the offering of the
securities, including the name or names of any underwriters or agents, the
purchase price of such securities and the proceeds to us from such sale, any
underwriting discounts or agency fees and other item's constituting
underwriters' or agents' compensation, any initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such securities may be listed.
If underwriters are used in the sale, the securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or prices, which may be changed, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at negotiated
prices.
Unless a prospectus supplement states otherwise, the obligations of the
underwriters to purchase any series of securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all of
such series of securities, if any are purchased.
Underwriters and agents may be entitled under agreements entered into with
us to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act of 1933, or to contribution with respect to
payments which the underwriters or agents may be required to make. Underwriters
and agents may be customers of, engage in transactions with, or perform services
for us and our affiliates in the ordinary course of business.
Each series of securities will be a new issue of securities and will have no
established trading market other than the common stock which is listed on the
NYSE. Any common stock sold pursuant to a prospectus supplement will be listed
on the NYSE, subject to official notice of issuance. Any underwriters to whom we
sell securities for public offering and sale may make a market in the
securities, but such underwriters will not be obligated to do so and may
discontinue any market making
27
<PAGE>
at any time without notice. The securities, other than the common stock, may or
may not be listed on a national securities exchange.
LEGAL OPINIONS
Some legal matters relating to the securities offered hereby as well as some
legal matters described under "Material United States Federal Income Tax
Consequences" will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom
LLP. Certain legal matters relating to Maryland law relating to the validity of
the securities being offered by this prospectus is being passed upon for us by
Miles & Stockbridge.
EXPERTS
Our financial statements incorporated in this Prospectus by reference from
our Annual Report on Form 10-K for the period from March 24, 1998 (commencement
of operations) through December 31, 1998 have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
28
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses to be borne by the registrant in
connection with the offerings described in this Registration Statement. All such
expenses other than the Securities and Exchange Commission registration fee are
estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............... $ 55,600
Transfer Agents, Trustees and Depositary's Fees and Expenses...... *
Printing and Engraving Fees and Expenses.......................... *
Accounting Fees and Expenses...................................... *
Legal Fees........................................................ *
Rating Agency Fees................................................ *
Miscellaneous (including Listing Fees, if applicable)............. *
---------
Total........................................................... $ *
---------
---------
</TABLE>
- ------------------------
* To be completed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by the MGCL, the registrant's Articles of Amendment and
Restatement obligate it to indemnify its present and former directors and
officers and the Manager and its employees, officers, directors and controlling
persons and to pay or reimburse reasonable expenses for such persons in advance
of the final disposition of a proceeding to the maximum extent permitted from
time to time by Maryland law. The MGCL permits a corporation to indemnify its
present and former directors and officers, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by them
in connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities, unless it is established that (a)
the act or omission of the director or officer was material to the matter giving
rise to such proceeding and (i) was committed in bad faith, or (ii) was the
result of active and deliberate dishonesty, (b) the director or officer actually
received an improper personal benefit in money, property or services, or (c) in
the case of any criminal proceeding, the director or officer had reasonable
cause to believe that the act or omission was unlawful. The registrant's Bylaws
implement the provisions relating to indemnification contained in its Articles
of Amendment and Restatement. The MCGL permits the charter of a Maryland
corporation to include a provision limiting the liability of its directors and
officers to the corporation and its stockholders for money damages, except to
the extent that (i) the person actually received an improper benefit or profit
in money, property or services, or (ii) a judgment or other final adjudication
is entered in a proceeding based on a finding that the person's action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. The registrant's
Articles of Amendment and Restatement contain a provision providing for
elimination of the liability of its directors or officers to it or its
stockholders for money damages to the maximum extent permitted by Maryland law
from time to time. In addition, the registrant's officers, directors, and
controlling persons are indemnified against certain liabilities by the
registrant under the Underwriting Agreement relating to this Offering. The
registrant will maintain for the benefit of its officers and directors,
officers' and directors' insurance.
II-1
<PAGE>
ITEM 16. EXHIBITS
The following is a list of all exhibits filed as a part of this Registration
Statement on Form S-3, including those incorporated herein by reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ----------- ---------------------------------------------------------------------------------------------------------
<C> <S>
1.1 The form of Underwriting Agreement will be filed as an exhibit to a Current Report of the Registrant on
Form 8-K and incorporated herein by reference.
4.1 Form of Senior Indenture.
4.2 Form of Subordinated Indenture.
4.3 The form of any Senior Note with respect to each particular series of Senior Notes issued hereunder will
be filed as an exhibit to a Current Report of the Registrant on Form 8-K and incorporated herein by
reference.
4.4 The form of any Subordinated Note with respect to each particular series of Subordinated Notes issued
hereunder will be filed as an exhibit to a Current Report of the Registrant on Form 8-K and incorporated
herein by reference.
4.5 The form of any articles supplementary with respect to any preferred stock issued hereunder will be filed
as an exhibit to a Current Report of the Registrant on Form 8-K and incorporated herein by reference.
4.6 The form of Warrant Agreement with respect to any warrant served hereunder will be filed as an exhibit to
a Current Report of the Registrant on Form 8-K and incorporated herein by reference.
4.7 The form of any warrant with respect to each series of warrants will be filed as an exhibit to a Current
Report of the Registrant on Form 8-K and incorporated herein by reference.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.*
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges.*
23.1 Consent of Deloitte & Touche LLP, Independent Accountants.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1).*
24.1 Power of Attorney of certain officers and directors of Anthracite (included on the signature pages).
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of ,
as Trustee under the Senior Indenture.*
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of ,
as Trustee under the Subordinated Indenture.*
</TABLE>
- ------------------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement,
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions set forth in Item 15, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Anthracite
Capital, Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, in the State of
New York on April 1, 1999.
ANTHRACITE CAPITAL, INC.
By /s/ RICHARD M. SHEA
-----------------------------------------
Name: Richard M. Shea
Title: Chief Operating Officer and Chief
Financial Officer
POWER OF ATTORNEY
KNOWN BY ALL PERSONS BY THESE PRESENTS. that each person whose signatures
appears below, constitutes and appoints Richard M. Shea, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for such person and in his name, place and stead, in any and all capacities, in
connection with the registrant's Registration Statement in the name and on
behalf of the registrant or on behalf of the undersigned as a director or
officer of the registrant, on Form S-3 under the Securities Act of 1933, as
amended, including, without limiting the generality of the foregoing, to sign
the Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement, and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
/s/ LAURENCE D. FINK
- ------------------------------ Chairman of the Board April 1, 1999
Laurence D. Fink
President and Chief
/s/ HUGH R. FRATER Executive Officer and
- ------------------------------ Director (Principal April 1, 1999
Hugh R. Frater Executive Officer)
Chief Operating Officer and
/s/ RICHARD M. SHEA Chief Financial Officer
- ------------------------------ (Principal Financial April 1, 1999
Richard M. Shea Officer and Principal
Accounting Officer)
/s/ DONALD G. DRAPKIN
- ------------------------------ Director April 1, 1999
Donald G. Drapkin
/s/ CARL GUETHER
- ------------------------------ Director April 1, 1999
Carl Guether
/s/ JEFFREY C. KEIL
- ------------------------------ Director April 1, 1999
Jeffrey C. Keil
/s/ KENDRICK R. WILSON, III
- ------------------------------ Director April 1, 1999
Kendrick R. Wilson, III
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ----------- --------------------------------------------------------------------------------------------------------
<C> <S>
1.1 The form of Underwriting Agreement will be filed as an exhibit to a Current Report of the Registrant on
Form 8-K and incorporated herein by reference.
4.1 Form of Senior Indenture.
4.2 Form of Subordinated Indenture.
4.3 The form of any Senior Note with respect to each particular series of Senior Notes issued hereunder will
be filed as an exhibit to a Current Report of the Registrant on Form 8-K and incorporated herein by
reference.
4.4 The form of any Subordinated Note with respect to each particular series of Subordinated Notes issued
hereunder will be filed as an exhibit to a Current Report of the Registrant on Form 8-K and incorporated
herein by reference.
4.5 The form of any articles supplementary with respect to any preferred stock issued hereunder will be
filed as an exhibit to a Current Report of the Registrant on Form 8-K and incorporated herein by
reference.
4.6 The form of Warrant Agreement with respect to any warrant issued hereunder will be filed as an exhibit
to a Current Report of the Registrant on Form 8-K and incorporated herein by reference.
4.7 The form of any warrant with respect to each series of warrants will be filed as an exhibit to a Current
Report of the Registrant on Form 8-K and incorporated herein by reference.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.*
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges.*
23.1 Consent of Deloitte & Touche LLP, Independent Accountants.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1).*
24.1 Power of Attorney of certain officers and directors of Anthracite (included on the signature pages).
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of ,
as Trustee under the Senior Indenture.*
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of ,
as Trustee under the Subordinated Indenture.*
</TABLE>
- ------------------------
* To be filed by amendment.
II-6
<PAGE>
ANTHRACITE CAPITAL, INC.,
Issuer
AND
[ ]
Trustee
-----------------------------------
INDENTURE
Dated as of [ ], 1999
-----------------------------------
Senior Debt Securities
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section Of
Trust Indenture Act Section Of
Of 1939, As Amended Indenture
- ------------------- ---------
<S> <C>
310(a)............................................................................. 7.09
310(b)............................................................................. 7.08
7.10
310(c)............................................................................. Inapplicable
311(a)............................................................................. 7.13(a)
311(b)............................................................................. 7.13(b)
311(c)............................................................................. Inapplicable
312(a)............................................................................. 5.01
5.02(a)
312(b)............................................................................. 5.02(b)
312(c)............................................................................. 5.02(c)
313(a)............................................................................. 5.04(a)
313(b)............................................................................. 5.04(b)
313(c)............................................................................. 5.04(a)
5.04(b)
313(d)............................................................................. 5.04(c)
314(a)............................................................................. 5.03
314(b)............................................................................. Inapplicable
314(c)............................................................................. 13.06
314(d)............................................................................. Inapplicable
314(e)............................................................................. 13.06
314(f)............................................................................. Inapplicable
315(a)............................................................................. 7.01(a)
7.02
315(b)............................................................................. 6.07
315(c)............................................................................. 7.01
315(d)............................................................................. 7.01(b)
7.01(c)
315(e)............................................................................. 6.07
316(a)............................................................................. 6.06
8.04
</TABLE>
- --------
* This Cross-Reference Table does not constitute part of the Indenture and
shall not have any bearing on the interpretation of any of its terms or
provisions.
<PAGE>
<TABLE>
<S> <C>
316(b)............................................................................. 6.04
316(c)............................................................................. 8.01
317(a)............................................................................. 6.02
317(b)............................................................................. 4.03
318(a)............................................................................. 13.08
</TABLE>
<PAGE>
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PARTIES................................................................................................................. 1
RECITALS................................................................................................................ 1
ARTICLE I.
DEFINITIONS
SECTION 1.01 Definitions of Terms....................................................................................1
Affiliate...............................................................................................2
Authenticating Agent....................................................................................2
Bankruptcy Law..........................................................................................2
Board of Directors......................................................................................2
Board Resolution........................................................................................2
Business Day............................................................................................2
Certificate.............................................................................................2
Company.................................................................................................2
Corporate Trust Office..................................................................................2
Custodian...............................................................................................2
Default.................................................................................................3
Depositary..............................................................................................3
Event of Default........................................................................................3
Global Security.........................................................................................3
Governmental Obligations................................................................................3
"herein", "hereof" and "hereunder"......................................................................3
Indenture...............................................................................................3
Interest Payment Date...................................................................................3
Officers' Certificate...................................................................................4
Opinion of Counsel......................................................................................4
Outstanding.............................................................................................4
Person..................................................................................................4
Predecessor Security....................................................................................4
</TABLE>
- --------
* This Table of Contents does not constitute part of the Indenture and shall
not have any bearing upon the interpretation of any of its terms or
provisions.
<PAGE>
<TABLE>
<S> <C>
Responsible Officer.....................................................................................4
Securities..............................................................................................5
Securityholder..........................................................................................5
Subsidiary..............................................................................................5
Trustee.................................................................................................5
Trust Indenture Act.....................................................................................5
Voting Stock............................................................................................5
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION
AND EXCHANGE OF SECURITIES
SECTION 2.01 Designation and Terms of Securities.....................................................................5
SECTION 2.02 Form of Securities and Trustee's Certificate............................................................7
SECTION 2.03 Denominations: Provisions for Payment..................................................................8
SECTION 2.04 Execution and Authentications...........................................................................9
SECTION 2.05 Registration of Transfer and Exchange..................................................................10
SECTION 2.06 Temporary Securities...................................................................................11
SECTION 2.07 Mutilated, Destroyed, Lost or Stolen Securities........................................................12
SECTION 2.08 Cancellation...........................................................................................13
SECTION 2.09 Benefits of Indenture..................................................................................13
SECTION 2.10 Authenticating Agent...................................................................................13
SECTION 2.11 Global Securities......................................................................................14
ARTICLE III
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01 Redemption.............................................................................................15
SECTION 3.02 Notice of Redemption...................................................................................15
SECTION 3.03 Payment Upon Redemption................................................................................16
SECTION 3.04 Sinking Fund...........................................................................................17
SECTION 3.05 Satisfaction of Sinking Fund Payments with Securities..................................................17
SECTION 3.06 Redemption of Securities for Sinking Fund..............................................................17
ARTICLE IV.
CERTAIN COVENANTS
SECTION 4.01 Payment of Principal, Premium and Interest.............................................................18
SECTION 4.02 Maintenance of Office or Agency........................................................................18
SECTION 4.03 Paying Agents..........................................................................................18
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 4.04 Appointment to Fill Vacancy in Office of Trustee.......................................................20
SECTION 4.05 Compliance with Consolidation Provisions...............................................................20
ARTICLE V.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.01 Company to Furnish Trustee Names and Addresses of Securityholders......................................20
SECTION 5.02 Preservation Of Information; Communications With Securityholders.......................................20
SECTION 5.03 Reports by the Company.................................................................................21
SECTION 5.04 Reports by the Trustee.................................................................................21
ARTICLE VI.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01 Events of Default......................................................................................22
SECTION 6.02 Collection of Indebtedness and Suits for Enforcement by Trustee........................................24
SECTION 6.03 Application of Moneys Collected........................................................................25
SECTION 6.04 Limitation on Suits....................................................................................26
SECTION 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver...........................................27
SECTION 6.06 Control by Securityholders.............................................................................27
SECTION 6.07 Undertaking to Pay Costs...............................................................................28
ARTICLE VII.
CONCERNING THE TRUSTEE
SECTION 7.01 Certain Duties and Responsibilities of Trustee.........................................................28
SECTION 7.02 Certain Rights of Trustee..............................................................................29
SECTION 7.03 Trustee Not Responsible for Recitals or Issuance or Securities.........................................31
SECTION 7.04 May Hold Securities....................................................................................31
SECTION 7.05 Moneys Held in Trust...................................................................................31
SECTION 7.06 Compensation and Reimbursement.........................................................................31
SECTION 7.07 Reliance on Officers' Certificate......................................................................32
SECTION 7.08 Disqualification; Conflicting Interests................................................................32
SECTION 7.09 Corporate Trustee Required; Eligibility................................................................32
SECTION 7.10 Resignation and Removal; Appointment of Successor......................................................33
SECTION 7.11 Acceptance of Appointment By Successor.................................................................34
SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business............................................35
SECTION 7.13 Preferential Collection of Claims Against the Company..................................................36
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE VIII.
CONCERNING THE SECURITYHOLDERS
SECTION 8.01 Evidence of Action by Securityholders..................................................................36
SECTION 8.02 Proof of Execution by Securityholders..................................................................37
SECTION 8.03 Who May be Deemed Owners...............................................................................37
SECTION 8.04 Certain Securities Owned by Company Disregarded........................................................37
SECTION 8.05 Actions Binding on Future Securityholders..............................................................38
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures Without the Consent of Securityholders.........................................38
SECTION 9.02 Supplemental Indentures With Consent of Securityholders................................................39
SECTION 9.03 Effect of Supplemental Indentures......................................................................40
SECTION 9.04 Securities Affected by Supplemental Indentures.........................................................40
SECTION 9.05 Execution of Supplemental Indentures...................................................................40
ARTICLE X.
SUCCESSOR CORPORATION
SECTION 10.01 Company May Consolidate, Etc...........................................................................41
SECTION 10.02 Successor Corporation Substituted......................................................................41
SECTION 10.03 Evidence of Consolidation, Etc. to Trustee.............................................................42
ARTICLE XI.
