<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 12, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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POPULAR, INC.
(Exact name of co-registrant as specified in its charter)
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<TABLE>
<S> <C>
PUERTO RICO 66-0416582
(State or other jurisdiction of (IRS employer
incorporation or organization) identification number)
209 MUNOZ RIVERA AVENUE HATO REY, PUERTO RICO 00918
(Address of principal executive offices) (Zip Code)
</TABLE>
(809) 765-9800
(Co-registrant's telephone number, including area code)
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POPULAR INTERNATIONAL BANK, INC.
(Exact name of co-registrant as specified in its charter)
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<TABLE>
<S> <C>
PUERTO RICO N/A
(State or other jurisdiction of incorporation or (IRS employer
organization) identification number)
209 MUNOZ RIVERA AVENUE 00918
HATO REY, PUERTO RICO (Zip Code)
(Address of principal executive offices)
</TABLE>
(809) 765-9800
(Co-registrant's telephone number, including area code)
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POPULAR NORTH AMERICA, INC.
(Exact name of co-registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 66-0476353
(State or other jurisdiction of (IRS employer
incorporation or organization) identification number)
521 FELLOWSHIP ROAD 08054
MT. LAUREL, NEW JERSEY (Zip Code)
(Address of principal executive office)
</TABLE>
(809) 765-9800
(Co-registrant's telephone number, including area code)
JORGE A. JUNQUERA
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
(809) 765-9800
(Name, address, and telephone number, including area code, of agent for service)
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COPIES TO:
DONALD J. TOUMEY, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement as determined by
the Registrants on the basis of market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. []
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please 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. [X]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TO BE OFFERING PRICE AGGREGATE OF REGISTRATION
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE
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<S> <C> <C> <C> <C>
Debt Securities and Preferred Stock................. $1,000,000,000 100% $1,000,000,000 $303,031
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Guarantees.......................................... (2) (2) (2) (2)
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(2) No additional consideration will be received for the Guarantees.
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The Co-registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Co-registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY STATE.
SUBJECT TO COMPLETION, DATED MAY 12, 1997
PROSPECTUS
DEBT SECURITIES
OF
POPULAR, INC.
OR
POPULAR INTERNATIONAL BANK, INC.
(UNCONDITIONALLY GUARANTEED
BY POPULAR, INC.)
OR
POPULAR NORTH AMERICA, INC.
(UNCONDITIONALLY GUARANTEED
BY POPULAR, INC.)
PREFERRED STOCK
OF
POPULAR, INC.
OR
POPULAR INTERNATIONAL BANK, INC.
(UNCONDITIONALLY GUARANTEED
BY POPULAR, INC.)
OR
POPULAR NORTH AMERICA, INC.
(UNCONDITIONALLY GUARANTEED
BY POPULAR, INC.)
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Popular, Inc. (formerly BanPonce Corporation) (the "Corporation") intends to
issue from time to time in one or more series its (i) unsecured debt securities,
which may be either senior or subordinated, and (ii) shares of preferred stock.
Popular International Bank, Inc. ("PIB") intends to issue from time to time in
one or more series its (i) unsecured debt securities, which may be either senior
or subordinated, and (ii) shares of preferred stock. Popular North America, Inc.
(formerly BanPonce Financial Corp.) ("PNA") intends to issue from time to time
in one or more series its (i) unsecured debt securities, which may be either
senior or subordinated, and (ii) shares of preferred stock. Unsecured debt
securities issued by PIB or PNA will be fully and unconditionally guaranteed as
to the payment of principal, premium, if any, and interest by the Corporation.
Shares of preferred stock issued by PIB or PNA will be fully and unconditionally
guaranteed as to the payment of dividends, redemption price, if any, and
liquidation preference, if any, by the Corporation. The foregoing debt
securities and shares of preferred stock are collectively referred to herein as
the "Securities." The Corporation's guarantees of debt securities or preferred
stock issued by PIB or PNA are collectively referred to herein as the
"Guarantees." The Securities will be limited to an aggregate initial offering
price not to exceed $1,000,000,000 or, in the case of debt securities, the
equivalent thereof in one or more foreign currencies, including composite
currencies. The Securities offered may be offered, separately or together, in
separate series, in amounts, at prices and on terms to be determined at the time
of sale and to be set forth in a supplement to this Prospectus (a "Prospectus
Supplement").
The subordinated debt securities when issued will be subordinated as
described herein under "Description of Debt Securities and Guarantees." Unless
otherwise indicated in the Prospectus Supplement, payment of the principal of
the subordinated debt securities may be accelerated only in the case of certain
events involving the bankruptcy, insolvency or reorganization of the
Corporation, PIB or PNA, as the case may be. There is no right of acceleration
of payment of subordinated debt securities in the case of a default in the
performance of any covenant of the Corporation, PIB or PNA, including the
payment of principal or interest.
The specific terms of the Securities in respect of which this Prospectus is
being delivered, including (i) in the case of debt securities, the issuer, the
specific designation, aggregate principal amount, denominations, maturity,
premium, if any, rate (which may be fixed or variable) and time of payment of
interest, if any, terms for redemption at the option of the Corporation, PIB,
PNA or the holder, if any, currency or currencies of denomination and payment,
if other than U.S. dollars, the terms, if any, for conversion into other debt
securities or preferred stock and any other terms in connection with the
offering and sale of the debt securities in respect of which this Prospectus is
being delivered, as well as the initial public offering price, and the principal
amounts, if any, to be purchased by underwriters and (ii) in the case of
preferred stock, the issuer, the specific title and stated value, number of
shares or fractional interests therein, any dividend, liquidation, redemption,
voting and other rights, the terms, if any, for conversion into other preferred
stock, the securities exchanges, if any, on which the preferred stock is to be
listed, the initial public offering price, and the number of shares, if any, to
be purchased by the underwriters, will be as set forth in the accompanying
Prospectus Supplement. All or a portion of the debt securities may be issued in
permanent global form.
The Securities may be sold to underwriters for public offering pursuant to
terms of offering fixed at the time of sale. In addition, the Securities may be
sold by the Corporation, PIB or PNA directly or through dealers or agents
designated from time to time, which agents may be affiliates of the Corporation.
The Prospectus Supplement will also set forth with respect to the sale of the
Securities in respect of which this Prospectus is being delivered the names of
the underwriters, dealers or agents, if any, together with the terms of
offering, the compensation of such underwriters and the net proceeds to the
Corporation.
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THE SECURITIES WILL BE UNSECURED OBLIGATIONS OF THE CORPORATION, PIB OR PNA,
AS THE CASE MAY BE, AND WILL NOT BE SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER
GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE SECURITIES OFFICE OF THE OFFICE OF THE COMMISSIONER OF
FINANCIAL INSTITUTIONS OF THE COMMONWEALTH OF PUERTO RICO OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION, SUCH
SECURITIES OFFICE OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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The date of this Prospectus is , 1997
<PAGE> 3
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Corporation can be inspected and
copied at the Commission's public reference room located at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and the regional offices of the
Commission in New York (7 World Trade Center, New York, New York 10048) and
Chicago (Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661).
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Such material may also be accessed electronically by means of the
Commission's home page on the Internet at http://www.sec.gov. This Prospectus
does not contain all of the information set forth in the Registration Statement
on Form S-3 which the Corporation has filed with the Commission under the
Securities Act of 1933 (the "Act"), to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation hereby incorporates by reference into this Prospectus the
following documents filed by the Corporation with the Commission:
1. The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1996, provided, however, that the information referred to in
Item 402(a)(8) of Regulation S-K promulgated by the Commission shall not be
deemed to be specifically incorporated by reference herein.
2. The Corporation's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997.
3. The Corporation's Current Reports on Form 8-K, dated January 9,
1997, February 19, 1997, April 7, 1997, May 7, 1997 and May 8, 1997.
4. The Corporation's Registration Statement on Form 8-A, dated August
18, 1988, filed pursuant to Section 12(g) of the Exchange Act, pursuant to
which the Corporation registered its Series A Participating Cumulative
Preferred Stock Purchase Rights.
5. The Corporation's Registration Statement on Form 8-A, dated June
17, 1994, as amended by the Corporation's Amendment on Form 8-A/A, dated
June 21, 1994, filed pursuant to Section 12(g) of the Exchange Act,
pursuant to which the Corporation registered its 8.35% Non-Cumulative
Monthly Income Preferred Stock, 1994 Series A.
All documents filed by the Corporation subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities and
the Guarantees pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
shall be deemed to be incorporated by reference into this Prospectus and to be a
part thereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus, including any beneficial
owner, may obtain without charge, upon oral or written request, a copy of any of
the documents incorporated by reference herein, except for the exhibits to such
documents. Written requests should be mailed to Amilcar Jordan, Senior Vice
President, Popular, Inc., P.O. Box 362708, San Juan, Puerto Rico 00936-2708.
Telephone requests may be directed to (787) 765-9800.
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<PAGE> 4
RECENT DEVELOPMENTS
On December 30, 1996, the Corporation announced an agreement for the
acquisition of Roig Commercial Bank ("Roig Commercial"). Roig Commercial
operates twenty-five branches, mainly located in the eastern part of Puerto
Rico, with assets of approximately $900 million and deposits of $650 million.
Applications for prior approval have been filed with the Federal Reserve and
local banking authorities, and the transaction is subject to their approval.
On January 24, 1997, the Corporation signed a definitive agreement to
acquire CBC Bancorp, Ltd. ("CBC"), the parent company of Capital Bank & Trust
and Capitol Bank of Westmont, through an indirect wholly owned subsidiary of the
Corporation pursuant to an Agreement and Plan of Merger by and among the
Corporation, CBC Interim, Inc. and CBC. CBC, with assets of $315 million and
deposits of $280 million at June 30, 1996, operates three branches in Chicago
and Westmont, Illinois through its banking subsidiaries. The Federal Reserve
approved the application for the acquisition of CBC on April 25, 1997. The
acquisition is subject to the Corporation's receipt of all other required
regulatory approvals.
At the annual meeting of stockholders on April 25, 1997, the Corporation's
shareholders approved amendments to the Corporation's Restated Articles of
Incorporation to change the name of the Corporation to Popular, Inc. from
BanPonce Corporation, and to increase the total number of authorized shares of
capital stock to 190,000,000. The authorized capital stock of the Corporation
consists of 180,000,000 shares of Common Stock, par value of $6.00 per share,
and 10,000,000 shares of Preferred Stock without par value.
On April 30, 1997, Popular North America, Inc. acquired all of the shares
of Seminole National Bank, a national bank headquartered in Florida with assets
at March 31, 1997 of approximately $28 million. The bank will operate under the
name Banco Popular, N.A. (Florida).
On May 8, 1997, the Corporation announced that its Board of Directors had
authorized the repurchase of up to 3,000,000 shares of outstanding common stock
to offset the issuance of shares in connection with recent proposed
acquisitions.
POPULAR, INC.
The Corporation is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"), and incorporated in 1984 under
the laws of the Commonwealth of Puerto Rico ("Puerto Rico"). The Corporation is
the largest financial institution in Puerto Rico, with consolidated assets of
$17.4 billion, total deposits of $10.5 billion and stockholders' equity of $1.3
billion at March 31, 1997. Based on total assets at December 31, 1996, the
Corporation was the 42nd largest bank holding company in the United States. At
the Corporation's annual meeting of shareholders held on April 25, 1997, the
Corporation's shareholders approved a proposal made by the Board of Directors to
change the name of BanPonce Corporation to Popular, Inc. The Corporation's
principal executive offices are located at 209 Munoz Rivera Avenue, Hato Rey,
Puerto Rico 00918 and its telephone number is (787) 765-9800.
The Corporation's principal subsidiary, Banco Popular de Puerto Rico
("Banco Popular" or the "Bank"), was incorporated over 100 years ago in 1893 and
is Puerto Rico's largest bank with total assets of $14.8 billion, deposits of
$9.9 billion and stockholders' equity of $1.1 billion at March 31, 1997. The
Bank accounted for 85% of the total consolidated assets of the Corporation at
March 31, 1997. A consumer-oriented bank, Banco Popular has the largest retail
franchise in Puerto Rico, operating 179 branches and 330 automated teller
machines. The Bank also has the largest trust operation in Puerto Rico and is
the largest servicer of mortgage loans for investors. In addition, it operates
the largest Hispanic bank branch network in the mainland United States with 29
branches in New York and an agency in Chicago. As of March 31, 1997, these
branches had a total of approximately $1.5 billion in deposits. The Bank also
operates seven branches in the U.S. Virgin Islands and one branch in the British
Virgin Islands. Banco Popular has three subsidiaries, Popular Leasing & Rental
Inc., Puerto Rico's largest vehicle leasing and daily rental company, Popular
Finance Inc. (formerly Popular Consumer Services, Inc.), a small-loan and
secondary mortgage company with 35 offices in Puerto Rico operating under the
name of Best Finance and Popular Mortgage, Inc., a mortgage loan company with
four offices in Puerto Rico operating under the name of Popular Mortgage
(formerly Puerto Rico Home Mortgage).
The Corporation has two other principal subsidiaries: Popular Securities,
Inc. (formerly BP Capital Markets) and PIB, which in turn owns all of the
outstanding stock of PNA. For additional information regarding PNA or PIB, see
"Popular North America, Inc." and "Popular International Bank Inc.",
3
<PAGE> 5
respectively. Popular Securities, Inc. is a direct subsidiary of Popular, Inc.
and engages in the business of a securities broker-dealer in Puerto Rico, with
institutional brokerage, financial advisory, and investment and security
brokerage operations.
POPULAR INTERNATIONAL BANK INC.
Popular International Bank, Inc. ("PIB") is a wholly owned subsidiary of
the Corporation organized in 1992 under the laws of the Commonwealth of Puerto
Rico and operating as an "international banking entity" under the International
Banking Center Regulatory Act of Puerto Rico (the "IBC Act"). PIB owns all of
the outstanding capital stock of PNA. Summary consolidated financial statements
of PIB are included in the notes to the Corporation's consolidated financial
statements.
POPULAR NORTH AMERICA, INC.
Popular North America, Inc. ("PNA") (formerly BanPonce Financial Corp.), a
wholly owned subsidiary of PIB and an indirect, wholly owned subsidiary of the
Corporation, was organized in 1991 under the laws of the State of Delaware.
PNA owns all of the common stock of Pioneer Bancorp, Inc., a corporation
organized under the laws of the State of Delaware and headquartered in Chicago,
Illinois, and a registered bank holding company under the BHC Act, which,
through its wholly owned subsidiary River Associates Bancorp, Inc., a Delaware
corporation, owns Banco Popular, Illinois (formerly Pioneer Bank & Trust
Company), a bank organized under the laws of the State of Illinois with five
branches in that state. The deposits of Banco Popular, Illinois are
<PAGE> 6
insured by the Federal Deposit Insurance Corporation (the "FDIC"). As of March
31, 1997, the assets of Banco Popular, Illinois were $465.2 million and its
deposits were $371.8 million.
PNA owns all of the common stock of COMBANCORP, a corporation organized
under the laws of California and headquartered in Los Angeles, and a registered
bank holding company under the BHC Act. COMBANCORP owns Banco Popular, N.A.
(California) ("Banco Popular (California)"), a national bank with four branches
in California. The deposits of Banco Popular (California) are also insured by
the FDIC and it is subject to the supervision of the Office of the Comptroller
of the Currency. See "Certain Regulatory Matters". As of March 31, 1997, it had
assets of $136.4 million and deposits of $93.6 million.
As a result of the ownership of Banco Popular, Illinois and Banco Popular
(California), PNA and PIB are registered bank holding companies under the BHC
Act.
PNA is also the direct owner of all the common stock of Banco Popular, FSB,
a federal savings bank which acquired from the Resolution Trust Corporation
certain assets and all of the deposits of four New Jersey branches of the former
Carteret Federal Savings Bank, a federal savings bank under Resolution Trust
Corporation (the "RTC") conservatorship. The deposits of Banco Popular, FSB are
insured by the FDIC and it is subject to the supervision of the Office of Thrift
Supervision. See "Certain Regulatory Matters".
Banco Popular, FSB owns Equity One, a Delaware corporation (formerly Spring
Financial Services, Inc.) ("Equity One"). Equity One is a diversified consumer
finance company engaged in the business of making personal and mortgage loans
and providing dealer financing through 104 offices in 29 states with total
assets of $1.1 billion as of March 31, 1997. Equity One had initially been
acquired by PNA on September 30, 1991, prior to which time PNA had no
significant business operations.
Summary consolidated financial statements of PNA are included in the notes
to the Corporation's consolidated financial statements.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
OF THE CORPORATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
QUARTER ENDED --------------------------------
MARCH 31, 1997 1996 1995 1994 1993 1992
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<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding Interest on Deposits.......................... 2.0 2.0 2.0 2.6 3.0 2.9
Including Interest on Deposits.......................... 1.4 1.4 1.4 1.5 1.5 1.3
Ratio of Earnings to Fixed Charges and Preferred Stock
Dividends:
Excluding Interest on Deposits.......................... 1.9 2.0 2.0 2.5 3.0 2.9
Including Interest on Deposits.......................... 1.4 1.4 1.4 1.5 1.5 1.3
</TABLE>
For purposes of computing these consolidated ratios, earnings represent
income before income taxes, cumulative effect of a change in accounting
principles and equity in undistributed income of unconsolidated subsidiaries and
affiliates, plus fixed charges excluding capitalized interest. Fixed charges
represent all interest expense (ratios are presented both excluding and
including interest on deposits), the portion of net rental expense which is
deemed representative of the interest factor, the amortization of debt issuance
expense and capitalized interest.
USE OF PROCEEDS
The Corporation intends to use the net proceeds from the sale of the
Securities issued by the Corporation for general corporate purposes, including
investments in, or extensions of credit to, its existing and future
subsidiaries, for the acquisition of other banking and financial institutions
and repayment of outstanding borrowings. The Corporation does not at present
have any plans to use the proceeds from any offering for a material acquisition
or to repay outstanding borrowings. All or a substantial portion of the proceeds
from the sale of Securities issued by PNA will be loaned by PNA to its direct or
indirect subsidiaries, including Equity One, or used by PNA for general
corporate purposes. The net proceeds from the sale of Securities by PIB will be
loaned by PIB to its affiliates or used by PIB for general corporate purposes.
The precise amounts and timing of the application of proceeds will depend on
various factors existing at the time of offering of the Securities, including
the Corporation's subsidiaries' funding requirements and the availability of
other funds. Pending such use, the proceeds may be temporarily invested in
short-term obligations.
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<PAGE> 7
CERTAIN REGULATORY MATTERS
GENERAL
Each of the Corporation, PIB and PNA are bank holding companies subject to
supervision and regulation by the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") under the BHC Act. As a bank holding
company, the Corporation's, PIB's and PNA's activities and those of their
banking and nonbanking subsidiaries are limited to the business of banking and
activities closely related or incidental to banking, and none of the
Corporation, PIB or PNA may directly or indirectly acquire the ownership or
control of more than 5% of any class of voting shares or substantially all of
the assets of any company in the United States, including a bank, without the
prior approval of the Federal Reserve Board. In addition, bank holding companies
are generally prohibited under the BHC Act from engaging in nonbanking
activities, subject to certain exceptions.
Banco Popular is considered a foreign bank for purposes of the
International Banking Act of 1978, as amended (the "IBA"). Under the IBA, Banco
Popular is not permitted to operate a branch or agency, that is located outside
of its "home state," except to the extent that a national bank with the same
home state is permitted to do so. See "-- Interstate Banking Legislation" below.
Puerto Rico is not considered a state for purposes of these geographic
limitations. Banco Popular has designated the state of New York as its home
state. In addition, some states have laws prohibiting or restricting foreign
banks from acquiring banks located in such states and treat Puerto Rico's banks
and bank holding companies as foreign banks for such purposes.
Banco Popular, Banco Popular, Illinois, Banco Popular (California) and
Banco Popular, FSB are subject to supervision and examination by applicable
federal and state banking agencies including, in the case of Banco Popular, the
Federal Reserve Board and the Office of the Commissioner of Financial
Institutions of Puerto Rico, in the case of Banco Popular, Illinois, the FDIC
and the Illinois Commissioner of Banks and Trust Companies, in the case of Banco
Popular (California), the Office of the Comptroller of the Currency (the "OCC")
and in the case of Banco Popular, FSB, the Office of Thrift Supervision (the
"OTS") and the FDIC. Banco Popular, Banco Popular, Illinois, Banco Popular
(California) and Banco Popular, FSB are subject to requirements and restrictions
under federal and state law, including requirements to maintain reserves against
deposits, restrictions on the types and amounts of loans that may be granted and
the interest that may be charged thereon, and limitations on the types of other
investments that may be made and the types of services that may be offered.
Various consumer laws and regulations also affect the operations of Banco
Popular, Banco Popular, Illinois, Banco Popular (California) and Banco Popular,
FSB. In addition to the impact of regulation, commercial banks are affected
significantly by the actions of the Federal Reserve Board as it attempts to
control the money supply and credit availability in order to influence the
economy.
HOLDING COMPANY STRUCTURE
Banco Popular, Banco Popular, Illinois, Banco Popular (California) and
Banco Popular, FSB are subject to restrictions under federal law that limit the
transfer of funds between them and the Corporation, PNA, PIB and the
Corporation's other nonbanking subsidiaries, whether in the form of loans, other
extensions of credit, investments or asset purchases. Such transfers by Banco
Popular, Banco Popular, Illinois, Banco Popular (California) or Banco Popular,
FSB, respectively, to the Corporation, PNA or PIB, as the case may be, or to any
one nonbanking subsidiary, are limited in amount to 10% of the transferring
institution's capital stock and surplus and, with respect to the Corporation and
all of its nonbanking subsidiaries, to an aggregate of 20% of the transferring
institution's capital stock and surplus. Furthermore, such loans and extensions
of credit are required to be secured in specified amounts.
Under Federal Reserve Board policy, a bank holding company, such as the
Corporation, PIB or PNA, is expected to act as a source of financial strength to
each of its subsidiary banks and to commit resources to support each such
subsidiary bank. This support may be required at times when, absent such policy,
the bank holding company might not otherwise provide such support. In addition,
any capital loans by a bank holding company to any of its subsidiary depository
institutions are subordinate in right of payment to deposits and to certain
other indebtedness of such subsidiary depository institution. In the event of a
bank holding company's
5
<PAGE> 8
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary depository institution
will be assumed by the bankruptcy trustee and entitled to a priority of payment.
Banco Popular, Banco Popular, Illinois, Banco Popular (California) and Banco
Popular, FSB are currently the only subsidiary depository institutions of the
Corporation, PIB and PNA.
Because the Corporation, PIB and PNA are holding companies, their right to
participate in the assets of any subsidiary upon the latter's liquidation or
reorganization will be subject to the prior claims of the subsidiary's creditors
(including depositors in the case of subsidiary depository institutions) except
to the extent that the Corporation, PIB or PNA, as the case may be, may itself
be a creditor with recognized claims against the subsidiary.
Under the Federal Deposit Insurance Act (the "FDIA"), a depository
institution (which term includes both banks and savings associations), the
deposits of which are insured by the FDIC, can be held liable for any loss
incurred by, or reasonably expected to be incurred by, the FDIC in connection
with (i) the default of a commonly controlled FDIC-insured depository
institution or (ii) any assistance provided by the FDIC to any commonly
controlled FDIC-insured depository institution "in danger of default." "Default"
is defined generally as the appointment of a conservator or a receiver and "in
danger of default" is defined generally as the existence of certain conditions
indicating that a default is likely to occur in the absence of regulatory
assistance. Banco Popular, Banco Popular, Illinois, Banco Popular (California)
and Banco Popular, FSB are currently the only controlled FDIC-insured depository
institutions of the Corporation. In some circumstances (depending upon the
amount of the loss or anticipated loss suffered by the FDIC), cross-guarantee
liability may result in the ultimate failure or insolvency of one or more
insured depository institutions in a holding company structure. Any obligation
or liability owed by a subsidiary depository institution to its parent company
is subordinated to the subsidiary bank's cross-guarantee liability with respect
to commonly controlled insured depository institutions.
CAPITAL ADEQUACY
Under the Federal Reserve Board's risk-based capital guidelines for bank
holding companies and member banks, the minimum guidelines for the ratio of
qualifying total capital ("Total capital") to risk-weighted assets (including
certain off-balance sheet items, such as standby letters of credit) is 8%. At
least half of the Total capital is to be comprised of common equity, retained
earnings, minority interests in unconsolidated subsidiaries, noncumulative
perpetual preferred stock and a limited amount of cumulative perpetual preferred
stock, less goodwill and certain other intangible assets discussed below ("Tier
1 capital"). The remainder may consist of a limited amount of subordinated debt,
other preferred stock, certain other instruments and a limited amount of loan
and lease loss reserves ("Tier 2 capital").
The Federal Reserve Board has adopted regulations that require most
intangibles, including core deposit intangibles, to be deducted from Tier 1
Capital. The regulations, however, permit the inclusion of a limited amount of
intangibles related to purchased mortgage servicing rights and purchased credit
card relationships and include a "grandfather" provision permitting the
continued inclusion of certain existing intangibles.
In addition, the Federal Reserve Board has established minimum leverage
ratio guidelines for bank holding companies and member banks. These guidelines
provide for a minimum ratio of Tier 1 capital to total assets, less goodwill and
certain other intangible assets discussed below (the "leverage ratio") of 3% for
bank holding companies and member banks that meet certain specified criteria,
including that they have the highest regulatory rating. All other bank holding
companies and member banks will be required to maintain a leverage ratio of 3%
plus an additional cushion of at least 100 to 200 basis points. The guidelines
also provide that banking organizations experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels, without significant reliance on intangible
assets. Furthermore, the guidelines indicate that the Federal Reserve Board will
continue to consider a "tangible Tier 1 leverage ratio" and other indicia of
capital strength in evaluating proposals for expansion or new activities. The
tangible Tier 1 leverage ratio is the ratio of a banking organization's Tier 1
capital, less all intangibles, to total assets, less all intangibles.
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Under the Federal Reserve Board's requirements, the Corporation's and Banco
Popular's capital ratios at March 31, 1997 are set forth below:
<TABLE>
<CAPTION>
CORPORATION BANCO POPULAR
----------- -------------
<S> <C> <C>
Tier 1 capital.............................................. 13.35% 11.47%
Total capital............................................... 15.90% 12.73%
Leverage ratio.............................................. 7.71% 6.63%
</TABLE>
Banco Popular, Illinois, Banco Popular (California) and Banco Popular, FSB
are subject to similar capital requirements adopted by the FDIC, the OCC and the
OTS, respectively.
Failure to meet capital guidelines could subject a bank to a variety of
enforcement remedies, including the termination of deposit insurance by the
FDIC, and to certain restrictions on its business. See "-- FDICIA" below.
Bank regulators have in the past indicated their desire to raise capital
requirements applicable to banking organizations beyond current levels. However,
management is unable to predict whether and when higher capital requirements
would be imposed and, if so, at what levels or on what schedule.
FDICIA
Under the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") federal banking regulators must take prompt corrective action in
respect of depository institutions that do not meet minimum capital
requirements. FDICIA and regulations thereunder establish five capital tiers:
"well capitalized," "adequately capitalized," "undercapitalized," "significantly
undercapitalized," and "critically undercapitalized." A depository institution
is deemed well capitalized if it maintains a leverage ratio of at least 5%, a
risk-based Tier 1 capital ratio of at least 6% and a risk-based Total capital
ratio of at least 10% and is not subject to any written agreement or directive
to meet a specific capital level. A depository institution is deemed adequately
capitalized if it is not well capitalized but maintains a leverage ratio of at
least 4% (or at least 3% if given the highest regulatory rating and not
experiencing or anticipating significant growth), a risk-based Tier 1 capital
ratio of at least 4% and a risk-based Total capital ratio of at least 8%. A
depository institution is deemed undercapitalized if it fails to meet the
standards for adequately capitalized institutions (unless it is deemed
significantly or critically undercapitalized). An institution is deemed
significantly undercapitalized if it has a leverage ratio of less than 3%, a
risk-based Tier 1 capital ratio of less than 3% or a risk-based Total capital
ratio of less than 6%. An institution is deemed critically undercapitalized if
it has tangible equity equal to 2% or less of total assets. A depository
institution may be deemed to be in a capitalization category that is lower than
is indicated by its actual capital position if it receives a less than
satisfactory examination rating in any one of four categories.
At March 31, 1997, Banco Popular, Banco Popular, Illinois, Banco Popular
(California) and Banco Popular, FSB were each well capitalized. An institution's
capital category, as determined by applying the prompt corrective action
provisions of law, may not constitute an accurate representation of the overall
financial condition or prospects of the Corporation or its banking subsidiaries,
and should be considered in conjunction with other available information
regarding the Corporation's financial condition and results of operations.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to
restrictions on borrowing from the Federal Reserve System. In addition,
undercapitalized depository institutions are subject to growth limitations and
are required to submit capital restoration plans. A depository institution's
holding company must guarantee the capital plan, up to an amount equal to the
lesser of 5% of the depository institution's assets at the time it becomes
undercapitalized or the amount of the capital deficiency when the institution
fails to comply with the plan. The federal banking agencies may not accept a
capital plan without determining, among other things, that the plan is based on
realistic assumptions and is likely to succeed in restoring the depository
institution's capital. If a depository institution fails to submit an acceptable
plan, it is
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<PAGE> 10
treated as if it is significantly undercapitalized. Significantly
undercapitalized depository institutions may be subject to a number of
requirements and restrictions, including orders to sell sufficient voting stock
to become adequately capitalized, requirements to reduce total assets and
cessation of receipt of deposits from correspondent banks. Critically
undercapitalized depository institutions are subject to appointment of a
receiver or conservator.