SATISFACTION AND DISCHARGE
SECTION 11.01 Satisfaction and Discharge of Indenture................................................................42
SECTION 11.02 Discharge of Obligations...............................................................................43
SECTION 11.03 Deposited Moneys to be Held in Trust...................................................................43
SECTION 11.04 Payment of Moneys Held by Paying Agents................................................................43
SECTION 11.05 Repayment to Company...................................................................................43
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE XII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01 No Recourse............................................................................................44
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.01 Effect on Successors and Assigns.......................................................................44
SECTION 13.02 Actions by Successor...................................................................................45
SECTION 13.03 Surrender of Company Powers............................................................................45
SECTION 13.04 Notices................................................................................................45
SECTION 13.05 Governing Law..........................................................................................45
SECTION 13.06 Treatment of Securities as Debt........................................................................46
SECTION 13.07 Compliance Certificates and Opinions...................................................................46
SECTION 13.08 Payments on Business Days .............................................................................46
SECTION 13.09 Conflict with Trust Indenture Act .....................................................................46
SECTION 13.10 Counterparts...........................................................................................47
SECTION 13.11 Separability...........................................................................................47
SECTION 13.12 Assignment.............................................................................................47
</TABLE>
<PAGE>
INDENTURE, dated as of [ ], 1999, among Anthracite Capital, Inc., a
Maryland corporation (the "Company"), and [ ], as trustee (the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured debt secur ities (hereinafter referred to as the
"Securities"), in an unlimited aggregate principal amount to be issued from time
to time in one or more series as in this Indenture provided, as registered
Securities without coupons, to be authenticated by the certificate of the
Trustee;
WHEREAS, to provide the terms and conditions upon which the Securities
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of
the Securities by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of Securities:
ARTICLE I.
DEFINITIONS
SECTION 1.01 DEFINITIONS OF TERMS.
The terms defined in this Section (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section and shall include the plural
as well as the singular. All other terms used in this Indenture that are defined
in the Trust Indenture Act of 1939, as amended, or that are by reference in such
Act defined in the Securities Act of 1933, as amended (except as herein
otherwise expressly provided or unless the context otherwise requires), shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this instrument.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (d) a
<PAGE>
partnership in which the specified Person is a general partner, (e) any officer
or director of the specified Person, and (f) if the specified Person is an
individual, any entity of which the specified Person is an officer, director or
general partner.
"Authenticating Agent" means an authenticating agent with respect to
all or any of the series of Securities appointed with respect to all or any
series of the Securities by the Trustee pursuant to Section 2.10.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
duly authorized committee of such 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.
"Business Day" means, with respect to any series of Securities, any day
other than a day on which Federal or State banking institutions in the Borough
of Manhattan, The City of New York, are authorized or obligated by law,
executive order or regulation to close.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer, the Treasurer or the principal
accounting officer of the Company. The Certificate need not comply with the
provisions of Section 13.07.
"Company" means Anthracite Capital, Inc., a corporation duly organized
and existing under the laws of the State of Maryland, and, subject to the
provisions of Article Ten, shall also include its successors and assigns.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at [ ], except that
whenever a provision herein refers to an office or agency of the Trustee in the
Borough of Manhattan, The City of New York, such office is located, at the date
hereof, at [ ].
"Custodian" means any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
2
<PAGE>
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Depositary" means, with respect to Securities of any series, for which
the Company shall determine that such Securities will be issued as a Global
Security, The Deposi tory Trust Company, New York, New York, another clearing
agency, or any successor registered as a clearing agency under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), or other applicable
statute or regulation, which, in each case, shall be designated by the Company
pursuant to either Section 2.01 or 2.11.
"Event of Default" means, with respect to Securities of a particular
series any event specified in Section 6.01, continued for the period of time, if
any, therein designated.
"Global Security" means, with respect to any series of Securities, a
Security executed by the Company and delivered by the Trustee to the Depositary
or pursuant to the Depositary's instruction, all in accordance with the
Indenture, which shall be registered in the name of the Depositary or its
nominee.
"Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on any
such Governmental Obligation held by such custodian for the account of the
holder of such depositary receipt; PROVIDED, HOWEVER, that (except as required
by law) such custo dian 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 Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.
"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.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.
"Interest Payment Date", when used with respect to any installment of
interest on a Security of a particular series, means the date specified in such
Security or in a Board Resolution
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or in an indenture supplemental hereto with respect to such series as the fixed
date on which an installment of interest with respect to Securities of that
series is due and payable.
"Officers' Certificate" means a certificate signed by the Chairman or a
Vice President and by the Treasurer or an Assistant Treasurer or the Controller
or an Assistant Controller or the Secretary or an Assistant Secretary of the
Company that is delivered to the Trustee in accordance with the terms hereof.
Each such certificate shall include the statements provided for in Section
13.07, if and to the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing of legal counsel, who
may be an employee of or counsel for the Company that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include the
statements provided for in Section 13.07, if and to the extent required by the
provisions thereof.
"Outstanding", when used with reference to Securities of any series,
means, subject to the provisions of Section 8.04, as of any particular time, all
Securities of that series theretofore authenticated and delivered by the Trustee
under this Indenture, except (a) Securities theretofore canceled by the Trustee
or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled; (b) Securities or portions
thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); PROVIDED, HOWEVER, that if such Securities or portions of
such Securities are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; and (c)
Securities in lieu of or in substitu tion for which other Securities shall have
been authenticated and delivered pursuant to the terms of Section 2.07.
"Person" means any individual, corporation, partnership, joint-venture,
joint-stock company, unincorporated organization or government or any agency or
political subdivision thereof.
"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 2.07 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Responsible Officer" when used with respect to the Trustee means the
Chairman of the Board of Directors, the Chairman, any Vice President, the
Secretary, the Treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall
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be such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Securities" means the debt Securities authenticated and delivered
under this Indenture.
"Securityholder", "holder of Securities", "registered holder", or
other similar term, means the Person or Persons in whose name or names a
particular Security shall be registered on the books of the Company kept for
that purpose in accordance with the terms of this Indenture.
"Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be owned by such
Person, or by one or more of its Subsidiaries, or by such Person and one or more
of its Subsidiaries and (iii) any limited partnership of which such Person or
any of its Subsidiaries is a general partner.
"Trustee" means [ ], and, subject to the provisions of Article Seven,
shall also include its successors and assigns, and, if at any time there is more
than one Person acting in such capacity hereunder, "Trustee" shall mean each
such Person. The term "Trustee" as used with respect to a particular series of
the Securities shall mean the trustee with respect to that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, subject to the provisions of Sections 9.01, 9.02, and 10.01, as in
effect at the date of execution of this instrument.
"Voting Stock", as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power only by reason
of the occurrence of a contingency.
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF SECURITIES
SECTION 2.01 DESIGNATION AND TERMS OF SECURITIES.
(a) The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more series up to the aggregate principal amount of
Securities of that series from time to time
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authorized by or pursuant to a Board Resolution of the Company or pursuant to
one or more indentures supplemental hereto. Prior to the initial issuance of
Securities of any series, there shall be established in or pursuant to a Board
Resolution of the Company, and set forth in an Officers' Certificate of the
Company, or established in one or more indentures supplemental hereto:
(1) the title of the Security of the series (which shall distinguish
the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of
that series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of that
series);
(3) the date or dates on which the principal of the Securities of the
series is payable;
(4) the rate or rates at which the Securities of the series shall bear
interest or the manner of calculation of such rate or rates, if any;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner
of determination of such Interest Payment Dates and the record date for the
determination of holders to whom interest is payable on any such Interest
Payment Dates;
(6) the right, if any, to extend the interest payment periods and the
duration of such extension;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which, Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions (including payments made in cash in participation of future
sinking fund obligations) or at the option of a holder thereof and the
period or periods within which, the price or prices at which, and the terms
and conditions upon which, Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) the form of the Securities of the series including the form of the
Certificate of Authentication for such series;
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(10) if other than denominations of one thousand U.S. dollars ($1,000)
or any integral multiple thereof, the denominations in which the Securities
of the series shall be issuable;
(11) any and all other terms with respect to such series (which terms
shall not be inconsistent with the terms of this Indenture) including any
terms which may be required by or advisable under United States laws or
regulations or advisable in connec tion with the marketing of Securities of
that series;
(12) whether the Securities are issuable as a Global Security and, in
such case, the identity for the Depositary for such series;
(13) whether the Securities will be convertible into 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, including the
conversion price and the conversion period;
(14) if the amount of payments of principal of and any premium or
interest on the Securities of the series may be determined with reference to
an index, the manner in which such amounts shall be determined;
(15) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section
6.01;
(16) any additional or different Events of Default or restrictive
covenants provided for with respect to the Securities of the series;
(17) any provisions granting special rights to holders when a specified
event occurs; and
(18) any special tax implications of the notes, including provisions
for original issue discount securities, if offered.
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 any such Board Resolution or in any indentures supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution of the Company, 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 of the Company setting forth the terms of the series.
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Securities of any particular series may be issued at various times,
with different dates on which the principal or any installment of principal is
payable, with different rates of interest, if any, or different methods by which
rates of interest may be determined, with different dates on which such interest
may be payable and with different redemption dates. Unless otherwise provided, a
series may be reopened for issuances of additional Securities of such series.
SECTION 2.02 FORM OF SECURITIES AND TRUSTEE'S CERTIFICATE.
The Securities of any series and the Trustee's certificate of
authentication to be borne by such Securities shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution of the Company and as set forth in an
Officers' Certificate of the Company and may have such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Securities of that series
may be listed, or to conform to usage.
SECTION 2.03 DENOMINATIONS: PROVISIONS FOR PAYMENT.
The Securities shall be issuable as registered Securities and in the
denominations of one thousand U.S. dollars ($1,000) or any integral multiple
thereof, subject to Section 2.01(11). The Securities of a particular series
shall bear interest payable on the dates and at the rate specified with respect
to that series. The principal of and the interest on the Securities of any
series, as well as any premium thereon in case of redemption thereof prior to
maturity, shall be payable in the coin or currency of the United States of
America that at the time is legal tender for public and private debt, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, the City and State of New York. Each Security shall be dated the date
of its authentication. Interest on the Securities shall be computed on the basis
of a 360-day year composed of twelve 30-day months.
The interest installment on any Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Securities of that series shall be paid to the Person in whose name said
Security (or one or more Predecessor Securities) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Security of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on such Security will be paid upon presentation and surrender of such
Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Securities of the
same series (herein called
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"Defaulted Interest") shall forthwith cease to be payable to the registered
holder on the relevant regular record date by virtue of having been such holder;
and such Defaulted Interest shall be paid by the Company, at its election, as
provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Securities to the Persons in whose names such Securities (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
such Security 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
or shall make arrange ments satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, 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
not be more than 15 nor 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 mailed, first class
postage prepaid, to each Securityholder at his or her address as it appears
in the Security Register (as hereinafter defined), 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 mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Securities (or their respective Predecessor Securities) are
registered on such special record date and shall be no longer payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Securities 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.
Unless otherwise set forth in a Board Resolution of the Company or one
or more indentures supplemental hereto establishing the terms of any series of
Securities pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Securities with respect to any
Interest Payment Date for such series shall mean either the fifteenth day of the
month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if such
Interest Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in
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which an Interest Payment Date established for such series pursuant to Section
2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a
month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Security of a
series delivered under this Indenture upon transfer of or in exchange for or in
lieu of any other Security of such series shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other Security.
SECTION 2.04 EXECUTION AND AUTHENTICATIONS.
The Securities shall be signed on behalf of the Company by its
Chairman, or one of its Vice Presidents, together with its Treasurer, or one of
its Assistant Treasurers, or its Secretary, or one of its Assistant Secretaries,
under its corporate seal attested by its Secretary or one of its Assistant
Secretaries. Signatures may be in the form of a manual or facsimile signature.
The Company may use the facsimile signature of any Person who shall have been a
Chairman or Vice President thereof, or of any Person who shall have been a
Secretary or Assistant Secretary thereof, notwithstanding the fact that at the
time the Securities shall be authenticated and delivered or disposed of such
Person shall have ceased to be the Chairman or a Vice President, or the
Secretary or an Assistant Secretary, of the Company. The seal of the Company may
be in the form of a facsimile of such seal and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. The Securities may contain
such notations, legends or endorsements required by law, stock exchange rule or
usage. Each Security shall be dated the date of its authentication by the
Trustee.
A Security shall not be valid until authenticated manually by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Security so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.
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 written order of the
Company for the authentication and delivery of such Securities, signed by its
Chairman or any Vice President and its Secretary or any Assistant Secretary, and
the Trustee in accordance with such written order shall authenticate and deliver
such Securities.
In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.
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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 immuni ties under the Securities and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.
SECTION 2.05 REGISTRATION OF TRANSFER AND EXCHANGE.
(a) Securities of any series may be exchanged upon presentation thereof
at the office or agency of the Company designated for such purpose in the
Borough of Manhattan, the City and State of New York, for other Securities of
such series of authorized denominations, and for a like aggregate principal
amount, upon payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, all as provided in this Section. In respect of any
Securities so surrendered for exchange, the Company shall execute, the Trustee
shall authenticate and such office or agency shall deliver in exchange therefor
the Security or Securities of the same series that the Securityholder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company a register
or registers (herein referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall register
the Securities and the transfers of Securities as in this Article provided and
which at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Securities and transfer of Securities
as herein provided shall be appointed as authorized by Board Resolution (the
"Security Registrar").
Upon surrender for transfer of any Security at the office or agency of
the Company designated for such purpose, the Company shall execute, the Trustee
shall authenticate and such office or agency shall deliver in the name of the
transferee or transferees a new Security or Securities of the same series as the
Security presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or registration of
transfer, as provided in this Section, shall be accompanied (if so required by
the Company or the Security Registrar) by a written instrument or instruments of
transfer, in form satisfactory to the Company or the Security Registrar, duly
executed by the registered holder or by such holder's duly authorized attorney
in writing.
(c) No service charge shall be made for any exchange or registration of
transfer of Securities, or issue of new Securities in case of partial redemption
of any series, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, other than exchanges
pursuant to Section 2.06, the second paragraph of Section 3.03 and Section 9.04
not involving any transfer.
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(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Securities during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
less than all the Outstanding Securities of the same series and ending at the
close of business on the day of such mailing, nor (ii) to register the transfer
of or exchange any Securities of any series or portions thereof called for
redemption. The provisions of this Section 2.05 are, with respect to any Global
Security, subject to Section 2.11 hereof.
SECTION 2.06 TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and the Trustee shall authenticate and deliver, temporary
Securities (printed, litho graphed or typewritten) of any authorized
denomination. Such temporary Securities shall be substantially in the form of
the definitive Securities in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Company. Every temporary Security of
any series shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substan tially the same manner, and with like
effect, as the definitive Securities of such series. Without unnecessary delay
the Company will execute and will furnish definitive Securities of such series
and thereupon any or all temporary Securities of such series may be surrendered
in exchange therefor (without charge to the holders), at the office or agency of
the Company designated for the purpose in the Borough of Manhattan, the City and
State of New York, and the Trustee shall authenticate and such office or agency
shall deliver in exchange for such temporary Securities an equal aggregate
principal amount of definitive Securities of such series, unless the Company
advises the Trustee to the effect that definitive Securities need not be
executed and furnished until further notice from the Company. Until so
exchanged, the temporary Securities of such series shall be entitled to the same
benefits under this Indenture as definitive Securities of such series
authenticated and delivered hereunder.
SECTION 2.07 MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
In case any temporary or definitive Security shall become mutilated or
be destroyed, lost or stolen, the Company (subject to the next succeeding
sentence) shall execute, and upon the Company's request the Trustee (subject as
aforesaid) shall authenticate and deliver, a new Security of the same series,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Security, or in lieu of and in substitution for the Security
so destroyed, lost or stolen. In every case the applicant for a substituted
Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of
the applicant's Security and of the ownership thereof. The Trustee may
authenticate any such substituted Security and deliver the same upon the written
request or authorization of any officer of the Company. Upon the issuance of any
substituted Security, the Company may
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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. In case any Security
that has matured or is about to mature shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Security, pay
or authorize the payment of the same (without surrender thereof except in the
case of a mutilated Security) if the applicant for such payment shall furnish to
the Company and the Trustee such security or indemnity as they may require to
save them harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Security and of the ownership thereof.
Every replacement Security issued pursuant to the provisions of this
Section shall constitute an additional contractual obligation of the Company
whether or not the mutilated, destroyed, lost or stolen Security shall be found
at any time, or be enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Securities of the same series duly issued hereunder. All Securities shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities, and shall preclude (to the extent lawful) any and all
other rights or remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.08 CANCELLATION.
All Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any
paying agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be cancelled by it, and no Securities shall be issued in
lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Company at the time of such surrender, the
Trustee shall deliver to the Company canceled Securities held by the Trustee. In
the absence of such request the Trustee may dispose of canceled Securities in
accordance with its standard procedures and deliver a certificate of disposition
to the Company. If the Company shall otherwise acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
SECTION 2.09 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give or be construed to give to any Person, other than the parties hereto
and the holders of the Securities any legal or equitable right, remedy or claim
under or in respect of this Indenture, or under any covenant, condition or
provision herein contained; all such covenants, conditions and provisions being
for the sole benefit of the parties hereto and of the holders of the Securities.
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SECTION 2.10 AUTHENTICATING AGENT.
So long as any of the Securities of any series remain Outstanding there
may be an Authenticating Agent for any or all such series of Securities which
the Trustee shall have the right to appoint. Said Authenticating Agent shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, transfer or partial redemption thereof, 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. All references in this Indenture to the authentication of
Securities by the Trustee shall be deemed to include authentication by an
Authenticating Agent for such series. Each Authenticating Agent shall be
acceptable to the Company and shall be a corporation that has a combined capital
and surplus, as most recently reported or determined by it, sufficient under the
laws of any jurisdic tion under which it is organized or in which it is doing
business to conduct a trust business, and that is otherwise authorized under
such laws to conduct such business and is subject to supervi sion or examination
by Federal or State authorities. If at any time any Authenticating Agent shall
cease to be eligible in accordance with these provisions, it shall resign
immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticat ing Agent, upon acceptance of its appointment hereunder, shall
become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11 GLOBAL SECURITIES.
(a) If the Company shall establish pursuant to Section 2.01 that the
Securities of a particular series are to be issued as a Global Security, then
the Company shall execute and the Trustee shall, in accordance with Section
2.04, authenticate and deliver, a Global Security that (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
all of the Outstanding Securities of such series, (ii) shall be registered in
the name of the Depositary or its nominee, (iii) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary's instruction and (iv)
shall bear a legend substantially to the following effect: "Except as otherwise
provided in Section 2.11 of the Indenture, this Security may be transferred, in
whole but not in part, only to another nominee of the Depositary or to a
successor Depositary or to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05, the Global Security
of a series may be transferred, in whole but not in part and in the manner
provided in Section 2.05,
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only to another nominee of the Depositary for such series, or to a successor
Depositary for such series selected or approved by the Company or to a nominee
of such successor Depositary.
(c) If at any time the Depositary for a series of the Securities
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no longer
be registered or in good standing under the Exchange Act, or other applicable
statute or regulation, and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer be applicable to the Securities of such series and the Company will
execute, and subject to Section 2.05, the Trustee will authenticate and deliver
the Securities of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security of such series in exchange for such
Global Security. In addition, the Company may at any time determine that the
Securities of any series shall no longer be represented by a Global Security and
that the provisions of this Section 2.11 shall no longer apply to the Securities
of such series. In such event the Company will execute and subject to Section
2.05, the Trustee, upon receipt of an Officers' Certificate evidencing such
determination by the Company, will authenticate and deliver the Securities of
such series in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security of such series in exchange for such Global
Security. Upon the exchange of the Global Security for such Securities in
definitive registered form without coupons, in authorized denominations, the
Global Security shall be canceled by the Trustee. Such Securities in definitive
registered form issued in exchange for the Global Security pursuant to this
Section 2.11(c) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to the Depositary for delivery to the Persons in
whose names such Securities are so registered.
ARTICLE III.
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01 REDEMPTION.
The Company may redeem the Securities of any series issued hereunder on
and after the dates and in accordance with the terms established for such series
pursuant to Section 2.01 hereof.
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SECTION 3.02 NOTICE OF REDEMPTION.
(a) In case the Company shall desire to exercise such right to redeem
all or, as the case may be, a portion of the Securities of any series in
accordance with the right reserved so to do, the Company shall, or shall cause
the Trustee to, give notice of such redemption to holders of the Securities of
such series to be redeemed by mailing, first class postage prepaid, a notice of
such redemption not less than 30 days and not more than 90 days before the date
fixed for redemption of that series to such holders at their last addresses as
they shall appear upon the Security Register unless a shorter period is
specified in the Securities to be redeemed. Any notice that is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the registered holder receives the notice. In any case, failure
duly to give such notice to the holder of any Security of any series designated
for redemption in whole or in part, or any defect in the notice, shall not
affect the validity of the proceedings for the redemption of any other
Securities of such series or any other series. In the case of any redemp tion 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 any such restriction.
Each such notice of redemption shall specify the date fixed for
redemption and the redemption price at which Securities of that series are to be
redeemed, and shall state that payment of the redemption price of such
Securities to be redeemed will be made at the office or agency of the Company in
the Borough of Manhattan, the City and State of New York, upon presentation and
surrender of such Securities, that interest accrued to the date fixed for redemp
tion will be paid as specified in said notice, that from and after said date
interest will cease to accrue and that the redemption is for a sinking fund, if
such is the case. If less than all the Securities of a series are to be
redeemed, the notice to the holders of Securities of that series to be redeemed
in whole or in part shall specify the particular Securities to be so redeemed.
In case any Security is to be redeemed in part only, the notice that relates to
such Security shall state the portion of the principal amount thereof to be
redeemed, and shall state that on and after the redemption date, upon surrender
of such Security, a new Security or Securities of such series in principal
amount equal to the unredeemed portion thereof will be issued.
(b) If less than all the Securities of a series are to be redeemed, the
Company shall give the Trustee at least 45 days' notice in advance of the date
fixed for redemption as to the aggregate principal amount of Securities of the
series to be redeemed, and thereupon the Trustee shall select, by lot or in such
other manner as it shall deem appropriate and fair in its discretion and that
may provide for the selection of a portion or portions (equal to one thousand
U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount
of such Securities of a denomination larger than $1,000, the Securities to be
redeemed and shall thereafter promptly notify the Company in writing of the
numbers of the Securities to be redeemed, in whole or in part.
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The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its Chairman or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the
Securities of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Security Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.03 PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been completed as
above provided, the Securities or portions of Securities of the series to be
redeemed specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption and interest on such
Securities or portions of Securities shall cease to accrue on and after the date
fixed for redemption, unless the Company shall default in the payment of such
redemption price and accrued interest with respect to any such Security or
portion thereof. On presentation and surrender of such Securities on or after
the date fixed for redemption at the place of payment specified in the notice,
said Securities shall be paid and redeemed at the applicable redemption price
for such series, together with interest accrued thereon to the date fixed for
redemption (but if the date fixed for redemption is an interest payment date,
the interest installment payable on such date shall be payable to the registered
holder at the close of business on the applicable record date pursuant to
Section 2.03).
(b) Upon presentation of any Security of such series that is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Security is presented shall
deliver to the holder thereof, at the expense of the Com pany, a new Security of
the same series of authorized denominations in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 3.04 SINKING FUND.
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to
any sinking fund for the retirement of Securities of a series, except as
otherwise specified as contemplated by Section 2.01 for Securities of such
series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series 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 Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of
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Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 3.05. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.
SECTION 3.05 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (i) may deliver Outstanding Securities of a series (other
than any Securities previously called for redemption) and (ii) may apply as a
credit Securities of a series that 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 the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series, PROVIDED that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
redemption price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 3.06 REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of the series, the portion thereof, if any,
that is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 3.05 and the basis for such credit and will, together with
such Officers' Certificate, deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before 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 3.02 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 3.02. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Section 3.03.
ARTICLE IV.
CERTAIN COVENANTS
SECTION 4.01 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Securities of that series
at the time and place and in the manner provided herein and established with
respect to such Securities.
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SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY.
So long as any series of the Securities remain Outstanding, the Company
agrees to maintain an office or agency in the Borough of Manhattan, the City and
State of New York, with respect to each such series and at such other location
or locations as may be designated as provided in this Section 4.02, where (i)
Securities of that series may be presented for payment, (ii) Securities of that
series may be presented as hereinabove authorized for registration of transfer
and exchange, and (iii) notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the Company
shall, by written notice signed by its Chairman or a Vice President and
delivered to the trustee, designate some other office or agency for such
purposes or any of them. 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, 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 presenta tions, notices and
demands.
SECTION 4.03 PAYING AGENTS.
(a) If the Company shall appoint one or more paying agents for all or
any series of the Securities, other than the Trustee, the Company will cause
each such paying agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of this
Section:
(1) that it will hold all sums held by it as such agent for the payment
of the principal of (and premium, if any) or interest on the Securities of
that series (whether such sums have been paid to it by the Company or by any
other obligor of such Securi ties) in trust for the benefit of the Persons
entitled thereto;
(2) that it will give the Trustee notice of any failure by the Company
(or by any other obligor of such Securities) to make any payment of the
principal of (and premium, if any) or interest on the Securities of that
series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set forth
in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
any series of the Securities, it will on or before each due date of the
principal of (and premium, if any) or
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interest on Securities of that series, set aside, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay such
principal (and premium, if any) or interest so becoming due on Securities of
that series until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of such action, or
any failure (by it or any other obligor on such Securities) to take such action.
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 (and premium, if
any) or interest on any Securities of that series, deposit with the paying agent
a sum sufficient to pay the principal (an premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such paying agent
is the Trustee) the Company will promptly notify the Trustee of this action or
failure so to act.
(c) Notwithstanding anything in this Section to the contrary, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.05, and (ii) 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 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 terms and conditions 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.
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SECTION 4.04 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 4.05 COMPLIANCE WITH CONSOLIDATION PROVISIONS.
The Company will not, while any of the Securities remain Outstanding,
consoli date with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other company unless the provisions of
Article Ten hereof are complied with.
ARTICLE V.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS.
The Company will furnish or cause to be furnished to the Trustee (a) on
a monthly basis on each regular record date (as defined in Section 2.03) a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the holders of each series of Securities as of such regular record date,
PROVIDED that the Company shall not be obligated to furnish or cause to furnish
such list at any time that the list shall not differ in any respect from the
most recent list furnished to the Trustee by the Company and (b) 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; PROVIDED,
HOWEVER, that, in either case, no such list need be furnished for any series for
which the Trustee shall be the Security Registrar.
SECTION 5.02 PRESERVATION OF INFORMATION; COMMUNICATIONS WITH
SECURITYHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practica ble, all information as to the names and addresses of the holders of
Securities contained in the most recent list furnished to it as provided in
Section 5.01 and as to the names and addresses of holders of Securities received
by the Trustee in its capacity as Security Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
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(c) Securityholders may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Securities.
SECTION 5.03 REPORTS BY THE COMPANY.
(a) The Company covenants and agrees to file with the Trustee, within
30 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports that may be required pursuant to
Section 13 of the Exchange Act, in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from to time
by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable over-night delivery service that provides for
evidence of receipt, to the Securityholders, as their names and addresses appear
upon the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section as may
be required by rules and regulations prescribed from time to time by the
Commission.
SECTION 5.04 REPORTS BY THE TRUSTEE.
(a) On or before July 15 in each year in which any of the Securities
are Outstanding, the Trustee shall transmit by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear upon the
Security Register, a brief report dated as of the preceding May 15, if and to
the extent required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the
Trust Indenture Act.
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(c) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Securities are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Securities become
listed on any stock exchange.
ARTICLE VI.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01 EVENTS OF DEFAULT.
(a) Whenever used herein with respect to Securities of a particular
series, "Event of Default" means any one or more of the following events that
has occurred and is continuing:
(1) the Company defaults in the payment of any installment of interest
upon any of the Securities of that series, as and when the same shall become
due and payable, and continuance of such default for a period of 90 days;
PROVIDED, HOWEVER, that a valid extension of an interest payment period by
the Company in accordance with the terms of any indenture supplemental
hereto, shall not constitute a default in the payment of interest for this
purpose;
(2) the Company defaults in the payment of the principal of (or
premium, if any, on) any of the Securities of that series as and when the
same shall become due and payable whether at maturity, upon redemption, by
declaration or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series; PROVIDED, HOWEVER,
that a valid extension of the maturity of such Securities in accordance with
the terms of any indenture supplemental hereto shall not constitute a
default in the payment of principal or premium, if any;
(3) the Company fails to observe or perform any other of its covenants
or agreements with respect to that series contained in this Indenture or
otherwise established with respect to that series of Securities pursuant to
Section 2.01 hereof (other than a covenant or agreement that has been
expressly included in this Indenture solely for the benefit of one or more
series of Securities other than such series) for a period of 90 days after
the date on which written notice of such failure, requiring the same to be
remedied and stating that such notice is a "Notice of Default" hereunder,
shall have been given to the Company by the Trustee, by registered or
certified mail, or to the Company and the Trustee by the holders of at least
25% in principal amount of the Securities of that series at the time
Outstanding;
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(4) the Company pursuant to or within the meaning of any Bankruptcy Law
(i) commences a voluntary case, (ii) consents to the entry of an order for
relief against it in an involuntary case, (iii) consents to the appointment
of a Custodian of it or for all or substantially all of its property or (iv)
makes a general assignment for the benefit of its creditors; or
(5) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (i) is for relief against the Company in an involuntary
case, (ii) appoints a Custodian of the Company for all or substantially all
of their respective property, or (iii) orders the liquidation of the
Company, and the order or decree remains unstayed and in effect for 90 days.
(b) In each and every such case, unless the principal of all the
Securities of that series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Securities of that series then Outstanding hereunder, by notice in writing to
the Company (and to the Trustee if given by such Securityholders), may declare
the principal of all the Securities of that series to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, notwithstanding anything contained in this
Indenture or in the Securities of that series or established with respect to
that series pursuant to Section 2.01 to the contrary.
(c) At any time after the principal of the Securities of that series
shall have been so declared due and payable, and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the holders of a majority in aggregate principal amount of
the Securities of that series then Outstanding hereunder, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if: (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Securities
of that series and the principal of (and premium, if any, on) any and all
Securities of that series that shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and, to the
extent that such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the Securities of
that series to the date of such payment or deposit) and the amount payable to
the Trustee under Section 7.06, and (ii) any and all Events of Default under the
Indenture with respect to such series, other than the nonpayment of principal on
Securities of that series that shall not have become due by their terms, shall
have been remedied or waived as provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Securities of that series under this Indenture and such proceedings
shall have been discontinued
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or abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such proceedings had been
taken.
SECTION 6.02 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
(a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Securities of a series, or
any payment required by any sinking or analogous fund established with respect
to that series as and when the same shall have become due and payable, and such
default shall have continued for a period of 90 Business Days, or (2) in case it
shall default in the payment of the principal of (or premium, if any, on) any of
the Securities of a series when the same shall have become due and payable,
whether upon maturity of the Securities of a series or upon redemption or upon
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Securities of that series,
the whole amount that then shall have been become due and payable on all such
Securities for principal (and premium, if any) or interest, or both, as the case
may be, with interest upon the overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under applicable law)
upon overdue installments of interest at the rate per annum expressed in the
Securities of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under Section 7.06.
(b) If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the
Securities of that series and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or
other obligor upon the Securities of that series, wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorgani zation, readjustment, arrangement, composition or judicial proceedings
affected the Company, or its creditors or property, the Trustee shall have power
to intervene in such proceedings and take any action therein that may be
permitted by the court and shall (except as may be otherwise pro vided by law)
be entitled to file such proofs of claim and other papers and documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
holders of Securities of such series allowed for the entire amount due and
payable by the Company under the Indenture at the date of institution of such
proceedings and for any additional amount that may become due and payable by the
Company after such date, and to collect and receive any moneys
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or other property payable or deliverable on any such claim, and to distribute
the same after the deduction of the amount payable to the Trustee under Section
7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the holders of Securities of such series to make
such payments to the Trustee, and, in the event that the Trustee shall consent
to the making of such payments directly to such Securityholders, to pay to the
Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture,
or under any of the terms established with respect to Securities of that series,
may be enforced by the Trustee without the possession of any of such Securities,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or 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 payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Securities of such
series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in the Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 6.03 APPLICATION OF MONEYS COLLECTED.
Any moneys collected by the Trustee pursuant to this Article with
respect to a particular series of Securities shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the Securities of that series, and notation
thereon the payment, if only partially paid, and upon surrender thereof if fully
paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06; and
SECOND: To the payment of the amounts then due and unpaid upon
Securities of such series for principal (and premium, if any) and interest,
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or
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priority of any kind, according to the amounts due and payable on such
Securities for principal (and premium, if any) and interest, respectively.
SECTION 6.04 LIMITATION ON SUITS.
No holder of any Security of any series shall have any right by virtue
or by availing of any provision of this Indenture to institute any suit, action
or proceeding in equity or at law upon or under or with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless (i) such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof
with respect to the Securities of such series specifying such Event of Default,
as hereinbefore provided; (ii) the holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as trustee hereunder; (iii) such holder or holders
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby;
and (iv) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity, shall have failed to institute any such action, suit or
proceeding and (v) during such 60 day period, the holders of a majority in
principal amount of the Securities of that series do not give the Trustee a
direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary, any other
provisions of this Indenture, the right of any holder of any Security to receive
payment of the principal of (and premium, if any) and interest on such Security,
as therein provided, on or after the respec tive due dates expressed in such
Security (or in the case of redemption, on the redemption date), or to institute
suit for the enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the consent of
such holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security of such series
with every other such taker and holder and the Trustee, that no one or more
holders of Securities of such series shall have any right in any manner
whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such
Securities, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Securities of such series. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
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SECTION 6.05 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER.
(a) Except as otherwise provided in Section 2.07, all powers and
remedies given by this Article to the Trustee or to the Securityholders shall,
to the extent permitted by law, be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the
Securities, by judicial proceedings or otherwise, to enforce the per formance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Securities.
(b) No delay or omission of the Trustee or of any holder of any of the
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or on acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Securityholders.
SECTION 6.06 CONTROL BY SECURITYHOLDERS.
The holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding, determined in accordance with
Section 8.04, 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 such series;
PROVIDED, HOWEVER, that such direction shall not be in conflict with any rule of
law or with this Indenture or be unduly prejudicial to the rights of holders of
Securities of any other series at the time Outstanding determined in accordance
with Section 8.04. Subject to the provisions of Section 7.01, the Trustee shall
have the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Officers of the Trustee, determine that
the proceeding so directed would involve the Trustee in personal liability. The
holders of a majority in aggregate principal amount of the Securities of any
series at the time Outstanding affected thereby, determined in accordance with
Section 8.04, may on behalf of the holders of all of the Securities of such
series waive any past default in the performance of any of the covenants
contained herein or established pursuant to Section 2.01 with respect to such
series and its consequences, except a default in the payment of the principal
of, or premium, if any, or interest on, any of the Securities of that series as
and when the same shall become due by the terms of such Securities otherwise
than by acceleration (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal and any premium has been
deposited with the Trustee (in accordance with Section 6.01(c)). Upon any such
waiver, the default covered thereby shall be deemed to be cured for all purposes
of this Indenture and the Company, the Trustee and the holders of the Securities
of such series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.
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SECTION 6.07 UNDERTAKING TO PAY COSTS.
All parties to this Indenture agree, and each holder of any Securities
by such holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the
Outstanding Securities of any series, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security of such series, on or after the
respective due dates expressed in such Security or established pursuant to this
Indenture.
ARTICLE VII.
CONCERNING THE TRUSTEE
SECTION 7.01 CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of Default with
respect to the Securities of a series and after the curing of all Events of
Default with respect to the Securities of that series that may have occurred,
shall undertake to perform with respect to the Securities of such series such
duties and only such duties as are specifically set forth in this Indenture, and
no implied covenants shall be read into this Indenture against the Trustee. In
case an Event of Default with respect to the Securities of a series has occurred
(that has not been cured or waived), the Trustee shall exercise with respect to
Securities of that 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 man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) 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:
(1) prior to the occurrence of an Event of Default with respect to the
Securi ties of a series and after the curing or waiving of all such Events
of Default with respect to that series that may have occurred:
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(i) the duties and obligations of the Trustee shall with respect
to the Securities of such series be determined solely by the express
provi sions of this Indenture, and the Trustee shall not be liable with
respect to the Securities of such series except for the performance of
such duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to the Securities of such series conclusively
rely, as to the truth of the statements and the correctness of the
opinions ex pressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions that by
any provision hereof are specifi cally 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 requirement of this
Indenture;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee, was negligent in ascertaining
the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
the holders of not less than a majority in principal amount of the
Securities of any series at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee
under this Indenture with respect to the Securities of that series; and
(4) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity
against such risk is not reasonably assured to it.
SECTION 7.02 CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
security or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
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(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company, by the Chairman or any Vice President and by
the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer thereof (unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted hereunder in
good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to a series of the Securities (that has not been cured
or waived) to exercise with respect to Securities of that series such of the
rights and powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(e) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security, or
other papers or documents, unless requested in writing so to do by the holders
of not less than a majority in principal amount of the Outstand ing Securities
of the particular series affected thereby (determined as provided in Section
8.04); PROVIDED, HOWEVER, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding. The reasonable expense
of every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand; and
(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
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SECTION 7.03 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OR
SECURITIES.
(a) The recitals contained herein and in the Securities shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities.
(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Securities or of the proceeds of such Securities, or
for the use or application of any moneys paid over by the Trustee in accordance
with any provision of this Indenture or established pursuant to Section 2.01, or
for the use or application of any moneys received by any paying agent other than
the Trustee.
SECTION 7.04 MAY HOLD SECURITIES.
The Trustee or any paying agent or Security Registrar, in its
individual or any other capacity, may become the owner or pledgee of Securities
with the same rights it would have if it were not Trustee, paying agent or
Security Registrar.
SECTION 7.05 MONEYS HELD IN TRUST.
Subject to the provisions of Section 11.05, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree with the Company to pay thereon.
SECTION 7.06 COMPENSATION AND REIMBURSEMENT.
(a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), as the Company, and the Trustee may from time to time agree in
writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and, except as otherwise expressly provided herein,
the Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. The Company also
covenants to indemnify
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the Trustee (and its officers, agents, directors and employees) for, and to hold
it harmless against, any loss, liability or expense incurred without negligence
or bad faith on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Securities.
SECTION 7.07 RELIANCE ON OFFICERS' CERTIFICATE.
Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting to take any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.
SECTION 7.08 DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
SECTION 7.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee with respect to the Securities
issued hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial, or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examin ing
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. The
Company may not, nor may any Person directly or
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indirectly controlling, controlled by, or under common control with the Company,
serve as Trustee. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 7.10.
SECTION 7.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at any time
resign with respect to the Securities of one or more series by giving written
notice thereof to the Company and by transmitting notice of resignation by mail,
first class postage prepaid, to the Securityholders of such series, as their
names and addresses appear upon the Security Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
with respect to Securities of such series by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted appointment
within 30 days after the mailing 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 Securities of such series, or any
Securityholder of that series who has been a bona fide holder of a Security or
Securities for at least six months may on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any one of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section
7.08 after written request therefor by the Company or by any Securityholder
who has been a bona fide holder of a Security or Securities for at least six
months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Securityholder; or
(3) the Trustee shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a
receiver of the Trustee or of its property shall be appointed or consented
to, or any public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, the Company may remove the Trustee with
respect to all Securities and appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee, or, unless the Trustee's duty to resign
is stayed as provided herein, any Securityholder who has been a bona fide
holder of a Security or Securities for at least six
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months may, on behalf of that holder and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor trustee. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, remove the Trustee
and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding may at any time remove the
Trustee with respect to such series by so notifying the Trustee and the Company
and may appoint a successor Trustee for such series with the consent of the
Company.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Securities of a series pursuant to any of
the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Securities of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Securities of any particular series.
SECTION 7.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) 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.
(b) 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)
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
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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 supple mental indenture shall
constitute such Trustees co-trustees of the same trust, 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 that no
Trustee shall be responsible for any act or failure to act on the part of any
other Trustee hereunder; 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, such retiring Trustee shall
with respect to the Securities of that or those series to which the appointment
of such successor trustee relates have no further responsibility for the
exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture, 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, to the extent contemplated by such supplemental indenture,
the 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.
(c) 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 paragraph (a) or (b) of this Section, as the case may be.
(d) 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.
(e) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register. If the Company
fails to transmit such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
SECTION 7.12 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 the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, PROVIDED that such corporation shall be
qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any
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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 7.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent included therein.
ARTICLE VIII.
CONCERNING THE SECURITYHOLDERS
SECTION 8.01 EVIDENCE OF ACTION BY SECURITYHOLDERS.
Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the Securities
of a particular series may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action the holders
of such majority or specified percentage of that series have joined therein may
be evidenced by any instrument or any number of instruments of similar tenor
executed by such holders of Securities of that series in Person or by agent or
proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Securityholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of Outstanding Securities of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Securities of that series
shall be computed as of the record date; PROVIDED, HOWEVER, that no such
authorization, agreement or consent by such Securityholders on the record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
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SECTION 8.02 PROOF OF EXECUTION BY SECURITYHOLDERS.
Subject to the provisions of Section 7.01, proof of the execution of
any instrument by a Securityholder (such proof will not require notarization) or
his agent or proxy and proof of the holding by any Person of any of the
Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall be proved by the Security
Register of such Securities or by a certificate of the Security Registrar
thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03 WHO MAY BE DEEMED OWNERS.
Prior to the due presentment for registration of transfer of any
Security, the Company, the Trustee, any paying agent and any Security Registrar
may deem and treat the Person in whose name such Security shall be registered
upon the books of the Company as the absolute owner of such Security (whether or
not such Security shall be overdue and notwith standing any notice of ownership
or writing thereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and (subject to Section 2.03) interest on such Security and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.
SECTION 8.04 CERTAIN SECURITIES OWNED BY COMPANY DISREGARDED.
In determining whether the holders of the requisite aggregate principal
amount of Securities of a particular series have concurred in any direction,
consent of waiver under this Indenture, the Securities of that series that are
owned by the Company or any other obligor on the Securities of that series or by
any Person directly or indirectly controlling or controlled by or under common
control with the Company or any other obligor on the Securities of that series
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determina tion, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver,
only Securities of such series that the Trustee actually knows are so owned
shall be so disregarded. The Securities so owned that have been pledged in good
faith may be regarded as Outstanding for the purposes of this Section, if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not a Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor. In case
38
<PAGE>
of a dispute as to such right, any decision by the Trustee taken upon the advice
of counsel shall be full protection to the Trustee.
SECTION 8.05 ACTIONS BINDING ON FUTURE SECURITYHOLDERS.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Securities of a
particular series specified in this Indenture in connection with such action,
any holder of a Security of that series that is shown by the evidence to be
included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 8.02, revoke such action so far as concerns such Security.
Except as aforesaid any such action taken by the holder of any Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Security. Any action taken
by the holders of the majority or percentage in aggregate principal amount of
the Securities of a particular series specified in this Indenture in connection
with such action shall be conclusively binding upon the Company, the Trustee and
the holders of all the Securities of that series.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
SECURITYHOLDERS.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect), without the
consent of the Securityholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein, in the
Securities of any series;
(b) to comply with Article Ten;
(c) to provide for uncertificated Securities in addition to or in place
of certificated Securities;
39
<PAGE>
(d) 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;
(e) to add to, delete from, or revise the conditions, limitations, and
restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Securities, as herein set forth;
(f) to make any change that does not adversely affect the rights of any
Securityholder in any material respect; or
(g) to provide for the issuance of and establish the form and terms and
conditions of the Securities of any series as provided in Section 2.01, to
establish the form of any certifications required to be furnished pursuant to
the terms of this Indenture or any series of Securities, or to add to the rights
of the holders of any series of Securities.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipula tions that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the
holders of any of the Securities at the time Outstanding, notwithstanding any of
the provisions of Section 9.02.
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Section 8.01) of the holders
of not less than a majority in aggregate principal amount of the Securities of
each series affected by such supplemental indenture or indentures at the time
Outstanding, the Company, when authorized by Board Resolutions, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental indenture or of modifying in any manner not covered by
Section 9.01 the rights of the holders of the Securities of such series under
this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall,
without the consent of the holders of each Security then Outstanding and
affected thereby, (i) extend the fixed maturity of any Securities of any series,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof; (ii) change any obligation to pay additional amounts; (iii) reduce the
amount of principal of an original issue discount security or any other
40
<PAGE>
Security payable upon acceleration of the maturity thereof; (iv) change currency
in which any Security or any premium or interest is payable; (v) impair the
right to enforce any payment on or with respect to any Security; (vi) adversely
change the right to convert or exchange, including decreasing the conversion
rate or increasing the conversion price of, such Security (if applica ble);
(vii) if the Securities are secured, change the terms and conditions pursuant to
which the Securities are secured in a manner adverse to the holders of the
Securities; (vii) reduce the percentage in principal amount of outstanding
Securities of any series, the consent of whose holders is required for
modification or amendment of the indenture or for waiver of compliance with
certain provisions of the indenture or for waiver of certain defaults; (ix)
reduce the requirements contained in the indenture for quorum or voting; (x)
change any obligations of the Company to maintain an office or agency in the
places and for the purposes required by the indentures; or (xi) modify any of
the above provisions.
It shall not be necessary for the consent of the Securityholders of any
series affected thereby under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 9.03 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article or of Section 10.01, this Indenture shall, with
respect to such series, be and be deemed to be modified and amended in
accordance therewith and the respective rights, limita tions of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Securities of the series affected thereby shall
thereafter be deter mined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.04 SECURITIES AFFECTED BY SUPPLEMENTAL INDENTURES.
Securities of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, may bear a
notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of that series so modified as to conform, in the
opinion of the Board of Directors of the Company, to any modification of this
Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the
Securities of that series then Outstanding.
41
<PAGE>
SECTION 9.05 EXECUTION OF SUPPLEMENTAL INDENTURES.
Upon the request of the Company, accompanied by its Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture. The Trustee, subject to the
provisions of Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and that
it is proper for the Trustee under the provisions of this Article to join in the
execution thereof; PROVIDED, HOWEVER, that such Opinion of Counsel need not be
provided in connection with the execution of a supplemental indenture that
establishes the terms of a series of Securities pursuant to Section 2.01 hereof.
Promptly after the execution by the Company and the Trustee of any
supplemen tal indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders of all series affected thereby as their names and addresses
appear upon the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
ARTICLE X.
SUCCESSOR CORPORATION
SECTION 10.01 COMPANY MAY CONSOLIDATE, ETC.
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
corporation or corporations (whether or not affiliated with the Company) or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of the property of the Company or its successor or
successors as an entirety, or substantially as an entirety, to any other
corporation (whether or not affiliated with the Company or its successor or
successors) authorized to acquire and operate the same; PROVIDED, HOWEVER, the
Company hereby covenants and agrees that, upon any such consolidation, merger,
sale, conveyance, transfer or other disposition, the due and punctual payment of
the principal of (premium, if any) and interest on all of the Securities of all
series in accordance with the terms of each series, according to their tenor and
the due and punctual performance and observance of all the covenants and
conditions of this Indenture with respect to
42
<PAGE>
each series or established with respect to such series pursuant to Section 2.01
to be kept or performed by the Company shall be expressly assumed, by
supplemental indenture (which shall conform to the provisions of the Trust
Indenture Act, as then in effect) satisfactory in form to the Trustee executed
and delivered to the Trustee by the entity formed by such consolidation, or into
which the Company shall have been merged, or by the entity which shall have
acquired such property.
SECTION 10.02 SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the Securities of all
series Outstanding and the due and punctual performance of all of the covenants
and conditions of this Indenture or established with respect to each series of
the Securities pursuant to Section 2.01 to be performed by the Company with
respect to each series, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named as the
Company herein, and thereupon the predecessor corporation shall be relieved of
all obligations and covenants under this Indenture and the Securities.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition such changes in phraseology and form (but not in
substance) may be made in the Securities thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Securities
shall prevent the Company from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other Person (whether or not
affiliated with the Company).
SECTION 10.03 EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.
The Trustee, subject to the provisions of Section 7.01, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
ARTICLE XI.
SATISFACTION AND DISCHARGE
SECTION 11.01 SATISFACTION AND DISCHARGE OF INDENTURE.
If at any time: (a) the Company shall have delivered to the Trustee for
cancella tion all Securities of a series theretofore authenticated (other than
any Securities that shall have
43
<PAGE>
ben destroyed, lost or stolen and that shall have been replaced or paid as
provided in Section 2.07) and Securities for whose payment money or Governmental
Obligations have theretofore been deposited in trust or segregated and held in
trust by the Company (and thereupon repaid to the Company or discharged from
such trust, as provided in Section 11.05); or (b) all such Securities of a
particular series not theretofore delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due and
payable within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit or cause to be deposited with the Trustee as trust
funds the entire amount in moneys or Governmental Obligations sufficient or a
combination thereof, 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 at maturity or upon redemption all Securities
of that series not theretofore delivered to the Trustee for cancellation,
including principal (and premium, if any) and interest due or to become due to
such date of maturity or date fixed for redemption, as the case may be, and if
the Company shall also pay or cause to be paid all other sums payable hereunder
with respect to such series by the Company then this Indenture shall thereupon
cease to be of further effect with respect to such series except for the
provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall
survive until the date of maturity or redemption date, as the case may be, and
Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the
Trustee, on demand of the Company and at the cost and expense of the Company
shall execute proper instruments acknowledging satisfaction of and discharging
this Indenture with respect to such series.
SECTION 11.02 DISCHARGE OF OBLIGATIONS.