The capital-based prompt corrective action provisions of FDICIA and their
implementing regulations apply to FDIC-insured depository institutions such as
the banking and savings association subsidiaries of the Corporation, PIB and
PNA, but they are not directly applicable to holding companies, such as the
Corporation, PIB or PNA which control such institutions. However, federal
banking agencies have indicated that, in regulating holding companies, they may
take appropriate action at the holding company level based on their assessment
of the effectiveness of supervisory actions imposed upon subsidiary insured
depository institutions pursuant to such provisions and regulations.
INTERSTATE BANKING LEGISLATION
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
permits bank holding companies, with Federal Reserve Board approval, to acquire
banks located in states other than the holding company's home state without
regard to whether the transaction is prohibited under state law. In addition,
commencing June 1, 1997, national and state banks with different home states
will be permitted to merge across state lines, with approval of the appropriate
federal banking agency, unless the home state of a participating bank passes
legislation prior to May 31, 1997 expressly prohibiting interstate mergers.
States may "opt in" to permit interstate branching by merger prior to June 1,
1997 and to permit de novo interstate branching. Once a bank has established
branches in a state through an interstate merger transaction, the bank may
establish and acquire additional branches at any location in the state where any
bank involved in the interstate merger transaction could have established or
acquired branches under applicable federal or state law. A bank that has
established a branch in a state through de novo branching may establish and
acquire additional branches in such state in the same manner and to the same
extent as a bank having a branch in such state as a result of an interstate
merger. If a state opts out of interstate branching within the specified time
period, no bank in any other state may establish a branch in the state which has
opted out, whether through an acquisition or de novo. A foreign bank, like Banco
Popular, may branch interstate by merger or de novo to the same extent as
domestic banks in the foreign bank's home state, which, in the case of Banco
Popular, is New York.
Various other legislation, including proposals to overhaul the bank
regulatory system, expand bank and bank holding company powers and limit the
investments that a depository institution may make with insured funds, is from
time to time introduced in Congress. The Corporation, PIB and PNA cannot
determine the ultimate effect that such potential legislation, if enacted, or
implementing regulations, would have upon their financial condition or results
of operations.
DIVIDEND RESTRICTIONS
The principal source of cash flow for the Corporation is dividends from
Banco Popular. Various statutory provisions limit the amount of dividends Banco
Popular can pay to the Corporation without regulatory approval. As a member bank
subject to the regulation of the Federal Reserve Board, Banco Popular must
obtain the approval of the Federal Reserve Board for any dividend if the total
of all dividends declared by the bank in any calendar year would exceed the
total of its net profits, as defined by the Federal Reserve Board, for that
year, combined with its retained net profits for the preceding two years. In
addition, a member bank may not pay a dividend in an amount greater than its
undivided profits then on hand after deducting its losses and bad debts. For
this purpose, bad debts are generally defined to include the principal amount of
loans that are in arrears with respect to interest by six months or more unless
such loans are fully secured and in the process of collection. Moreover, for
purposes of this limitation, a member bank is not permitted to add the balance
in its allowance for loan losses account to its undivided profits then on hand.
A member bank may, however, net the sum of its bad debts as so defined against
the balance in its allowance for loan losses account and deduct from undivided
profits only bad debts as so defined in excess of that account. At March 31,
1997, Banco Popular
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<PAGE> 11
could have declared a dividend of approximately $169.6 million without the
approval of the Federal Reserve Board. Illinois law contains similar limitations
on the amount of dividends that Banco Popular, Illinois can pay and the National
Bank Act contains similar limitations on the amount of dividends that Banco
Popular (California) can pay. In addition, OTS regulations limit the amount of
capital distributions (whether by dividend or otherwise) that any savings
association may make without prior OTS approval, based upon the savings
association's regulatory capital levels. These limitations are applicable to
Banco Popular, FSB. Also, in connection with the acquisition by Banco Popular,
FSB, from the RTC of four New Jersey branches of the former Carteret Federal
Savings Bank, the RTC provided Banco Popular, FSB and the Corporation interim
financial assistance. Pursuant to the terms of such financing, evidenced by a
promissory note (which matures on January 20, 2000 but is prepayable any time
before then), Banco Popular, FSB may not, among other things, declare or pay any
stock dividends on its outstanding capital stock (unless such dividends are used
exclusively for payment of principal of or interest on such promissory note) or
make any distributions of its assets until payment in full of such promissory
note.
The payment of dividends by Banco Popular, Banco Popular, Illinois, Banco
Popular (California) or Banco Popular, FSB, may also be affected by other
regulatory requirements and policies, such as the maintenance of adequate
capital. If, in the opinion of the applicable regulatory authority, a depository
institution under its jurisdiction is engaged in, or is about to engage in, an
unsafe or unsound practice (that, depending on the financial condition of the
depository institution, could include the payment of dividends), such authority
may require, after notice and hearing, that such depository institution cease
and desist from such practice. The Federal Reserve Board has issued a policy
statement that provides that insured banks and bank holding companies should
generally pay dividends only out of current operating earnings. In addition, all
insured depository institutions are subject to the capital-based limitations
required by the FDICIA. See "FDICIA."
See "-- Puerto Rico Regulation" for a description of certain restrictions
on Banco Popular's ability to pay dividends under Puerto Rico law.
FDIC INSURANCE ASSESSMENTS
Banco Popular, Banco Popular, Illinois, Banco Popular (California) and
Banco Popular, FSB are subject to FDIC deposit insurance assessments.
Pursuant to FDICIA, the FDIC has adopted a risk-based assessment system,
under which the assessment rate for an insured depository institution varies
according to the level of risk incurred in its activities. An institution's risk
category is based partly upon whether the institution is well capitalized,
adequately capitalized or less than adequately capitalized. Each insured
depository institution is also assigned to one of the following "supervisory
subgroups": "A," "B" or "C". Group "A" institutions are financially sound
institutions with only a few minor weaknesses; group "B" institutions are
institutions that demonstrate weaknesses that, if not corrected, could result in
significant deterioration; and group "C" institutions are institutions for which
there is a substantial probability that the FDIC will suffer a loss in
connection with the institution unless effective action is taken to correct the
areas of weakness.
The FDIC reduced the insurance premiums it charges on bank deposits insured
by the Bank Insurance Fund ("BIF") to the statutory minimum of $2,000.00 for
"well capitalized" banks, effective January 1, 1996. On September 30, 1996, the
Deposit Insurance Funds Act of 1996 ("DIFA") was enacted and signed into law.
DIFA repealed the statutory minimum premium, and currently premiums related to
deposits assessed by both the BIF and the Savings Association Insurance Fund
("SAIF") are to be assessed at a rate of between 0 cents and 27 cents per
$100.00 of deposits. DIFA also provides for a special one-time assessment
imposed on deposits insured by the SAIF to recapitalize the SAIF to bring the
SAIF up to statutory required levels. The Corporation accrued for the one-time
assessment in the third quarter of 1996.
DIFA also separates, effective January 1, 1997, the Financing Corporation
("FICO") assessment to service the interest on its bond obligations from the BIF
and SAIF assessments. The amount assessed on individual institutions by the FICO
will be in addition to the amount, if any, paid for deposit insurance according
to the FDIC's risk-related assessment rate schedules. FICO assessment rates for
the first
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<PAGE> 12
semiannual period of 1997 were set at 1.30 basis points annually for
BIF-assessable deposits and 6.48 basis points annually for SAIF-assessable
deposits. (These rates may be adjusted quarterly to reflect changes in
assessment bases for the BIF and the SAIF. By law, the FICO rate on
BIF-assessable deposits must be one-fifth the rate on SAIF-assessable deposits
until the insurance funds are merged or until January 1, 2000, whichever occurs
first.) As of March 31, 1997, the Corporation had a BIF deposit assessment base
of approximately $9.8 billion and a SAIF deposit assessment base of
approximately $209 million.
BROKERED DEPOSITS
FDIC regulations adopted under FDICIA govern the receipt of brokered
deposits. Under these regulations, a bank cannot accept, rollover or renew
brokered deposits (which term is defined also to include any deposit with an
interest rate more than 75 basis points above prevailing rates) unless (i) it is
well capitalized, or (ii) it is adequately capitalized and receives a waiver
from the FDIC. A bank that is adequately capitalized may not pay an interest
rate on any deposits in excess of 75 basis points over certain prevailing market
rates specified by regulation. There are no such restrictions on a bank that is
well capitalized. The Corporation does not believe the brokered deposits
regulation has had or will have a material effect on the funding or liquidity of
Banco Popular, Banco Popular, Illinois, Banco Popular (California) or Banco
Popular, FSB.
PUERTO RICO REGULATION
General
As a commercial bank organized under the laws of Puerto Rico, Banco Popular
is subject to supervision, examination and regulation by the Office of the
Commissioner of Financial Institutions of Puerto Rico (the "Office of the
Commissioner"), pursuant to the Puerto Rico Banking Act of 1933, as amended (the
"Banking Law").
Section 27 of the Banking Law requires that at least ten percent (10%) of
the yearly net income of the Bank be credited annually to a reserve fund. This
apportionment shall be done every year until the reserve fund shall be equal to
ten percent (10%) of the total deposits or the total paid-in capital, whichever
is greater. At the end of its most recent fiscal year, Banco Popular had an
adequate reserve fund established.
Section 27 of the Banking Law also provides that when the expenditures of a
bank are greater than the receipts, the excess of the former over the latter
shall be charged against the undistributed profits of the bank, and the balance,
if any, shall be charged against the reserve fund, as a reduction thereof. If
there is no reserve fund sufficient to cover such balance in whole or in part,
the outstanding amount shall be charged against the capital account and no
dividend shall be declared until said capital has been restored to its original
amount and the reserve fund to 20% of the original capital.
Section 16 of the Banking Law requires every bank to maintain a legal
reserve which shall not be less than 20% of its demand liabilities, except
government deposits (federal, state and municipal) which are secured by actual
collateral. However, if a bank becomes a member of the Federal Reserve System,
the 20% legal reserve shall not be effective and the reserve requirements
demanded by the Federal Reserve System shall be applicable. However, pursuant to
an order of the Federal Reserve Board dated November 24, 1982, Banco Popular has
been exempted from such reserve requirements with respect to deposits payable in
Puerto Rico. As to those deposits, the Section 16 reserve requirements are
applicable.
Section 17 of the Banking Law permits Banco Popular to make loans to any
one person, firm, partnership or corporation, up to an aggregate amount of
fifteen percent (15%) of the paid-in capital and reserve fund of Banco Popular.
As of March 31, 1997, the legal lending limit for the Bank under this provision
was approximately $93 million. If such loans are secured by collateral worth at
least twenty-five percent (25%) more than the amount of the loan, the aggregate
maximum amount may reach one third of the paid-in capital of the Bank, plus its
reserve fund. There are no restrictions under Section 17 on the amount of loans
that are wholly secured by bonds, securities and other evidences of indebtedness
of the Government of the United
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States or Puerto Rico, or by current debt bonds, not in default, of
municipalities or instrumentalities of Puerto Rico.
Section 14 of the Banking Law authorizes Banco Popular to conduct certain
financial and related activities directly or through subsidiaries, including
finance leasing of personal property, making and servicing mortgage loans and
operating a small-loan company. Banco Popular engages in these activities
through its wholly owned subsidiaries, Popular Leasing & Rental, Inc., Popular
Mortgage, Inc., and Popular Consumer Services, Inc., respectively, all of which
are organized and operate in Puerto Rico.
The Finance Board, which is a part of the Office of the Commissioner, but
also includes as its members the Secretary of the Treasury, the Secretary of
Commerce, the Secretary of Consumer Affairs, the President of the Planning
Board, and the President of the Government Development Bank for Puerto Rico, has
the authority to regulate the maximum interest rates and finance charges that
may be charged on loans to individuals and unincorporated businesses in Puerto
Rico. The current regulations of the Finance Board provide that the applicable
interest rate on loans to individuals and unincorporated businesses (including
real estate development loans but excluding certain other personal and
commercial loans secured by mortgages on real estate properties) is to be
determined by free competition. The Finance Board also has authority to regulate
the maximum finance charges on retail installment sales contracts, which are
currently set at 21%, and for credit card purchases, which are currently set at
26%. There is no maximum rate set for installment sales contracts involving
motor vehicles, commercial, agricultural and industrial equipment, commercial
electric appliances and insurance premiums.
IBC Act
Under the IBC Act, without the prior approval of the Office of the
Commissioner, PIB may not amend its articles of incorporation or issue
additional shares of capital stock or other securities convertible into
additional shares of capital stock unless such shares are issued directly to the
shareholders of PIB previously identified in the application to organize the
international banking entity, in which case notification to the Office of the
Commissioner must be given within ten business days following the date of the
issue. Pursuant to the IBC Act, without the prior approval of the Office of the
Commissioner, PIB may not initiate the sale, encumbrance, assignment, merger or
other transfer of shares if by such transaction a person or persons acting in
concert could acquire direct or indirect control of 10% or more of any class of
the Company's stock. Such authorization must be requested at least 30 days prior
to the transaction.
PIB must submit to the Office of the Commissioner a report of its condition
and results of operation on a quarterly basis and its annual audited financial
statement at the close of its fiscal year. Under the IBC Act, PIB may not deal
with "domestic persons" as such term is defined in the IBC Act. Also, it may
only engage in those activities authorized in the IBC Act, the regulations
adopted thereunder and its license.
The IBC Act empowers the Office of the Commissioner to revoke or suspend,
after a hearing, the license of an international banking entity if, among other
things, it fails to comply with the IBC Act, regulations issued by the Office of
the Commissioner or the terms of its license, or if the Office of the
Commissioner finds that the business of the international banking entity is
conducted in a manner not consistent with the public interest.
DESCRIPTION OF DEBT SECURITIES
The Corporation's senior debt securities (the "Senior Debt Securities"),
may be issued from time to time in one or more series under an Indenture, dated
as of February 15, 1995, as supplemented by the First Supplemental Indenture
thereto, dated as of May 8, 1997 (collectively, the "Senior Indenture"), each
between the Corporation and The First National Bank of Chicago, as trustee (the
"Senior Trustee"). The Corporation's subordinated debt securities (the
"Subordinated Debt Securities") may be issued from time to time in one or more
series under an Indenture, dated as of November 30, 1995 (the "Subordinated
Indenture"), between the Corporation and The First National Bank of Chicago, as
trustee (the "Subordinated Trustee").
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PIB's senior debt securities (the "PIB Senior Debt Securities") may be
issued from time to time in one or more series under an Indenture (the "PIB
Senior Indenture") among the Corporation, PIB and the trustee named in the
applicable Prospectus Supplement, as trustee (the "PIB Senior Trustee"). PIB's
subordinated debt securities ("PIB Subordinated Debt Securities") may be issued
from time to time in one or more series under an Indenture (the "PIB
Subordinated Indenture") among the Corporation, PIB and the trustee named in the
applicable Prospectus Supplement, as trustee (the "PIB Subordinated Trustee").
PNA's senior debt securities (the "PNA Senior Debt Securities") may be issued
from time to time in one or more series under an Indenture, dated as of October
1, 1991, as supplemented by the First Supplemental Indenture thereto, dated as
of February 28, 1995, and by the Second Supplemental Indenture thereto, dated as
of May 8, 1997 (collectively, the "PNA Senior Indenture"), each among the
Corporation, PNA and The First National Bank of Chicago (the successor trustee
to Citibank N.A.), as trustee (the "PNA Senior Trustee"). PNA's subordinated
debt securities (the "PNA Subordinated Debt Securities") may be issued from time
to time in one or more series under an Indenture (the "PNA Subordinated
Indenture") among the Corporation, PNA and the trustee named in the applicable
Prospectus Supplement, as trustee (the "PNA Subordinated Trustee"). The Senior
Debt Securities, the Subordinated Debt Securities, the PIB Senior Debt
Securities, the PIB Subordinated Debt Securities, the PNA Senior Debt Securities
and the PNA Subordinated Debt Securities are sometimes referred to collectively
as the "Debt Securities." The Senior Indenture, the Subordinated Indenture, the
PIB Senior Indenture, the PIB Subordinated Indenture, the PNA Senior Indenture
and the PNA Subordinated Indenture are sometimes referred to collectively as the
"Indentures," and the Senior Trustee, the Subordinated Trustee, the PIB Senior
Trustee, the PIB Subordinated Trustee, the PNA Senior Trustee and the PNA
Subordinated Trustee are sometimes referred to collectively as the "Trustees."
The statements under this caption are brief summaries of material provisions
contained in the Indentures and are qualified in their entirety by reference to
the Indentures, including the definition therein of certain terms, copies of
which are filed as exhibits to the Registration Statement of which this
Prospectus is a part.
GENERAL
Each Indenture provides for the issuance of debt securities in one or more
series, and does not limit the principal amount of debt securities which may be
issued thereunder.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities being offered hereby: (1) the specific title of the Debt
Securities; (2) whether the Debt Securities are Senior Debt Securities,
Subordinated Debt Securities, PIB Senior Debt Securities, PIB Subordinated Debt
Securities, PNA Senior Debt Securities or PNA Subordinated Debt Securities; (3)
the aggregate principal amount of the Debt Securities; (4) the percentage of
their principal amount at which the Debt Securities will be issued; (5) the date
or dates on which the Debt Securities will mature; (6) the rate or rates (which
may be fixed or variable) per annum or the method for determining such rate or
rates, if any, at which the Debt Securities will bear interest; (7) the times,
if any, at which any such interest will be payable; (8) any provisions relating
to optional or mandatory redemption of the Debt Securities; (9) the
denominations in which the Debt Securities are authorized to be issued; (10) the
extent to which Debt Securities will be issuable in global form and, if so, the
identity of the Depositary for such global Debt Securities; (11) the currency or
units of two or more currencies in which the Debt Securities are denominated, if
other than United States dollars, and the currency in which interest is payable
if other than the currency in which the Debt Securities are denominated; (12)
the place or places at which the Corporation, PIB or PNA will make payments of
principal (and premium, if any) and interest, if any, and the method of such
payment; (13) the Person to whom any Debt Security of such series will be
payable, if other than the Person in whose name that Debt Security (or one or
more Predecessor Debt Securities) is registered at the close of business on the
Regular Record Date for such interest; (14) whether the Debt Securities may be
issued as Original Issue Discount Securities; (15) whether the amount of payment
of principal of or any premium or interest on any Debt Security may be
determined with reference to an index, formula or other method and the manner in
which such amount shall be determined; (16) any additional covenants and Events
of Default and the remedies with respect thereto not currently set forth in the
respective Indenture; and (17) any other specific terms of Debt Securities.
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<PAGE> 15
One or more series of the Debt Securities may be issued as Discount
Securities. A "Discount Security" is a debt security, including any zero-coupon
security, which is issued at a price lower than the amount payable at the Stated
Maturity thereof and which provides that upon redemption or acceleration of the
Maturity thereof an amount less than the amount payable upon the Stated Maturity
thereof and determined in accordance with the terms thereof shall become due and
payable.
Unless otherwise indicated in the applicable Prospectus Supplement, the
covenants contained in the Indentures and the Debt Securities will not afford
holders of the Debt Securities protection in the event of a sudden decline in
credit rating that might result from a recapitalization, restructuring, or other
highly leveraged transaction.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in certificated or global form.
Debt Securities in certificated form may be presented for registration of
transfer (with the form of transfer endorsed thereon duly executed), at the
office of the Security Registrar or at the office of any transfer agent
designated by the Corporation, PIB or PNA, as the case may be, for such purpose
with respect to any series of Debt Securities and referred to in an applicable
Prospectus Supplement, without service charge and upon payment of any taxes and
other governmental charges as described in the relevant Indenture. Such transfer
or exchange will be effected upon the Security Registrar being satisfied with
the documents of title and identity of the Person making the request. The
Security Registrar with respect to the Debt Securities will be designated in the
applicable Prospectus Supplement. If a Prospectus Supplement refers to any
transfer agents (in addition to the Security Registrar) initially designated by
the Corporation, PIB or PNA with respect to any series of Debt Securities, the
Corporation, PIB or PNA, as the case may be, may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Corporation, PIB or
PNA, as the case may be, will be required to maintain a transfer agent in each
Place of Payment for such series. The Corporation, PIB or PNA, as the case may
be, may at any time designate additional transfer agents with respect to any
series of Debt Securities.
In the event of any redemption in part, the Corporation, PIB or PNA, as the
case may be, shall not be required to (i) issue, register the transfer of or
exchange any Debt Security during a period beginning at the opening of business
15 days before the mailing of a notice of redemption of Debt Securities of like
tenor and of the series of which such Debt Security is a part and ending at the
close of business on the day of such mailing and (ii) register the transfer of
or exchange any Debt Security so selected for redemption, in whole or in part,
except the unredeemed portion of any Debt Security being redeemed in part.
PAYMENT AND PAYING AGENT
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and premium (if any) on any Debt Security will be made only
against surrender to the Paying Agent of such Debt Security. Unless otherwise
indicated in an applicable Prospectus Supplement, principal of and any premium
and interest on the Debt Securities will be payable, subject to any applicable
laws and regulations, at the office of such Paying Agent or Paying Agents as the
Corporation, PIB or PNA, as the case may be, may designate from time to time,
except that at the option of the Corporation, PIB or PNA, as the case may be,
payment of any interest may be made by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register with
respect to such Debt Securities. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of interest on a Debt Security on any Interest
Payment Date will be made to the Person in whose name such Debt Security (or
Predecessor Debt Security) is registered at the close of business on the Regular
Record Date for such interest.
The Paying Agent for payments with respect to Debt Securities of each
series will be specified in the applicable Prospectus Supplement. The
Corporation, PIB or PNA, as the case may be, may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that
the Corporation, PIB or PNA, as the case may be, will be required to maintain a
Paying Agent in each Place of Payment for each series of Debt Securities.
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All moneys paid by the Corporation, PIB or PNA, as the case may be, to a
Paying Agent for the payment of the principal of and any premium or interest on
any Debt Security which remain unclaimed at the end of two years after such
principal, premium or interest shall have become due and payable will be repaid
to the Corporation, PIB or PNA, as the case may be, and the Holder of such Debt
Security will thereafter look only to the Corporation, PIB or PNA, as the case
may be, for payment thereof.
CERTAIN COVENANTS
Each of the Senior Indenture, the PIB Senior Indenture and the PNA Senior
Indenture provides that the Corporation, subject to the provisions described
under "Consolidation, Merger, Sale or Conveyance," will not sell, assign,
transfer, or otherwise dispose of, or permit Banco Popular to issue, sell,
assign, transfer or otherwise dispose of any shares of, or securities
convertible into or options to subscribe for, Voting Stock of Banco Popular
unless Banco Popular remains a Controlled Subsidiary (as defined below) of the
Corporation, and will not permit Banco Popular to merge or consolidate or
convey, transfer, lease or sell its properties substantially as an entirety,
unless the surviving corporation or transferee, as the case may be, is a
Controlled Subsidiary of the Corporation. There is no similar restriction in the
Subordinated Indenture, the PIB Subordinated Indenture or the PNA Subordinated
Indenture.
Each of the Senior Indenture, the PIB Senior Indenture and the PNA Senior
Indenture also provides that the Corporation will not, and it will not permit
any Material Banking Subsidiary (as defined below) at any time directly or
indirectly to, create, assume, incur or permit to exist any indebtedness for
borrowed money secured by a pledge, lien or other encumbrance on the Voting
Stock of any Material Banking Subsidiary without making effective provision
whereby the Debt Securities and the Guarantees (and, if the Corporation so
elects, any other indebtedness ranking on a parity with the Debt Securities and
the Guarantees) shall be secured equally and ratably with such secured
indebtedness so long as such other indebtedness shall be so secured; provided,
however, that the foregoing covenant shall not be applicable to liens for taxes
or assessments or governmental charges or levies not then due and delinquent or
the validity of which is being contested in good faith or which are less than
$10,000,000 in amount, liens created by or resulting from any litigation or
legal proceeding which is currently being contested in good faith by appropriate
proceedings or which involve claims of less than $10,000,000, or deposits to
secure (or in lieu of) surety, stay, appeal or customs bonds. There is no
similar restriction in the Subordinated Indenture, the PIB Subordinated
Indenture or the PNA Subordinated Indenture.
For the purpose of the foregoing provisions, "Material Banking Subsidiary"
means any Controlled Subsidiary chartered as a banking corporation under
federal, state or Puerto Rican law that is a significant subsidiary of the
Corporation as defined in Rule 1-02 of Regulation S-X of the Rules and
Regulations of the Commission. "Controlled Subsidiary" means any corporation
more than 80% of the outstanding Voting Stock of which is owned by the
Corporation. As of the date of this Prospectus, Banco Popular is the only
"Material Banking Subsidiary" of the Corporation.
REDEMPTION
General
If the Debt Securities of a series provide for mandatory redemption by the
Corporation, PIB or PNA, as the case may be, or redemption at the election of
the Corporation, PIB or PNA, as the case may be, unless otherwise provided in
the applicable Prospectus Supplement, such redemption shall be on not less than
30 nor more than 60 days' notice and, in the event of redemption of Debt
Securities of a series of like tenor in part, the Debt Securities to be redeemed
will be selected by the Trustee in such usual manner as it shall deem fair and
appropriate. Notice of such redemption will be mailed to Holders of Debt
Securities of such series to their last addresses as they appear on the register
of the Debt Securities of such series.
For Taxation
Should the Corporation or PIB, on the occasion of the next payment in
respect of any series of the Debt Securities, be obliged to pay any Additional
Amounts as are referenced in "Taxation by the Commonwealth of
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Puerto Rico" below, due to a change in law, regulation or interpretation, the
Corporation, PIB or PNA, as the case may be, may, at its option, on the giving
of not less than 30 nor more than 60 days' notice to the Holders of the Debt
Securities of each series, redeem such series of the Debt Securities as a whole
at a redemption price of 100% of the principal amount thereof with the accrued
interest to the date fixed for redemption or such other redemption price as set
forth in the applicable Prospectus Supplement.
GLOBAL SECURITIES
The Debt Securities may be issued in whole or in part in the form of one or
more Global Securities that will be deposited with, or on behalf of, a
depositary (the "Depositary") identified in the Prospectus Supplement relating
to such Debt Securities. Unless and until it is exchangeable in whole or in part
for Debt Securities in definitive form, a Global Security may not be transferred
except as a whole by the Depositary for such Global Security to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement, if any, with respect to a
series of Debt Securities will be described in the Prospectus Supplement
relating to such series. The Corporation, PIB and PNA anticipate that the
following provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the Depositary for such Global Security or its
nominee ("Participant") or persons that may hold interests through Participants.
Such accounts shall be designated by the underwriters or agents with respect to
the Debt Securities underwritten or solicited by them or by the Corporation, PIB
or PNA in the case of Debt Securities offered and sold directly by the
Corporation, PIB or PNA, as the case may be. The Corporation, PIB or PNA, as the
case may be, will obtain confirmation from the Depositary that upon the issuance
of a Global Security the Depositary for such Global Security will credit, on its
book-entry registration and transfer system, the Participants' accounts with the
respective principal amounts of the Debt Securities represented by such Global
Security. Ownership of beneficial interests in such Global Security will be
shown on, and the transfer of such ownership interests will be effected only
through, records maintained by the Depositary (with respect to interests of
Participants) and on the records of Participants (with respect to interests of
persons held through Participants). The laws of some states may require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to own,
transfer or pledge beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
Indentures. Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to have the Debt Securities represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of the Debt Securities in definitive form and will not
be considered the owners or Holders thereof under the Indentures. Accordingly,
each person owning a beneficial interest in such a Global Security must rely on
the procedures of the Depositary and, if such person is not a Participant, on
the procedures of the Participant through which such person owns its interests,
to exercise any rights of a Holder under the applicable Indenture. The
Corporation, PIB and PNA understand that under existing industry practices, in
the event that the Corporation, PIB or PNA, as the case may be, requests any
action of Holders or that an owner of a beneficial interest in such a Global
Security desires to give or take any action that a Holder is entitled to give or
take under the applicable Indenture, the Depositary would authorize the
Participants holding the relevant beneficial interests to give or take such
action, and such Participants would authorize beneficial owners owning through
such Participants to give or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Payment of principal of, and premium and interest, if any, on Debt
Securities registered in the name of a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Security representing such Debt Securities. None of the Corporation,
PIB, PNA, the
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Trustee, any Paying Agent or any other agent of the Corporation, PIB, PNA or the
Trustee will have any responsibility or liability for any aspect of the records
relating to payments made on account of beneficial ownership interests in the
Global Security for such Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Corporation, PIB or PNA, as the case may be, will obtain confirmation
from the Depositary that upon receipt of any payment of principal of, or premium
or interest on, a Global Security, the Depositary will immediately credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of the Depositary. Payments by Participants to owners of
beneficial interests in such Global Security held through such Participants will
be the responsibility of such Participants, as is now the case with securities
held for the accounts of customers registered in "street names."
If the Depositary for any Debt Securities represented by a Global Security
notifies the Corporation, PIB or PNA, as the case may be, that it is unwilling
or unable to continue as Depositary or ceases to be a clearing agency registered
under the Exchange Act and a successor Depositary is not appointed by the
Corporation, PIB or PNA, as the case may be, then within ninety days after
receiving such notice or becoming aware that Depositary is no longer so
registered, the Corporation, PIB or PNA, as the case may be, will issue such
Debt Securities in definitive form in exchange for such Global Security. In
addition, if an event of default, or an event which with notice or the lapse of
time or both would become an event of default, with respect to the Debt
Securities of a series has occurred and is continuing or either the Corporation,
PIB or PNA, as the case may be, at any time and in its sole discretion
determines not to have the Debt Securities represented by one or more Global
Securities, the Corporation, PIB or PNA, as the case may be, will issue Debt
Securities in definitive form in exchange for all of the Global Securities
representing such Debt Securities.
TAXATION BY THE COMMONWEALTH OF PUERTO RICO
All payments of, or in respect of, principal of, and any premium or
interest on, the Debt Securities and all payments pursuant to the Guarantees
will be made without withholding or deduction for, or on account of, any present
or future taxes, duties, assessments or governmental charges of whatever nature
imposed or levied by or on behalf of Puerto Rico or by or with any district,
municipality or other political subdivision thereof or authority therein having
power to tax unless such taxes, duties, assessments or governmental charges are
required by law to be withheld or deducted.
In the event that the Corporation or PIB is required by law to deduct or
withhold any amounts in respect of taxes, duties, assessments or governmental
charges, the Corporation or PIB, as the case may be, will pay such additional
amounts of, or in respect of, principal, premium and interest as will result
(after deduction of the said taxes, duties, assessments or governmental charges)
in the payment to the Holders of the Debt Securities, of the amounts which would
otherwise have been payable in respect to the Debt Securities in the absence of
such deduction or withholding ("Additional Amounts"), except that no such
Additional Amounts shall be payable:
(i) to any Holder of a Debt Security or any interest therein or rights
in respect thereof where such deduction or withholding is required by
reason of such Holder having some connection with Puerto Rico or any
political subdivision or taxing authority thereof or therein other than the
mere holding of and payment in respect of such Debt Security;
(ii) in respect of any deduction or withholding that would not have
been required but for the presentation by the Holder of a Debt Security for
payment on a date more than 30 days after Maturity or the date on which
payment thereof is duly provided for, whichever occurs later; or
(iii) in respect of any deduction or withholding that would not have
been required but for the failure to comply with any certification,
identification or other reporting requirements concerning the nationality,
residence, identity or connection with Puerto Rico, or any political
subdivision or taxing authority thereof or therein, of the Holder of a Debt
Security or any interest therein or rights in respect thereof, if
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compliance is required by Puerto Rico, or any political subdivision or
taxing authority thereof or therein, as a precondition to exemption from
such deduction or withholding.
GOVERNING LAW
The Indentures, the Debt Securities and the Guarantees of the Debt
Securities of PIB and PNA will be governed by, and construed in accordance with,
the laws of the State of New York.
TERMS APPLICABLE TO THE SENIOR DEBT SECURITIES OR
SUBORDINATED DEBT SECURITIES
MODIFICATION OF THE SENIOR AND SUBORDINATED INDENTURES
The Senior and Subordinated Indentures contain provisions permitting the
Corporation and the respective Trustees, with the consent of Holders of not less
than a majority in principal amount of the Senior Debt Securities or
Subordinated Debt Securities which are affected by the modification, to modify
the particular Indenture or any supplemental indenture or the rights of the
Holders of the Senior Debt Securities or Subordinated Debt Securities issued
under such Indenture; provided that no such modification may, without the
consent of the Holder of each Outstanding Senior Debt Security or Subordinated
Debt Security affected thereby, (a) change the stated maturity date of the
principal of, or any installment of principal of or interest, if any, on, any
Senior Debt Security or Subordinated Debt Security, (b) reduce the principal
amount of, or premium or rate of interest, if any, on, any Senior Debt Security
or Subordinated Debt Security, (c) reduce the amount of principal of an Original
Issue Discount Security payable upon acceleration of the maturity thereof, (d)
change the place or coin or currency of payment of principal of, or premium or
interest, if any, on, any Senior Debt Security or Subordinated Debt Security,
(e) impair the right to institute suit for the enforcement of any payment on or
with respect to any Senior Debt Security or Subordinated Debt Security, (f)
reduce the percentage in principal amount of Outstanding Senior Debt Securities
or Subordinated Debt 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, (g) modify (with certain exceptions) any provision of the Indenture
which requires the consent of the Holder of each Outstanding Senior Debt
Security or Subordinated Debt Security affected thereby or (h) with respect to
the Subordinated Indenture, modify the subordination provisions in a manner
adverse to Holders of Outstanding Subordinated Debt Securities.
SUBORDINATION
Unless otherwise indicated in the applicable Prospectus Supplement, the
following provisions shall apply to the Subordinated Debt Securities.
The payment of the principal of, premium, if any, and interest on the
Subordinated Debt Securities will, to the extent set forth in the Subordinated
Indenture, be subordinated in right of payment to the prior payment in full of
all Senior Indebtedness (as defined below) of the Corporation. In certain events
of insolvency, the payment of the principal of, premium, if any, and interest on
the Subordinated Debt Securities will, to the extent set forth in the
Subordinated Indenture, also be effectively subordinated in right of payment to
the prior payment in full of all Other Financial Obligations (as defined below)
of the Corporation. As of March 31, 1997, $1,827 million aggregate principal
amount of Senior Indebtedness and $65 million of Other Financial Obligations of
the Corporation were outstanding. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshalling of assets or any
bankruptcy, insolvency or similar proceedings of the Corporation, the holders of
all Senior Indebtedness of the Corporation will first be entitled to receive
payment in full of all amounts due or to become due thereon before the Holders
of the Subordinated Debt Securities will be entitled to receive any payment in
respect of the principal of, premium, if any, or interest on the Subordinated
Debt Securities. If, upon any such payment or distribution of assets to
creditors, there remain, after giving effect to such subordination provisions in
favor of the holders of Senior Indebtedness of the Corporation, any amounts of
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cash, property or securities available for payment or distribution in respect of
Subordinated Debt Securities (as defined in the Subordinated Indenture,
"Corporation Excess Proceeds") and if, at such time, any person entitled to
payment pursuant to the terms of Other Financial Obligations of the Corporation
has not received payment in full of all amounts due or to become due on or in
respect of such Other Financial Obligations of the Corporation, then such
Corporation Excess Proceeds shall first be applied to pay or provide for the
payment in full of such Other Financial Obligations of the Corporation before
any payment or distribution may be made in respect of the Subordinated Debt
Securities. In the event of the acceleration of the maturity of any Subordinated
Debt Securities, the holders of all Senior Indebtedness of the Corporation will
first be entitled to receive payment in full of all amounts due or to become due
thereon before the Holders of the Subordinated Debt Securities will be entitled
to receive any payment of the principal of, premium, if any, or interest on the
Subordinated Debt Securities. Accordingly, in case of such an acceleration, all
Senior Indebtedness of the Corporation would have to be repaid before any
payment could be made in respect of the Subordinated Debt Securities. No
payments on account of principal, premium, if any, or interest in respect of the
Subordinated Debt Securities may be made if there shall have occurred and be
continuing a default in any payment with respect to any Senior Indebtedness of
the Corporation, or an event of default with respect to any Senior Indebtedness
of the Corporation permitting the holders thereof to accelerate the maturity
thereof, or if any judicial proceeding shall be pending with respect to any such
default.
By reason of such subordination, in the event of the insolvency of the
Corporation, creditors of the Corporation who are not holders of Senior
Indebtedness of the Corporation or the Subordinated Debt Securities may recover
less, ratably, than holders of Senior Indebtedness of the Corporation and may
recover more, ratably, than Holders of the Subordinated Debt Securities.
"Senior Indebtedness" of the Corporation is defined in the Subordinated
Indenture to mean the principal of, premium, if any, and interest on (i) all
indebtedness of the Corporation for money borrowed (including indebtedness of
others guaranteed by the Corporation) other than the Subordinated Debt
Securities, whether outstanding on the date of the Subordinated Indenture or
thereafter created, assumed or incurred and (ii) any amendments, renewals,
extensions, modifications and refundings of any such indebtedness, unless in
either case in the instrument creating or evidencing any such indebtedness or
pursuant to which it is outstanding it is provided that such indebtedness is not
superior in right of payment to the Subordinated Debt Securities. For the
purposes of this definition, "indebtedness for money borrowed" is defined as (i)
any obligation of, or any obligation guaranteed by, the Corporation for the
repayment of borrowed money, whether or not evidenced by bonds, debentures,
notes or other written instruments, (ii) any deferred payment obligation of, or
any such obligation guaranteed by, the Corporation for the payment of the
purchase price of property or assets evidenced by a note or similar instrument
and (iii) any obligation of, or any such obligation guaranteed by, the
Corporation for the payment of rent or other amounts under a lease of property
or assets which obligation is required to be classified and accounted for as a
capitalized lease on the balance sheet of the Corporation under generally
accepted accounting principles.
"Other Financial Obligations" of the Corporation is defined in the
Subordinated Indenture to mean all obligations of the Corporation to make
payment pursuant to the terms of financial instruments, such as (i) securities
contracts and foreign currency exchange contracts, (ii) derivative instruments,
such as swap agreements (including interest rate and currency and foreign
exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange agreements, options,
commodity futures contracts, commodity options contracts and (iii) similar
financial instruments; provided that the term Other Financial Obligations shall
not include (x) obligations on account of Senior Indebtedness of the Corporation
and (y) obligations on account of indebtedness for money borrowed ranking pari
passu with or subordinate to the Subordinated Debt Securities.
EVENTS OF DEFAULT
Senior Indenture
An Event of Default with respect to Senior Debt Securities of any series is
defined in the Senior Indenture as being: default for 30 days in payment of any
interest on Senior Debt Securities of such series;
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default in payment of principal of, or premium, if any, on any Senior Debt
Securities of such series; default in deposit of any mandatory sinking fund
payment required by the Senior Debt Securities of such series; default for 60
days after notice, in performance or breach of any other covenant or warranty in
the Senior Indenture (except for a covenant expressly relating to a series of
Senior Debt Securities other than that series of Senior Debt Securities) or in
the Senior Debt Securities of such series; acceleration of the Senior Debt
Securities of any other series or any other indebtedness for borrowed money of
the Corporation or any Material Banking Subsidiary, in each case exceeding
$10,000,000 in an aggregate principal amount, as a result of a default under the
terms of the instrument or instruments under which such indebtedness is issued
or secured, unless such acceleration is annulled within 30 days after written
notice as provided in the Indenture, provided that if such default is remedied
or cured by the Corporation or any Material Banking Subsidiary or waived by
holders of such indebtedness, the Event of Default by reason thereof shall be
deemed to have been thereupon remedied, cured or waived; certain events of
bankruptcy, insolvency or reorganization with respect to the Corporation or any
Material Banking Subsidiary; or any other Event of Default specified in the
applicable Prospectus Supplement. In case an Event of Default with respect to
Senior Debt Securities of any series shall occur and be continuing, the Senior
Trustee or the Holders of not less than 25% in principal amount of the Senior
Debt Securities of such series then outstanding may declare the principal of all
such Senior Debt Securities of such series to be due and payable. The
Corporation is required to furnish to the Senior Trustee annually a statement as
to the performance by the Corporation of its obligations under the Senior
Indenture and as to any default in such performance. Under certain circumstances
any declaration of acceleration with respect to Senior Debt Securities of any
series may be rescinded and past defaults (except a default in the payment of
principal of or interest on the Senior Debt Securities) may be waived by the
Holders of a majority in aggregate principal amount of the Senior Debt
Securities of such series then outstanding. The Senior Indenture provides that
the Senior Trustee may withhold notice to the Holders of Senior Debt Securities
of any series of any continuing default (except in the payment of the principal
of (or premium, if any) or interest on any Senior Debt Securities of such
series) if such Senior Trustee considers it in the interest of Holders of such
series of Senior Debt Securities to do so.
Subordinated Indenture
An Event of Default with respect to the Subordinated Debt Securities of any
series is defined in the Subordinated Indenture as being certain events
involving a bankruptcy, insolvency or reorganization of the Corporation. If an
Event of Default with respect to Subordinated Debt Securities of any series
shall have occurred and be continuing, either the Subordinated Trustee or the
Holders of not less than 25% in aggregate principal amount of the Subordinated
Debt Securities of such series then outstanding may declare the principal of the
Subordinated Debt Securities of such series to be due and payable immediately.
The Corporation is required to furnish to the Subordinated Trustee annually a
statement as to the performance by the Corporation of its obligations under the
Subordinated Indenture and as to any default in such performance. Under certain
circumstances, any declaration of acceleration with respect to Subordinated Debt
Securities of any series may be rescinded and past defaults (except a default in
the payment of principal of or interest on the Subordinated Debt Securities) may
be waived by the Holders of a majority in aggregate principal amount of the
Subordinated Debt Securities of such series then outstanding. The Subordinated
Indenture provides that the Subordinated Trustee may withhold notice to the
Holders of the Subordinated Debt Securities of any series of any continuing
default (except in the payment of the principal of (or premium, if any) or
interest on any Subordinated Debt Securities of such series) if the Subordinated
Trustee considers it in the interest of the Holders of such series of
Subordinated Debt Securities to do so.
The Subordinated Indenture does not provide for any right of acceleration
of the payment of principal of a series of Subordinated Debt Securities upon a
default in the payment of principal or interest or in the performance of any
covenant or agreement in the Subordinated Debt Securities of the particular
series or in the Subordinated Indenture.
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CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Corporation has covenanted in the Senior and Subordinated Indentures
that it will not merge or consolidate with any other corporation or sell,
convey, transfer or lease all or substantially all of its assets to any person,
firm or corporation unless the Corporation is the continuing corporation or the
successor corporation expressly assumes the obligations under any outstanding
Senior Debt Securities and Subordinated Debt Securities and the respective
Senior and Subordinated Indentures and the Corporation or such successor
corporation is not, immediately after such merger, consolidation, sale or
conveyance, in default in the performance of any of the covenants or conditions
of the respective Indenture. The Indentures do not contain any other covenant
which restricts the Corporation's ability to merge or consolidate with any other
corporation, sell, convey, transfer or lease all or substantially all of its
assets to any persons, firm or corporation or otherwise engage in restructuring
transactions.
TERMS APPLICABLE TO THE PNA SENIOR DEBT SECURITIES OR PNA
SUBORDINATED DEBT SECURITIES
MODIFICATION OF THE PNA SENIOR AND PNA SUBORDINATED INDENTURES
The PNA Senior and PNA Subordinated Indentures contain provisions
permitting the Corporation, PNA and the respective PNA Trustees, with the
consent of Holders of not less than a majority in principal amount of the PNA
Senior Debt Securities or PNA Subordinated Debt Securities that are affected by
the modification, to modify the particular Indenture or any supplemental
indenture or the rights of the Holders of the PNA Senior Debt Securities or PNA
Subordinated Debt Securities issued under such Indenture, provided that no such
modification may, without the consent of the Holder of each Outstanding PNA
Senior Debt Security or PNA Subordinated Debt Security affected thereby, (a)
change the stated maturity date of the principal of, or any installment of
principal of or interest, if any, on, any PNA Senior Debt Security or PNA
Subordinated Debt Security, (b) reduce the principal amount of, or premium or
rate of interest, if any, on, any PNA Senior Debt Security or PNA Subordinated
Debt Security, (c) reduce the amount of principal of an Original Issue Discount
PNA Senior Debt Security or PNA Subordinated Debt Security payable upon
acceleration of the maturity thereof, (d) change the place or coin or currency
of payment of principal of, or premium or interest, if any, on, any PNA Senior
Debt Security or PNA Subordinated Debt Security, (e) impair the right to
institute suit for the enforcement of any payment on or with respect to any PNA
Senior Debt Security or PNA Subordinated Debt Security, (f) modify or affect in
any manner adverse to Holders the terms and conditions of the obligations of the
Guarantor in respect of the due and punctual payment of principal or any premium
and interest, sinking fund payment or Additional Amounts in respect of the PNA
Senior Debt Securities or PNA Subordinated Debt Securities, (g) reduce the
percentage in principal amount of Outstanding PNA Senior Debt Securities or PNA
Subordinated Debt 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, (h) modify (with certain exceptions) any provision of the Indenture
that requires the consent of the Holder of each Outstanding PNA Senior Debt
Security or PNA Subordinated Debt Security affected thereby or (i) with respect
to the PNA Subordinated Indenture, modify the subordination provisions in a
manner adverse to Holders of Outstanding PNA Subordinated Debt Securities.
SUBORDINATION
Unless otherwise indicated in the applicable Prospectus Supplement, the
following provisions shall apply to the PNA Subordinated Debt Securities and the
guarantee of them by the Corporation.
The payment of the principal of, premium, if any, and interest on the PNA
Subordinated Debt Securities and the Corporation's Guarantees thereof (the "PNA
Subordinated Guarantees") will, to the extent set forth in the PNA Subordinated
Indenture, be subordinated in right of payment to the prior payment in full of
all Senior Indebtedness (as defined below) of PNA or the Corporation, as the
case may be. In certain events of insolvency, the payment of the principal of,
premium, if any, and interest on the PNA Subordinated Debt
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Securities and any payments with respect to the PNA Subordinated Guarantees
will, to the extent set forth in the PNA Subordinated Indenture, also be
effectively subordinated in right of payment to the prior payment in full of all
Other Financial Obligations (as defined below) of PNA or the Corporation, as the
case may be. As of March 31, 1997, $1,058 million aggregate principal amount of
Senior Indebtedness and $25 million of Other Financial Obligations of PNA were
outstanding. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of PNA or the Corporation, the holders of all Senior Indebtedness
thereof will first be entitled to receive payment in full of all amounts due or
to become due thereon before the Holders of the PNA Subordinated Debt Securities
or the PNA Subordinated Guarantees will be entitled to receive any payment in
respect of the principal of, premium, if any, or interest on the PNA
Subordinated Debt Securities or the PNA Subordinated Guarantees, as the case may
be. If, upon any such payment or distribution of assets to creditors, there
remain, after giving effect to such subordination provisions in favor of the
holders of Senior Indebtedness of PNA and the Corporation, any amounts of cash,
property or securities available for payment or distribution in respect of PNA
Subordinated Debt Securities or the PNA Subordinated Guarantees (as defined in
the PNA Subordinated Indenture, "PNA Excess Proceeds") and if, at such time, any
person entitled to payment pursuant to the terms of Other Financial Obligations
of PNA or the Corporation has not received payment in full of all amounts due or
to become due on or in respect of such Other Financial Obligations of PNA or the
Corporation, then such PNA Excess Proceeds shall first be applied to pay or
provide for the payment in full of such Other Financial Obligations of PNA or
the Corporation, as the case may be, before any payment or distribution may be
made in respect of the PNA Subordinated Debt Securities or the PNA Subordinated
Guarantees. In the event of the acceleration of the maturity of any PNA
Subordinated Debt Securities, the holders of all Senior Indebtedness of PNA or
the Corporation, as the case may be, will first be entitled to receive payment
in full of all amounts due or to become due thereon before the Holders of the
PNA Subordinated Debt Securities or the PNA Subordinated Guarantees will be
entitled to receive any payment of the principal of, premium, if any, or
interest on the PNA Subordinated Debt Securities or the PNA Subordinated
Guarantees, as the case may be. Accordingly, in case of such an acceleration,
all Senior Indebtedness of PNA or the Corporation would have to be repaid before
any payment could be made in respect of the PNA Subordinated Debt Securities or
the PNA Subordinated Guarantees, as the case may be. No payments on account of
principal, premium, if any, or interest in respect of the PNA Subordinated Debt
Securities or the PNA Subordinated Guarantees may be made if there shall have
occurred and be continuing a default in any payment with respect to any Senior
Indebtedness of PNA or the Corporation, an event of default with respect to any
Senior Indebtedness of PNA or the Corporation permitting the holders thereof to
accelerate the maturity thereof, or if any judicial proceeding shall be pending
with respect to any such default.
By reason of such subordination, in the event of the insolvency of PNA or
the Corporation, creditors of PNA or the Corporation who are not holders of
Senior Indebtedness, the PNA Subordinated Debt Securities or the PNA
Subordinated Guarantees may recover less, ratably, than holders of Senior
Indebtedness of PNA or the Corporation, as the case may be, and may recover
more, ratably, than Holders of the PNA Subordinated Debt Securities or the PNA
Subordinated Guarantees.
"Senior Indebtedness" of PNA is defined in the PNA Subordinated Indenture
to mean the principal of, premium, if any, and interest on (i) all indebtedness
of PNA for money borrowed (including indebtedness of others guaranteed by PNA)
other than the PNA Subordinated Debt Securities, whether outstanding on the date
of the PNA Subordinated Indenture or thereafter created, assumed or incurred and
(ii) any amendments, renewals, extensions, modifications and refundings of any
such indebtedness, unless in either case in the instrument creating or
evidencing any such indebtedness or pursuant to which it is outstanding it is
provided that such indebtedness is not superior in right of payment to the PNA
Subordinated Debt Securities. For the purposes of this definition, "indebtedness
for money borrowed" is defined as (i) any obligation of, or any obligation
guaranteed by, PNA for the repayment of borrowed money, whether or not evidenced
by bonds, debentures, notes or other written instruments, (ii) any deferred
payment obligation of, or any such obligation guaranteed by, PNA for the payment
of the purchase price of property or assets evidenced by a note or similar
instrument, and (iii) any obligation of, or any such obligation guaranteed by,
PNA for the payment of rent or
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other amounts under a lease of property or assets which obligation is required
to be classified and accounted for as a capitalized lease on the balance sheet
of PNA under generally accepted accounting principles.
"Other Financial Obligations" of PNA is defined in the PNA Subordinated
Indenture to mean all obligations of PNA to make payment pursuant to the terms
of financial instruments, such as (i) securities contracts and foreign currency
exchange contracts, (ii) derivative instruments, such as swap agreements
(including interest rate and currency and foreign exchange rate swap
agreements), cap agreements, floor agreements, collar agreements, interest rate
agreements, foreign exchange agreements, options, commodity futures contracts,
commodity options contracts and (iii) similar financial instruments; provided
that the term Other Financial Obligations shall not include (x) obligations on
account of Senior Indebtedness of PNA and (y) obligations on account of
indebtedness for money borrowed ranking pari passu with or subordinate to the
PNA Subordinated Debt Securities.
"Senior Indebtedness" of the Corporation is defined in the PNA Subordinated
Indenture to mean the principal of, premium, if any, and interest on (i) all
indebtedness of the Corporation for money borrowed (including indebtedness of
others guaranteed by the Corporation other than the PNA Subordinated
Guarantees), whether outstanding on the date of the PNA Subordinated Indenture
or thereafter created, assumed or incurred and (ii) any amendments, renewals,
extensions, modifications and refundings of any such indebtedness, unless in
either case in the instrument creating or evidencing any such indebtedness or
pursuant to which it is outstanding it is provided that such indebtedness is not
superior in right of payment to the PNA Subordinated Guarantees. For the
purposes of this definition, "indebtedness for money borrowed" is defined as (i)
any obligation of, or any obligation guaranteed by, the Corporation for the
repayment of borrowed money, whether or not evidenced by bonds, debentures,
notes or other written instruments, (ii) any deferred payment obligation of, or
any such obligation guaranteed by, the Corporation for the payment of the
purchase price of property or assets evidenced by a note or similar instrument,
and (iii) any obligation of, or any such obligation guaranteed by, the
Corporation for the payment of rent or other amounts under a lease of property
or assets which obligation is required to be classified and accounted for as a
capitalized lease on the balance sheet of the Corporation under generally
accepted accounting principles.
"Other Financial Obligations" of the Corporation is defined in the PNA
Subordinated Indenture to mean all obligations of the Corporation to make
payment pursuant to the terms of financial instruments, such as (i) securities
contracts and foreign currency exchange contracts, (ii) derivative instruments,
such as swap agreements (including interest rate and currency and foreign
exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange agreements, options,
commodity futures contracts, commodity options contracts and (iii) similar
financial instruments; provided that the term Other Financial Obligations shall
not include (x) obligations on account of Senior Indebtedness and (y)
obligations on account of indebtedness for money borrowed ranking pari passu
with or subordinate to the PNA Subordinated Guarantees.
EVENTS OF DEFAULT
PNA Senior Indenture
An Event of Default with respect to PNA Senior Debt Securities of any
series is defined in the PNA Senior Indenture as being: default for 30 days in
payment of any interest on PNA Senior Debt Securities of such series; default in
payment of principal of (or premium, if any) on any PNA Senior Debt Securities
of such series; default in deposit of any mandatory sinking fund payment
required by the PNA Senior Debt Securities of such series; default for 60 days,
after notice, in performance or breach of any other covenant or warranty in the
PNA Senior Indenture (except for a covenant expressly relating to a series of
PNA Senior Debt Securities other than that series of PNA Senior Debt Securities)
or in the PNA Senior Debt Securities of such series; acceleration of the PNA
Senior Debt Securities of any other series or any other indebtedness for
borrowed money of the Corporation, PNA or any Material Banking Subsidiary, in
each case exceeding $10,000,000 in an aggregate principal amount, as a result of
a default under the terms of the instrument or instruments under which such
indebtedness is issued or secured, unless such acceleration is annulled within
30 days after written notice as provided in the Indenture, provided that if such
default is remedied or cured by
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<PAGE> 25
the Corporation, PNA or any Material Banking Subsidiary or waived by the holders
of such indebtedness, the Event of Default by reason thereof shall be deemed to
have been thereupon remedied, cured or waived; certain events of bankruptcy,
insolvency or reorganization of the Corporation, any Material Banking Subsidiary
or PNA; or any other Event of Default specified in the applicable Prospectus
Supplement. In case an Event of Default with respect to PNA Senior Debt
Securities of any series shall occur and be continuing, the PNA Senior Trustee
or the Holders of not less than 25% in principal amount of the PNA Senior Debt
Securities of such series then outstanding may declare the principal of all the
PNA Senior Debt Securities of such series to be due and payable. The Corporation
and PNA are required to furnish to the PNA Senior Trustee annually a statement
or statements as to the performance by the Corporation and PNA of their
respective obligations under the PNA Senior Indenture of such series and as to
any default in such performance. Under certain circumstances any declaration of
acceleration with respect to PNA Senior Debt Securities of any series may be
rescinded and past defaults (except a default in the payment of principal of or
interest on the PNA Senior Debt Securities) may be waived by the Holders of a
majority in aggregate principal amount of the PNA Senior Debt Securities of such
series then outstanding. The PNA Senior Indenture provides that the PNA Senior
Trustee may withhold notice to the Holders of PNA Senior Debt Securities of any
series of any continuing default (except in the payment of the principal of (or
premium, if any) or interest on any PNA Senior Debt Securities of such series)
if such PNA Senior Trustee considers it in the interest of Holders of such
series of PNA Senior Debt Securities to do so.
PNA Subordinated Indenture
An Event of Default with respect to the PNA Subordinated Debt Securities of
any series is defined in the PNA Subordinated Indenture as being certain events
involving a bankruptcy, insolvency or reorganization of the Corporation or PNA.
If an Event of Default with respect to PNA Subordinated Debt Securities of any
series shall have occurred and be continuing, either the PNA Subordinated
Trustee or the Holders of not less than 25% in aggregate principal amount of the
PNA Subordinated Debt Securities of such series then outstanding may declare the
principal of the PNA Subordinated Debt Securities of such series to be due and
payable immediately. The Corporation and PNA are required to furnish to the PNA
Subordinated Trustee annually a statement as to the performance by the
Corporation and PNA of their respective obligations under the PNA Subordinated
Indenture and as to any default in such performance. Under certain
circumstances, any declaration of acceleration with respect to PNA Subordinated
Debt Securities of any series may be rescinded and past defaults (except a
default in the payment of principal of or interest on the PNA Subordinated Debt
Securities) may be waived by the Holders of a majority in aggregate principal
amount of the PNA Subordinated Debt Securities of such series then outstanding.
The PNA Subordinated Indenture provides that the PNA Subordinated Trustee may
withhold notice to the Holders of the PNA Subordinated Debt Securities of any
series of any continuing default (except in the payment of the principal of (or
premium, if any) or interest on any PNA Subordinated Debt Securities of such
series) if the PNA Subordinated Trustee considers it in the interest of the
Holders of such series of PNA Subordinated Debt Securities to do so.
The PNA Subordinated Indenture does not provide for any right of
acceleration of the payment of principal of a series of PNA Subordinated Debt
Securities upon a default in the payment of principal or interest or in the
performance of any covenant or agreement in the PNA Subordinated Debt Securities
of the particular series, in the PNA Subordinated Indenture or in the PNA
Subordinated Guarantees.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Each of the Corporation and PNA has covenanted in the PNA Senior and PNA
Subordinated Indentures that it will not merge or consolidate with any other
corporation or sell, convey, transfer or lease all or substantially all of its
assets to any person, firm or corporation unless the Corporation or PNA, as the
case may be, is the continuing corporation or the successor corporation
expressly assumes the obligations under any outstanding PNA Senior Debt
Securities and PNA Subordinated Debt Securities and the PNA Subordinated
Guarantees and the respective PNA Senior and PNA Subordinated Indentures and the
Corporation or PNA, as the case may be, or such successor corporation is not,
immediately after such merger, consolidation, sale or
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conveyance, in default in the performance of any of the covenants or conditions
of the respective Indenture. The Indentures do not contain any other covenant
that restricts the Corporation's or PNA's ability to merge or consolidate with
any other corporation, sell, convey, transfer or lease all or substantially all
of its assets to any person, firm or corporation or otherwise engage in
restructuring transactions.