If at any time all such Securities of a particular series not
heretofore delivered to the Trustee for cancellation or that have not become due
and payable as described in Section 11.01 shall have been paid by the Company by
depositing irrevocably with the Trustee as trust funds moneys or an amount of
Governmental Obligations sufficient to pay at maturity or upon redemption all
such Securities of that series not theretofore delivered to the Trustee for
cancella tion, including principal (and premium, if any) and interest due or to
become due to such date of maturity or date fixed for redemption, as the case
may be, and if the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company with respect to such series, then after the
date such moneys or Governmental Obligations, as the case may be, are deposited
with the Trustee the obligations of the Company under this Indenture with
respect to such series shall cease to be of further effect except for the
provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03, 7.06, 7.10 and 11.05
hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.
SECTION 11.03 DEPOSITED MONEYS TO BE HELD IN TRUST.
All moneys or Governmental Obligations deposited with the Trustee
pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be
available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to
44
<PAGE>
the holders of the particular series of Securities for the payment or redemption
of which such moneys or Governmental Obligations have been deposited with the
Trustee.
SECTION 11.04 PAYMENT OF MONEYS HELD BY PAYING AGENTS.
In connection with the satisfaction and discharge of this Indenture all
moneys or Governmental Obligations then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys or Governmental Obligations.
SECTION 11.05 REPAYMENT TO COMPANY.
Any moneys or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company, in trust for payment of principal
of or premium or interest on the Securities of a particular series that are not
applied but remain unclaimed by the holders of such Securities for at least two
years after the date upon which the principal of (and premium, if any) or
interest on such Securities shall have respectively become due and payable,
shall be repaid to the Company on May 31 of each year or (if then held by the
Company) shall be discharged from such trust; and thereupon the paying agent and
the Trustee shall be released from all further liability with respect to such
moneys or Governmental Obligations, and the holder of any of the Securities
entitled to receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company for the payment thereof.
ARTICLE XII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.01 NO RECOURSE.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company or any such
predecessor or successor corporation, whether by virtue of any constitu tion,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements
45
<PAGE>
contained in this Indenture or in any of the Securities or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorpora tor, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Securities or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Securities.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.01 EFFECT ON SUCCESSORS AND ASSIGNS.
All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind their respective
successors and assigns, whether so expressed or not.
SECTION 13.02 ACTIONS BY SUCCESSOR.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.
SECTION 13.03 SURRENDER OF COMPANY POWERS.
The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power so
surrendered shall terminate both as to the Company and as to any successor
corporation.
SECTION 13.04 NOTICES.
Except as otherwise expressly provided herein any notice or demand that
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Securities to or on the Company may
be given or served by being deposited first class postage prepaid in a
post-office letterbox addressed (until another address is filed in writing by
the Company with the Trustee), as follows: Anthracite Capital Inc., 345 Park
Avenue, 29th Floor, New York, NY 10154. Any notice, election, request or demand
by the Company or any
46
<PAGE>
Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.
SECTION 13.05 GOVERNING LAW.
This Indenture and each Security shall be deemed to be a contract made
under the internal laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of said State.
SECTION 13.06 TREATMENT OF SECURITIES AS DEBT.
It is intended that the Securities will be treated as indebtedness and
not as equity for federal income tax purposes. The provisions of this Indenture
shall be interpreted to further this intention.
SECTION 13.07 COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company,
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent 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 have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture shall include (1) a statement that the Person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
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<PAGE>
SECTION 13.08 PAYMENTS ON BUSINESS DAYS.
Except as provided pursuant to Section 2.01 pursuant to a Board
Resolution, and as set forth in an Officers' Certificate, or established in one
or more indentures supplemental to this Indenture, in any case where the date of
maturity of interest or principal of any Security or the date of redemption of
any Security shall not be a Business Day, then payment of interest or principal
(and premium, if any) may be made on the next succeeding Business Day with the
same force and effect as if made on the nominal date of maturity or redemption,
and no interest shall accrue for the period after such nominal date.
SECTION 13.09 CONFLICT WITH TRUST INDENTURE ACT.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.10 COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
SECTION 13.11 SEPARABILITY.
In case any one or more of the provisions contained in this Indenture
or in the Securities of any series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Securities, but this Indenture and such Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 13.12 ASSIGNMENT.
The Company will have the right at all times to assign any of its
rights or obligations under this Indenture to a direct or indirect wholly-owned
Subsidiary of the Company, PROVIDED that, in the event of any such assignment,
the Company, will remain liable for all such obligations. Subject to the
foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties thereto.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
ANTHRACITE CAPITAL, INC.
By:
-----------------------------------
Name:
Title:
[ ],
as Trustee
By:
-----------------------------------
Name:
Title:
49
<PAGE>
ANTHRACITE CAPITAL, INC.,
Issuer
AND
[ ],
Trustee
-----------------------------------
INDENTURE
Dated as of [ ], 1999
-----------------------------------
Subordinated Debt Securities
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section Of
Trust Indenture Act Section Of
Of 1939, As Amended Indenture
- ------------------- ----------
<S> <C>
310(a)............................................................................. 7.09
310(b)............................................................................. 7.08
7.10
310(c)............................................................................. Inapplicable
311(a)............................................................................. 7.13(a)
311(b)............................................................................. 7.13(b)
311(c)............................................................................. Inapplicable
312(a)............................................................................ 5.01
5.02(a)
312(b)............................................................................. 5.02(b)
312(c)............................................................................. 5.02(c)
313(a)............................................................................. 5.04(a)
313(b)............................................................................. 5.04(b)
313(c)............................................................................. 5.04(a)
5.04(b)
313(d)............................................................................. 5.04(c)
314(a)............................................................................. 5.03
314(b)............................................................................. Inapplicable
314(c)............................................................................. 13.06
314(d)............................................................................. Inapplicable
314(e)............................................................................. 13.06
314(f)............................................................................. Inapplicable
315(a)............................................................................. 7.01(a)
7.02
315(b)............................................................................. 6.07
315(c)............................................................................. 7.01
315(d)............................................................................. 7.01(b)
7.01(c)
315(e)............................................................................. 6.07
316(a)............................................................................. 6.06
8.04
</TABLE>
- --------
* This Cross-Reference Table does not constitute part of the Indenture and
shall not have any bearing on the interpretation of any of its terms or
provisions.
<PAGE>
<TABLE>
<S> <C>
316(b)........... 6.04
316(c)........... 8.01
317(a)........... 6.02
317(b)........... 4.03
318(a)........... 13.08
</TABLE>
<PAGE>
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PARTIES................................................................... 1
RECITALS.................................................................. 1
ARTICLE I.
DEFINITIONS
SECTION 1.01 Definitions of Terms........................................ 1
Affiliate................................................... 1
Authenticating Agent........................................ 2
Bankruptcy Law.............................................. 2
Board of Directors.......................................... 2
Board Resolution............................................ 2
Business Day................................................ 2
Certificate................................................. 2
Company..................................................... 2
Corporate Trust Office...................................... 2
Custodian................................................... 2
Default..................................................... 3
Depositary.................................................. 3
Event of Default............................................ 3
Global Security............................................. 3
Governmental Obligations.................................... 3
"herein", "hereof" and "hereunder".......................... 3
Indenture................................................... 3
Interest Payment Date....................................... 3
Officers' Certificate....................................... 4
Opinion of Counsel.......................................... 4
Outstanding................................................. 4
Person...................................................... 4
Predecessor Security........................................ 4
Responsible Officer......................................... 4
</TABLE>
- --------
* This Table of Contents does not constitute part of the Indenture and shall
not have any bearing upon the interpretation of any of its terms or
provisions.
<PAGE>
<TABLE>
<S> <C>
Securityholder.............................................. 5
Subsidiary.................................................. 5
Trustee..................................................... 5
Trust Indenture Act......................................... 5
Voting Stock................................................ 5
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF SECURITIES
SECTION 2.01 Designation and Terms of Securities......................... 5
SECTION 2.02 Form of Securities and Trustee's Certificate................ 8
SECTION 2.03 Denominations: Provisions for Payment...................... 8
SECTION 2.04 Execution and Authentications............................... 10
SECTION 2.05 Registration of Transfer and Exchange....................... 11
SECTION 2.06 Temporary Securities........................................ 12
SECTION 2.07 Mutilated, Destroyed, Lost or Stolen Securities............. 12
SECTION 2.08 Cancellation................................................ 13
SECTION 2.09 Benefits of Indenture....................................... 13
SECTION 2.10 Authenticating Agent........................................ 14
SECTION 2.11 Global Securities........................................... 14
ARTICLE III
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01 Redemption.................................................. 15
SECTION 3.02 Notice of Redemption........................................ 16
SECTION 3.03 Payment Upon Redemption..................................... 17
SECTION 3.04 Sinking Fund................................................ 17
SECTION 3.05 Satisfaction of Sinking Fund Payments with Securities....... 18
SECTION 3.06 Redemption of Securities for Sinking Fund................... 18
ARTICLE IV.
CERTAIN COVENANTS
SECTION 4.01 Payment of Principal, Premium and Interest.................. 18
SECTION 4.02 Maintenance of Office or Agency............................. 19
SECTION 4.03 Paying Agents............................................... 19
SECTION 4.04 Appointment to Fill Vacancy in Office of Trustee............ 21
SECTION 4.05 Compliance with Consolidation Provisions.................... 21
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ARTICLE V.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.01 Company to Furnish Trustee Names and Addresses of
Securityholders............................................ 21
SECTION 5.02 Preservation Of Information; Communications With
Securityholders............................................ 21
SECTION 5.03 Reports by the Company...................................... 22
SECTION 5.04 Reports by the Trustee...................................... 22
ARTICLE VI.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01 Events of Default........................................... 23
SECTION 6.02 Collection of Indebtedness and Suits for Enforcement
by Trustee................................................. 25
SECTION 6.03 Application of Moneys Collected............................. 26
SECTION 6.04 Limitation on Suits......................................... 27
SECTION 6.05 Rights and Remedies Cumulative; Delay or
Omission Not Waiver........................................ 28
SECTION 6.06 Control by Securityholders.................................. 28
SECTION 6.07 Undertaking to Pay Costs.................................... 29
ARTICLE VII.
CONCERNING THE TRUSTEE
SECTION 7.01 Certain Duties and Responsibilities of Trustee.............. 29
SECTION 7.02 Certain Rights of Trustee................................... 30
SECTION 7.03 Trustee Not Responsible for Recitals or Issuance
or Securities.............................................. 32
SECTION 7.04 May Hold Securities......................................... 32
SECTION 7.05 Moneys Held in Trust........................................ 32
SECTION 7.06 Compensation and Reimbursement.............................. 32
SECTION 7.07 Reliance on Officers' Certificate........................... 33
SECTION 7.08 Disqualification; Conflicting Interests..................... 33
SECTION 7.09 Corporate Trustee Required; Eligibility..................... 33
SECTION 7.10 Resignation and Removal; Appointment of Successor........... 34
SECTION 7.11 Acceptance of Appointment By Successor...................... 35
SECTION 7.12 Merger, Conversion, Consolidation or Succession
to Business................................................ 36
SECTION 7.13 Preferential Collection of Claims Against the Company....... 37
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ARTICLE VIII.
CONCERNING THE SECURITYHOLDERS
SECTION 8.01 Evidence of Action by Securityholders....................... 37
SECTION 8.02 Proof of Execution by Securityholders....................... 38
SECTION 8.03 Who May be Deemed Owners.................................... 38
SECTION 8.04 Certain Securities Owned by Company Disregarded............. 38
SECTION 8.05 Actions Binding on Future Securityholders................... 39
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures Without the Consent
of Securityholders......................................... 39
SECTION 9.02 Supplemental Indentures With Consent
of Securityholders......................................... 40
SECTION 9.03 Effect of Supplemental Indentures........................... 41
SECTION 9.04 Securities Affected by Supplemental Indentures.............. 41
ARTICLE X.
SUCCESSOR CORPORATION
SECTION 10.01 Company May Consolidate, Etc................................ 42
SECTION 10.02 Successor Corporation Substituted........................... 42
SECTION 10.03 Evidence of Consolidation, Etc. to Trustee.................. 43
ARTICLE XI.
SATISFACTION AND DISCHARGE
SECTION 11.01 Satisfaction and Discharge of Indenture..................... 43
SECTION 11.02 Discharge of Obligations.................................... 44
SECTION 11.03 Deposited Moneys to be Held in Trust........................ 44
SECTION 11.04 Payment of Moneys Held by Paying Agents..................... 44
SECTION 11.05 Repayment to Company........................................ 44
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ARTICLE XII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01 No Recourse................................................. 45
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.01 Effect on Successors and Assigns............................ 46
SECTION 13.02 Actions by Successor........................................ 46
SECTION 13.03 Surrender of Company Powers................................. 46
SECTION 13.04 Notices..................................................... 46
SECTION 13.05 Governing Law............................................... 46
SECTION 13.06 Treatment of Securities as Debt............................. 47
SECTION 13.07 Compliance Certificates and Opinions........................ 47
SECTION 13.08 Payments on Business Days................................... 47
SECTION 13.09 Conflict with Trust Indenture Act........................... 47
SECTION 13.10 Counterparts................................................ 48
SECTION 13.11 Separability................................................ 48
SECTION 13.12 Assignment.................................................. 48
ARTICLE XIV.
SUBORDINATION OF SECURITIES
SECTION 14.01 Subordination Terms......................................... 48
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INDENTURE, dated as of [ ], 1999, among Anthracite Capital, Inc., a
Maryland corporation (the "Company"), and [ ], as trustee (the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured subordinated debt securities (hereinafter referred to as
the "Securities"), in an unlimited aggregate principal amount to be issued from
time to time in one or more series as in this Indenture provided, as registered
Securities without coupons, to be authenticated by the certificate of the
Trustee;
WHEREAS, to provide the terms and conditions upon which the Securities
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of
the Securities by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of Securities:
ARTICLE I.
DEFINITIONS
SECTION 1.01 DEFINITIONS OF TERMS.
The terms defined in this Section (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section and shall include the plural
as well as the singular. All other terms used in this Indenture that are defined
in the Trust Indenture Act of 1939, as amended, or that are by reference in such
Act defined in the Securities Act of 1933, as amended (except as herein
otherwise expressly provided or unless the context otherwise requires), shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this instrument.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or
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indirectly controlling, controlled by, or under common control with the
specified Person, (d) a partnership in which the specified Person is a general
partner, (e) any officer or director of the specified Person, and (f) if the
specified Person is an individual, any entity of which the specified Person is
an officer, director or general partner.
"Authenticating Agent" means an authenticating agent with respect to
all or any of the series of Securities appointed with respect to all or any
series of the Securities by the Trustee pursuant to Section 2.10.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
duly authorized committee of such 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.
"Business Day" means, with respect to any series of Securities, any day
other than a day on which Federal or State banking institutions in the Borough
of Manhattan, The City of New York, are authorized or obligated by law,
executive order or regulation to close.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer, the Treasurer or the principal
accounting officer of the Company. The Certificate need not comply with the
provisions of Section 13.07.
"Company" means Anthracite Capital, Inc., a corporation duly organized
and existing under the laws of the State of Maryland, and, subject to the
provisions of Article Ten, shall also include its successors and assigns.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at [ ], except that
whenever a provision herein refers to an office or agency of the Trustee in the
Borough of Manhattan, The City of New York, such office is located, at the date
hereof, at [ ].
"Custodian" means any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
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"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Depositary" means, with respect to Securities of any series, for which
the Company shall determine that such Securities will be issued as a Global
Security, The Depository Trust Company, New York, New York, another clearing
agency, or any successor registered as a clearing agency under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), or other applicable
statute or regulation, which, in each case, shall be designated by the Company
pursuant to either Section 2.01 or 2.11.
"Event of Default" means, with respect to Securities of a particular
series any event specified in Section 6.01, continued for the period of time, if
any, therein designated.
"Global Security" means, with respect to any series of Securities, a
Security executed by the Company and delivered by the Trustee to the Depositary
or pursuant to the Depositary's instruction, all in accordance with the
Indenture, which shall be registered in the name of the Depositary or its
nominee.
"Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on any
such Governmental Obligation held by such custodian for the account of the
holder of such depositary receipt; PROVIDED, HOWEVER, 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 Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.
"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.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.
"Interest Payment Date", when used with respect to any installment of
interest on a Security of a particular series, means the date specified in such
Security or in a Board Resolution
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or in an indenture supplemental hereto with respect to such series as the fixed
date on which an installment of interest with respect to Securities of that
series is due and payable.
"Officers' Certificate" means a certificate signed by the Chairman or a
Vice President and by the Treasurer or an Assistant Treasurer or the Controller
or an Assistant Controller or the Secretary or an Assistant Secretary of the
Company that is delivered to the Trustee in accordance with the terms hereof.