GUARANTEE
PNA Senior Debt Securities
The Corporation will guarantee the punctual payment of the principal of,
premium, if any, and interest on the PNA Senior Debt Securities, when and as the
same are due and payable. The guarantee is absolute and unconditional,
irrespective of any circumstance that might otherwise constitute a legal or
equitable discharge of a surety or guarantor. To evidence the guarantee, a
Guarantee, executed by the Corporation, will be endorsed on each PNA Senior Debt
Security. Holders of the PNA Senior Debt Securities may proceed directly against
the Corporation in the event of default under the PNA Senior Debt Securities
without first proceeding against PNA. The Guarantees will rank pari passu with
all other unsecured and unsubordinated obligations of the Corporation.
PNA Subordinated Debt Securities
The Corporation will guarantee, on a subordinated basis, the punctual
payment of the principal of, premium, if any, and interest on the PNA
Subordinated Debt Securities, when and as the same are due and payable. The
guarantee is absolute and unconditional, irrespective of any circumstance that
might otherwise constitute a legal or equitable discharge of a surety or
guarantor. To evidence the guarantee, a Guarantee, executed by the Corporation,
will be endorsed on each PNA Subordinated Debt Security. Holders of the PNA
Subordinated Debt Securities may proceed directly against the Corporation in the
event of default under the PNA Subordinated Debt Securities without first
proceeding against PNA. The PNA Subordinated Guarantees will rank pari passu
with all other unsecured and subordinated obligations of the Corporation. See
"Subordination."
TERMS APPLICABLE TO THE PIB SENIOR DEBT SECURITIES
OR PIB SUBORDINATED DEBT SECURITIES
MODIFICATION OF THE PIB SENIOR AND PIB SUBORDINATED INDENTURES
The PIB Senior and PIB Subordinated Indentures contain provisions
permitting the Corporation, PIB and the respective PIB Trustees, with the
consent of Holders of not less than a majority in principal amount of the PIB
Senior Debt Securities or PIB Subordinated Debt Securities that are affected by
the modification, to modify the particular Indenture or any supplemental
indenture or the rights of the Holders of the PIB Senior Debt Securities or PIB
Subordinated Debt Securities issued under such Indenture; provided that no such
modification may, without the consent of the Holder of each outstanding PIB
Senior Debt Security or PIB Subordinated Debt Security affected thereby, (a)
change the stated maturity date of the principal of, or any installment of
principal of or interest, if any, on, any PIB Senior Debt Security or PIB
Subordinated Debt Security, (b) reduce the principal amount of, or premium or
rate of interest, if any, on, any PIB Senior Debt Security or PIB Subordinated
Debt Security, (c) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the maturity thereof, (d) change the place
or coin or currency of payment of principal of, or premium or interest, if any,
on, any PIB Senior Debt Security or PIB Subordinated Debt Security, (e) impair
the right to institute suit for the enforcement of any payment on or with
respect to any PIB Senior Debt Security or PIB Subordinated Debt Security, (f)
modify or affect in any manner adverse to Holders the terms and conditions of
the obligations of the Guarantor in respect of the due and punctual payment of
principal or any premium and interest, sinking fund payment or Additional
Amounts in respect of the PIB Senior Debt Securities or PIB Subordinated Debt
Securities, (g) reduce the percentage in principal amount of Outstanding PIB
Senior Debt Securities or PIB Subordinated Debt Securities of any series, the
consent of whose Holders is required for modification or amendment of the
Indenture or for waiver
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of compliance with certain provisions of the Indenture or for waiver of certain
defaults, (h) modify (with certain exceptions) any provision of the Indenture
that requires the consent of the Holder of each Outstanding PIB Senior Debt
Security or PIB Subordinated Debt Security affected thereby or (i) with respect
to the PIB Subordinated Indenture, modify the subordination provisions in a
manner adverse to Holders of Outstanding PIB Subordinated Debt Securities.
SUBORDINATION
Unless otherwise indicated in the applicable Prospectus Supplement, the
following provisions shall apply to the PIB Subordinated Debt Securities and the
guarantee of them by the Corporation.
The payment of the principal of, premium, if any, and interest on the PIB
Subordinated Debt Securities and the Corporation's Guarantees thereof (the "PIB
Subordinated Guarantees") will, to the extent set forth in the PIB Subordinated
Indenture, be subordinated in right of payment to the prior payment in full of
all Senior Indebtedness (as defined below) of PIB or the Corporation, as the
case may be. In certain events of insolvency, the payment of the principal of,
premium, if any, and interest on the PIB Subordinated Debt Securities and any
payments with respect to the PIB Subordinated Guarantees will, to the extent set
forth in the PIB Subordinated Indenture, also be effectively subordinated in
right of payment to the prior payment in full of all Other Financial Obligations
(as defined below) of PIB or the Corporation, as the case may be. As of March
31, 1997, no Senior Indebtedness and no Other Financial Obligations of PIB were
outstanding. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of PIB or the Corporation, the holders of all Senior Indebtedness
thereof will first be entitled to receive payment in full of all amounts due or
to become due thereon before the Holders of the PIB Subordinated Debt Securities
or the PIB Subordinated Guarantees will be entitled to receive any payment in
respect of the principal of, premium, if any, or interest on the PIB
Subordinated Debt Securities or the PIB Subordinated Guarantees, as the case may
be. If, upon any such payment or distribution of assets to creditors, there
remain, after giving effect to such subordination provisions in favor of the
holders of Senior Indebtedness of PIB and the Corporation, any amounts of cash,
property or securities available for payment or distribution in respect of PIB
Subordinated Debt Securities or the PIB Subordinated Guarantees (as defined in
the PIB Subordinated Indenture, "PIB Excess Proceeds") and if, at such time, any
person entitled to payment pursuant to the terms of Other Financial Obligations
of PIB or the Corporation has not received payment in full of all amounts due or
to become due on or in respect of such Other Financial Obligations of PIB or the
Corporation, then such PIB Excess Proceeds shall first be applied to pay or
provide for the payment in full of such Other Financial Obligations of PIB or
the Corporation, as the case may be, before any payment or distribution may be
made in respect of the PIB Subordinated Debt Securities or the PIB Subordinated
Guarantees. In the event of the acceleration of the maturity of any PIB
Subordinated Debt Securities, the holders of all Senior Indebtedness of PIB or
the Corporation, as the case may be, will first be entitled to receive payment
in full of all amounts due or to become due thereon before the Holders of the
PIB Subordinated Debt Securities or the PIB Subordinated Guarantees will be
entitled to receive any payment of the principal of, premium, if any, or
interest on the PIB Subordinated Debt Securities or the PIB Subordinated
Guarantees, as the case may be. Accordingly, in case of such an acceleration,
all Senior Indebtedness of PIB or the Corporation would have to be repaid before
any payment could be made in respect of the PIB Subordinated Debt Securities or
the PIB Subordinated Guarantees, as the case may be. No payments on account of
principal, premium, if any, or interest in respect of the PIB Subordinated Debt
Securities or the PIB Subordinated Guarantees may be made if there shall have
occurred and be continuing a default in any payment with respect to any Senior
Indebtedness of PIB or the Corporation, an event of default with respect to any
Senior Indebtedness of PIB or the Corporation permitting the holders thereof to
accelerate the maturity thereof, or if any judicial proceeding shall be pending
with respect to any such default.
By reason of such subordination, in the event of the insolvency of PIB or
the Corporation, creditors of PIB or the Corporation who are not holders of
Senior Indebtedness, the PIB Subordinated Debt Securities or the PIB
Subordinated Guarantees may recover less, ratably, than holders of Senior
Indebtedness of PIB or the
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Corporation, as the case may be, and may recover more, ratably, than Holders of
the PIB Subordinated Debt Securities or the PIB Subordinated Guarantees.
"Senior Indebtedness" of PIB is defined in the PIB Subordinated Indenture
to mean the principal of, premium, if any, and interest on (i) all indebtedness
of PIB for money borrowed (including indebtedness of others guaranteed by PIB)
other than the PIB Subordinated Debt Securities, whether outstanding on the date
of the PIB Subordinated Indenture or thereafter created, assumed or incurred and
(ii) any amendments, renewals, extensions, modifications and refundings of any
such indebtedness, unless in either case in the instrument creating or
evidencing any such indebtedness or pursuant to which it is outstanding it is
provided that such indebtedness is not superior in right of payment to the PIB
Subordinated Debt Securities. For the purposes of this definition, "indebtedness
for money borrowed" is defined as (i) any obligation of, or any obligation
guaranteed by, PIB for the repayment of borrowed money, whether or not evidenced
by bonds, debentures, notes or other written instruments, (ii) any deferred
payment obligation of, or any such obligation guaranteed by, PIB for the payment
of the purchase price of property or assets evidenced by a note or similar
instrument, and (iii) any obligation of, or any such obligation guaranteed by,
PIB for the payment of rent or other amounts under a lease of property or assets
which obligation is required to be classified and accounted for as a capitalized
lease on the balance sheet of PIB under generally accepted accounting
principles.
"Other Financial Obligations" of PIB is defined in the PIB Subordinated
Indenture to mean all obligations of PIB to make payment pursuant to the terms
of financial instruments, such as (i) securities contracts and foreign currency
exchange contracts, (ii) derivative instruments, such as swap agreements
(including interest rate and currency and foreign exchange rate swap
agreements), cap agreements, floor agreements, collar agreements, interest rate
agreements, foreign exchange agreements, options, commodity futures contracts,
commodity options contracts and (iii) similar financial instruments; provided
that the term Other Financial Obligations shall not include (x) obligations on
account of Senior Indebtedness of PIB and (y) obligations on account of
indebtedness for money borrowed ranking pari passu with or subordinate to the
PIB Subordinated Debt Securities.
"Senior Indebtedness" of the Corporation is defined in the PIB Subordinated
Indenture to mean the principal of, premium, if any, and interest on (i) all
indebtedness of the Corporation for money borrowed (including indebtedness of
others guaranteed by the Corporation other than the PIB Subordinated
Guarantees), whether outstanding on the date of the PIB Subordinated Indenture
or thereafter created, assumed or incurred and (ii) any amendments, renewals,
extensions, modifications and refundings of any such indebtedness, unless in
either case in the instrument creating or evidencing any such indebtedness or
pursuant to which it is outstanding it is provided that such indebtedness is not
superior in right of payment to the PIB Subordinated Guarantees. For the
purposes of this definition, "indebtedness for money borrowed" is defined as (i)
any obligation of, or any obligation guaranteed by, the Corporation for the
repayment of borrowed money, whether or not evidenced by bonds, debentures,
notes or other written instruments, (ii) any deferred payment obligation of, or
any such obligation guaranteed by, the Corporation for the payment of the
purchase price of property or assets evidenced by a note or similar instrument,
and (iii) any obligation of, or any such obligation guaranteed by, the
Corporation for the payment of rent or other amounts under a lease of property
or assets which obligation is required to be classified and accounted for as a
capitalized lease on the balance sheet of the Corporation under generally
accepted accounting principles.
"Other Financial Obligations" of the Corporation is defined in the PIB
Subordinated Indenture to mean all obligations of the Corporation to make
payment pursuant to the terms of financial instruments, such as (i) securities
contracts and foreign currency exchange contracts, (ii) derivative instruments,
such as swap agreements (including interest rate and currency and foreign
exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange agreements, options,
commodity futures contracts, commodity options contracts and (iii) similar
financial instruments; provided that the term Other Financial Obligations shall
not include (x) obligations on account of Senior Indebtedness and (y)
obligations on account of indebtedness for money borrowed ranking pari passu
with or subordinate to the PIB Subordinated Guarantees.
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EVENTS OF DEFAULT
PIB Senior Indenture
An Event of Default with respect to PIB Senior Debt Securities of any
series is defined in the PIB Senior Indenture as being: default for 30 days in
payment of any interest on PIB Senior Debt Securities of such series; default in
payment of principal of (or premium on, if any) any PIB Senior Debt Securities
of such series; default in deposit of any mandatory sinking fund payment
required by the PIB Senior Debt Securities of such series; default for 60 days,
after notice, in performance or breach of any other covenant or warranty in the
PIB Senior Indenture (except for a covenant expressly relating to a series of
PIB Senior Debt Securities other than that series of PIB Senior Debt Securities)
or in the PIB Senior Debt Securities of such series; acceleration of the PIB
Senior Debt Securities of any other series or any other indebtedness for
borrowed money, of the Corporation, PIB or any Material Banking Subsidiary, in
each case in an aggregate principal amount exceeding $10,000,000, as a result of
a default under the terms of the instrument or instruments under which such
indebtedness is issued or secured, unless such acceleration is annulled within
30 days after written notice as provided in the Indenture, provided that if such
default is remedied or cured by the Corporation, PIB or any Material Banking
Subsidiary or waived by holders of such indebtedness, the Event of Default by
reason thereof shall be deemed to have been thereupon remedied, cured or waived;
certain events of bankruptcy, insolvency or reorganization with respect to the
Corporation, PIB or any Material Banking Subsidiary; or any other Event of
Default specified in the applicable Prospectus Supplement. In case an Event of
Default with respect to PIB Senior Debt Securities of any series shall occur and
be continuing, the PIB Senior Trustee or the Holders of not less than 25% in
principal amount of the PIB Senior Debt Securities of such series then
outstanding may declare the principal of all the PIB Senior Debt Securities of
such series to be due and payable. The Corporation and PIB are required to
furnish to the PIB Senior Trustee annually a statement as to the performance by
the Corporation and PIB of their respective obligations under the PIB Senior
Indenture and as to any default in such performance. Under certain circumstances
any declaration of acceleration with respect to PIB Senior Debt Securities of
any series may be rescinded and past defaults (except a default in the payment
of principal of or interest on the PIB Senior Debt Securities) may be waived by
the Holders of a majority in aggregate principal amount of the PIB Senior Debt
Securities of such series then outstanding. The PIB Senior Indenture provides
that the PIB Senior Trustee may withhold notice to the Holders of PIB Senior
Debt Securities of any series of any continuing default (except in the payment
of the principal of (or premium, if any) or interest on any PIB Senior Debt
Securities of such series) if such PIB Senior Trustee considers it in the
interest of Holders of such series of PIB Senior Debt Securities to do so.
PIB Subordinated Indenture
An Event of Default with respect to the PIB Subordinated Debt Securities of
any series is defined in the PIB Subordinated Indenture as being certain events
involving a bankruptcy, insolvency or reorganization of the Corporation or PIB.
If an Event of Default with respect to PIB Subordinated Debt Securities of any
series shall have occurred and be continuing, either the PIB Subordinated
Trustee or the Holders of not less than 25% in aggregate principal amount of the
PIB Subordinated Debt Securities of such series then outstanding may declare the
principal of the PIB Subordinated Debt Securities of such series to be due and
payable immediately. The Corporation and PIB are required to furnish to the PIB
Subordinated Trustee annually a statement as to the performance by the
Corporation and PIB of their respective obligations under the PIB Subordinated
Indenture and as to any default in such performance. Under certain
circumstances, any declaration of acceleration with respect to PIB Subordinated
Debt Securities of any series may be rescinded and past defaults (except a
default in the payment of principal of or interest on the PIB Subordinated Debt
Securities) may be waived by the Holders of a majority in aggregate principal
amount of the PIB Subordinated Debt Securities of such series then outstanding.
The PIB Subordinated Indenture provides that the PIB Subordinated Trustee may
withhold notice to the Holders of the PIB Subordinated Debt Securities of any
series of any continuing default (except in the payment of the principal of (or
premium, if any) or interest on any PIB Subordinated Debt Securities of such
series) if the PIB Subordinated Trustee considers it in the interest of the
Holders of such series of PIB Subordinated Debt Securities to do so.
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The PIB Subordinated Indenture does not provide for any right of
acceleration of the payment of principal of a series of PIB Subordinated Debt
Securities upon a default in the payment of principal or interest or in the
performance of any covenant or agreement in the PIB Subordinated Debt Securities
of the particular series, in the PIB Subordinated Indenture or in the PIB
Subordinated Guarantees.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Each of the Corporation and PIB has covenanted in the PIB Senior and PIB
Subordinated Indentures that it will not merge or consolidate with any other
corporation or sell, convey, transfer or lease all or substantially all of its
assets to any person, firm or corporation unless the Corporation or PIB, as the
case may be, is the continuing corporation or the successor corporation
expressly assumes the obligations under any outstanding PIB Senior Debt
Securities and Subordinated Debt Securities and the PIB Subordinated Guarantees
and the respective PIB Senior and PIB Subordinated Indentures and the
Corporation, or PIB, as the case may be, or such successor corporation is not,
immediately after such merger, consolidation, sale or conveyance, in default in
the performance of any of the covenants or conditions of the respective
Indenture. The Indentures do not contain any other covenant that restricts the
Corporation's or PIB's ability to merge or consolidate with any other
corporation, sell, convey, transfer or lease all or substantially all of its
assets to any persons, firm or corporation or otherwise engage in restructuring
transactions.
GUARANTEE
PIB Senior Debt Securities
The Corporation will guarantee the punctual payment of the principal of,
premium, if any, and interest on the PIB Senior Debt Securities, when and as the
same are due and payable. The guarantee is absolute and unconditional,
irrespective of any circumstance that might otherwise constitute a legal or
equitable discharge of a surety or guarantor. To evidence the guarantee, a
Guarantee, executed by the Corporation, will be endorsed on each PIB Senior Debt
Security. Holders of the PIB Senior Debt Securities may proceed directly against
the Corporation in the event of default under the PIB Senior Debt Securities
without first proceeding against PIB. The Guarantees will rank pari passu with
all other unsecured and unsubordinated obligations of the Corporation.
PIB Subordinated Debt Securities
The Corporation will guarantee, on a subordinated basis, the punctual
payment of the principal of, premium, if any, and interest on the PIB
Subordinated Debt Securities, when and as the same are due and payable. The
guarantee is absolute and unconditional, irrespective of any circumstance that
might otherwise constitute a legal or equitable discharge of a surety or
guarantor. To evidence the guarantee, a Guarantee, executed by the Corporation,
will be endorsed on each PIB Subordinated Debt Security. Holders of the PIB
Subordinated Debt Securities may proceed directly against the Corporation in the
event of default under the PIB Subordinated Debt Securities without first
proceeding against PIB. The PIB Subordinated Guarantees will rank pari passu
with all other unsecured and subordinated obligations of the Corporation. See
"Subordination."
DESCRIPTION OF PREFERRED STOCK OF THE CORPORATION
The following summary contains a description of certain general terms of
the Corporation's preferred stock (the "Preferred Stock") to which any
Prospectus Supplement may relate. Certain terms of any series of the Preferred
Stock offered by any Prospectus Supplement will be described in the Prospectus
Supplement relating thereto. If so indicated in the Prospectus Supplement, the
terms of any series may differ from the terms set forth below. The following
summary description of certain provisions of the Preferred Stock is subject to
and qualified in its entirety by reference to the provisions of the
Corporation's Restated Certificate of Incorporation, as amended, the
Certificates of Designation describing the Corporation's 8.35% Non-Cumulative
Monthly Income Preferred Stock, 1994 Series A (the "Series A Preferred Stock")
and the Corporation's Series A Participating Preferred Stock (the "Series A
Participating Preferred Stock"),
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respectively, and the Certificate of Resolution (the "Certificate of
Resolution") relating to each particular series of the Preferred Stock, each of
which will be filed or incorporated by reference, as the case may be, as an
exhibit to the Registration Statement of which this Prospectus is a part at or
prior to the time of the issuance of such Preferred Stock.
GENERAL
Under the Corporation's Restated Certificate of Incorporation, the Board of
Directors of the Corporation is authorized, without further stockholder action,
to provide for the issuance of up to 10,000,000 shares of preferred stock (of
which 4,000,000 shares have been designated and issued as Series A Preferred
Stock and 350,000 shares have been authorized and designated but not issued for
the Series A Participating Preferred Stock), without par value, in one or more
series, with such designations of titles; dividend rates; special or relative
rights in the event of a liquidation, distribution or sale of assets or
dissolution or winding up of the Corporation; sinking fund provisions;
redemption or purchase account provisions; conversion provisions; and voting
rights, as shall be set forth as and when established by the Board of Directors
of the Corporation. The shares of any series of Preferred Stock will be, when
issued, fully paid and non-assessable and holders thereof shall have no
preemptive rights in connection therewith.
The liquidation preference of any series of the Preferred Stock is not
necessarily indicative of the price at which shares of such series of Preferred
Stock will actually trade at or after the time of their issuance. The market
price of any series of Preferred Stock can be expected to fluctuate with changes
in market and economic conditions, the financial condition and prospects of the
Corporation and other factors that generally influence the market prices of
securities.
RANK
Any series of Preferred Stock will, with respect to dividend rights and
rights on liquidation, winding up and dissolution, rank (i) senior to all
classes of common stock of the Corporation and to all equity securities issued
by the Corporation the terms of which specifically provide that such equity
securities will rank junior to the Preferred Stock (collectively referred to as
the "Junior Securities"); (ii) on a parity with all equity securities issued by
the Corporation the terms of which specifically provide that such equity
securities will rank on a parity with the Preferred Stock (collectively referred
to as the "Parity Securities"); and (iii) junior to all equity securities issued
by the Corporation the terms of which specifically provide that such equity
securities will rank senior to the Preferred Stock. As used in any Certificate
of Resolution for these purposes, the term "equity securities" will not include
debt securities convertible into or exchangeable for equity securities.
DIVIDENDS
Holders of each series of Preferred Stock will be entitled to receive,
when, as and if declared by the Board of Directors of the Corporation out of
funds legally available therefor, cash dividends at such rates and on such dates
as are set forth in the Prospectus Supplement relating to such series of
Preferred Stock. Dividends will be payable to holders of record of the Preferred
Stock as they appear on the books of the Corporation on such record dates as
shall be fixed by the Board of Directors. Dividends on any series of Preferred
Stock may be cumulative or non-cumulative. The Corporation's ability to pay
dividends on its Preferred Stock is subject to policies established by the
Federal Reserve Board. See "Certain Regulatory Matters -- Dividend
Restrictions."
No full dividends may be declared or paid or funds set apart for the
payment of dividends on any Parity Securities unless dividends shall have been
paid or set apart for such payment on the Preferred Stock. If full dividends are
not so paid, the Preferred Stock shall share dividends pro rata with the Parity
Securities.
The holders of any series of shares of Preferred Stock at the close of
business on a dividend payment record date will be entitled to receive the
dividend payable on such shares (except that holders of shares called for
redemption on a redemption date occurring between such record date and the
dividend payment date shall not be entitled to receive such dividend on such
dividend payment date but instead will receive accrued and
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unpaid dividends to such redemption date) on the corresponding dividend payment
date notwithstanding the conversion thereof or the Corporation's default in
payment of the dividend due. Except as provided above, the Corporation will make
no payment or allowance for unpaid dividends, whether or not in arrears, on
converted shares or for dividends on the shares of preferred stock or issued
upon conversion.
CONVERSION
The Prospectus Supplement for any series of Preferred Stock will state the
terms, if any, on which shares of that series are convertible into shares of
another series of preferred stock of the Corporation.
For any series of Preferred Stock which is convertible, the Corporation
shall at all times reserve and keep available, out of the aggregate of its
authorized but unissued preferred stock or preferred stock held in its treasury
or both, for the purpose of effecting the conversion of the shares of such
series of Preferred Stock, the full number of shares of preferred stock then
deliverable upon the conversion of all outstanding shares of such series.
No fractional shares or scrip representing fractional shares of preferred
stock will be issued upon the conversion of shares of any series of convertible
Preferred Stock. Each holder to whom fractional shares would otherwise be issued
will instead be entitled to receive, at the Corporation's election, either (a) a
cash payment equal to the current market price of such holder's fractional
interest or (b) a cash payment equal to such holder's proportionate interest in
the net proceeds (following the deduction of applicable transaction costs) from
the sale promptly by an agent, on behalf of such holders, of shares of preferred
stock representing the aggregate of such fractional shares.
EXCHANGEABILITY
If so determined by the Board of Directors of the Corporation, the holders
of shares of Preferred Stock of any series may be obligated at any time or at
maturity to exchange such shares for preferred stock or debt securities of the
Corporation. The terms of any such exchange and any such preferred stock or debt
securities will be described in the Prospectus Supplement relating to such
series of Preferred Stock.
REDEMPTION
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Corporation or the holder thereof upon terms and at
the redemption prices set forth in the Prospectus Supplement relating to such
series.
In the event of partial redemptions of Preferred Stock, whether by
mandatory or optional redemption, the shares to be redeemed will be determined
by lot or pro rata, as may be determined by the Board of Directors of the
Corporation or by any other method determined to be equitable by the Board of
Directors.
On or after a redemption date, unless the Corporation defaults in the
payment of the redemption price, dividends will cease to accrue on shares of
Preferred Stock called for redemption and all rights of holders of such shares
will terminate except for the right to receive the redemption price.
Under current regulations, bank holding companies may not exercise any
option to redeem shares of preferred stock included as Tier 1 capital, or
exchange such preferred stock for debt securities, without the prior approval of
the Federal Reserve Board. Ordinarily, the Federal Reserve Board would not
permit such a redemption unless (1) the shares are redeemed with the proceeds of
a sale by the bank holding company of common stock or perpetual preferred stock
or (2) the Federal Reserve Board determines that the bank holding company's
condition and circumstances warrant the reduction of a source of permanent
capital.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, holders of each series of Preferred Stock that ranks senior to
the Junior Securities will be entitled to receive out of assets of the
Corporation available for distribution to shareholders, before any distribution
is made on any Junior
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Securities, including Common Stock, distributions upon liquidation in the amount
set forth in the Prospectus Supplement relating to such series of Preferred
Stock, plus an amount equal to any declared and unpaid dividends. If upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the amounts payable with respect to the Preferred Stock of any
series and any other Parity Securities are not paid in full, the holders of the
Preferred Stock of such series and the Parity Securities will share ratably in
any such distribution of assets of the Corporation in proportion to the full
liquidation preferences to which each is entitled. After payment of the full
amount of the liquidation preference to which they are entitled, the holders of
such series of Preferred Stock will not be entitled to any further participation
in any distribution of assets of the Corporation.
VOTING RIGHTS
Except as indicated in the Prospectus Supplement relating to a particular
series of Preferred Stock, or except as expressly required by applicable law,
the holders of the Preferred Stock will have no voting rights.
Under regulations adopted by the Federal Reserve Board, if the holders of
shares of any series of Preferred Stock of the Corporation become entitled to
vote for the election of directors, such series may then be deemed a "class of
voting securities" and a holder of 25% or more of such series (or a holder of 5%
if it otherwise exercises a "controlling influence" over the Corporation) may
then be subject to regulation as a bank holding company in accordance with the
BHC Act. In addition, at such time as such series is deemed a class of voting
securities, (i) any other bank holding company may be required to obtain the
approval of the Federal Reserve Board to acquire or retain 5% or more of such
series, and (ii) any person other than a bank holding company may be required to
file with the Federal Reserve Board under the Change in Bank Control Act to
acquire or retain 10% or more of such series.
Section 12 of the Banking Law requires the prior approval of the Office of
the Commissioner to obtain control of any bank organized under the Banking Law.
The Banking Law requires that in any transfer of voting and outstanding capital
stock of any bank organized under the laws of Puerto Rico to any person or
entity that, upon consummation of the transfer, will become the owner, directly
or indirectly, of more than 5% of the voting and outstanding capital stock of
said bank, the parties to the transfer shall inform the Office of the
Commissioner of the proposed transfer at least 60 days prior to the date such
transfer is to be effected. The Banking Law does not contain any provision
allowing for the extension of such 60-day time period. The transfer requires the
approval of the Office of the Commissioner if it results in a change of control
of the bank. For the purposes of Section 12 of the Banking Law, the term
"control" means the power to, directly or indirectly, direct or influence
decisively the administration or the norms of the bank. The Department of the
Treasury (predecessor to the Office of the Commissioner) made a determination
that the foregoing provisions of the Banking Law are applicable to a change in
control of the Corporation in a letter dated April 9, 1985.
Pursuant to Section 12(d) of the Banking Law, as soon as the Office of the
Commissioner receives notice of a proposed transaction that may result in the
control or in a change of control of a bank, the Office of the Commissioner
shall have the duty to make the necessary investigations. The Office of the
Commissioner shall issue authorization for the transfer of control of the bank
if the results of his investigations are in his judgment satisfactory. The
decision of the Office of the Commissioner is final and unreviewable.
DESCRIPTION OF PREFERRED STOCK OF PIB
The following summary contains a description of certain general terms of
PIB's preferred stock (the "PIB Preferred Stock") to which any Prospectus
Supplement may relate. Certain terms of any series of the Preferred Stock
offered by any Prospectus Supplement will be described in the Prospectus
Supplement relating thereto. If so indicated in the Prospectus Supplement, the
terms of any series may differ from the terms set forth below. The following
summary description of certain provisions of the PIB Preferred Stock is subject
to and qualified in its entirety by reference to the provisions of PIB's
Certificate of Incorporation, as amended, and the Certificate of Amendment
relating to each particular series of the PIB Preferred Stock, each of which
will be filed or incorporated by reference, as the case may be, as an exhibit to
the Registration
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Statement of which this Prospectus is a part at or prior to the time of the
issuance of such PIB Preferred Stock.
The authorized capital stock of PIB consists of 1,000,000 shares of Common
Stock, par value $5.00 per share, and 25,000,000 shares of preferred stock, par
value $25.00 per share. The preferred stock is issuable in one or more series,
with such terms, and at such times and for such consideration as the Board of
Directors of PIB determines. As of the date of this Prospectus, no shares of
preferred stock of PIB were issued and outstanding. All of the common stock of
PIB is owned by the Corporation.
GENERAL
Under PIB's Certificate of Incorporation, the Board of Directors of the
Corporation is authorized, without further stockholder action, to provide for
the issuance of up to 25,000,000 shares of preferred stock, par value $25.00 per
share, in one or more series, with such designations of titles; dividend rates;
special or relative rights in the event of a liquidation, distribution or sale
of assets or dissolution or winding up of PIB; sinking fund provisions; any
redemption or purchase account provisions; conversion provisions; and voting
rights, as shall be set forth as and when established by the Board of Directors
of PIB. The shares of any series of PIB Preferred Stock will be, when issued,
fully paid and nonassessable and holders thereof shall have no preemptive rights
in connection therewith.
The liquidation preference of any series of the PIB Preferred Stock is not
necessarily indicative of the price at which shares of such series of PIB
Preferred Stock will actually trade at or after the time of their issuance. The
market price of any series of PIB Preferred Stock can be expected to fluctuate
with changes in market and economic conditions, the financial condition and
prospects of the Corporation and PIB and other factors that generally influence
the market prices of securities.
RANK
Any series of PIB Preferred Stock will, with respect to dividend rights and
rights on liquidation, winding up and dissolution, rank (i) senior to all
classes of common stock of PIB and to all equity securities issued by PIB the
terms of which specifically provide that such equity securities will rank junior
to the PIB Preferred Stock (collectively referred to as the "PIB Junior
Securities"); (ii) on a parity with all equity securities issued by PIB, the
terms of which specifically provide that such equity securities will rank on a
parity with the PIB Preferred Stock (collectively referred to as the "PIB Parity
Securities"); and (iii) junior to all equity securities issued by PIB, the terms
of which specifically provide that such equity securities will rank senior to
the PIB Preferred Stock (collectively referred to as the "PIB Senior
Securities"). As used in any Certificate of Amendment for these purposes, the
term "equity securities" will not include debt securities convertible into or
exchangeable for equity securities.
DIVIDENDS
Holders of each series of PIB Preferred Stock will be entitled to receive,
when, as and if declared by the Board of Directors of PIB out of funds legally
available therefor, cash dividends at such rates and on such dates as are set
forth in the Prospectus Supplement relating to such series of the PIB Preferred
Stock. Dividends will be payable to holders of record of the PIB Preferred Stock
as they appear on the books of PIB on such record dates as shall be fixed by the
Board of Directors. Dividends on any series of PIB Preferred Stock may be
cumulative or non-cumulative. PIB's ability to pay dividends on its Preferred
Stock is subject to policies established by the Federal Reserve Board. See
"Certain Regulatory Matters -- Dividend Restrictions."
No full dividends may be declared or paid or funds set apart for the
payment of dividends on any PIB Parity Securities unless dividends shall have
been paid or set apart for such payment on the PIB Preferred Stock. If full
dividends are not so paid, the PIB Preferred Stock shall share dividends pro
rata with the PIB Parity Securities.
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The holders of any series of shares of PIB Preferred Stock at the close of
business on a dividend payment record date will be entitled to receive the
dividend payable on such shares (except that holders of shares called for
redemption on a redemption date occurring between such record date and the
dividend payment date shall not be entitled to receive such dividend on such
dividend payment date but instead will receive accrued and unpaid dividends to
such redemption date) on the corresponding dividend payment date notwithstanding
the conversion thereof or PIB's default in payment of the dividend due. Except
as provided above, PIB will make no payment or allowance for unpaid dividends,
whether or not in arrears, on converted shares or for dividends on the shares of
preferred stock issued upon conversion.
CONVERSION
The Prospectus Supplement for any series of the PIB Preferred Stock will
state the terms, if any, on which shares of that series are convertible into
shares of another series of preferred stock of PIB.
For any series of PIB Preferred Stock which is convertible, PIB shall at
all times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued preferred stock or shares of preferred
stock held in its treasury or both, for the purpose of effecting the conversion
of the shares of such series of PIB Preferred Stock, the full number of shares
of preferred stock then deliverable upon the conversion of all outstanding
shares of such series.
No fractional shares or scrip representing fractional shares of preferred
stock will be issued upon the conversion of shares of any series of convertible
PIB Preferred Stock. Each holder to whom fractional shares would otherwise be
issued will instead be entitled to receive, at PIB's election, either (a) a cash
payment equal to the current market price of such holder's fractional interest
or (b) a cash payment equal to such holder's proportionate interest in the net
proceeds (following the deduction of applicable transaction costs) from the sale
promptly by an agent, on behalf of such holders, of shares of preferred stock
representing the aggregate of such fractional shares.
EXCHANGEABILITY
If so determined by the Board of Directors of PIB, the holders of shares of
PIB Preferred Stock of any series may be obligated at any time or at maturity to
exchange such shares for preferred stock or debt securities of PIB. The terms of
any such exchange and any such preferred stock or debt securities will be
described in the Prospectus Supplement relating to such series of PIB Preferred
Stock.
REDEMPTION
A series of PIB Preferred Stock may be redeemable at any time, in whole or
in part, at the option of PIB or the holder thereof upon terms and at the
redemption prices set forth in the Prospectus Supplement relating to such
series.
In the event of partial redemptions of PIB Preferred Stock, whether by
mandatory or optional redemption, the shares to be redeemed will be determined
by lot or pro rata, as may be determined by the Board of Directors of PIB or by
any other method determined to be equitable by the Board of Directors.
On or after a redemption date, unless PIB defaults in the payment of the
redemption price, dividends will cease to accrue on shares of PIB Preferred
Stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
Under current regulations, bank holding companies may not exercise any
option to redeem shares of preferred stock included as Tier 1 capital, or
exchange such preferred stock for debt securities, without the prior approval of
the Federal Reserve Board. Ordinarily, the Federal Reserve Board would not
permit such a redemption unless (1) the shares are redeemed with the proceeds of
a sale by the bank holding company of common stock or perpetual preferred stock
or (2) the Federal Reserve Board determines that the bank holding company's
condition and circumstances warrant the reduction of a source of permanent
capital.
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LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
PIB, holders of each series of PIB Preferred Stock that ranks senior to the PIB
Junior Securities will be entitled to receive out of assets of PIB available for
distribution to shareholders, before any distribution is made on any PIB Junior
Securities, including common stock, distributions upon liquidation in the amount
set forth in the Prospectus Supplement relating to such series of Preferred
Stock, plus an amount equal to any accrued and unpaid dividends. If upon any
voluntary or involuntary liquidation, dissolution or winding up of PIB the
amounts payable with respect to the PIB Preferred Stock of any series and any
other PIB Parity Securities are not paid in full, the holders of the PIB
Preferred Stock of such series and the PIB Parity Securities will share ratably
in any such distribution of assets of PIB in proportion to the full liquidation
preferences to which each is entitled. After payment of the full amount of the
liquidation preference to which they are entitled, the holders of such series of
PIB Preferred Stock will not be entitled to any further participation in any
distribution of assets of PIB.
VOTING RIGHTS
Except as indicated in the Prospectus Supplement relating to a particular
series of PIB Preferred Stock, or except as expressly required by applicable
law, the holders of the PIB Preferred Stock will have no voting rights.
Under regulations adopted by the Federal Reserve Board, if the holders of
shares of any series of PIB Preferred Stock become entitled to vote for the
election of directors, such series may then be deemed a "class of voting
securities" and a holder of 25% or more of such series (or a holder of 5% if it
otherwise exercises a "controlling influence" over PIB) may then be subject to
regulation as a bank holding company in accordance with the BHC Act. In
addition, at such time as such series is deemed a class of voting securities,
(i) any other bank holding company may be required to obtain the approval of the
Federal Reserve Board to acquire or retain 5% or more of such series, and (ii)
any person other than a bank holding company may be required to file with the
Federal Reserve Board under the Change in Bank Control Act to acquire or retain
10% or more of such series.
GUARANTEE
The Corporation will fully and unconditionally guarantee the punctual
payment of (i) any accrued and unpaid dividends, whether or not declared, on the
PIB Preferred Stock of any series, (ii) the redemption price for any shares of
PIB Preferred Stock called or redemption at the option of PIB or the holder
thereof in accordance with the terms of such series of PIB Preferred Stock,
(iii) the liquidation preference of PIB Preferred Stock and (iv) any additional
amounts with respect to a series of PIB Preferred Stock.
The Guarantee of the PIB Preferred Stock shall constitute an unsecured
obligation of the Corporation and will rank junior to all liabilities of the
Corporation. The Guarantee will rank senior to the Corporation's common stock
and shall have such rank relative to the preferred stock of the Corporation as
shall be specified in the applicable Prospectus Supplement.
DESCRIPTION OF PREFERRED STOCK OF PNA
The following summary contains a description of certain general terms of
PNA's preferred stock (the "PNA Preferred Stock") to which any Prospectus
Supplement may relate. Certain terms of any series of the PNA Preferred Stock
offered by any Prospectus Supplement will be described in the Prospectus
Supplement relating thereto. If so indicated in the Prospectus Supplement, the
terms of any series may differ from the terms set forth below. The following
summary description of certain provisions of the PNA Preferred Stock is subject
to and qualified in its entirety by reference to the provisions of PNA's
Certificate of Incorporation, as amended, and the Certificate of Designation
relating to each particular series of the PNA Preferred Stock, each of which
will be filed or incorporated by reference, as the case may be, as an exhibit to
the Registration Statement of which this Prospectus is a part at or prior to the
time of the issuance of such PNA Preferred Stock.
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The authorized capital stock of PNA consists of 10,000 shares of Common
Stock, par value $1.00 per share, and 1,000 shares of preferred stock, par value
$.01 per share. The preferred stock is issuable in one or more series, with such
terms, and at such times and for such consideration as the Board of Directors of
PNA determines. As of the date of this Prospectus, no shares of preferred stock
of PNA were issued and outstanding. All of the common stock of PNA is owned by
PIB.
GENERAL
Under PNA's Certificate of Incorporation, the Board of Directors of the
Corporation is authorized, without further stockholder action, to provide for
the issuance of up to 1,000 shares of preferred stock, par value $.01 per share,
in one or more series, with such designations of titles; dividend rates; special
or relative rights in the event of a liquidation, distribution or sale of assets
or dissolution or winding up of PNA; sinking fund provisions; any redemption or
purchase account provisions; conversion provisions; and voting rights, as shall
be set forth as and when established by the Board of Directors of PNA. The
shares of any series of PNA Preferred Stock will be, when issued, fully paid and
nonassessable and holders thereof shall have no preemptive rights in connection
therewith.
The liquidation preference of any series of the PNA Preferred Stock is not
necessarily indicative of the price at which shares of such series of PNA
Preferred Stock will actually trade at or after the time of their issuance. The
market price of any series of PNA Preferred Stock can be expected to fluctuate
with changes in market and economic conditions, the financial condition and
prospects of the Corporation and PNA and other factors that generally influence
the market prices of securities.
RANK
Any series of PNA Preferred Stock will, with respect to dividend rights and
rights on liquidation, winding up and dissolution, rank (i) senior to all
classes of common stock of PNA and to all equity securities issued by PNA the
terms of which specifically provide that such equity securities will rank junior
to the PNA Preferred Stock (collectively referred to as the "PNA Junior
Securities"); (ii) on a parity with all equity securities issued by PNA, the
terms of which specifically provide that such equity securities will rank on a
parity with the PNA Preferred Stock (collectively referred to as the "PNA Parity
Securities"); and (iii) junior to all equity securities issued by PNA, the terms
of which specifically provide that such equity securities will rank senior to
the PNA Preferred Stock (collectively referred to as the "PNA Senior
Securities"). As used in any Certificate of Designation for these purposes, the
term "equity securities" will not include debt securities convertible into or
exchangeable for equity securities.
DIVIDENDS
Holders of each series of PNA Preferred Stock will be entitled to receive,
when, as and if declared by the Board of Directors of PNA out of funds legally
available therefor, cash dividends at such rates and on such dates as are set
forth in the Prospectus Supplement relating to such series of the PNA Preferred
Stock. Dividends will be payable to holders of record of the PNA Preferred Stock
as they appear on the books of PNA on such record dates as shall be fixed by the
Board of Directors. Dividends on any series of PNA Preferred Stock may be
cumulative or non cumulative. PNA's ability to pay dividends on its Preferred
Stock is subject to policies established by the Federal Reserve Board. See
"Certain Regulatory Matters -- Dividend Restrictions."
No full dividends may be declared or paid or funds set apart for the
payment of dividends on any PNA Parity Securities unless dividends shall have
been paid or set apart for such payment on the PNA Preferred Stock. If full
dividends are not so paid, the PNA Preferred Stock shall share dividends pro
rata with the PNA Parity Securities.
The holders of any series of shares of PNA Preferred Stock at the close of
business on a dividend payment record date will be entitled to receive the
dividend payable on such shares (except that holders of shares called for
redemption on a redemption date occurring between such record date and the
dividend payment date shall not be entitled to receive such dividend on such
dividend payment date but instead will
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<PAGE> 38
receive accrued and unpaid dividends to such redemption date) on the
corresponding dividend payment date notwithstanding the conversion thereof or
PNA's default in payment of the dividend due. Except as provided above, PNA will
make no payment or allowance for unpaid dividends, whether or not in arrears, on
converted shares or for dividends on the shares of preferred stock issued upon
conversion.
CONVERSION
The Prospectus Supplement for any series of the PNA Preferred Stock will
state the terms, if any, on which shares of that series are convertible into
shares of another series of preferred stock of PNA.
For any series of PNA Preferred Stock which is convertible, PNA shall at
all times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued preferred stock or shares of preferred
stock held in its treasury or both, for the purpose of effecting the conversion
of the shares of such series of PNA Preferred Stock, the full number of shares
of preferred stock then deliverable upon the conversion of all outstanding
shares of such series.
No fractional shares or scrip representing fractional shares of preferred
stock will be issued upon the conversion of shares of any series of convertible
PNA Preferred Stock. Each holder to whom fractional shares would otherwise be
issued will instead be entitled to receive, at PNA's election, either (a) a cash
payment equal to the current market price of such holder's fractional interest
or (b) a cash payment equal to such holder's proportionate interest in the net
proceeds (following the deduction of applicable transaction costs) from the sale
promptly by an agent, on behalf of such holders, of shares of preferred stock
representing the aggregate of such fractional shares.
EXCHANGEABILITY
If so determined by the Board of Directors of PNA, the holders of shares of
PNA Preferred Stock of any series may be obligated at any time or at maturity to
exchange such shares for preferred stock or debt securities of PNA. The terms of
any such exchange and any such preferred stock or debt securities will be
described in the Prospectus Supplement relating to such series of PNA Preferred
Stock.
REDEMPTION
A series of PNA Preferred Stock may be redeemable at any time, in whole or
in part, at the option of PNA or the holder thereof upon terms and at the
redemption prices set forth in the Prospectus Supplement relating to such
series.
In the event of partial redemptions of PNA Preferred Stock, whether by
mandatory or optional redemption, the shares to be redeemed will be determined
by lot or pro rata, as may be determined by the Board of Directors of PNA or by
any other method determined to be equitable by the Board of Directors.
On or after a redemption date, unless PNA defaults in the payment of the
redemption price, dividends will cease to accrue on shares of PNA Preferred
Stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
Under current regulations, bank holding companies may not exercise any
option to redeem shares of preferred stock included as Tier 1 capital, or
exchange such preferred stock for debt securities, without the prior approval of
the Federal Reserve Board. Ordinarily, the Federal Reserve Board would not
permit such a redemption unless (1) the shares are redeemed with the proceeds of
a sale by the bank holding company of common stock or perpetual preferred stock
or (2) the Federal Reserve Board determines that the bank holding company's
condition and circumstances warrant the reduction of a source of permanent
capital.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
PNA, holders of each series of PNA Preferred Stock that ranks senior to the PNA
Junior Securities will be entitled to receive out of assets of PNA available for
distribution to shareholders, before any distribution is made on any PNA Junior
Securities,
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<PAGE> 39
including common stock, distributions upon liquidation in the amount set forth
in the Prospectus Supplement relating to such series of Preferred Stock, plus an
amount equal to any accrued and unpaid dividends. If upon any voluntary or
involuntary liquidation, dissolution or winding up of PNA the amounts payable
with respect to the PNA Preferred Stock of any series and any other PNA Parity
Securities are not paid in full, the holders of the PNA Preferred Stock of such
series and the PNA Parity Securities will share ratably in any such distribution
of assets of PNA in proportion to the full liquidation preferences to which each
is entitled. After payment of the full amount of the liquidation preference to
which they are entitled, the holders of such series of PNA Preferred Stock will
not be entitled to any further participation in any distribution of assets of
PNA.
VOTING RIGHTS
Except as indicated in the Prospectus Supplement relating to a particular
series of PNA Preferred Stock, or except as expressly required by applicable
law, the holders of the PNA Preferred Stock will have no voting rights.
Under regulations adopted by the Federal Reserve Board, if the holders of
shares of any series of PNA Preferred Stock become entitled to vote for the
election of directors, such series may then be deemed a "class of voting
securities" and a holder of 25% or more of such series (or a holder of 5% if it
otherwise exercises a "controlling influence" over PNA) may then be subject to
regulation as a bank holding company in accordance with the BHC Act. In
addition, at such time as such series is deemed a class of voting securities,
(i) any other bank holding company may be required to obtain the approval of the
Federal Reserve Board to acquire or retain 5% or more of such series, and (ii)
any person other than a bank holding company may be required to file with the
Federal Reserve Board under the Change in Bank Control Act to acquire or retain
10% or more of such series.
GUARANTEE
The Corporation will fully and unconditionally guarantee the punctual
payment of (i) any accrued and unpaid dividends, whether or not declared, on the
PNA Preferred Stock of any series, (ii) the redemption price for any shares of
PNA Preferred Stock called for redemption at the option of PNA or the holder
thereof in accordance with the terms of such series of PNA Preferred Stock,
(iii) the liquidation preference of PNA Preferred Stock and (iv) any additional
amounts with respect to a series of PNA Preferred Stock.
The Guarantee of the PNA Preferred Stock shall constitute an unsecured
obligation of the Corporation and will rank junior to all liabilities of the
Corporation. The Guarantee will rank senior to the Corporation's common stock
and shall have such rank relative to the preferred stock of the Corporation as
shall be specified in the applicable Prospectus Supplement.
VALIDITY OF OFFERED SECURITIES
The validity of the Preferred Stock and the PIB Preferred Stock will be
passed upon for the Corporation and PIB by Brunilda Santos de Alvarez, counsel
to the Corporation. The validity of the Senior Debt Securities, the Subordinated
Debt Securities, the PIB Senior Debt Securities, the PIB Subordinated Debt
Securities and the Guarantees will be passed upon for the Corporation and PIB by
Ms. Alvarez as to matters of the laws of the Commonwealth of Puerto Rico and by
Sullivan & Cromwell as to matters of New York law. The validity of the PNA
Preferred Stock, the PNA Senior Debt Securities and the PNA Subordinated Debt
Securities will be passed upon for PNA by Sullivan & Cromwell. The validity of
the Securities will be passed upon for any underwriters or agents by counsel
named in the Prospectus Supplement.
EXPERTS
The financial statements incorporated in this Prospectus by reference from
the Corporation's Annual Report on Form 10-K for the year ended December 31,
1996 have been so incorporated in reliance on the report of Price Waterhouse,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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<PAGE> 40
PLAN OF DISTRIBUTION
The Corporation, PIB or PNA, as the case may be, may sell Securities to or
through underwriting syndicates represented by managing underwriters, or through
one or more underwriters without a syndicate for public offering and sale by
them, or may sell Securities to investors directly or through agents. Any such
underwriter or agent involved in the offer and sale of the Securities will be
named in the Prospectus Supplement.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. In connection with the sale of the Securities, underwriters
may be deemed to have received compensation from the Corporation, PIB or PNA, as
the case may be, in the form of underwriting discounts or commissions and may
also receive commissions from purchasers of the Securities for whom they may act
as agent. Underwriters may sell the Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent.
Any compensation paid by the Corporation, PIB or PNA, as the case may be,
to underwriters or agents in connection with the offering of the Securities, and
any discounts, concessions or commissions allowed by underwriters to
participating dealers, will be set forth in the Prospectus Supplement.
Underwriters, dealers and agents participating in the distribution of the
Securities may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the Securities may
be deemed to be underwriting discounts and commissions under the Act.
Underwriters, dealers and agents may be entitled, under agreements entered into
with Corporation, PIB or PNA, as the case may be, to indemnification against
certain civil liabilities, including liabilities under the Act.
All Securities will be a new issue of securities with no established
trading market. Any underwriters to whom Securities are sold by the Corporation,
PIB or PNA, as the case may be, for public offering and sale may make a market
in such Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any Securities.
Certain of the underwriters and their associates may be customers of,
lenders to, engage in transactions with, and perform services for, the
Corporation or its subsidiaries in the ordinary course of business.
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<PAGE> 41
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the securities being registered are:
<TABLE>
<S> <C>
Registration Fee............................................ $303,031
Fees and Expenses of Accountants............................ 30,000
Fees and Expenses of Counsel................................ 150,000
Blue Sky Fees and Expenses.................................. 25,000
Printing and Engraving Expenses............................. 25,000
Rating Agency Fees.......................................... 135,000
Trustee's Fees.............................................. 10,000
Miscellaneous............................................... 21,969
--------
Total............................................. $693,031
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) The Corporation and PIB are Puerto Rico corporations.
(i) Article ELEVENTH of the Restated Certificate of Incorporation of
the Corporation provides the following:
(1) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right
of the Corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at
the written request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Corporation and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
(2) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the Corporation, or is or was
serving at the written request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the court in which such
action or suit was brought shall determine upon application that,
despite the adjudication of liability
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but in view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
(3) To the extent that a director, officer, employee or agent of
the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in paragraph 1 or
2 of this Article ELEVENTH, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
(4) Any indemnification under paragraph 1 or 2 of this Article
ELEVENTH (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct
set forth therein. Such determination shall be made (a) by the Board of
Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (b) if such a
quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a
written opinion, or (c) by the stockholders.
(5) Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking
by or on behalf of the director, officer, employee or agent to repay
such amount unless it shall ultimately be determined that he is entitled
to be indemnified by the Corporation as authorized in this Article
ELEVENTH.
(6) The indemnification provided by this Article ELEVENTH shall not
be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any statute, by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
(7) By action of its Board of Directors, notwithstanding any
interest of the directors in the action, the Corporation may purchase
and maintain insurance, in such amounts as the Board of Directors deems
appropriate, on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the
written request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether
or not the Corporation would have the power or would be required to
indemnify him against such liability under the provisions of this
Article ELEVENTH or of the General Corporation Law of the Commonwealth
of Puerto Rico or of any other state of the United States or foreign
country as may be applicable.
(ii) Article ELEVENTH of the Certificate of Incorporation of PIB
provides the following:
(1) PIB shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of PIB) by reason
of the fact that he is or was a director, officer, employee or agent of
PIB, or is or was serving at the written request of PIB as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
PIB, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the person did not act in good
faith and in a manner which he
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<PAGE> 43
reasonably believed to be in or not opposed to the best interests of PIB
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(2) PIB shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of PIB to procure a judgment in its
favor by reason of the fact that he is or was a director, officer,
employee or agent of PIB, or is or was serving at the written request of
PIB as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of PIB, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to PIB unless and only to the
extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
(3) To the extent that a director, officer, employee or agent of
PIB has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraph 1 or 2 of this
Article ELEVENTH, or in defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(4) Any indemnification under paragraph 1 or 2 of this Article
ELEVENTH (unless ordered by a court) shall be made by PIB only as
authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct
set forth therein. Such determination shall be made (a) by the Board of
Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (b) if such a
quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a
written opinion, or (c) by the stockholders.
(5) Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by PIB in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors
in the specific case upon receipt of an undertaking by or on behalf of
the director, officer, employee or agent to repay such amount unless it
shall ultimately be determined that he is entitled to be indemnified by
PIB as authorized in this Article ELEVENTH.
(6) The indemnification provided by this Article ELEVENTH shall not
be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any statute, by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
(7) By action of its Board of Directors, notwithstanding any
interest of the directors in the action, PIB may purchase and maintain
insurance, in such amounts as the Board of Directors deems appropriate,
on behalf of any person who is or was a director, officer, employee or
agent of PIB, or is or was serving at the written request of PIB as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not PIB would have the
power or would be required to indemnify him against such liability under
the provisions of this Article ELEVENTH or of the General Corporation
Law of the Commonwealth of Puerto Rico or of any other state of the
United States or foreign country as may be applicable.
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<PAGE> 44
(b) PNA is a Delaware corporation.
(i) Section 102 of the Delaware General Corporation Law allows a
corporation to eliminate the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except in cases where the director breached his duty of loyalty,
failed to act in good faith, engaged in intentional misconduct or knowing
violation of law, authorized the unlawful payment of a dividend or approved an
unlawful stock repurchase or obtained an improper personal benefit. Section 145
of the Delaware General Corporation Law, as amended, provides that a corporation
may indemnify any person who was or is a party or is threatened to be a party to
any threatened, pending or completed action, suit, or proceeding, whether civil,
criminal, administrative or investigative, other than an action by or in right
of the Corporation, by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or is or was serving at its request in such
capacity in another corporation or business association against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement,
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
(ii) Section 6.4 of the By-laws of PNA provides the following:
Section 6.4. Indemnification of Directors, Officers and
Employees. The Corporation shall indemnify to the full extent permitted by
law any person made or threatened to be made a party to any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person or such person's testator or intestate
is or was a director, officer or employee of the Corporation or serves or
served at the request of the Corporation any other enterprise as a
director, officer or employee. Expenses, including attorneys' fees,
incurred by any such person in defending any such action, suit or
proceeding shall be paid or reimbursed by the Corporation promptly upon
receipt by it of an undertaking of such person to repay such expenses if it
shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation. The rights provided to any person by this
by-law shall be enforceable against the Corporation by such person who
shall be presumed to have relied upon it in serving or continuing to serve
as a director, officer or employee as provided above. No amendment of this
by-law shall impair the rights of any person arising at any time with
respect to events occurring prior to such amendment. For purposes of this
by-law, the term "Corporation" shall include any predecessor of the
Corporation and any constituent corporation (including any constituent of a
constituent) absorbed by the Corporation in a consolidation or merger; the
term "other enterprise" shall include any corporation, partnership, joint
venture, trust or employee benefit plan; service "at the request of the
Corporation" shall include service as a director, officer or employee of
the Corporation which imposes duties on, or involves services by, such
director, officer or employee with respect to an employee benefit plan, its
participants or beneficiaries; any excise taxes assessed on a person with
respect to an employee benefit plan shall be deemed to be indemnifiable
expenses; and action by a person with respect to an employee benefit plan
which such person reasonably believes to be in the interest of the
participants and beneficiaries of such plan shall be deemed to be action
not opposed to the best interests of the Corporation.
(c) The Corporation, PIB and PNA maintain directors' and officers'
liability insurance policies.
(d) Reference is made to the indemnity provisions in the Underwriting
Agreement, which is incorporated by reference as Exhibit 1 to this Registration
Statement from Registration Statement No. 33-57038.
ITEM 16. EXHIBITS
<TABLE>
<C> <S> <C>
(1)(a) -- Form of Underwriting Agreement. (Incorporated by reference
from Registration Statement No. 33-57038)
(4)(a) -- Restated Certificate of Incorporation of Popular, Inc., as
amended (English translation).
(4)(b) -- Certificate of Incorporation of Popular International Bank,
Inc. (English translation). (Incorporated by Reference from
Registration Statement No. 33-54299)
(4)(c) -- Certificate of Incorporation of Popular North America, Inc.,
as amended.
</TABLE>
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<PAGE> 45
<TABLE>
<C> <S> <C>
(4)(d) -- Copy of Senior Indenture of Popular, Inc., dated as of
February 15, 1995, as supplemented by the First Supplemental
Indenture thereto, dated as of May 8, 1997, each between
Popular, Inc. and The First National Bank of Chicago, as
trustee.
(4)(e) -- Copy of Subordinated Indenture of Popular, Inc., dated as of
November 30, 1995, between Popular, Inc. and The First
National Bank of Chicago, as trustee.
(4)(f) -- Copy of Senior Indenture of Popular North America, Inc.,
dated as of October 1, 1991, as supplemented by the First
Supplemental Indenture thereto, dated as of February 28,
1995, and by the Second Supplemental Indenture thereto,
dated as of May 8, 1997, each among Popular North America,
Inc., Popular, Inc., as Guarantor, and The First National
Bank of Chicago, as trustee.
(4)(g) -- Form of Subordinated Indenture of Popular North America,
Inc. (Incorporated by reference from Registration Statement
No. 33-61601)
(4)(h) -- Form of Senior Indenture of Popular International Bank, Inc.