Each such certificate shall include the statements provided for in Section
13.07, if and to the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing of legal counsel, who
may be an employee of or counsel for the Company that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include the
statements provided for in Section 13.07, if and to the extent required by the
provisions thereof.
"Outstanding", when used with reference to Securities of any series,
means, subject to the provisions of Section 8.04, as of any particular time, all
Securities of that series theretofore authenticated and delivered by the Trustee
under this Indenture, except (a) Securities theretofore canceled by the Trustee
or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled; (b) Securities or portions
thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); PROVIDED, HOWEVER, that if such Securities or portions of
such Securities are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; and (c)
Securities in lieu of or in substitution for which other Securities shall have
been authenticated and delivered pursuant to the terms of Section 2.07.
"Person" means any individual, corporation, partnership, joint-venture,
joint-stock company, unincorporated organization or government or any agency or
political subdivision thereof.
"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 2.07 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Responsible Officer" when used with respect to the Trustee means the
Chairman of the Board of Directors, the Chairman, any Vice President, the
Secretary, the Treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall
4
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be such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"Securities" means the debt Securities authenticated and delivered
under this Indenture.
"Securityholder", "holder of Securities", "registered holder", or other
similar term, means the Person or Persons in whose name or names a particular
Security shall be registered on the books of the Company kept for that purpose
in accordance with the terms of this Indenture.
"Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be owned by such
Person, or by one or more of its Subsidiaries, or by such Person and one or more
of its Subsidiaries and (iii) any limited partnership of which such Person or
any of its Subsidiaries is a general partner.
"Trustee" means [ ], and, subject to the provisions of Article Seven,
shall also include its successors and assigns, and, if at any time there is more
than one Person acting in such capacity hereunder, "Trustee" shall mean each
such Person. The term "Trustee" as used with respect to a particular series of
the Securities shall mean the trustee with respect to that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, subject to the provisions of Sections 9.01, 9.02, and 10.01, as in
effect at the date of execution of this instrument.
"Voting Stock", as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power only by reason
of the occurrence of a contingency.
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF SECURITIES
SECTION 2.01 DESIGNATION AND TERMS OF SECURITIES.
(a) The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more
5
<PAGE>
series up to the aggregate principal amount of Securities of that series from
time to time authorized by or pursuant to a Board Resolution of the Company or
pursuant to one or more indentures supplemental hereto. Prior to the initial
issuance of Securities of any series, there shall be established in or pursuant
to a Board Resolution of the Company, and set forth in an Officers' Certificate
of the Company, or established in one or more indentures supplemental hereto:
(1) the title of the Security of the series (which shall distinguish
the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of
that series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of that
series);
(3) the date or dates on which the principal of the Securities of the
series is payable;
(4) the rate or rates at which the Securities of the series shall bear
interest or the manner of calculation of such rate or rates, if any;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner
of determination of such Interest Payment Dates and the record date for the
determination of holders to whom interest is payable on any such Interest
Payment Dates;
(6) the right, if any, to extend the interest payment periods and the
duration of such extension;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which, Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions (including payments made in cash in participation of future
sinking fund obligations) or at the option of a holder thereof and the
period or periods within which, the price or prices at which, and the terms
and conditions upon which, Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) the subordination terms of the Securities of the series;
6
<PAGE>
(10) the form of the Securities of the series including the form of the
Certificate of Authentication for such series;
(11) if other than denominations of one thousand U.S. dollars ($1,000)
or any integral multiple thereof, the denominations in which the Securities
of the series shall be issuable;
(12) any and all other terms with respect to such series (which terms
shall not be inconsistent with the terms of this Indenture) including any
terms which may be required by or advisable under United States laws or
regulations or advisable in connection with the marketing of Securities of
that series;
(13) whether the Securities are issuable as a Global Security and, in
such case, the identity for the Depositary for such series;
(14) if the amount of payments of principal of and any premium or
interest on the Securities of the series may be determined with reference to
an index, the manner in which such amounts shall be determined;
(15) whether the Securities will be convertible into 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, including the
conversion price and the conversion period;
(16) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section
6.01;
(17) any additional or different Events of Default or restrictive
covenants provided for with respect to the Securities of the series; and
(18) any provisions granting special rights to holders when a specified
event occurs; and
(19) any special tax implications of the notes, including provisions
for original issue discount securities, if offered.
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 any such Board Resolution or in any indentures supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution of the Company, a copy of an appropriate record
of such action shall be
7
<PAGE>
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 of the Company setting forth the terms of the series.
Securities of any particular series may be issued at various times,
with different dates on which the principal or any installment of principal is
payable, with different rates of interest, if any, or different methods by which
rates of interest may be determined, with different dates on which such interest
may be payable and with different redemption dates.
SECTION 2.02 FORM OF SECURITIES AND TRUSTEE'S CERTIFICATE.
The Securities of any series and the Trustee's certificate of
authentication to be borne by such Securities shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution of the Company and as set forth in an
Officers' Certificate of the Company and may have such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Securities of that series
may be listed, or to conform to usage.
SECTION 2.03 DENOMINATIONS: PROVISIONS FOR PAYMENT.
The Securities shall be issuable as registered Securities and in the
denominations of one thousand U.S. dollars ($1,000) or any integral multiple
thereof, subject to Section 2.01(11). The Securities of a particular series
shall bear interest payable on the dates and at the rate specified with respect
to that series. The principal of and the interest on the Securities of any
series, as well as any premium thereon in case of redemption thereof prior to
maturity, shall be payable in the coin or currency of the United States of
America that at the time is legal tender for public and private debt, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, the City and State of New York. Each Security shall be dated the date
of its authentication. Interest on the Securities shall be computed on the basis
of a 360-day year composed of twelve 30-day months.
The interest installment on any Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Securities of that series shall be paid to the Person in whose name said
Security (or one or more Predecessor Securities) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Security of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on such Security will be paid upon presentation and surrender of such
Security as provided in Section 3.03.
8
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Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Securities of the
same series (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant regular record date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Securities to the Persons in whose names such Securities (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
such Security 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
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, 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
not be more than 15 nor 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 mailed, first class
postage prepaid, to each Securityholder at his or her address as it appears
in the Security Register (as hereinafter defined), 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 mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Securities (or their respective Predecessor Securities) are
registered on such special record date and shall be no longer payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Securities 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.
Unless otherwise set forth in a Board Resolution of the Company or one
or more indentures supplemental hereto establishing the terms of any series of
Securities pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Securities with respect to any
Interest Payment Date for such series shall mean either the fifteenth day of the
month immediately preceding the month in which an Interest Payment Date
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established for such series pursuant to Section 2.01 hereof shall occur, if such
Interest Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the fifteenth day of a month, whether or not such date is a
Business Day.
Subject to the foregoing provisions of this Section, each Security of a
series delivered under this Indenture upon transfer of or in exchange for or in
lieu of any other Security of such series shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other Security.
SECTION 2.04 EXECUTION AND AUTHENTICATIONS.
The Securities shall be signed on behalf of the Company by its
Chairman, or one of its Vice Presidents, together with its Treasurer, or one of
its Assistant Treasurers, or its Secretary, or one of its Assistant Secretaries,
under its corporate seal attested by its Secretary or one of its Assistant
Secretaries. Signatures may be in the form of a manual or facsimile signature.
The Company may use the facsimile signature of any Person who shall have been a
Chairman or Vice President thereof, or of any Person who shall have been a
Secretary or Assistant Secretary thereof, notwithstanding the fact that at the
time the Securities shall be authenticated and delivered or disposed of such
Person shall have ceased to be the Chairman or a Vice President, or the
Secretary or an Assistant Secretary, of the Company. The seal of the Company may
be in the form of a facsimile of such seal and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. The Securities may contain
such notations, legends or endorsements required by law, stock exchange rule or
usage. Each Security shall be dated the date of its authentication by the
Trustee.
A Security shall not be valid until authenticated manually by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Security so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.
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 written order of the
Company for the authentication and delivery of such Securities, signed by its
Chairman or any Vice President and its Secretary or any Assistant Secretary, and
the Trustee in accordance with such written order shall authenticate and deliver
such Securities.
In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating
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that the form and terms thereof have been established in conformity with the
provisions of this Indenture.
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 or otherwise in a manner that is not reasonably acceptable to the
Trustee.
SECTION 2.05 REGISTRATION OF TRANSFER AND EXCHANGE.
(a) Securities of any series may be exchanged upon presentation thereof
at the office or agency of the Company designated for such purpose in the
Borough of Manhattan, the City and State of New York, for other Securities of
such series of authorized denominations, and for a like aggregate principal
amount, upon payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, all as provided in this Section. In respect of any
Securities so surrendered for exchange, the Company shall execute, the Trustee
shall authenticate and such office or agency shall deliver in exchange therefor
the Security or Securities of the same series that the Securityholder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company a register
or registers (herein referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall register
the Securities and the transfers of Securities as in this Article provided and
which at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Securities and transfer of Securities
as herein provided shall be appointed as authorized by Board Resolution (the
"Security Registrar").
Upon surrender for transfer of any Security at the office or agency of
the Company designated for such purpose, the Company shall execute, the Trustee
shall authenticate and such office or agency shall deliver in the name of the
transferee or transferees a new Security or Securities of the same series as the
Security presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or registration of
transfer, as provided in this Section, shall be accompanied (if so required by
the Company or the Security Registrar) by a written instrument or instruments of
transfer, in form satisfactory to the Company or the Security Registrar, duly
executed by the registered holder or by such holder's duly authorized attorney
in writing.
(c) No service charge shall be made for any exchange or registration of
transfer of Securities, or issue of new Securities in case of partial redemption
of any series, but the Company may require payment of a sum sufficient to cover
any tax or other governmental
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charge in relation thereto, other than exchanges pursuant to Section 2.06, the
second paragraph of Section 3.03 and Section 9.04 not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Securities during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
less than all the Outstanding Securities of the same series and ending at the
close of business on the day of such mailing, nor (ii) to register the transfer
of or exchange any Securities of any series or portions thereof called for
redemption. The provisions of this Section 2.05 are, with respect to any Global
Security, subject to Section 2.11 hereof.
SECTION 2.06 TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and the Trustee shall authenticate and deliver, temporary
Securities (printed, litho graphed or typewritten) of any authorized
denomination. Such temporary Securities shall be substantially in the form of
the definitive Securities in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Company. Every temporary Security of
any series shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Securities of such series. Without unnecessary delay
the Company will execute and will furnish definitive Securities of such series
and thereupon any or all temporary Securities of such series may be surrendered
in exchange therefor (without charge to the holders), at the office or agency of
the Company designated for the purpose in the Borough of Manhattan, the City and
State of New York, and the Trustee shall authenticate and such office or agency
shall deliver in exchange for such temporary Securities an equal aggregate
principal amount of definitive Securities of such series, unless the Company
advises the Trustee to the effect that definitive Securities need not be
executed and furnished until further notice from the Company. Until so
exchanged, the temporary Securities of such series shall be entitled to the same
benefits under this Indenture as definitive Securities of such series
authenticated and delivered hereunder.
SECTION 2.07 MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
In case any temporary or definitive Security shall become mutilated or
be destroyed, lost or stolen, the Company (subject to the next succeeding
sentence) shall execute, and upon the Company's request the Trustee (subject as
aforesaid) shall authenticate and deliver, a new Security of the same series,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Security, or in lieu of and in substitution for the Security
so destroyed, lost or stolen. In every case the applicant for a substituted
Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss
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or theft of the applicant's Security and of the ownership thereof. The Trustee
may authenticate any such substituted Security and deliver the same upon the
written request or authorization of any officer of the Company. Upon the
issuance of any substituted Security, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. In case any Security that has matured or is
about to mature shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Security, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Security) if the applicant for such payment shall furnish to the Company and the
Trustee such security or indemnity as they may require to save them harmless,
and, in case of destruction, loss or theft, evidence to the satisfaction of the
Company and the Trustee of the destruction, loss or theft of such Security and
of the ownership thereof.
Every replacement Security issued pursuant to the provisions of this
Section shall constitute an additional contractual obligation of the Company
whether or not the mutilated, destroyed, lost or stolen Security shall be found
at any time, or be enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Securities of the same series duly issued hereunder. All Securities shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities, and shall preclude (to the extent lawful) any and all
other rights or remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.08 CANCELLATION.
All Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any
paying agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be cancelled by it, and no Securities shall be issued in
lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Company at the time of such surrender, the
Trustee shall deliver to the Company canceled Securities held by the Trustee. In
the absence of such request the Trustee may dispose of canceled Securities in
accordance with its standard procedures and deliver a certificate of disposition
to the Company. If the Company shall otherwise acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
SECTION 2.09 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give or be construed to give to any Person, other than the parties hereto
and the holders of the Securities (and, with respect to the provisions of
Article Fourteen, the holders of Senior Indebtedness) any
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legal or equitable right, remedy or claim under or in respect of this Indenture,
or under any covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit of the parties
hereto and of the holders of the Securities (and, with respect to the provisions
of Article Fourteen, the holders of Senior Indebtedness).
SECTION 2.10 AUTHENTICATING AGENT.
So long as any of the Securities of any series remain Outstanding there
may be an Authenticating Agent for any or all such series of Securities which
the Trustee shall have the right to appoint. Said Authenticating Agent shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, transfer or partial redemption thereof, 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. All references in this Indenture to the authentication of
Securities by the Trustee shall be deemed to include authentication by an
Authenticating Agent for such series. Each Authenticating Agent shall be
acceptable to the Company and shall be a corporation that has a combined capital
and surplus, as most recently reported or determined by it, sufficient under the
laws of any jurisdiction under which it is organized or in which it is doing
business to conduct a trust business, and that is otherwise authorized under
such laws to conduct such business and is subject to supervision or examination
by Federal or State authorities. If at any time any Authenticating Agent shall
cease to be eligible in accordance with these provisions, it shall resign
immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall
become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11 GLOBAL SECURITIES.
(a) If the Company shall establish pursuant to Section 2.01 that the
Securities of a particular series are to be issued as a Global Security, then
the Company shall execute and the Trustee shall, in accordance with Section
2.04, authenticate and deliver, a Global Security that (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
all of the Outstanding Securities of such series, (ii) shall be registered in
the name of the Depositary or its nominee, (iii) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary's instruction and (iv)
shall bear a legend substantially to the following effect: "Except as otherwise
provided in Section 2.11 of the Indenture, this Security may be transferred,
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in whole but not in part, only to another nominee of the Depositary or to a
successor Depositary or to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05, the Global Security
of a series may be transferred, in whole but not in part and in the manner
provided in Section 2.05, only to another nominee of the Depositary for such
series, or to a successor Depositary for such series selected or approved by the
Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the Securities
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no longer
be registered or in good standing under the Exchange Act, or other applicable
statute or regulation, and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer be applicable to the Securities of such series and the Company will
execute, and subject to Section 2.05, the Trustee will authenticate and deliver
the Securities of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security of such series in exchange for such
Global Security. In addition, the Company may at any time determine that the
Securities of any series shall no longer be represented by a Global Security and
that the provisions of this Section 2.11 shall no longer apply to the Securities
of such series. In such event the Company will execute and subject to Section
2.05, the Trustee, upon receipt of an Officers' Certificate evidencing such
determination by the Company, will authenticate and deliver the Securities of
such series in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security of such series in exchange for such Global
Security. Upon the exchange of the Global Security for such Securities in
definitive registered form without coupons, in authorized denominations, the
Global Security shall be canceled by the Trustee. Such Securities in definitive
registered form issued in exchange for the Global Security pursuant to this
Section 2.11(c) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to the Depositary for delivery to the Persons in
whose names such Securities are so registered.
ARTICLE III.
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01 REDEMPTION.
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The Company may redeem the Securities of any series issued hereunder on
and after the dates and in accordance with the terms established for such series
pursuant to Section 2.01 hereof.
SECTION 3.02 NOTICE OF REDEMPTION.
(a) In case the Company shall desire to exercise such right to redeem
all or, as the case may be, a portion of the Securities of any series in
accordance with the right reserved so to do, the Company shall, or shall cause
the Trustee to, give notice of such redemption to holders of the Securities of
such series to be redeemed by mailing, first class postage prepaid, a notice of
such redemption not less than 30 days and not more than 90 days before the date
fixed for redemption of that series to such holders at their last addresses as
they shall appear upon the Security Register unless a shorter period is
specified in the Securities to be redeemed. Any notice that is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the registered holder receives the notice. In any case, failure
duly to give such notice to the holder of any Security of any series designated
for redemption in whole or in part, or any defect in the notice, shall not
affect the validity of the proceedings for the redemption of any other
Securities of such series or any other series. 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 any such restriction.