(4)(i) -- Form of Subordinated Indenture of Popular International
Bank, Inc. (Incorporated by reference from Registration
Statement No. 33-57038)
(4)(j) -- Rights Agreement, dated as of August 11, 1988, between
Popular, Inc. and Chemical Bank (as successor to
Manufacturers Hanover Trust Company). (Incorporated by
reference from Registration Statement No. 33-39028)
(4)(k) -- Amendment to Rights Agreement, dated as of December 11,
1990, between Popular, Inc. and Chemical Bank (as successor
to Manufacturers Hanover Trust Company). (Incorporated by
reference from Registration Statement No. 33-39028)
(5)(a) -- Opinion of Brunilda Santos de Alvarez, Esq.
(5)(b) -- Opinion of Sullivan & Cromwell.
(12) -- Computation of Consolidated Ratios of Earnings to Fixed
Charges and Earnings to Fixed Charges and Preferred Stock
Dividends.
(23)(a) -- Consent of Independent Auditors.
(23)(b) -- Consent of Brunilda Santos de Alvarez, Esq. (included in
Exhibit (5)(a))
(23)(c) -- Consent of Sullivan & Cromwell. (included in Exhibit (5)(b))
(24) -- Powers of attorney (included on pages II-7 through II-11).
(25) -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The First National Bank of Chicago, as
Trustee under the Senior Indenture of Popular, Inc., the
Senior Indenture of Popular North America, Inc. and the
Subordinated Indenture of Popular, Inc.
</TABLE>
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ITEM 17. UNDERTAKINGS
The undersigned Co-registrants hereby undertake:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
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<PAGE> 46
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Coregistrants pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Corporation's annual report
pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by any Co-registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this Registration Statement as of the time it was declared
effective.
(d) That, for purposes of determining any liability under the
Securities Act of 1933, each posteffective amendment that contains a form
of prospectus shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Co-registrants hereby undertake to file an application for
the purpose of determining the eligibility of the Subordinated Trustee, PNA
Subordinated Trustee, PIB Senior Trustee and PIB Subordinated 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 such Act.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Co-registrants pursuant to the provisions referred to in Item 15 of this
Registration Statement, or otherwise, the Co-registrants have 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 by the Co-registrants against such
liabilities (other than the payment by the Co-registrants of expenses incurred
or paid by a director, officer or controlling person of the Coregistrants 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 Co-registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by them is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-6
<PAGE> 47
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Co-registrant 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 to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of San Juan, Commonwealth of Puerto Rico, on the
12th day of May, 1997.
POPULAR, INC.
(Co-registrant)
By /s/ JORGE A. JUNQUERA
------------------------------------
JORGE A. JUNQUERA
Senior Executive Vice President and
Director
(Principal Financial Officer)
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.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of POPULAR, INC. (the "Corporation") hereby constitutes and
appoints Richard L. Carrion, David H. Chafey, Jr., Jorge A. Junquera, Orlando
Berges, Amilcar Jordan and Roberto R. Herencia, and each of them singly, the
true and lawful agents and attorneys-in-fact of the undersigned with full power
of substitution and resubstitution and with full power and authority in said
agents and attorneys-in-fact, and in any one of them, to sign for each of the
undersigned and in his name, place or stead in any and all capacities indicated
below, a Registration Statement on Form S-3 to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, relating to
the registration of up to $1,000,000,000 aggregate initial offering price of
debt, securities, preferred stock and guarantees, and to sign any and all
pre-effective amendments or post-effective amendments to such Registration
Statement and to file the same, with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, granting unto
said agents and attorneys-in-fact, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said agents and
attorneys-in-fact or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue thereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RICHARD L. CARRION Chairman, President and Chief May 12, 1997
- ----------------------------------------------------- Executive Officer (Principal
Richard L. Carrion Executive Officer)
/s/ ALFONSO F. BALLESTER Director May 12, 1997
- -----------------------------------------------------
Alfonso F. Ballester
/s/ JUAN J. BERMUDEZ Director May 12, 1997
- -----------------------------------------------------
Juan J. Bermudez
/s/ FRANCISCO J. CARRERAS Director May 12, 1997
- -----------------------------------------------------
Francisco J. Carreras
</TABLE>
II-7
<PAGE> 48
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DAVID H. CHAFEY, JR. Senior Executive Vice President May 12, 1997
- ----------------------------------------------------- and Director
David H. Chafey, Jr.
/s/ LUIS E. DUBON, JR. Director May 12, 1997
- -----------------------------------------------------
Luis E. Dubon, Jr.
/s/ ANTONIO LUIS FERRE Director May 12, 1997
- -----------------------------------------------------
Antonio Luis Ferre
/s/ HECTOR R. GONZALEZ Director May 12, 1997
- -----------------------------------------------------
Hector R. Gonzalez
/s/ JORGE A. JUNQUERA Senior Executive Vice President May 12, 1997
- ----------------------------------------------------- and Director (Principal
Jorge A. Junquera Financial Officer)
/s/ MANUEL MORALES, JR. Director May 12, 1997
- -----------------------------------------------------
Manuel Morales, Jr.
Director
- -----------------------------------------------------
Alberto M. Paracchini
Director
- -----------------------------------------------------
Francisco M. Rexach, Jr.
/s/ FELIX J. SERRALLES NEVARES Director May 12, 1997
- -----------------------------------------------------
Felix J. Serralles Nevares
/s/ SALUSTIANO ALVAREZ MENDEZ Director May 12, 1997
- -----------------------------------------------------
Salustiano Alvarez Mendez
/s/ JULIO E. VIZCARRONDO, JR. Director May 12, 1997
- -----------------------------------------------------
Julio E. Vizcarrondo, Jr.
/s/ AMILCAR JORDAN Senior Vice President (Principal May 12, 1997
- ----------------------------------------------------- Accounting Officer)
Amilcar Jordan
</TABLE>
II-8
<PAGE> 49
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Co-registrant 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 to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of San Juan, Commonwealth of Puerto Rico, on the
12th day of May, 1997.
POPULAR INTERNATIONAL BANK, INC.
(Co-registrant)
By /s/ JORGE A. JUNQUERA
------------------------------------
Jorge A. Junquera
Chairman of the Board
(Principal Executive Officer)
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.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of POPULAR INTERNATIONAL BANK, INC. (the "Corporation") hereby
constitutes and appoints Richard L. Carrion, David H. Chafey, Jr., Jorge A.
Junquera, Orlando Berges, Amilcar Jordan and Roberto R. Herencia, and each of
them singly, the true and lawful agents and attorneys-in-fact of the undersigned
with full power of substitution and resubstitution and with full power and
authority in said agents and attorneys-in-fact, and in any one of them, to sign
for each of the undersigned and in his name, place or stead in any and all
capacities indicated below, a Registration Statement on Form S-3 to be filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to the registration of up to $1,000,000,000 aggregate initial
offering price of debt, securities, preferred stock and guarantees, and to sign
any and all preeffective amendments or post-effective amendments to such
Registration Statement and to file the same, with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting unto said agents and attorneys-in-fact, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said agents and attorneys-in-fact or any of them, or their or his
substitutes or substitute, may lawfully do or cause to be done by virtue
thereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JORGE A. JUNQUERA Chairman of the Board May 12, 1997
- ----------------------------------------------------- (Principal Executive
Jorge A. Junquera Officer)
/s/ ALFONSO F. BALLESTER Director May 12, 1997
- -----------------------------------------------------
Alfonso F. Ballester
/s/ RICHARD L. CARRION President and Director May 12, 1997
- -----------------------------------------------------
Richard L. Carrion
Director
- -----------------------------------------------------
Manuel L. del Valle
/s/ DAVID H. CHAFEY, JR. Executive Vice President and May 12, 1997
- ----------------------------------------------------- Director
David H. Chafey, Jr.
/s/ AMILCAR JORDAN Senior Vice President and May 12, 1997
- ----------------------------------------------------- Treasurer (Principal
Amilcar Jordan Financial and Accounting
Officer)
</TABLE>
II-9
<PAGE> 50
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Co-registrant 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 to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of San Juan, Commonwealth of Puerto Rico, on the
12th day of May, 1997.
POPULAR NORTH AMERICA, INC.
(Co-registrant)
BY: /s/ JORGE A. JUNQUERA
------------------------------------
Jorge A. Junquera
President and Director
(Principal Financial Officer)
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.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of POPULAR NORTH AMERICA, INC. (the "Corporation") hereby
constitutes and appoints Richard L. Carrion, David H. Chafey, Jr., Jorge A.
Junquera, Orlando Berges, Amilcar Jordan and Roberto R. Herencia, and each of
them singly, the true and lawful agents and attorneys-in-fact of the undersigned
with full power of substitution and resubstitution and with full power and
authority in said agents and attorneys-in-fact, and in any one of them, to sign
for each of the undersigned and in his name, place or stead in any and all
capacities indicated below, a Registration Statement on Form S-3 to be filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to the registration of up to $1,000,000,000 aggregate initial
offering price of debt, securities, preferred stock and guarantees, and to sign
any and all pre-effective amendments or post-effective amendments to such
Registration Statement and to file the same, with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting unto said agents and attorneys-in-fact, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said agents and attorneys-in-fact or any of them, or their or his
substitutes or substitute, may lawfully do or cause to be done by virtue
thereof.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<C> <S> <C>
/s/ JORGE A. JUNQUERA President and Director May 12, 1997
- ----------------------------------------------------- (Principal Financial Officer)
Jorge A. Junquera
/s/ DAVID H. CHAFEY, JR. Senior Executive Vice President May 12, 1997
- ----------------------------------------------------- and Director
David H. Chafey, Jr.
/s/ ALFONSO F. BALLESTER Director May 12, 1997
- -----------------------------------------------------
Alfonso F. Ballester
/s/ RICHARD L. CARRION Chairman (Principal Executive May 12, 1997
- ----------------------------------------------------- Officer)
Richard L. Carrion
</TABLE>
II-10
<PAGE> 51
<TABLE>
<C> <S> <C>
- ------------------------------------------------------ Director
Manuel L. del Valle
/s/ ROBERTO R. HERENCIA Senior Vice President and Director May 12, 1997
- ------------------------------------------------------
Roberto R. Herencia
/s/ AMILCAR JORDAN Senior Vice President and Treasurer May 12, 1997
- ------------------------------------------------------ (Principal Accounting Officer)
Amilcar Jordan
</TABLE>
II-11
<PAGE> 52
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<C> <C> <S> <C>
(4)(a) -- Restated Certificate of Incorporation of Popular, Inc., as
amended (English translation)...............................
(4)(c) -- Certificate of Incorporation of Popular North America, Inc.,
as amended..................................................
(4)(d) -- Copy of Senior Indenture of Popular, Inc., dated as of
February 15, 1995, as supplemented by the First Supplemental
Indenture thereto, dated as of May 8, 1997, each between
Popular, Inc. and The First National Bank of Chicago, as
trustee.....................................................
(4)(e) -- Copy of Subordinated Indenture of Popular, Inc., dated as of
November 30, 1995, between Popular, Inc. and The First
National Bank of Chicago, as trustee........................
(4)(f) -- Copy of Senior Indenture of Popular North America, Inc.,
dated as of October 1, 1991, as supplemented by the First
Supplemental Indenture thereto, dated as of February 28,
1995, and by the Second Supplemental Indenture thereto,
dated as of May 8, 1997, each among Popular North America,
Inc., Popular, Inc., as Guarantor, and The First National
Bank of Chicago, as trustee.................................
(4)(h) -- Form of Senior Indenture of Popular International Bank,
Inc.........................................................
(5)(a) -- Opinion of Brunilda Santos de Alvarez, Esq..................
(5)(b) -- Opinion of Sullivan & Cromwell..............................
(12) -- Computation of Consolidated Ratios of Earnings to Fixed
Charges and Earnings to Fixed Charges and Preferred Stock
Dividends...................................................
(23)(a) -- Consent of Independent Auditors.............................
(23)(b) -- Consent of Brunilda Santos de Alvarez, Esq. (included in
Exhibit (5)(a)).............................................
(23)(c) -- Consent of Sullivan & Cromwell (included in Exhibit 5(b)).
(24) -- Powers of attorney (included on pages II-7 through II-11)...
(25) -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The First National Bank of Chicago, as
Trustee under the Senior Indenture of Popular, Inc., the
Senior Indenture of Popular North America, Inc. and the
Subordinated Indenture of Popular Inc. .....................
</TABLE>
- ---------------
<PAGE> 1
EXHIBIT 4(a)
CERTIFICATE OF INCORPORATION
OF BANPONCE CORPORATION
FIRST: The name of the Corporation is BanPonce Corporation.
SECOND: The principal office of the Corporation shall be at the
Popular Center Building, 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918
and its resident agent at such address is Leda, Brunilda Santos de Alvarez.
THIRD: The nature of the business and the purposes of the Corporation
are to engage in, carry out and conduct, for profit, to the extent permitted by
law, the following activities:
1. To purchase, subscribe for, or otherwise acquire and
own, hold, use, sell, assign, transfer, mortgage, pledge, exchange, or
otherwise dispose of, and deal in and with the personal or mixed property of
every kind and description, including shares of stock, bonds, debentures,
notes, evidences of indebtedness and other securities, or other interests in
debentures, notes, mortgages, or other contracts or obligations and any
certificates, receipts or other instruments representing options, right or
warrants to receive, purchase or subscribe for the same or representing any
other rights or interests therein or in any property or assets of or created or
issued by any person, or persons, corporation or corporations, association or
associations, domestic or foreign, including agencies, instrumentalities,
authorities, administrations, corporations or other public governmental bodies
or subdivision thereof, and to pay therefor, in whole or in part, in cash or by
exchanging therefor, stocks, bonds, or other evidences of indebtedness or
securities of this or other corporation, and while the owner or holder of any
such personal or mixed property, stocks, bonds, debentures, notes, evidences of
indebtedness or other securities, contracts or obligations, to receive, collect
and dispose of the interest, dividends, and income arising from such property
and to possess and exercise in respect thereof all the rights, powers and
privileges of ownership, including all voting powers on any stocks so owned to
the same extent as a natural person might or could do.
2. To purchase or otherwise acquire and own, hold, use,
sell, assign, transfer, exchange and convey, pledge, lease, rent, remodel,
improve, reconstruct, mortgage and otherwise encumber or dispose of real estate
whether improved or unimproved, and any right, privilege or interest of any
kind whatsoever therein, and to manage, operate, own, hold, deal in and dispose
of all or any part of such property and assets whether real, personal or mixed,
as may be necessary or desirable for the successful conduct and operation of
such business and to possess and exercise in respect thereof all the rights,
powers and privileges of ownership, to the same extent as a natural person
might or could do; provided, however, that the Corporation shall not be
authorized, as respects real property located within the Commonwealth of Puerto
Rico, to conduct the business of buying and selling real estate, and shall in
all other respects be subject to the provisions of Section 14 of Article VI of
the Constitution of the Commonwealth of Puerto Rico.
<PAGE> 2
2
3. To aid either by loans or by guaranty of securities or in any other
manner, any corporation, domestic or foreign, any shares of stock, or any
bonds, debentures, evidences of indebtedness or other securities whereof are
held by this corporation or in which it shall have any interest, and to do any
acts designed to protect, preserve, improve, or enhance the value of any
property at any time held or controlled by this Corporation or in which it at
the same time may be interested.
4. To endorse or guarantee the payment of principal, interest, or
dividends on securities and to guarantee the performance of sinking funds or
other obligations of, and to guarantee in any way permitted by law the
performance of any contracts or obligations of every kind and description with
or of any person, firm, association, corporation or of the government or
subdivisions thereof.
5. To lend its surplus or uninvested funds from time to time to such
extent, to such persons, firms, associations, corporations or governmental
bodies or subdivisions, agencies or instrumentalities thereof, and on such
terms and on such security, if any, as the Board of Directors of the Corporation
may determine.
6. To borrow money for any of the purposes of the Corporation, from
time to time, and without limit as to amount; from time to time, to issue and
sell its own securities in such amounts, on such terms and conditions, for such
purposes and for such consideration, as may now be or hereafter shall be
permitted by the laws of the Commonwealth of Puerto Rico; and to secure the same
by mortgage upon, or the pledge, or the conveyance or assignment in trust of,
the whole or any part of the properties, assets, business and good will of the
Corporation then owned or acquired.
7. To merge into or consolidate with, and to enter into agreements and
cooperative relations, not in contravention of law, with any person, firm,
association or corporation; to purchase or otherwise acquire and to hold,
cancel, reissue, sell, exchange, transfer or otherwise deal in its own shares
of capital stock or other securities from time to time to the extent and upon
such terms as shall be permitted by the law of the Commonwealth of Puerto Rico;
provided, however, that shares of its own capital stock so purchased or held
shall not be directly or indirectly voted, nor shall they be entitled to the
payment of dividends during such period or periods as they shall be held by the
Corporation.
8. To manufacture, process, purchase, sell and generally to trade and
deal in and with goods, wares and merchandise of every kind, nature and
description, and to engage and participate in any mercantile, industrial or
trading business of any kind or character whatsoever.
9. To apply for, register, obtain, purchase, lease, take licenses in
respect of or otherwise acquire, and to hold, own, use, operate, develop,
enjoy, turn to account, grant licenses and immunities in respect of, manufacture
under and to introduce, sell, assign, mortgage, pledge, or otherwise dispose
of, and, in any manner deal with and contract with reference to:
<PAGE> 3
3
(a) inventions, devices, formulas, processes and any
improvements and modifications thereof;
(b) letters patent, patent rights, patented processes,
copyrights, designs, and similar rights, trade-marks, trade symbols and other
indications of origin and ownership granted by or recognized under the laws of
the Commonwealth of Puerto Rico, the Government of the United States of America
or of any state or subdivision thereof, or of any foreign country or subdivision
thereof, and all rights connected therewith or appertaining thereunto;
(c) franchises, licenses, grants and concessions.
10. To acquire by purchase, exchange or otherwise, all of any part
of, or any interest in, the properties, assets, business and good will of any
one or more persons, firms, associations, or corporations heretofore or
hereafter engaged in any business for which a corporation may now or hereafter
be organized under the laws of the Commonwealth of Puerto Rico; to pay for the
same in cash, property or its own or other securities; to hold, operate,
reorganize, liquidate, sell or in any manner dispose of the whole or any part
thereof; and in connection therewith, to assume or guarantee performance of any
liabilities, obligations or contracts of such persons, firms, associations or
corporations, and to conduct the whole or any part of any business thus
acquired.
11. To draw, make, accept, endorse, discount, execute, and issue
promissory notes, drafts, bills of exchange, warrants, bonds, debentures, and
other negotiable or transferable instruments and evidences of indebtedness
whether secured by mortgage or otherwise, as well as to secure the same by
mortgage or otherwise, so far as may be permitted by the laws of the
Commonwealth of Puerto Rico.
12. To the extent permitted by law, and subject to obtaining the
license required under the provisions of Section 9.060 of the Insurance Code of
Puerto Rico (26 LPRA 906), to act as agent for insurance companies in
soliciting and receiving applications for property, marine and transportation,
vehicle, casualty surety and title insurance, and all other kinds of insurance
except life and disability insurance, the collection of premiums, and doing
such other business as may be delegated to agents by such companies, and to
conduct a general insurance agency business.
13. To organize or cause to be organized under the laws of the
Commonwealth of Puerto Rico, or of any other State of the United States of
America, or the District of Columbia, or of any territory, dependency, colony or
possession of the United States of America, or of any foreign country, a
corporation or corporations for the purpose of transacting, promoting or
carrying on any or all of the objects or purposes for which the corporation
is organized, and to dissolve, wind up, liquidate merge or consolidate any
such corporation or corporations or to cause the same to be dissolved, wound up,
liquidated, merged or consolidated.
<PAGE> 4
4
14. To conduct its business in any and all of its branches and maintain
offices both within and without the Commonwealth of Puerto Rico, in any and all
States of the United States of America, in the District of Columbia, in any or
all territories, dependencies, colonies or possessions of the United States of
America, and in foreign countries.
15. To such extent as a corporation organized under the laws of the
Commonwealth of Puerto Rico may now or hereafter lawfully do, to do, either as
principal or agent and either alone or through subsidiaries or in connection
with other persons, firms, associations or corporations, all and everything
necessary, suitable, convenient or proper for, or in connection with or incident
to, the accomplishment of any of the purposes or the attainment of any one
or more of the objects herein enumerated, or designed directly or indirectly to
promote interests of the Corporation or to enhance the value of its properties;
and in general to do any and all things and exercise any and all powers,
rights, and privileges which a corporation may now or hereafter be organized to
do or to exercise under the laws of the Commonwealth of Puerto Rico.
The foregoing provisions of this Article THIRD shall be construed both
as purposes and powers and each as an independent purpose and power. The
foregoing enumeration of specific purposes and powers shall not be held to limit
or restrict in any manner the purposes and powers of the Corporation and the
purposes and powers herein specified shall, except when otherwise provided in
this Article THIRD, be in no way limited or restricted by reference to, or
interference from, the terms of any provisions of this or any other Article of
this Certificate of Incorporation.
FOURTH: The Corporation is to have perpetual existence.
FIFTH: The minimum amount of capital with which the Corporation shall
commence business shall be $1,000.00.
The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue, upon resolutions approved by the
Board of Directors from time to time, is one hundred million shares
(100,000,000), of which ninety million shares (90,000,000) shall be shares of
Common Stock of the par value of $6.00 per shares (hereinafter called "Common
Stock"), and ten million shall be shares of Preferred Stock without par value
(hereinafter called "Preferred Stock").
The amount of the authorized capital stock of any class or classes of
stock may be increased or decreased by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote.
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the Preferred Stock
shall be as follows:
(1) The Board of Directors is expressly authorized at any time, and
from time
<PAGE> 5
5
to time, to provide for the issuance of shares of Preferred Stock in one or
more series, and with such voting powers, full or limited but not to exceed one
vote per share, or without voting powers, and with such designations,
preferences, and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be expressed in
the resolution or resolutions providing or the issue thereof adopted by the
Board of Directors and as are not otherwise expressed in this Certificate of
Incorporation or any amendment thereto, including (but without limiting the
generality of the foregoing) the following:
(a) the designation of such series;
(b) the purchase price which the Corporation shall receive
for each share of such series;
(c) the dividend rate of such series, the conditions and
dates upon which such dividends shall be payable, the preference or relation
which such dividends shall bear to the dividends payable on any other class or
classes or on any other series of any class or classes of capital stock of the
Corporation, and whether such dividends shall be cumulative or non-cumulative;
(d) whether the shares of such series shall be subject to
redemption by the Corporation, and, if made subject to such redemption, the
times, prices and other terms and conditions of such redemption;
(e) the terms and amounts of any sinking fund provided for
the purchase or redemption of the shares of such series;
(f) whether the shares of such series shall be convertible
into or exchangeable for shares of any other class of classes or of any other
series of any class or classes of capital stock of the Corporation, and, if
provision be made for conversion or exchange, the times, prices, rates,
adjustments, and other terms and conditions of such conversion or exchange;
(g) the extent, if any, to which the holders of the shares of
such series shall be entitled to vote as a class or otherwise with respect to
the election of directors or otherwise;
(h) the restrictions and conditions, if any, upon the reissue
of any additional Preferred Stock ranking on a parity with or prior to such
shares as to dividends or upon dissolution;
(i) the rights of the holders of the shares of such series
upon the dissolution of, or upon the distribution of assets of, the
Corporation, which rights may be different in the case of a voluntary
dissolution than in the case of any involuntary dissolution.
(2) Except as otherwise required by law and except for such voting
powers with
<PAGE> 6
6
respect to the election of directors or other matters as may be stated in the
resolutions of the Board of Directors creating any series of Preferred Stock,
the holders of any such series shall have no voting power whatsoever.
SIXTH: The Board of Directors shall have the power, whenever it may
deem necessary to so act, from time to time, to authorize the issue of new
shares of stock. The common stockholders of record on any date designated by
resolution of the Board of Directors shall preference for the subscription for
common stock on a pro rata basis unless the Board of Directors unanimously
resolves otherwise, but the stockholders shall have no preference to subscribe
therefor in the event of new issues of shares of stock which may be authorized
pursuant to any Dividend Reinvestment and Stock Purchase Plan of the
Corporation or which may be authorized in order to exchange such new shares of
stock for property which the Board of Directors may consider convenient or
necessary for the Corporation to acquire, nor shall the stockholders have any
right of preference therefore in the event of new issues of stock in payment of
services rendered to the Corporation, or of shares of stock to be issued for
sale to officers or employees, on the basis of options, as an incentive either
to commence or to continue rendering services for the Corporation.
SEVENTH: The name and address of each incorporator is:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C> <C>
1. Socorro Santiago . . . . . 1395 San Alfonso Avenue
Urb. Altamesa
Rio Piedras, Puerto Rico
2. Annie Serrano . . . . . . DH-27 Llanuras Street
Rio Hondo IV
Bayamon, Puerto Rico
3. Julie Vazquez . . . . . . 31st Street, AE-22
Villas de Loiza
Canovanas, Puerto Rico
</TABLE>
EIGHTH: (1) The Board shall be composed of such number of directors as
are established from time to time by the Board of Directors and approved by an
absolute majority of directors; provided, however, that the total number of
directors shall always be an odd number and not less than nine (9) nor more
than twenty-five (25). The Board of Directors shall be divided into three
classes as nearly equal in number as possible, with each class having at least
three members and with the term of office of one class expiring each year.
Each director shall serve for a term ending on the date of the third annual
meeting of stockholders following the annual meeting at which such director was
elected; provided, however, that each initial director in Class 1 shall hold
office until the annual meeting of stockholders in 1991; each initial director
in Class
<PAGE> 7
7
2 shall hold office until the annual meeting of stockholders in 1992; and each
initial director in Class 3 shall hold office until the annual meeting of
stockholders in 1993. Except as provided in this Article Eighth, a director
shall be elected by the affirmative vote of a majority of the shares of the
class of stock represented at the annual meeting of stockholders for which the
director stands for election and entitled to elect such director.
(2) Any vacancies in the Board of Directors, by reason of an increase
in the number of directors or otherwise, shall be filled solely by the Board of
Directors, by majority vote of the directors then in office, though less than a
quorum, but any such director so elected shall hold office only until the next
succeeding annual meeting of stockholders. At such annual meeting, such
director shall be elected and qualified in the class in which such director is
assigned to hold office for the term or remainder of the term of such class.
Directors shall continue in office until others are chosen and qualified in
their stead. When the number of directors is changed, any newly created
directorships or any decrease in directorships shall be so assigned among the
classes by a majority of the directors then in office, though less than a
quorum, so as to make all classes as nearly equal in number as possible. To
the extent of any inequality within the limits of the foregoing, the class of
directorships shall be the class or classes then having the last date or the
later dates for the expiration of its or their terms. No decrease in the
number of directors shall shorten the term of any incumbent director.
(3) Any director may be removed from office as a director but only
for cause by the affirmative vote of the holders of two-thirds (2/3) of the
combined voting power of the then outstanding shares of stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class.
The Board of Directors may, by resolution passed by a majority of the
whole board, designate one or more committees, each committee to consist of two
or more of the directors of the Corporation, which to the extent provided in
the resolution or in the by-laws of the Corporation, shall have and may
exercise the powers of the Board of Directors (other than the power to remove
or elect officers) in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it. Such committee or committees shall have such
name or names as may be stated in the by-laws of the Corporation or as may be
determined from time to time by resolution adopted by the Board of Directors.
The Board of Directors may from time to time, in the manner provided
for in the by-laws of the Corporation, hold its regular or extraordinary
meetings outside of Puerto Rico.
NINTH: The Board of Directors may, upon resolution approved by an
absolute majority thereof, from time to time (after adoption of the original
by-laws of the Corporation) adopt, amend or repeal the by-laws of the
Corporation; provided, that any by-laws adopted, amended or repealed by the
Board of Directors may be amended or repealed, and any by-laws may be adopted,
by the stockholders of the Corporation.
<PAGE> 8
8
TENTH: The affirmative vote of the holders of not less than
seventy-five percent (75%) of the total number of outstanding shares of the
Corporation shall be required (i) to amend this Article TENTH, (ii) to approve
any Business Combination for which stockholder approval is required by
applicable law or (iii) to approve the voluntary dissolution of the
Corporation, notwithstanding that applicable law would otherwise permit any of
the above with the approval of fewer shares or without the approval of any
shares:
For purposes of this Article TENTH, the term "Business Combination"
shall mean:
(a) a merger, reorganization or consolidation in which the Corporation
is a constituent corporation; or
(b) the sale, lease, or hypothecation of substantially all the assets
of the Corporation.
Other than with respect to this Article TENTH, the affirmative vote of
the holders of not less than two-thirds of the total number of outstanding
shares of the Corporation shall be required to amend these Articles of
Incorporation, notwithstanding, that applicable law would otherwise permit
such amendment with the approval of fewer shares or without the approval of any
shares.
ELEVENTH: (1) The Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigate (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the written request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interest of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(2) The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the written request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, join venture, trust or other enterprise, against expenses
(including attorneys's fees) actually and
<PAGE> 9
9
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the Corporation
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
(3) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraph 1 or 2 of this Article
ELEVENTH, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorney's fees) actually and
reasonably incurred by him in connection therewith.
(4) Any indemnification under paragraph 1 or 2 of this Article
ELEVENTH (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth therein. Such
determination shall be made (a) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterest directors so directs, by independent legal counsel in a
written opinion, or (c) by the stockholders.
(5) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding as authorized by the Board of Directors in
the specific case upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Article ELEVENTH.
(6) The indemnification provided by this Article ELEVENTH shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any statute, by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
(7) By action of its Board of Directors, notwithstanding any interest of
the directors in the action, the Corporation may purchase and maintain
insurance, in such amounts as the Board of Directors deems appropriate, on
behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the written request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or
<PAGE> 10
10
other enterprise, against any liability asserted against him and incurred by
him in any such capacity, or arising out of this status as such, whether or not
the Corporation would have the power or would be required to indemnify him
against such liability under the provisions of his Article ELEVENTH or of the
General Corporation Law of the Commonwealth of Puerto Rico or of any other
State of the United State or foreign county as may be applicable.
<PAGE> 11
CERTIFICATE OF RESOLUTION
OF THE BOARD OF DIRECTORS OF BANPONCE CORPORATION
8.35% NON-CUMULATIVE
MONTHLY INCOME PREFERRED STOCK, 1994 SERIES A
(Pursuant to Article 501 of the General Corporation Law of the Commonwealth
of Puerto Rico)
We, the undersigned, Executive Vice President and Secretary of BANPONCE
CORPORATION (hereinafter called the "Corporation"), a corporation duly
organized and existing under the laws of the Commonwealth of Puerto Rico,
do hereby certify that, pursuant to the authority conferred upon the Board of
Directors of the Corporation by the Certificate of Incorporation of the
Corporation, the said Board of Directors on June 16, 1994, adopted the
following resolutions creating a series of 4,000,000 shares of Preferred Stock
designated as the "8.35% Non-Cumulative Monthly Income Preferred Stock, 1994
Series A."
RESOLVED, that pursuant to the authority expressly
granted to and vested in the Board of Directors of the
Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock
of the Corporation be and it hereby is created.
FURTHER RESOLVED, that the directors have determined
that the preferences and relative, participating, optional
or other special rights of the shares of such series of
Preferred Stock, and the qualifications, limitations or
restrictions thereof, as stated and expressed herein, are
under the circumstances prevailing on the date hereof
fair and equitable to all the existing shareholders of
the Corporation.
FURTHER RESOLVED, that the designation and amount
of such series and the voting powers, preferences and
relative, participating, optional or other special
rights of the shares of such series of Preferred Stock,
and the qualifications, limitations or restrictions
thereof are as follows:
A. DESIGNATION AND AMOUNT
The shares of such series of Preferred Stock shall
designated as the "8.35% Non-Cumulative Monthly Income
Preferred Stock 1994 Series A" (hereinafter called the
"Series A Preferred Stock"), and the number of
authorized shares constituting such series shall be
4,000,000.
B. DIVIDENDS
1. Holders of record of the Series A Preferred
Stock will be entitled to receive, when,
as and if declared by the Board of
Directors of the Corporation, out of funds
of the Corporation legally available
therefor, non-cumulative cash dividends
at the annual rate per share of 8.35% of
the liquidation preference of $25 per
share, or $0.173958 per share per
month, with each aggregate payment made
to each record holder of the Series A
Preferred Stock being rounded to the
next lowest cent.
2. Dividends on the Series A Preferred Stock
will accrue from their date of original
issuance and will be payable (when, as
and if declared by the Board of Directors
of the Corporation out of funds of the
Corporation legally available therefor)
monthly in arrears in United States
dollars commencing on July 31, 1994,
and on the last day of each calendar
month of each year thereafter to the
holders of record of the Series A
Preferred
<PAGE> 12
-2-
Stock as they appear on the books of the Corporation on the
second Business Day (as defined below) immediately
preceding the relevant date of payment. In the case of the
dividend payable on July 31, 1994, such dividend shall cover
the period from the date of issuance of the Series A Preferred
Stock to July 31, 1994. In the event that any date on which
dividends are payable is not a Business Day, then payment of
the dividend payable on such date will be made on the next
succeeding Business Day without any interest or other payment in
respect of any such delay, except that, if, such Business Day
is in the next succeeding calendar year, such payment will be
made on the Business Day immediately preceding the relevant
date of payment, in each case with the same force and effect as
if made on such date. A "Business Day" is a day other than a
day on which banking institutions in San Juan, Puerto Rico or
New York, New York are authorized or required by law to close.
3. Dividends on the Series A Preferred Stock will be
non-cumulative. The Corporation is not obligated or
required to declare or pay dividends on the Series A Preferred
Stock, even if it has funds available for the payment of such
dividends. If the Board of Directors of the Corporation or an
authorized committee thereof does not declare a dividend
payable on a dividend payment date in respect of the Series A
Preferred Stock, then the holders of the Series A Preferred
Stock shall have no right to receive a dividend in respect of
the monthly dividend period ending on such dividend payment
date and the Corporation will have no obligation to pay the
dividend accrued for such monthly dividend period or to pay any
interest thereon, whether or not dividends on such Series A
Preferred Stock are declared for any future monthly dividend
period.
4. The amount of dividends payable for any monthly dividend period
will be computed on the basis of twelve 30-day months
and a 360-day year. The amount of dividends payable for any
period shorter than a full monthly dividend period will be
computed on the basis of the actual number of days elapsed in
such period.
5. Subject to any applicable fiscal or other laws and regulations,
each dividend payment will be made by dollar check drawn
on a bank in New York, New York or San Juan, Puerto Rico and
mailed to the record holder thereof at such holder's address as
it appears on the register for such Series A Preferred Stock.
6. So long as any shares of the Series A Preferred Stock remain
outstanding, the Corporation shall not declare, set
apart or pay any dividend or make any other distribution of
assets (other than dividends paid or other distributions made
in stock of the Corporation ranking junior to the Series A
Preferred Stock as to the payment of dividends and as to the
distribution of assets, upon liquidation, dissolution or
winding up of the Corporation) on, or redeem, purchase, set
apart or otherwise acquire (except upon conversion or exchange
for stock of the Corporation ranking junior to the Series A
Preferred Stock as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding
up of the Corporation), shares of common stock or of any other
class of stock of the Corporation ranking junior to the Series
A Preferred Stock
<PAGE> 13
-3-
as to the payment of dividends or as to the distribution
of assets upon liquidation, dissolution or winding up of
the Corporation, unless (i) all accrued and unpaid dividends
on the Series A Preferred Stock for the twelve monthly
dividend periods ending on the immediately preceding dividend
payment date shall have been paid or are paid
contemporaneously and the full monthly dividend on the Series
A Preferred Stock for the then current month has been or is
contemporaneously declared and paid or declared and set apart
for payment and (ii) the Corporation has not defaulted in the
payment of the redemption price of any shares of Series A
Preferred Stock called for redemption.
7. When dividends are not paid in full on the Series A
Preferred Stock and any other shares of stock of the
Corporation ranking on a parity as to the payment of dividends
with the Series A Preferred Stock, all dividends declared upon
the Series A Preferred Stock and any such other shares of
stock of the Corporation will be declared pro rata so that the
amount of dividends declared per share on the Series A
Preferred Stock and any such other shares of stock will in all
cases bear to each other the same ratio that the liquidation
preference per share of the Series A Preferred Stock and any
such other shares of stock bear to each other.
8. Holders of record of the Series A Preferred Stock will
not be entitled to any dividend, whether payable in cash,
property or stock, in excess of the dividends provided for
herein on the shares of Series A Preferred Stock. The
Corporation may, however, at its discretion, declare a special
dividend in an amount sufficient to allow the Corporation to
pay dividends on any stock of the Corporation ranking junior
to the Series A Preferred Stock in compliance with the
provisions of Section B.6 above.
C. CONVERSION; EXCHANGE
The Series A Preferred Stock will not be convertible into or
exchangeable for any other securities of the Corporation.
D. REDEMPTION AT THE OPTION OF THE CORPORATION
1. The shares of the Series A Preferred Stock are not
redeemable prior to June 30, 1998. On and after that date,
the shares of the Series A Preferred Stock will be
redeemable in whole or in part from time to time at the option
of the Corporation, upon not less than 30 nor more than 60
days' notice by mail, at the redemption prices set forth below,
during the twelve-month periods beginning on June 30 of the
years set forth below, plus accrued and unpaid dividends for
the then current monthly dividend period to the date fixed for
redemption.
Year Redemption Price
____ ________________
1998 ................................. $26.25
1999 ................................. $26.00
2000 ................................. $25.75
2001 ................................. $25.50
2002 and thereafter .................. $25.00
<PAGE> 14
-4-
2. In the event that less than all of the outstanding shares of
the Series A Preferred Stock are to be redeemed in any
redemption at the option of the Corporation, the total number
of shares to be redeemed in such redemption shall be
determined by the Board of Directors and the shares to be
redeemed shall be allocated pro rata or by lot as may be
determined by the Board of Directors or by such other method
as the Board of Directors may approve and deem equitable,
including any method to conform to any rule or regulation of
any national or regional stock exchange or automated
quotation system upon which the shares of the Series A
Preferred Stock may at the time be listed or eligible for
quotation.
3. Notice of any proposed redemption shall be given by the
Corporation by mailing a copy of such notice to the holders of
record of the shares of Series A Preferred Stock to be
redeemed, at their address of record, not more than sixty nor
less than thirty days prior to the redemption data. The
notice of redemption to each holder of shares of Series A
Preferred Stock shall specify the number of shares of Series A
Preferred Stock to be redeemed, the redemption date and the
redemption price payable to such holder upon redemption, and
shall state that from and after said date dividends thereon
will cease to accrue. If less than all the shares owned by a
holder are then to be redeemed at the option of the
Corporation, the notice shall also specify the number of
shares of Series A Preferred Stock which are to be redeemed
and the numbers of the certificates representing such shares.
Any notice which is mailed as herein provided shall be
conclusively presume to have been duly given, whether or not
the stockholder receives such notice; and failure duly to
give such notice by mail, or any defect in such notice, to the
holders of any shares designated for redemption shall not
affect the validity of the proceedings for the redemption of
any other shares of Series A Preferred Stock.
4. Notice having been mailed as aforesaid, from and after the
redemption date (unless default be made in the payment of the
redemption price for any shares to be redeemed), all dividends
on the shares of Series A Preferred Stock called for redemption
shall cease to accrue and all rights of the holders of such
shares as stockholders of the Corporation by reason of the
ownership of such shares (except the right to receive the
redemption price, on presentation and surrender of the
respective certificates representing the redeemed shares),
shall cease on the redemption date, and such shares shall not
after the redemption date be deemed to be outstanding. In
case less than all the shares represented by any such
certificate are redeemed a new certificate shall be issued
without cost to the holder thereof representing the unredeemed
shares.
5. At its option, the Corporation may, on or prior to the
redemption date, irrevocably deposit the aggregate amount
payable upon redemption of the shares of the Series A
Preferred Stock to be redeemed with a bank or trust company
designated by the Corporation having its principal office in
New York, New York, San Juan, Puerto Rico, or any other city in
which the Corporation shall at that time maintain a transfer
agent with respect to its capital stock, and having a combined
capital and surplus (as shown by its latest published
statement) of at least $50,000,000 (hereinafter
<PAGE> 15
-5-
referred to as the "Depositary"), to be held in trust
by the Depositary for payment to the holders of the shares of
the Series A Preferred Stock to be redeemed. If such deposit
is made and the funds so deposited are made immediately
available to the holders of the shares of the Series A
Preferred Stock to be redeemed, the Corporation shall
thereupon be released and discharged (subject to the
provisions of Section D.6) from any obligation to make
payment of the amount payable upon redemption of the shares of
the Series A Preferred Stock to be redeemed, and the holders
of such shares shall look only to the Depositary for such
payment.
6. Any funds unclaimed at the end of two years from and
after the redemption date in respect of which such funds were
deposited shall be returned to the Corporation forthwith and
thereafter the holders of shares of the Series A Preferred
Stock called for redemption with respect to which such funds
were deposited shall look only to the Corporation for the
payment of the redemption price thereof. Any interest accrued
on any funds deposited with the Depositary shall belong to the
Corporation and shall be paid to it from time to time on
demand.
7. Any shares of the Series A Preferred Stock which shall at any
time have been redeemed shall, after such redemption, have the
status of authorized but unissued shares of Preferred Stock,
without designation as to series, until such shares are
once more designated as part of a particular series by the
Board of Directors.
E. LIQUIDATION PREFERENCE
1. Upon any voluntary or involuntary liquidation, dissolution,
or winding up of the Corporation, the then record holders of
shares of Series A Preferred Stock will be entitled to
receive out of the assets of the Corporation available for
distribution to shareholders, before any distribution is made
to holders of common stock or any other equity securities
of the Corporation ranking junior upon liquidation to the
Series A Preferred Stock, distributions upon liquidation in the
amount of $25 per share plus an amount equal to any accrued
and unpaid dividends for the current monthly dividend period
to the date of payment. Such amount shall be paid to the
holders of the Series A Preferred Stock prior to any payment
or distribution to the holders of the common stock of the
Corporation ranking junior to the Series A Preferred Stock in
respect of dividends or as to the distribution of assets upon
liquidation.
2. If upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the amounts
payable with respect to the Series A Preferred Stock and any
other shares of stock of the Corporation ranking as to any
such distribution on a parity with the Series A Preferred Stock
are not paid in full, the holders of the Series A Preferred
Stock and of such other shares wills share ratably in any such
distribution of assets of the Corporation in proportion to the
full liquidation preferences to which is entitled. After
payment of the full amount of the liquidation preference to
which they are entitled, the holders of shares of Series A
<PAGE> 16
-6-
Preferred Stock will not be entitled to any further participation in any
distribution of assets of the Corporation.
3. Neither the consolidation or merger of the Corporation with any other
corporation, nor any sale, lease or conveyance of all or any part of the
property or business of the Corporation, shall be deemed to be a
liquidation, dissolution, or winding up of the Corporation.
4. If the assets distributable upon any dissolution, liquidation, or winding
up of the Corporation shall be insufficient to permit the payment to the
holders of the Series A Preferred Stock of the full preferential amounts
aforesaid, then such assets or the proceeds thereof shall be distributed
among the holders of the Series A Preferred Stock ratably in proportion
to the respective amounts the holders of such shares of stock would be
entitled to receive if they were paid the full preferential amounts
aforesaid.
F. Voting Rights
1. Except as described in this Section F, or except as required by
applicable law, holders of the Series A Preferred Stock will not be
entitled to receive notice of or attend or vote at any meeting of
stockholders of the Corporation.
2. If the Corporation does not pay dividends in full on the Series A
Preferred Stock for eighteen consecutive monthly dividend periods, the
holders of outstanding shares of the Series A Preferred Stock, together
with the holders of any other shares of stock of the Corporation having
the right to vote for the election of directors solely in the event of
any failure to pay dividends, acting as a single class without regard to
series, will be entitled, by written notice to the Corporation given by
the holders of a majority in liquidation preference of such shares or by
ordinary resolution passed by the holders of a majority in liquidation
preference of such shares or by ordinary resolution passed by the
holders of a majority in liquidation preference of such shares present
in person or by proxy at a separate general meeting of such holders
convened for the purpose, to appoint two additional members of the
Board of Directors of the Corporation, to remove any such member from
office and to appoint another person in place of such member. Not later
than 30 days after such entitlement arises, if written notice by a
majority of the holders of such shares has not been given as provided
for in the preceding sentence, the Board of Directors or an authorized
committee thereof will convene a separate general meeting for the above
purpose. If the Board of Diretors or such authorized committee fails to
convene such meeting with such 30-day period, the holders of 10% of the
outstanding shares of the Series A Preferred Stock and any such other
stock will be entitled to convene such meting. The provisions of the
Certificate of Incorporation and By-laws of the Corporation relating to
the convening and conduct of general meetings of stockholders will apply
with respect to any such separate general meeting. Any member of the
Board of Directors so appointed shall vacate office if, following the
event which gave rise to such appointment, the Corporation shall have
resumed the payment of dividends in full on the Series A
<PAGE> 17
-7-
Preferred Stock and each such other series of stock for twelve consecutive
monthly dividend periods.
3. Any variation or abrogation of the rights, preferences and privileges of
the Series A Preferred Stock by way of amendment of the Corporation's
Certificate of Incorporation or otherwise (including, without limitation,
the authorization or issuance of any shares of the Corporation ranking,
as to dividend rights or rights on liquidation, winding up and
dissolution, senior to the Series A Preferred Stock) shall not be
effective (unless otherwise required by applicable law) except with the
consent in writing of the holders of at least two-thirds of the
outstanding shares of the Series A Preferred Stock or with the sanction
of a special resolution passed at a separate general meeting by the
holders of at least two-thirds in liquidation preference of the
outstanding shares of the Series A Preferred Stock. Notwithstanding the
foregoing, the Corporation may, without the consent or sanction of the
holders of the Series A Preferred Stock, authorize and issue shares of
the Corporation ranking, as to dividend rights and rights on liquidation,
winding up and dissolution, on a parity with or junior to the Series A
Preferred Stock.
4. No vote of the holders of the Series A Preferred Stock will be required
for the Corporation to redeem or purchase and cancel the Series A
Preferred Stock in accordance with the Certificated of Incorporation of
the Corporation or the Certificate of Resolution for the Series A
Preferred Stock.
5. The Corporation will cause a notice of any meeting at which holders of
the Series A Preferred Stock are entitled to vote to be mailed to each
record holder of such Series A Preferred Stock. Each such notice will
include a statement setting forth (i) the date of such meeting, (ii) a
description of any resolution to be proposed for adoption at such meeting
on which such holders are entitled to vote and (iii) instructions for
deliveries of proxies.
6. Except as set forth in this Section F, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote as set forth
herein) for taking any corporate action.
G. Rank
The Series A Preferred Stock will, with respect to dividend rights and
rights on liquidation, winding up and dissolution, rank (i) senior to all
classes of common stock of the Corporation, to the Corporation's Series A
Participating Preferred Stock and to all other equity securities issued by the
Corporation the terms of which specifically provide that such equity securities
will rank junior to the Series A Preferred Stock (or to all series of the
Preferred Stock in general); (ii) on a parity with all equity securities issued
by the Corporation the terms of which specifically provide that such equity
securities will rank on a parity with the Series A Preferred Stock (or to all
series of the Preferred Stock in general); and (iii) junior to all equity
securities issued by the Corporation the terms of which specifically provide
that such equity securities issued by the Corporation the terms of which
specifically provide that such equity securities will rank senior to the
Series A Preferred Stock (or to all series of the Preferred Stock in general).
For this purpose, the
<PAGE> 18
-8-
term "equity securities" does not include debt securities convertible into or
exchangeable for equity securities.
H. Form of Certificate for Series A Preferred Stock; Transfer and Registration
1. The Series A Preferred Stock shall be issued in registered form only.
The Corporation may treat the record holder of a share of Series A
Preferred Stock, including the Depository Trust Company and its nominee
and any other holder that holds such share on behalf of any other
person, as such record holder appears on the books of the registrar
for the Series A Preferred Stock, as the sole owner of such share for
all purposes.
2. The transfer of a share of Series A Preferred Stock may be registered
upon the surrender of the certificate evidencing the share of Series A
Preferred Stock to be transferred, together with the form of transfer
endorsed on it duly completed and executed, at the office of the
transfer agent and registrar.
3. Registration of transfers of shares of Series A Preferred Stock will be
effected without charge by or on behalf of the Corporation, but upon
payment (or the giving of such indemnity as the transfer agent and
registrar may require) in respect of any tax or other governmental
charges which may be imposed in relation to it.
4. The Corporation will not be required to register the transfer of a
share of Series A Preferred Stock after such share has been called for
redemption.
I. Replacement of Lost Certificates
If any certificate for a share of Series A Preferred Stock is mutilated or
alleged to have been lost, stolen or destroyed, a new certificate representing
the same share may be issued to the holder upon request subject to delivery of
the old certificate or, if alleged to have been lost, stolen or destroyed,
compliance with such conditions as to evidence, indemnity and the payment of
out-of-pocket expenses of the Corporation in connection with the request as the
Board of Directors of the Corporation may determine.
J. No Preemptive Rights
Holders of the Series A Preferred Stock will have no preemptive rights
purchase any securities of the Corporation.
K. No Repurchase at the Option of the Holders; Miscellaneous
Holders of the Series A Preferred Stock will have no right to require the
Corporation to repurchase any shares of Series A Preferred Stock, and the
shares of Series A Preferred Stock are not subject to any sinking fund or
similar obligation. The Corporation may, at its option, purchase shares of the
Series A Preferred Stock from holders thereof from time to time, by tender, in
privately negotiated transactions or otherwise.
<PAGE> 19
-9-
The undersigned hereby certify that the capital of the Corporation will
not be reduced under or by reason of the adoption of the above resolutions
providing for the creation of the above described series of Preferred Stock.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate to be signed by its Executive Vice
President, David H. Chafey, Jr., and its Secretary, Samuel T. Cespedes, this
16th day of June, 1994.
BANPONCE CORPORATION
By: /s/ David H. Chafey, Jr.
------------------------
David H. Chafey, Jr.
Executive Vice President
[CORPORATE SEAL]
By: /s/ Samuel T. Cespedes
------------------------
Samuel T. Cespedes
Secretary
Affidavit No. 576
-----
Acknowledged and subscribed before me in San Juan, Puerto Rico, this
16th day of June, 1994, by the following persons: David H. Chafey, Jr., of
legal age, married, executive, and resident of San Juan, Puerto Rico, in his
capacity as Executive Vice President of BanPonce Corporation; and Samuel T.
Cespedes, of legal age, married, attorney, and resident of San Juan, Puerto
Rico, in his capacity as Secretary of BanPonce Corporation, both are personally
know to me.
/s/ Alberto J. Morales
------------------------
Notary Public
<PAGE> 20
Certificate of Resolution
The undersigned, as Assistant Secretary of the Board of Directors of
BanPonce Corporation, does hereby certify that at a meeting of the Board of
Directors held on the 26th day of April, 1996, at which a quorum was present,
and acting throughout, a resolution was duly and regularly adopted, which is in
full force and effect and unrescinded, and which reads as follows:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation
was created pursuant to a resolution adopted by the Board of Directors on August
11, 1988, as amended on November 8, 1990 and November 12, 1992 and the
number of shares constituting said series shall be and is hereby increased from
350,000 shares to 700,000 shares.
RESOLVED FURTHER, that the directors have determined that the
preferences and relative, participating, optional or other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof, as stated and expressed herein, are under the circumstances prevailing
on the date hereof fair and equitable to all the existing stockholders of the
Corporation.
RESOLVED FURTHER, that the designation and amount of such series and
the voting powers, preferences and relative, participating, optional or other
special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
<PAGE> 21
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Participating Cumulative Preferred
Stock (no par value)" and the number of shares constituting such
series is hereby increased from 350,000 to 700,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior
to the Series A Participating Cumulative Preferred Stock with respect
to dividends, the holders of shares of Series A Participating
Cumulative Preferred Stock, in preference to the shares of Common
Stock, par value $6 per share, of the Corporation (the "Common Stock")
and any other stock of the Corporation junior to the Series A
Participating Cumulative Preferred Stock with respect to dividends,
shall be entitled to receive, when, as and if declared by the Board
of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on March 15, June 15, September 15 and
December 31 of each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the issuance of a share or fraction of a
share of Series A Participating Cumulative Preferred Stock, in an
amount per share (rounded tot he nearest cent) equal to the greater of
(a) $1.00 or (b) subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification of otherwise), declared on
the Common Stock, since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Participating Cumulative Preferred Stock. In the event the
Corporation shall at any time after August 31, 1988 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares
of Series A Participating Cumulative Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding
immediately prior to such event.
<PAGE> 22
(B) The Corporation shall declare a dividend or
distribution on the Series A Participating Cumulative Preferred Stock
as provided in paragraph (A) above immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Participating Cumulative Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Participating Cumulative Preferred
Stock from the quarterly Dividend Payment Date next preceding the date
of issue of such shares of Series A Participating Cumulative Preferred
Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issues
of such shares, unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination
of holders of shares of Series A Participating Cumulative Preferred
Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Participating
Cumulative Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series A Participating
Cumulative Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be no more
than 50 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. In addition to any other
voting rights required by law, the holders of shares of Series A
Participating Cumulative Preferred Stock shall have only the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Participating Cumulative Preferred Stock
shall entitle the holder thereof to one vote on all matters submitted
to a vote of the stockholders of the Corporation.
<PAGE> 23
(B) Except as otherwise provided herein or by law, the holders
of shares of Series A Participating Cumulative Preferred Stock and
the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Participating
Cumulative Preferred Stock shall be in arrears in an amount equal to
six quarterly dividends thereon, the occurrence of such contingency
shall mark the beginning of a period (herein called a "default
period") which shall extend until such time when all accrued and
unpaid dividends for all previous quarterly dividend periods and for
the current quarterly dividend period on all shares of Series A
Participating Cumulative Preferred Stock then outstanding shall have
been declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of Series A
Participating Cumulative Preferred Stock) with dividends in arrears in
an amount equal to six quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two Directors.
(ii) During any default period, such voting right of the
holders of Series A Participating Cumulative Preferred Stock may
be exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders
of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised
unless the holders of ten percent in number of shares of Preferred
Stock outstanding shall be present in person or by proxy. The absence
of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting right. At
any meeting at which the holders of Preferred Stock shall exercise
such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to fill
such vacancies, if any, in the Board of Directors as may then exist up
to two Directors or, if such right is exercised at an annual meeting,
to elect two Directors. If the number which may be so elected at any
special meeting does not amount to the required number, the holders of
the Preferred Stock shall have the right to make such increase in the
number of Directors as shall be necessary to permit the election by
them of the required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any
default period and during the continuance of such
<PAGE> 24
period, the number of Directors shall not be increased or decreased
except by vote of the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to or
pari passu with the Series A Participating Cumulative Preferred
Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right
to elect Directors, the Board of Directors may order, or any
stockholder or stockholders owning in aggregate not less than ten
percent of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting
of the holders of Preferred Stock which meeting shall thereupon be
called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at
which holders of Preferred Stock are entitled to vote pursuant to
this paragraph (C) (iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at his last
address as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 20 days and not
later than 50 days after such order or request or in default of the
calling of such meeting within 50 days after such order or request,
such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent of the
total number of shares of Cumulative Preference Stock outstanding.
Notwithstanding the provisions of this paragraph (C)(iii), no such
special meeting shall be called during the period within 50 days
immediately preceding the date fixed for the next annual meeting of
the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until
the holders of Preferred Stock shall have exercised their right to
elect two (2) Directors voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as provided
in paragraph (C) (ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected the Director
whose office shall have become vacant. References in this paragraph
(C) to Directors elected by the holders of a particular class of stock
shall include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
<PAGE> 25
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
number of Directors shall be such number as may be provided for in the
certificate of incorporation of by-laws irrespective of any increase
made pursuant to the provisions of paragraph (C)(ii) of this Section 3
(such number being subject, however, to change thereafter in any
manner provided by law or in the certificate of incorporation of
by-laws). Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (x) in the preceding sentence may be
filled by a majority of the remaining Directors.
(D) Unless the vote or consent of the holders of a greater
number of shares of Preferred Stock (including shares of the Series A
Participating Cumulative Preferred Stock) shall then be required by
law, the consent of the holders of at least a majority of all shares of
Preferred Stock (including shares of the Series A Participating
Cumulative Preferred Stock) at the time outstanding, given in person
or by proxy, either in writing or by a vote at a meeting called for
such purpose in accordance with the provisions of subparagraph (iii)
of Section 3(C) (as if a default period had occurred and was
continuing) at which the holders of all shares of Preferred Stock shall
vote together as a class without regard to series, shall be necessary
for authorizing, effecting or validating (i) the merger or
consolidation of the Corporation into or with any other corporation,
if such merger or consolidation would adversely affect the powers,
preferences or rights of any shares of any series of Preferred Stock or
(ii) the amendment, alteration or repeal of any of the provisions of
the Certificate of Incorporation or of any amendment thereof or
supplement thereto (including any Certificate of Designation,
Preferences and Rights or any similar document relating to any series
of Preferred Stock) as to affect adversely the powers, preferences,
or rights, of any series of Preferred Stock. The increase of the
authorized amount of the Preferred Stock, or the creation,
authorization or issuance of any shares of any other class of stock of
the Corporation ranking prior to or on a parity with the shares of any
series of Preferred Stock as to dividends or upon liquidation, or the
reclassification of any authorized or outstanding stock of the
Corporation into any such prior or parity shares, or the creation,
authorization or issuance of any obligation or security convertible
into or evidencing the right to purchase any such prior or parity
shares shall not be deemed to affect adversely the powers, preferences
or rights of any series of Preferred Stock.