Each such notice of redemption shall specify the date fixed for
redemption and the redemption price at which Securities of that series are to be
redeemed, and shall state that payment of the redemption price of such
Securities to be redeemed will be made at the office or agency of the Company in
the Borough of Manhattan, the City and State of New York, upon presentation and
surrender of such Securities, that interest accrued to the date fixed for redemp
tion will be paid as specified in said notice, that from and after said date
interest will cease to accrue and that the redemption is for a sinking fund, if
such is the case. If less than all the Securities of a series are to be
redeemed, the notice to the holders of Securities of that series to be redeemed
in whole or in part shall specify the particular Securities to be so redeemed.
In case any Security is to be redeemed in part only, the notice that relates to
such Security shall state the portion of the principal amount thereof to be
redeemed, and shall state that on and after the redemption date, upon surrender
of such Security, a new Security or Securities of such series in principal
amount equal to the unredeemed portion thereof will be issued.
(b) If less than all the Securities of a series are to be redeemed, the
Company shall give the Trustee at least 45 days' notice in advance of the date
fixed for redemption as to the aggregate principal amount of Securities of the
series to be redeemed, and thereupon the Trustee shall select, by lot or in such
other manner as it shall deem appropriate and fair in its discretion and that
may provide for the selection of a portion or portions (equal to one thousand
U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount
of such Securities of a denomination larger than $1,000, the Securities to be
redeemed and shall thereafter promptly
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notify the Company in writing of the numbers of the Securities to be redeemed,
in whole or in part.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its Chairman or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the
Securities of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Security Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.03 PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been completed as
above provided, the Securities or portions of Securities of the series to be
redeemed specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption and interest on such
Securities or portions of Securities shall cease to accrue on and after the date
fixed for redemption, unless the Company shall default in the payment of such
redemption price and accrued interest with respect to any such Security or
portion thereof. On presentation and surrender of such Securities on or after
the date fixed for redemption at the place of payment specified in the notice,
said Securities shall be paid and redeemed at the applicable redemption price
for such series, together with interest accrued thereon to the date fixed for
redemption (but if the date fixed for redemption is an interest payment date,
the interest installment payable on such date shall be payable to the registered
holder at the close of business on the applicable record date pursuant to
Section 2.03).
(b) Upon presentation of any Security of such series that is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Security is presented shall
deliver to the holder thereof, at the expense of the Company, a new Security of
the same series of authorized denominations in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 3.04 SINKING FUND.
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to
any sinking fund for the retirement of Securities of a series, except as
otherwise specified as contemplated by Section 2.01 for Securities of such
series.
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The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series 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 Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 3.05. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
SECTION 3.05 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (i) may deliver Outstanding Securities of a series (other
than any Securities previously called for redemption) and (ii) may apply as a
credit Securities of a series that 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 the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series, PROVIDED that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
redemption price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 3.06 REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of the series, the portion thereof, if any,
that is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 3.05 and the basis for such credit and will, together with
such Officers' Certificate, deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before 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 3.02 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 3.02. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Section 3.03.
ARTICLE IV.
CERTAIN COVENANTS
SECTION 4.01 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
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The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Securities of that series
at the time and place and in the manner provided herein and established with
respect to such Securities.
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY.
So long as any series of the Securities remain Outstanding, the Company
agrees to maintain an office or agency in the Borough of Manhattan, the City and
State of New York, with respect to each such series and at such other location
or locations as may be designated as provided in this Section 4.02, where (i)
Securities of that series may be presented for payment, (ii) Securities of that
series may be presented as hereinabove authorized for registration of transfer
and exchange, and (iii) notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the Company
shall, by written notice signed by its Chairman or a Vice President and
delivered to the trustee, designate some other office or agency for such
purposes or any of them. 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, 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, notices and
demands.
SECTION 4.03 PAYING AGENTS.
(a) If the Company shall appoint one or more paying agents for all or
any series of the Securities, other than the Trustee, the Company will cause
each such paying agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of this
Section:
(1) that it will hold all sums held by it as such agent for the payment
of the principal of (and premium, if any) or interest on the Securities of
that series (whether such sums have been paid to it by the Company or by any
other obligor of such Securities) in trust for the benefit of the Persons
entitled thereto;
(2) that it will give the Trustee notice of any failure by the Company
(or by any other obligor of such Securities) to make any payment of the
principal of (and premium, if any) or interest on the Securities of that
series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and
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(4) that it will perform all other duties of paying agent as set forth
in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
any series of the Securities, it will on or before each due date of the
principal of (and premium, if any) or interest on Securities of that series, set
aside, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest
so becoming due on Securities of that series until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure (by it or any other obligor on
such Securities) to take such action. 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 (and premium, if any) or interest on any Securities of that
series, deposit with the paying agent a sum sufficient to pay the principal (an
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of this action or failure so to act.
(c) Notwithstanding anything in this Section to the contrary, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.05, and (ii) 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 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 terms and conditions 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.
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SECTION 4.04 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 4.05 COMPLIANCE WITH CONSOLIDATION PROVISIONS.
The Company will not, while any of the Securities remain Outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other company unless the provisions of
Article Ten hereof are complied with.
ARTICLE V.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS.
The Company will furnish or cause to be furnished to the Trustee (a) on
a monthly basis on each regular record date (as defined in Section 2.03) a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the holders of each series of Securities as of such regular record date,
PROVIDED that the Company shall not be obligated to furnish or cause to furnish
such list at any time that the list shall not differ in any respect from the
most recent list furnished to the Trustee by the Company and (b) 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; PROVIDED,
HOWEVER, that, in either case, no such list need be furnished for any series for
which the Trustee shall be the Security Registrar.
SECTION 5.02 PRESERVATION OF INFORMATION; COMMUNICATIONS WITH
SECURITYHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Securities contained in the most recent list furnished to it as provided in
Section 5.01 and as to the names and addresses of holders of Securities received
by the Trustee in its capacity as Security Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
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(c) Securityholders may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Securities.
SECTION 5.03 REPORTS BY THE COMPANY.
(a) The Company covenants and agrees to file with the Trustee, within
30 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports that may be required pursuant to
Section 13 of the Exchange Act, in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from to time
by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable over-night delivery service that provides for
evidence of receipt, to the Securityholders, as their names and addresses appear
upon the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section as may
be required by rules and regulations prescribed from time to time by the
Commission.
SECTION 5.04 REPORTS BY THE TRUSTEE.
(a) On or before July 15 in each year in which any of the Securities
are Outstanding, the Trustee shall transmit by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear upon the
Security Register, a brief report dated as of the preceding May 15, if and to
the extent required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the
Trust Indenture Act.
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(c) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Securities are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Securities become
listed on any stock exchange.
ARTICLE VI.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01 EVENTS OF DEFAULT.
(a) Whenever used herein with respect to Securities of a particular
series, "Event of Default" means any one or more of the following events that
has occurred and is continuing:
(1) the Company defaults in the payment of any installment of interest
upon any of the Securities of that series, as and when the same shall become
due and payable, and continuance of such default for a period of 90 days;
PROVIDED, HOWEVER, that a valid extension of an interest payment period by
the Company in accordance with the terms of any indenture supplemental
hereto, shall not constitute a default in the payment of interest for this
purpose;
(2) the Company defaults in the payment of the principal of (or
premium, if any, on) any of the Securities of that series as and when the
same shall become due and payable whether at maturity, upon redemption, by
declaration or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series; PROVIDED, HOWEVER,
that a valid extension of the maturity of such Securities in accordance with
the terms of any indenture supplemental hereto shall not constitute a
default in the payment of principal or premium, if any;
(3) the Company fails to observe or perform any other of its covenants
or agreements with respect to that series contained in this Indenture or
otherwise established with respect to that series of Securities pursuant to
Section 2.01 hereof (other than a covenant or agreement that has been
expressly included in this Indenture solely for the benefit of one or more
series of Securities other than such series) for a period of 90 days after
the date on which written notice of such failure, requiring the same to be
remedied and stating that such notice is a "Notice of Default" hereunder,
shall have been given to the Company by the Trustee, by registered or
certified mail, or to the Company and the Trustee by the holders of at least
25% in principal amount of the Securities of that series at the time
Outstanding;
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(4) the Company pursuant to or within the meaning of any Bankruptcy Law
(i) commences a voluntary case, (ii) consents to the entry of an order for
relief against it in an involuntary case, (iii) consents to the appointment
of a Custodian of it or for all or substantially all of its property or (iv)
makes a general assignment for the benefit of its creditors; or
(5) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (i) is for relief against the Company in an involuntary
case, (ii) appoints a Custodian of the Company for all or substantially all
of their respective property, or (iii) orders the liquidation of the
Company, and the order or decree remains unstayed and in effect for 90 days.
(b) In each and every such case, unless the principal of all the
Securities of that series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Securities of that series then Outstanding hereunder, by notice in writing to
the Company (and to the Trustee if given by such Securityholders), may declare
the principal of all the Securities of that series to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, notwithstanding anything contained in this
Indenture or in the Securities of that series or established with respect to
that series pursuant to Section 2.01 to the contrary.
(c) At any time after the principal of the Securities of that series
shall have been so declared due and payable, and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the holders of a majority in aggregate principal amount of
the Securities of that series then Outstanding hereunder, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if: (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Securities
of that series and the principal of (and premium, if any, on) any and all
Securities of that series that shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and, to the
extent that such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the Securities of
that series to the date of such payment or deposit) and the amount payable to
the Trustee under Section 7.06, and (ii) any and all Events of Default under the
Indenture with respect to such series, other than the nonpayment of principal on
Securities of that series that shall not have become due by their terms, shall
have been remedied or waived as provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Securities of that series under this Indenture and such proceedings
shall have been discontinued
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or abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such proceedings had been
taken.
SECTION 6.02 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
(a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Securities of a series, or
any payment required by any sinking or analogous fund established with respect
to that series as and when the same shall have become due and payable, and such
default shall have continued for a period of 90 Business Days, or (2) in case it
shall default in the payment of the principal of (or premium, if any, on) any of
the Securities of a series when the same shall have become due and payable,
whether upon maturity of the Securities of a series or upon redemption or upon
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Securities of that series,
the whole amount that then shall have been become due and payable on all such
Securities for principal (and premium, if any) or interest, or both, as the case
may be, with interest upon the overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under applicable law)
upon overdue installments of interest at the rate per annum expressed in the
Securities of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under Section 7.06.
(b) If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the
Securities of that series and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or
other obligor upon the Securities of that series, wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial proceedings
affected the Company, or its creditors or property, the Trustee shall have power
to intervene in such proceedings and take any action therein that may be
permitted by the court and shall (except as may be otherwise provided by law)
be entitled to file such proofs of claim and other papers and documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
holders of Securities of such series allowed for the entire amount due and
payable by the Company under the Indenture at the date of institution of such
proceedings and for any additional amount that may become due and payable by the
Company after such date, and to collect and receive any moneys
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or other property payable or deliverable on any such claim, and to distribute
the same after the deduction of the amount payable to the Trustee under Section
7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the holders of Securities of such series to make
such payments to the Trustee, and, in the event that the Trustee shall consent
to the making of such payments directly to such Securityholders, to pay to the
Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture,
or under any of the terms established with respect to Securities of that series,
may be enforced by the Trustee without the possession of any of such Securities,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or 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 payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Securities of such
series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in the Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 6.03 APPLICATION OF MONEYS COLLECTED.
Any moneys collected by the Trustee pursuant to this Article with
respect to a particular series of Securities shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the Securities of that series, and notation
thereon the payment, if only partially paid, and upon surrender thereof if fully
paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of all Senior Indebtedness of the Company if and
to the extent required by Article Fourteen; and
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THIRD: To the payment of the amounts then due and unpaid upon
Securities of such series for principal (and premium, if any) and interest,
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 premium,
if any) and interest, respectively.
SECTION 6.04 LIMITATION ON SUITS.
No holder of any Security of any series shall have any right by virtue
or by availing of any provision of this Indenture to institute any suit, action
or proceeding in equity or at law upon or under or with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless (i) such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof
with respect to the Securities of such series specifying such Event of Default,
as hereinbefore provided; (ii) the holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as trustee hereunder; (iii) such holder or holders
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby;
and (iv) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity, shall have failed to institute any such action, suit or
proceeding and (v) during such 60 day period, the holders of a majority in
principal amount of the Securities of that series do not give the Trustee a
direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary, any other
provisions of this Indenture, the right of any holder of any Security to receive
payment of the principal of (and premium, if any) and interest on such Security,
as therein provided, on or after the respective due dates expressed in such
Security (or in the case of redemption, on the redemption date), or to institute
suit for the enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the consent of
such holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security of such series
with every other such taker and holder and the Trustee, that no one or more
holders of Securities of such series shall have any right in any manner
whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such
Securities, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Securities of such series. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
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SECTION 6.05 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER.
(a) Except as otherwise provided in Section 2.07, all powers and
remedies given by this Article to the Trustee or to the Securityholders shall,
to the extent permitted by law, be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Securities.
(b) No delay or omission of the Trustee or of any holder of any of the
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or on acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Securityholders.
SECTION 6.06 CONTROL BY SECURITYHOLDERS.
The holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding, determined in accordance with
Section 8.04, 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 such series;
PROVIDED, HOWEVER, that such direction shall not be in conflict with any rule of
law or with this Indenture or be unduly prejudicial to the rights of holders of
Securities of any other series at the time Outstanding determined in accordance
with Section 8.04. Subject to the provisions of Section 7.01, the Trustee shall
have the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Officers of the Trustee, determine that
the proceeding so directed would involve the Trustee in personal liability. The
holders of a majority in aggregate principal amount of the Securities of any
series at the time Outstanding affected thereby, determined in accordance with
Section 8.04, may on behalf of the holders of all of the Securities of such
series waive any past default in the performance of any of the covenants
contained herein or established pursuant to Section 2.01 with respect to such
series and its consequences, except a default in the payment of the principal
of, or premium, if any, or interest on, any of the Securities of that series as
and when the same shall become due by the terms of such Securities otherwise
than by acceleration (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal and any premium has been
deposited with the Trustee (in accordance with Section 6.01(c)). Upon any such
waiver, the default covered thereby shall be deemed to be cured for all purposes
of this Indenture and the Company, the Trustee and the holders of the Securities
of such series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.
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SECTION 6.07 UNDERTAKING TO PAY COSTS.
All parties to this Indenture agree, and each holder of any Securities
by such holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the
Outstanding Securities of any series, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security of such series, on or after the
respective due dates expressed in such Security or established pursuant to this
Indenture.
ARTICLE VII.
CONCERNING THE TRUSTEE
SECTION 7.01 CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of Default with
respect to the Securities of a series and after the curing of all Events of
Default with respect to the Securities of that series that may have occurred,
shall undertake to perform with respect to the Securities of such series such
duties and only such duties as are specifically set forth in this Indenture, and
no implied covenants shall be read into this Indenture against the Trustee. In
case an Event of Default with respect to the Securities of a series has occurred
(that has not been cured or waived), the Trustee shall exercise with respect to
Securities of that 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 man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) 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:
(1) prior to the occurrence of an Event of Default with respect to the
Securities of a series and after the curing or waiving of all such Events of
Default with respect to that series that may have occurred:
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(i) the duties and obligations of the Trustee shall with respect
to the Securities of such series be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable with
respect to the Securities of such series except for the performance of
such duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to the Securities of such series conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions that 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 requirement of this
Indenture;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee, was negligent in ascertaining
the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
the holders of not less than a majority in principal amount of the
Securities of any series at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee
under this Indenture with respect to the Securities of that series; and
(4) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity
against such risk is not reasonably assured to it.
SECTION 7.02 CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request,
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consent, order, approval, bond, security or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company, by the Chairman or any Vice President and by
the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer thereof (unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted hereunder in
good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to a series of the Securities (that has not been cured
or waived) to exercise with respect to Securities of that series such of the
rights and powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(e) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security, or
other papers or documents, unless requested in writing so to do by the holders
of not less than a majority in principal amount of the Outstand ing Securities
of the particular series affected thereby (determined as provided in Section
8.04); PROVIDED, HOWEVER, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding. The reasonable expense
of every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand; and
(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not
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be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
SECTION 7.03 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OR
SECURITIES.
(a) The recitals contained herein and in the Securities shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities.
(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Securities or of the proceeds of such Securities, or
for the use or application of any moneys paid over by the Trustee in accordance
with any provision of this Indenture or established pursuant to Section 2.01, or
for the use or application of any moneys received by any paying agent other than
the Trustee.
SECTION 7.04 MAY HOLD SECURITIES.
The Trustee or any paying agent or Security Registrar, in its
individual or any other capacity, may become the owner or pledgee of Securities
with the same rights it would have if it were not Trustee, paying agent or
Security Registrar.
SECTION 7.05 MONEYS HELD IN TRUST.
Subject to the provisions of Section 11.05, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree with the Company to pay thereon.
SECTION 7.06 COMPENSATION AND REIMBURSEMENT.
(a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), as the Company, and the Trustee may from time to time agree in
writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and, except as otherwise expressly provided herein,
the Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
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counsel and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify the Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of the
Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Securities.
SECTION 7.07 RELIANCE ON OFFICERS' CERTIFICATE.
Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting to take any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.
SECTION 7.08 DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
SECTION 7.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee with respect to the Securities
issued hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial, or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such
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corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. The Company may not, nor
may any Person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
SECTION 7.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at any time
resign with respect to the Securities of one or more series by giving written
notice thereof to the Company and by transmitting notice of resignation by mail,
first class postage prepaid, to the Securityholders of such series, as their
names and addresses appear upon the Security Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
with respect to Securities of such series by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted appointment
within 30 days after the mailing 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 Securities of such series, or any
Securityholder of that series who has been a bona fide holder of a Security or
Securities for at least six months may on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any one of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section
7.08 after written request therefor by the Company or by any Securityholder
who has been a bona fide holder of a Security or Securities for at least six
months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Securityholder; or
(3) the Trustee shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a
receiver of the Trustee or of its property shall be appointed or consented
to, or any public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, the Company may remove the Trustee with
respect to all Securities and appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so removed and
one copy to the
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successor trustee, or, unless the Trustee's duty to resign is stayed as
provided herein, any Securityholder who has been a bona fide holder of a
Security or Securities for at least six months may, on behalf of that holder
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding may at any time remove the
Trustee with respect to such series by so notifying the Trustee and the Company
and may appoint a successor Trustee for such series with the consent of the
Company.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Securities of a series pursuant to any of
the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Securities of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Securities of any particular series.
SECTION 7.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) 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.
(b) 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)
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
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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 supple mental indenture shall constitute such Trustees co-trustees of
the same trust, 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 that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; 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,
such retiring Trustee shall with respect to the Securities of that or those
series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, 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, to the extent contemplated by
such supplemental indenture, the 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.
(c) 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 paragraph (a) or (b) of this Section, as the case may be.
(d) 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.
(e) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register. If the Company
fails to transmit such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
SECTION 7.12 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 the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, PROVIDED that such corporation shall be
qualified under the provisions of Section 7.08 and eligible under
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the provisions of Section 7.09, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. In case 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 7.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent included therein.
ARTICLE VIII.
CONCERNING THE SECURITYHOLDERS
SECTION 8.01 EVIDENCE OF ACTION BY SECURITYHOLDERS.
Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the Securities
of a particular series may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action the holders
of such majority or specified percentage of that series have joined therein may
be evidenced by any instrument or any number of instruments of similar tenor
executed by such holders of Securities of that series in Person or by agent or
proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Securityholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of Outstanding Securities of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Securities of that series
shall be computed as of the record date; PROVIDED, HOWEVER, that no such
authorization, agreement or consent by such Securityholders on the record date
shall
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be deemed effective unless it shall become effective pursuant to the provisions
of this Indenture not later than six months after the record date.
SECTION 8.02 PROOF OF EXECUTION BY SECURITYHOLDERS.
Subject to the provisions of Section 7.01, proof of the execution of
any instrument by a Securityholder (such proof will not require notarization) or
his agent or proxy and proof of the holding by any Person of any of the
Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall be proved by the Security
Register of such Securities or by a certificate of the Security Registrar
thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03 WHO MAY BE DEEMED OWNERS.
Prior to the due presentment for registration of transfer of any
Security, the Company, the Trustee, any paying agent and any Security Registrar
may deem and treat the Person in whose name such Security shall be registered
upon the books of the Company as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notice of ownership
or writing thereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and (subject to Section 2.03) interest on such Security and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.
SECTION 8.04 CERTAIN SECURITIES OWNED BY COMPANY DISREGARDED.
In determining whether the holders of the requisite aggregate principal
amount of Securities of a particular series have concurred in any direction,
consent of waiver under this Indenture, the Securities of that series that are
owned by the Company or any other obligor on the Securities of that series or by
any Person directly or indirectly controlling or controlled by or under common
control with the Company or any other obligor on the Securities of that series
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver,
only Securities of such series that the Trustee actually knows are so owned
shall be so disregarded. The Securities so owned that have been pledged in good
faith may be regarded as Outstanding for the purposes of this Section, if the
pledgee shall
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establish to the satisfaction of the Trustee the pledgee's right so to act with
respect to such Securities and that the pledgee is not a Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.
SECTION 8.05 ACTIONS BINDING ON FUTURE SECURITYHOLDERS.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Securities of a
particular series specified in this Indenture in connection with such action,
any holder of a Security of that series that is shown by the evidence to be
included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 8.02, revoke such action so far as concerns such Security.
Except as aforesaid any such action taken by the holder of any Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Security. Any action taken
by the holders of the majority or percentage in aggregate principal amount of
the Securities of a particular series specified in this Indenture in connection
with such action shall be conclusively binding upon the Company, the Trustee and
the holders of all the Securities of that series.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.01 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
SECURITYHOLDERS.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect), without the
consent of the Securityholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein, in the
Securities of any series;
(b) to comply with Article Ten;
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(c) to provide for uncertificated Securities in addition to or in place
of certificated Securities;
(d) 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;
(e) to add to, delete from, or revise the conditions, limitations, and
restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Securities, as herein set forth;
(f) to make any change that does not adversely affect the rights of any
Securityholder in any material respect; or
(g) to provide for the issuance of and establish the form and terms and
conditions of the Securities of any series as provided in Section 2.01, to
establish the form of any certifications required to be furnished pursuant to
the terms of this Indenture or any series of Securities, or to add to the rights
of the holders of any series of Securities.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the
holders of any of the Securities at the time Outstanding, notwithstanding any of
the provisions of Section 9.02.
SECTION 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Section 8.01) of the holders
of not less than a majority in aggregate principal amount of the Securities of
each series affected by such supplemental indenture or indentures at the time
Outstanding, the Company, when authorized by Board Resolutions, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental indenture or of modifying in any manner not covered by
Section 9.01 the rights of the holders of the Securities of such series under
this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall,
without the consent of the holders of each Security then Outstanding and
affected thereby, (i) extend the fixed maturity of any Securities of any series,
or reduce the principal amount
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thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any premium payable upon the redemption thereof; (ii) change any
obligation to pay additional amounts; (iii) reduce the amount of principal of an
original issue discount security or any other Security payable upon acceleration
of the maturity thereof; (iv) change currency in which any Security or any
premium or interest is payable; (v) impair the right to enforce any payment on
or with respect to any Security; (vi) adversely change the right to convert or
exchange, including decreasing the conversion rate or increasing the conversion
price of, such Security (if applicable); (vii) modify the subordination
provisions in a manner adverse to the holders of such Securities; (viii) if the
Securities are secured, change the terms and conditions pursuant to which the
Securities are secured in a manner adverse to the holders of the Securities;
(ix) reduce the percentage in principal amount of outstanding Securities of any
series, the consent of whose holders is required for modification or amendment
of the indenture or for waiver of compliance with certain provisions of the
indenture or for waiver of certain defaults; (x) reduce the require ments
contained in the indenture for quorum or voting; (xi) change any obligations of
the Company to maintain an office or agency in the places and for the purposes
required by the indentures; or (xii) modify any of the above provisions.
It shall not be necessary for the consent of the Securityholders of any
series affected thereby under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 9.03 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article or of Section 10.01, this Indenture shall, with
respect to such series, be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Securities of the series affected thereby shall
thereafter be deter mined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.04 SECURITIES AFFECTED BY SUPPLEMENTAL INDENTURES.
Securities of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, may bear a
notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of that series so modified as to conform, in the
opinion of the Board of Directors of the Company, to any modification of this
Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the
Securities of that series then Outstanding.
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SECTION 9.05 EXECUTION OF SUPPLEMENTAL INDENTURES.
Upon the request of the Company, accompanied by its Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture. The Trustee, subject to the
provisions of Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and that
it is proper for the Trustee under the provisions of this Article to join in the
execution thereof; PROVIDED, HOWEVER, that such Opinion of Counsel need not be
provided in connection with the execution of a supplemental indenture that
establishes the terms of a series of Securities pursuant to Section 2.01 hereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders of all series affected thereby as their names and addresses
appear upon the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
ARTICLE X.
SUCCESSOR CORPORATION
SECTION 10.01 COMPANY MAY CONSOLIDATE, ETC.
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
corporation or corporations (whether or not affiliated with the Company) or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of the property of the Company or its successor or
successors as an entirety, or substantially as an entirety, to any other
corporation (whether or not affiliated with the Company or its successor or
successors) authorized to acquire and operate the same; PROVIDED, HOWEVER, the
Company hereby covenants and agrees that, upon any such consolidation, merger,
sale, conveyance, transfer or other disposition, the due and punctual payment of
the principal of (premium, if any) and interest on all of the Securities of all
series in accordance with the terms of each series, according to their tenor and
the due and punctual performance and observance of all the covenants and
conditions of this Indenture with respect to
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each series or established with respect to such series pursuant to Section 2.01
to be kept or performed by the Company shall be expressly assumed, by
supplemental indenture (which shall conform to the provisions of the Trust
Indenture Act, as then in effect) satisfactory in form to the Trustee executed
and delivered to the Trustee by the entity formed by such consolidation, or into
which the Company shall have been merged, or by the entity which shall have
acquired such property.
SECTION 10.02 SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the Securities of all
series Outstanding and the due and punctual performance of all of the covenants
and conditions of this Indenture or established with respect to each series of
the Securities pursuant to Section 2.01 to be performed by the Company with
respect to each series, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named as the
Company herein, and thereupon the predecessor corporation shall be relieved of
all obligations and covenants under this Indenture and the Securities.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition such changes in phraseology and form (but not in
substance) may be made in the Securities thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Securities
shall prevent the Company from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other Person (whether or not
affiliated with the Company).
SECTION 10.03 EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.
The Trustee, subject to the provisions of Section 7.01, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
ARTICLE XI.
SATISFACTION AND DISCHARGE
SECTION 11.01 SATISFACTION AND DISCHARGE OF INDENTURE.
If at any time: (a) the Company shall have delivered to the Trustee for
cancellation all Securities of a series theretofore authenticated (other than
any Securities that shall have
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ben destroyed, lost or stolen and that shall have been replaced or paid as
provided in Section 2.07) and Securities for whose payment money or Governmental
Obligations have theretofore been deposited in trust or segregated and held in
trust by the Company (and thereupon repaid to the Company or discharged from
such trust, as provided in Section 11.05); or (b) all such Securities of a
particular series not theretofore delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due and
payable within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit or cause to be deposited with the Trustee as trust
funds the entire amount in moneys or Governmental Obligations sufficient or a
combination thereof, 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 at maturity or upon redemption all Securities
of that series not theretofore delivered to the Trustee for cancellation,
including principal (and premium, if any) and interest due or to become due to
such date of maturity or date fixed for redemption, as the case may be, and if
the Company shall also pay or cause to be paid all other sums payable hereunder
with respect to such series by the Company then this Indenture shall thereupon
cease to be of further effect with respect to such series except for the
provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall
survive until the date of maturity or redemption date, as the case may be, and
Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the
Trustee, on demand of the Company and at the cost and expense of the Company
shall execute proper instruments acknowledging satisfaction of and discharging
this Indenture with respect to such series.
SECTION 11.02 DISCHARGE OF OBLIGATIONS.
If at any time all such Securities of a particular series not
heretofore delivered to the Trustee for cancellation or that have not become due
and payable as described in Section 11.01 shall have been paid by the Company by
depositing irrevocably with the Trustee as trust funds moneys or an amount of
Governmental Obligations sufficient to pay at maturity or upon redemption all
such Securities of that series not theretofore delivered to the Trustee for
cancella tion, including principal (and premium, if any) and interest due or to
become due to such date of maturity or date fixed for redemption, as the case
may be, and if the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company with respect to such series, then after the
date such moneys or Governmental Obligations, as the case may be, are deposited
with the Trustee the obligations of the Company under this Indenture with
respect to such series shall cease to be of further effect except for the
provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03, 7.06, 7.10 and 11.05
hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.
SECTION 11.03 DEPOSITED MONEYS TO BE HELD IN TRUST.
All moneys or Governmental Obligations deposited with the Trustee
pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be
available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to
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the holders of the particular series of Securities for the payment or redemption
of which such moneys or Governmental Obligations have been deposited with the
Trustee.
SECTION 11.04 PAYMENT OF MONEYS HELD BY PAYING AGENTS.
In connection with the satisfaction and discharge of this Indenture all
moneys or Governmental Obligations then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys or Governmental Obligations.
SECTION 11.05 REPAYMENT TO COMPANY.
Any moneys or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company, in trust for payment of principal
of or premium or interest on the Securities of a particular series that are not
applied but remain unclaimed by the holders of such Securities for at least two
years after the date upon which the principal of (and premium, if any) or
interest on such Securities shall have respectively become due and payable,
shall be repaid to the Company on May 31 of each year or (if then held by the
Company) shall be discharged from such trust; and thereupon the paying agent and
the Trustee shall be released from all further liability with respect to such
moneys or Governmental Obligations, and the holder of any of the Securities
entitled to receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company for the payment thereof.
ARTICLE XII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.01 NO RECOURSE.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company or any such
predecessor or successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements
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contained in this Indenture or in any of the Securities or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Securities or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Securities.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.01 EFFECT ON SUCCESSORS AND ASSIGNS.
All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind their respective
successors and assigns, whether so expressed or not.
SECTION 13.02 ACTIONS BY SUCCESSOR.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.
SECTION 13.03 SURRENDER OF COMPANY POWERS.
The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power so
surrendered shall terminate both as to the Company and as to any successor
corporation.
SECTION 13.04 NOTICES.
Except as otherwise expressly provided herein any notice or demand that
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Securities to or on the Company may
be given or served by being deposited first class postage prepaid in a
post-office letterbox addressed (until another address is filed in writing by
the Company with the Trustee), as follows: Anthracite Capital, Inc., 345
ParkAvenue, 29th Floor, New York, NY 10154. Any notice, election, request or
demand by the Company or any
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Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.
SECTION 13.05 GOVERNING LAW.
This Indenture and each Security shall be deemed to be a contract made
under the internal laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of said State.
SECTION 13.06 TREATMENT OF SECURITIES AS DEBT.
It is intended that the Securities will be treated as indebtedness and
not as equity for federal income tax purposes. The provisions of this Indenture
shall be interpreted to further this intention.
SECTION 13.07 COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company,
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent 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 have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture shall include (1) a statement that the Person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
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SECTION 13.08 PAYMENTS ON BUSINESS DAYS.
Except as provided pursuant to Section 2.01 pursuant to a Board
Resolution, and as set forth in an Officers' Certificate, or established in one
or more indentures supplemental to this Indenture, in any case where the date of
maturity of interest or principal of any Security or the date of redemption of
any Security shall not be a Business Day, then payment of interest or principal
(and premium, if any) may be made on the next succeeding Business Day with the
same force and effect as if made on the nominal date of maturity or redemption,
and no interest shall accrue for the period after such nominal date.
SECTION 13.09 CONFLICT WITH TRUST INDENTURE ACT.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.10 COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
SECTION 13.11 SEPARABILITY.
In case any one or more of the provisions contained in this Indenture
or in the Securities of any series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Securities, but this Indenture and such Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 13.12 ASSIGNMENT.
The Company will have the right at all times to assign any of its
rights or obligations under this Indenture to a direct or indirect wholly-owned
Subsidiary of the Company, PROVIDED that, in the event of any such assignment,
the Company, will remain liable for all such obligations. Subject to the
foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties thereto.
ARTICLE XIV.
SUBORDINATION OF SECURITIES
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SECTION 14.01 SUBORDINATION TERMS.
The payment by the Company of the principal of, premium, if any, and
interest on any series of Securities issued hereunder shall be subordinated to
the extent set forth in an indenture supplemental hereto relating to such
Securities.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
ANTHRACITE CAPITAL, INC.
By:
-----------------------------------
Name:
Title:
[ ],
as Trustee
By:
-----------------------------------
Name:
Title:
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Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Anthracite Capital, Inc. on Form S-3 of our report dated March 17, 1999,
appearing in the Annual Report on Form 10-K of Anthracite Capital, Inc. for
the period from March 24, 1998 (commencement of operations) through
December 31, 1998 and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
New York, NY
March 31, 1999