<PAGE> 26
(E) Except as set forth herein, holders of Series A Participating
Cumulative Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Participating Cumulative Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Participating
Cumulative Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Participating Cumulative Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Participating
Cumulative Preferred Stock, except dividends paid ratably on the Series A
Participating Cumulative Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Participating Cumulative Preferred
Stock, provided that the Corporation may at any time redeem, purchase otherwise
acquire shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) with the Series A Participating Cumulative Preferred
Stock, or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Participating Cumulative Preferred Stock, or any shares of
stock ranking on a parity with the Series A Participating Cumulative Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors,
<PAGE> 27
after consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the respective
series classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Participating
Cumulative Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth in the Certificate of Incorporation.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Participating Cumulative Preferred Stock unless, prior thereto, the holders of
shares of Series A Participating Cumulative Preferred Stock shall have received
$100.00 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares Series A Participating Cumulative Preferred
Stock shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of stock ranking on a
Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Participating Cumulative Preferred Stock, except distributions made ratably on
the Series A Participating Cumulative Preferred Stock and all other such parity
stock in proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution or winding up. In the event
the Corporation shall at any time after the Rights Declaration Date declare or
pay any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of
<PAGE> 28
the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Participating Cumulative Preferred Stock
were entitled immediately prior to such event under the proviso in clause (1)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Participating Cumulative Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Participating Cumulative Preferred
Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Participating
Cumulative Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A Participating Cumulative Preferred
Stock shall rank junior with respect to payment of dividends and on liquidation
to all other series of the Corporation's preferred stock outstanding on the
date hereof and to all such other series that specifically provide that they
shall rank senior to the Series A Participating Cumulative Preferred Stock.
<PAGE> 29
Section 10. Amendment. The Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Participating Cumulative
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares, if any, of Series
A Participating Cumulative Preferred Stock, voting separately as a Class.
Section 11. Fractional Shares. Series A Participating Cumulative Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Participating Cumulative Preferred Stock.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of this
Corporation in San Juan, Puerto Rico, this 6th day of November, 1996.
BANPONCE CORPORATION
By: /s/ Brunilda Santos de Alvarez
--------------------------------------
Brunilda Santos de Alvarez
Assistant Secretary
Affidavit Number: 645
-------
Subscribed and acknowledged to before me by Mrs. Brunilda Santos de
Alvarez, of legal age, married, lawyer and resident of Guaynabo, Puerto Rico,
as Assistant Secretary of the Board of Directors of BanPonce Corporation, to me
personally known at San Juan, Puerto, this 6th day of November, 1996.
[SEAL]
/s/ Estela Martinez de Miranda
------------------------------
Notary Public
<PAGE> 30
CERTIFICATE
The undersigned, Richard L. Carrion, President of the Board of Directors,
President and Chief Executive Officer of BanPonce Corporation, and Samuel T.
Cespedes, Secretary of the Board of Directors of BanPonce Corporation, hereby
certify:
That in the annual meeting of stockholders of BanPonce Corporation, held
in the city of San Juan, Puerto Rico on the 25th day of April, 1997, which was
duly called together, the following resolutions were adopted amending Article
First and Article Fifth of the Amended Articles of Incorporation of BanPonce
Corporation by the affirmative vote of more than two thirds and the affirmative
vote of the majority, respectively, of the common stock of BanPonce Corporation
issued and outstanding:
"RESOLVED, that Article First of the Restated Articles of Incorporation of
BanPonce Corporation be, and it hereby is, amended in its entirety to read as
follows:
"FIRST: The name of the Corporation is Popular, Inc."
RESOLVED, FURTHER, that the proper officers of the Corporation be, and
hereby are, authorized and directed to take all actions, execute all
instruments, and make all payments that are necessary or desirable, at their
discretion, to make effective the foregoing amendment to the Restated Articles
of Incorporation of the Corporation, including without limitation, filing a
certificate of such amendment with the Secretary of State of the Commonwealth
of Puerto Rico.
RESOLVED, that Article Fifth of the Restated Articles of Incorporation of
the Corporation be, and it hereby is, amended in its entirety to read as
follows:
"FIFTH: The minimum amount of capital with which the Corporation shall
commence business shall be $1,000.
The total number of shares of all classes of capital stock that the
Corporation shall have authority to issue, upon resolutions approved by the
Board of Directors from time to time, is one hundred ninety million shares
(190,000,000), of which one hundred eighty million shares (180,000,000) shall
be shares of Common Stock of the par value of $6, per shares (hereinafter
called "Common Stock"), and ten million (10,000,000) shall be shares of
Preferred Stock without par value (hereinafter called "Preferred Stock").
The amount of the authorized capital stock of any class or classes of
stock may be increased or decreased by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote.
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the Preferred Stock
shall be as follows:
<PAGE> 31
(1) The Board of Directors is expressly authorized at any time, and
from time to time, to provide for the issuance of shares of Preferred Stock in
one or more series, and with such voting powers, full or limited but not to
exceed one vote per share, or without voting powers, and with such
designations, preferences, and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, as
shall be expressed in the resolution or resolutions providing for the issue
thereof adopted by the Board of Directors and as are not otherwise expressed in
this Certificate of Incorporation or any amendment thereto, including (but
without limiting the generality of the foregoing) the following:
(a) the designation of such series;
(b) the purchase price that the Corporation shall receive
for each share of such series;
(c) the dividend rate of such series, the conditions and
dates upon which such dividends shall be payable, the preference or relation
that such dividends shall bear to the dividends payable on any other class or
classes or on any other series of any class or classes of capital stock of the
Corporation, and whether such dividends shall be cumulative or non-cumulative;
(d) whether the shares of such series shall be subject to
redemption by the Corporation, and, if made subject to such redemption, the
times, prices and other terms and conditions of such redemption;
(e) the terms and amounts of any sinking fund provided for
the purchase or redemption of the shares of such series;
(f) whether the shares of such series shall be convertible
into or exchangeable for shares of any other class of classes or of any other
series of any class or classes of capital stock of the Corporation, and, if
provision be made for conversion or exchange, the times, prices, rates,
adjustments and other terms and conditions of such conversion or exchange;
(g) the extent, if any, to which the holders of the shares
of such series shall be entitled to vote as a class or otherwise with respect
to the election of directors or otherwise;
(h) the restrictions and conditions, if any, upon the
reissue of any additional Preferred Stock ranking on a parity with or prior to
such shares as to dividends or upon dissolution;
(i) the rights of the holders of the shares such series
upon the dissolution of, or upon the distribution of assets of, the
Corporation, which rights may be different in the case of a voluntary
dissolution than in the case of an involuntary dissolution.
<PAGE> 32
(2) Except as otherwise required by law and except for such voting
powers with respect to the election of directors or other matters as may be
stated in the resolutions of the Board of Directors creating any series of
Preferred Stock, the holders of any such series shall have no voting power
whatsoever.
RESOLVED FURTHER, that the proper officers of the Corporation be, and
hereby are, authorized and directed to take all actions, execute all
instruments, and make all payments that are necessary or desirable, at their
discretion, to make effective the foregoing amendment to the Restated Articles
of Incorporation, including without limitation on filing a certificate of such
amendment with the Secretary of State of the Commonwealth of Puerto Rico.
IN WITNESS WHEREOF, we have hereunto set our hands and affixed the seal of
the Corporation in San Juan, Puerto Rico, this 25th day of April, 1997.
/s/ Richard L. Carrion /s/ Samuel T. Cespedes
- ------------------------------------ --------------------------------------
RICHARD L. CARRION SAMUEL T. CESPEDES
PRESIDENT - BOARD OF DIRECTORS SECRETARY
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Affidavit No. 730
Sworn and subscribed to before me by Richard L. Carrion, of legal age,
married and resident of San Juan, Puerto Rico, in his capacity as President of
the Board of Directors, President and Chief Executive Officer of BanPonce
Corporation, and Samuel T. Cespedes, of legal age, married and resident of San
Juan, Puerto Rico, in his capacity as Secretary of the Board of Directors of
BanPonce Corporation, who are both personally known to me in San Juan, Puerto
Rico, this 25th day of April, 1997.
/s/ Estella Martinez De Miranda
--------------------------------------
NOTARY PUBLIC
<PAGE> 1
EXHIBIT (4)(c)
CERTIFICATE OF INCORPORATION
OF
BANPONCE FINANCIAL CORP.
FIRST. The name of the corporation is BanPonce Financial Corp.
SECOND. The address of the corporation's registered office in
the State of Delaware is Corporation Trust Center, 1209 Orange Street in the
City of Wilmington, County of New Castle. The name of its registered agent at
such address is The Corporation Trust Company.
THIRD. The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
FOURTH. The total number of shares which the corporation
shall have authority to issue is 100 shares of Common Stock, and the par value
of each of such shares is $.01.
FIFTH. The name and mailing address of the incorporator is
William C. Caccamise, Jr., 125 Broad Street, New York, New York 10004.
SIXTH. The board of directors of the corporation is expressly
authorized to adopt, amend or repeal by-laws of the corporation.
SEVENTH. Elections of directors need not be by written ballot
except and to the extent provided in the by-laws of the corporation.
<PAGE> 2
IN WITNESS WHEREOF, I have signed this certificate of
incorporation this 11th day of April, 1991.
/s/ William C. Caccamise, Jr.
-----------------------------------
William C. Caccamise, Jr.
-2-
<PAGE> 3
CERTIFICATE OF AMENDMENT
TO CERTIFICATE OF INCORPORATION
BanPonce Financial Corp. a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That a special meeting of the Stockholders of said corporation,
duly called and held, upon written waiver of notice signed by the sole
stockholder of the Corporation, a resolution was adopted to amend the
Certificate of Incorporation of said Corporation. The resolution setting forth
the proposed amendment is as follows:
"RESOLVED, that the Certificate of Incorporation of BanPonce Financial
Corp. is hereby amended by changing the fourth Article thereof so that, as
amended said Article shall be and read as follows:
FOURTH: The total number of shares which the corporation shall have
the authority to issue is 10,000 shares of Common Stock, and the par
value of each of such shares is $1.00."
SECOND: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, BanPonce Financial Corp. has caused this certificate
to be signed by Richard L. Carrion, its Chairman of the Board of Directors and
attested by Ernesto N. Mayoral Megwinoff, its Assistant Secretary, this 23 day
of May, 1994.
By: /s/ Richard L. Carrion
---------------------------
Richard L. Carrion
Chairman of the Board of Directors
Attest:
By: /s/ Ernesto N. Mayoral
-----------------------
Secretary
<PAGE> 4
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BANPONCE FINANCIAL CORP.
Banponce Financial Corp., a Delaware corporation, hereby
certifies as follows:
FIRST. The Board of Directors of said corporation duly
adopted a resolution setting forth and declaring advisable the amendment of
Article Fourth of the certificate of incorporation, as amended, of said
corporation to create a new class of stock of the Corporation designated as
Preferred Stock and to increase the total number of shares of stock of all
classes that the Corporation shall have the authority to issue from 10,000
shares of Common Stock, par value $1.00 per share, to 10,010,000 shares of
stock, of which 10,000 shares of the par value of $1.00 per share shall be
designated as Common Stock and 10,000,000 shares of the par value of $.01 per
share shall be designated as Preferred Stock, so that, as amended, said Article
shall read as follows:
"FOURTH. The total number of shares of all classes of stock
which the corporation shall have authority to issue is 10,010,000, of
which 10,000 shares of the par value of $1.00 per share shall be
designated as Common
<PAGE> 5
Stock and 10,000,000 shares of the par value of $.01 per share shall
be designated as Preferred Stock. Shares of Preferred Stock may be
issued in series from time to time by the board of directors, and the
board of directors is expressly authorized to fix by resolution or
resolutions the designations and the powers, preferences and rights,
and the qualifications, limitations and restrictions thereof, of the
shares of each series of Preferred Stock, including without limitation
the following:
(a) the distinctive serial designation of such series which
shall distinguish it from other series;
(b) the number of shares included in such series, which
number may be increased or decreased from time to time unless
otherwise provided by the board of directors in the resolution or
resolutions providing for the issue of such series;
(c) the dividend rate (or method of determining such rate)
payable to the holders of the shares of such series, any conditions
upon which such dividends shall be paid and the date or dates upon
which such dividends shall be payable;
(d) whether dividends on the shares of such series shall be
cumulative and, in the case of shares of any series having cumulative
dividend rights, the date or dates or method of determining the date
or dates from
-2-
<PAGE> 6
which dividends on the shares of such series shall be cumulative;
(e) the amount or amounts which shall be payable out of the
assets of the corporation to the holders of the shares of such series
upon voluntary or involuntary liquidation, dissolution or winding up
the corporation;
(f) the price or prices at which, the period or periods
within which and the terms and conditions upon which the shares of
such series may be redeemed, in whole or in part, at the option of the
corporation or at the option of the holder or holders thereof or upon
the happening of a specified event or events;
(g) the obligation, if any, of the corporation to purchase or
redeem shares of such series pursuant to a sinking fund or otherwise
and the price or prices at which, the period or periods within which
and the terms and conditions upon which the shares of such series
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(h) whether or not the shares of such series shall be
convertible or exchangeable, at any time or times at the option of the
holder or holders thereof or at the option of the corporation or upon
the happening of a specified event or events, into shares of any other
class or classes or any other series of the same or any other class or
classes of stock of the corporation, and
-3-
<PAGE> 7
the price or prices or rate or rates of exchange or conversion and any
adjustments applicable thereto; and
(i) the voting rights, if any, of the holders of the shares
of such series.
SECOND. In lieu of a vote of stockholders, written consent to
the foregoing amendment has been given by the holder of all of the outstanding
stock entitled to vote thereon in accordance with the provisions of Section 228
of the General Corporation Law of the State of Delaware; and such amendment has
been duly adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, BanPonce Financial Corp. has caused this
certificate to be signed by David H. Chafey, Jr., its President, on the 2nd day
of August, 1995.
BANPONCE FINANCIAL CORP.
By: /s/ David H. Chafey, Jr.
-------------------------
Name: David H. Chafey, Jr.
Title: President
-4-
<PAGE> 8
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
BANPONCE FINANCIAL CORP.
BANPONCE FINANCIAL CORP., a Delaware corporation, hereby
certifies as follows:
FIRST: The name of the corporation is BanPonce Financial
Corp. The date of filing of its original certificate of incorporation with the
Secretary of State was April 11, 1991.
SECOND. This restated certificate of incorporation amends,
restates and integrates the provisions of the certificate of incorporation of
said corporation and has been duly adopted in accordance with the provisions of
Section 242 and 245 of the General Corporation Law of the State of Delaware by
written consent of the holder of all of the outstanding stock entitled to vote
thereon in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.
THIRD. The text of the certificate of incorporation is hereby
amended and restated to read herein as set forth in full:
"FIRST. The name of the corporation is BanPonce
Financial Corp.
SECOND. The address of the corporation's registered office is
the state of Delaware is Corporation Trust Center, 1209 Orange Street
in the City
<PAGE> 9
of Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD. The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
FOURTH. The total number of shares of all classes of stock
which the corporation shall have authority to issue is 11,000, of which 10,000
shares of the par value of $1.00 per share shall be designated as Common Stock
and 1,000 shares of the par value of $.01 per share shall be designated as
Preferred Stock. Shares of Preferred Stock may be issued in series from time to
time by the board of directors, and the board of directors is expressly
authorized to fix by resolution or resolutions the designations and the powers,
preferences and rights, and the qualifications, limitations the restrictions
thereof, of the shares of each series of Preferred Stock, including without
limitation the following:
(a) the distinctive serial designation of such
series which shall distinguish it from other series;
(b) the number of shares included in such series,
which number may be increased or decreased
-2-
<PAGE> 10
from time to time unless otherwise provided by the board of
directors in the resolution or resolutions providing for the
issue of series;
(c) the dividend rate (or method of determining
such rate) payable to the holders of the shares of such
series, any conditions upon which such dividends shall be paid
and the date or dates upon which such dividends shall be
payable;
(d) whether dividends on the shares of such
series shall be cumulative and, in the case of shares of any
series having cumulative dividend rights, the date or dates or
method of determining the date or dates from which dividends
on the shares of such series shall be cumulative;
(e) the amount or amounts which shall be payable
out of the assets of the corporation to the holders of the
shares of such series upon voluntary or involuntary
liquidation, dissolution or winding up the corporation;
(f) the price or prices at which, the period or
periods within which and the terms and conditions upon which
the shares of such series may be redeemed, in whole or in
part, at the option of the corporation or at the option of the
-3-
<PAGE> 11
holder or holders thereof or upon the happening of a specified
event or events;
(g) the obligation, if any, of the
corporation to purchase or redeem shares of such series
pursuant to a sinking fund or otherwise and the price or
prices at which, the period or periods within which and the
terms and conditions upon which the shares of such series
shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;
(h) whether or not the shares of such series
shall be convertible or exchangeable, at any time or times at
the option of the holder or holders thereof or at the option
of the corporation or upon the happening of a specified event
or events, into shares of any other class or classes or any
other series of the same or any other class or classes of
stock of the corporation, and the price or prices or rate or
rates of exchange or conversion and any adjustments applicable
thereto; and
(i) the voting rights, if any, of the holders of the
shares of such series.
FIFTH. The board of directors of the Corporation is expressly
authorized to adopt, amend or repeal bylaws of the Corporation.
-4-
<PAGE> 12
SIXTH. Elections of directors, need not be by written ballot
except and to the extent provided in the by-laws of the corporation."
IN WITNESS WHEREOF, BanPonce Financial Corp. has caused this
certificate to be signed by Brunilda Santos de Alvarez, its Assistant Secretary,
on the 13th day of August, 1996.
BANPONCE FINANCIAL CORP.
By /s/ Brunilda Santos de Alvarez
-----------------------------------
Name: Brunilda Santos de Alvarez
Title:Assistant Secretary
-5-
<PAGE> 13
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BANPONCE FINANCIAL CORP.
BANPONCE FINANCIAL CORP., a Delaware corporation hereby
certifies as follows:
FIRST. The Board of Directors of said corporation duly
adopted a resolution setting forth and declaring advisable the amendment of
Article First of the Amended and Restated Certificate of Incorporation of said
corporation so that, as amended, said Article shall read as follows:
"FIRST. The name of the corporation is Popular North America,
Inc."
SECOND. In lieu of a vote of stockholders, written consent to
the foregoing amendment has been given by the holder of all of the outstanding
stock entitled to vote thereon in accordance with the provisions of Section 228
of the General Corporation Law of the State of Delaware and such amendment has
been duly adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
<PAGE> 14
IN WITNESS WHEREOF, BanPonce Financial Corp. has caused this
certificate to be signed by Jorge A. Junquera, its President & Director, on the
6th day of May, 1997.
BANPONCE FINANCIAL CORP.
By: /s/ Jorge A. Junquera
------------------------------
Name: Jorge A. Junquera
Title: President & Director
<PAGE> 1
EXHIBIT (4)(d)
- --------------------------------------------------------------------------------
BANPONCE CORPORATION
TO
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
----------
INDENTURE
DATED AS OF FEBRUARY 15, 1995
----------
- --------------------------------------------------------------------------------
<PAGE> 2
BANPONCE CORPORATION
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318, INCLUSIVE, OF THE
TRUST INDENTURE ACT OF 1939;
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
ss. 310 (a)(1) ............................................ 609
(a)(2) ............................................ 609
(a)(3) ............................................ Not Applicable
(a)(4) ............................................ Not Applicable
(b) ............................................ 608
610
ss. 311 (a) ............................................ 613
(b) ............................................ 613
ss. 312 (a) ............................................ 701
702(a)
(b) ............................................ 702(b)
(c) ............................................ 702(c)
ss. 313 (a) ............................................ 703(a)
(b) ............................................ 703(a)
(c) ............................................ 703(a)
(d) ............................................ 703(b)
ss. 314 (a) ............................................ 704
(a)(4) ............................................ 101
1004
(b) ............................................ Not Applicable
(c)(1) ............................................ 102
(c)(2) ............................................ 102
(c)(3) ............................................ Not Applicable
(d) ............................................ Not Applicable
(e) ............................................ 102
ss. 315 (a) ............................................ 601
(b) ............................................ 602
(c) ............................................ 601
(d) ............................................ 601
(e) ............................................ 514
ss. 316 (a) ............................................ 101
(a)(1)(A) ............................................ 502
512
(a)(1)(B) ............................................ 513
(a)(2) ............................................ Not Applicable
(b) ............................................ 508
(c) ............................................ 104(c)
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
ss. 317 (a)(1) ............................................ 503
(a)(2) ............................................ 504
(b) ............................................ 1003
ss. 318 (a) ............................................ 107
</TABLE>
- ---------------------
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
-ii-
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PARTIES ......................................................................................... 1
RECITALS OF THE COMPANY.......................................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions........................................................... 1
Act................................................................... 2
Additional Amounts.................................................... 2
Affiliate; control.................................................... 2
Authenticating Agent.................................................. 2
Banco Popular......................................................... 2
Board of Directors.................................................... 2
Board Resolution...................................................... 2
Business Day.......................................................... 2
Commission............................................................ 3
Company............................................................... 3
Company Request; Company Order........................................ 3
Controlled Subsidiary................................................. 3
Corporate Trust Office................................................ 3
corporation........................................................... 3
Defaulted Interest.................................................... 3
Depositary............................................................ 3
Event of Default...................................................... 3
Global Security....................................................... 4
Holder................................................................ 4
Indenture............................................................. 4
interest.............................................................. 4
Interest Payment Date................................................. 4
Material Banking Subsidiary........................................... 4
Maturity.............................................................. 4
Officers' Certificate................................................. 5
Opinion of Counsel.................................................... 5
Original Issue Discount Security...................................... 5
Outstanding........................................................... 5
Paying Agent.......................................................... 6
Person................................................................ 6
Place of Payment...................................................... 6
</TABLE>
- -----------------------
NOTE: This table of contents shall not, for any purpose, be deemed
to be a part of the Indenture.
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Predecessor Security.................................................. 6
Redemption Date....................................................... 6
Redemption Price...................................................... 6
Regular Record Date................................................... 7
Securities............................................................ 7
Security Register and Security
Registrar.......................................................... 7
Special Record Date................................................... 7
Stated Maturity....................................................... 7
Subsidiary............................................................ 7
Taxes................................................................. 7
Trustee............................................................... 7
Trust Indenture Act................................................... 7
Vice President........................................................ 8
Voting Stock.......................................................... 8
Section 102. Compliance Certificates and Opinions.................................. 8
Section 103. Form of Documents Delivered to Trustee................................ 9
Section 104. Acts of Holders; Record Dates......................................... 9
Section 105. Notices, Etc., to Trustee and Company................................. 12
Section 106. Notice to Holders; Waiver............................................. 12
Section 107. Conflict with Trust Indenture Act..................................... 13
Section 108. Effect of Headings and
Table of Contents.................................................. 13
Section 109. Successors and Assigns................................................ 13
Section 110. Separability Clause................................................... 13
Section 111. Benefits of Indenture................................................. 13
Section 112. Governing Law......................................................... 14
Section 113. Legal Holidays........................................................ 14
Section 114. Appointment of Agent for Service...................................... 14
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally....................................................... 15
Section 202. Form of Face of Security.............................................. 15
Section 203. Form of Reverse of Security........................................... 17
Section 204. Form of Trustee's Certificate of
Authentication..................................................... 22
Section 205. Additional Provisions Required
in Global Security................................................. 22
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<Cation>
ARTICLE THREE
THE SECURITIES
Page
<S> <C> <C>
Section 301. Amount Unlimited; Issuable in Series.................................. 22
Section 302. Denominations......................................................... 26
Section 303. Execution, Authentication, Delivery
and Dating......................................................... 26
Section 304. Temporary Securities.................................................. 28
Section 305. Registration, Registration of Transfer
and Exchange....................................................... 29
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities......................................................... 31
Section 307. Payment of Interest; Interest Rights
Preserved.......................................................... 32
Section 308. Persons Deemed Owners................................................. 33
Section 309. Cancellation.......................................................... 34
Section 310. Computation of Interest............................................... 34
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of
Indenture.......................................................... 34
Section 402. Application of Trust Money............................................ 36
ARTICLE FIVE
REMEDIES
Section 501. Events of Default..................................................... 36
Section 502. Acceleration of Maturity; Rescission
and Annulment...................................................... 39
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee......................................... 40
Section 504. Trustee May File Proofs of Claims..................................... 41
Section 505. Trustee May Enforce Claims Without
Possession of Securities........................................... 42
Section 506. Application of Money Collected........................................ 42
Section 507. Limitation on Suits................................................... 42
</TABLE>
-v-
<PAGE> 7
<TABLE>
<CAPITON>
Page
<S> <C> <C>
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest........................................................... 43
Section 509. Restoration of Rights and Remedies.................................... 43
Section 510. Rights and Remedies Cumulative........................................ 44
Section 511. Delay or Omission Not Waiver.......................................... 44
Section 512. Control by Holders.................................................... 44
Section 513. Waiver of Past Defaults............................................... 45
Section 514. Undertaking for Costs................................................. 45
Section 515. Waiver of Stay or Extension Laws...................................... 45
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities................................... 46
Section 602. Notice of Defaults.................................................... 46
Section 603. Certain Rights of Trustee............................................. 46
Section 604. Not Responsible for Recitals or
Issuance of Securities............................................. 48
Section 605. May Hold Securities................................................... 48
Section 606. Money Held in Trust................................................... 48
Section 607. Compensation and Reimbursement........................................ 48
Section 608. Disqualification; Conflicting
Interest........................................................... 49
Section 609. Corporate Trustee Required;
Eligibility........................................................ 49
Section 610. Resignation and Removal; Appointment of
Successor.......................................................... 50
Section 611. Acceptance of Appointment by Successor................................ 51
Section 612. Merger, Conversion, Consolidation or
Succession to Business............................................. 53
Section 613. Preferential Collection of Claims
Against the Company................................................ 53
Section 614. Appointment of Authenticating Agent................................... 53
ARTICLE SEVEN
HOLDERS' LIST AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
</TABLE>
-vi-
<PAGE> 8
<TABLE>
<CAPITON>
Page
<S> <C> <C>
Addresses of Holders............................................... 56
Section 702. Preservation of Information;
Communications to Holders.......................................... 56
Section 703. Reports by Trustee.................................................... 57
Section 704. Reports by Company.................................................... 57
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only
Certain Terms...................................................... 57
Section 802. Successor Substituted................................................. 58
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent
of Holders......................................................... 59
Section 902. Supplemental Indentures with Consent of
Holders............................................................ 60
Section 903. Execution of Supplemental Indentures.................................. 61
Section 904. Effect of Supplemental Indentures .................................... 62
Section 905. Conformity with Trust Indenture Act................................... 62
Section 906. Reference in Securities to Supplemental
Indentures......................................................... 62
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and
Interest........................................................... 62
Section 1002. Maintenance of Office or Agency....................................... 62
Section 1003. Money for Securities Payments to Be
Held in Trust...................................................... 63
Section 1004. Statement by Offices as to Default.................................... 64
Section 1005. Existence............................................................. 65
Section 1006. Maintenance of Properties............................................. 65
Section 1007. Payment of Taxes and Other Claims..................................... 65
</TABLE>
-vii-
<PAGE> 9
<TABLE>
<CAPITON>
Page
<S> <C> <C>
Section 1008. Limitation upon Disposition of Voting
Stock of, and Merger and Sale of
Assets of Banco Popular............................................ 66
Section 1009. Limitation upon Creation of Liens
on Voting Stock of Material
Banking Subsidiaries............................................... 66
Section 1010. Payment of Additional Amounts......................................... 67
Section 1011. Waiver of Certain Covenants........................................... 68
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.............................................. 68
Section 1102. Election to Redeem; Notice to Trustee................................. 69
Section 1103. Selection by Trustee of Securities to
Be Redeemed........................................................ 69
Section 1104. Notice of Redemption.................................................. 70
Section 1105. Deposit of Redemption Price........................................... 70
Section 1106. Securities Payable on Redemption Date................................. 71
Section 1107. Securities Redeemed in Part........................................... 71
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.............................................. 72
Section 1202. Satisfaction of Sinking Fund Payments
with Securities.................................................... 72
Section 1203. Redemption of Securities for Sinking
Fund............................................................... 72
TESTIMONIUM .................................................................................... 73
SIGNATURES AND SEALS............................................................................. 73
ACKNOWLEDGMENTS.................................................................................. 74
</TABLE>
-vii-
<PAGE> 10
INDENTURE, dated as of February 15, 1995, between BANPONCE
CORPORATION, a corporation duly organized and existing under the laws of the
Commonwealth of Puerto Rico (herein called the "Company"), having its principal
office at 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918, and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, as Trustee (herein
called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
<PAGE> 11
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles; and
(4) the words "herein", "hereof" and "here under" and other
words of similar import refer to this indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act" when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" has the meaning assigned thereto in
Section 1010.
"Affiliate" of any specified Persons means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting Securi ties, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
-2-
<PAGE> 12
"Banco Popular" means Banco Popular de Puerto Rico
and its successors and assigns.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", except as may otherwise be provided herein or
in any Security, when used with respect to any Place of Payment or other
location, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable pro visions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
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<PAGE> 13
"Controlled Subsidiary" means any corporation more than 80
percent of the outstanding Voting Stock of which, except for directors'
qualifying shares, shall at the time be owned directly or indirectly by the
Company.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126, Attention:
Corporate Trust Services Division, except that for purposes of Section 1002,
such term shall mean the office or agency of the Trustee in the Borough of
Manhattan, the City of New York, which office at the date hereof is located at
14 Wall Street, Eighth Floor, New York, New York 10005.
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 301.
"Event of Default" has the meaning specified in Section 501.
"Global Security" means a Security bearing the legend
prescribed in Section 205 evidencing all or part of a series of Securities,
issued to the Depositary for such series or its nominee, and registered in the
name of such Depositary or nominee.
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or
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<PAGE> 14
amended by one or more indentures supplemental hereto entered into pursuant to
the applicable provisions hereof, including, for all purposes of this
instrument, and any such supplemental indenture, the provisions of the Trust
Indenture Act that are deemed to be a part of and govern this instrument and any
such supplemental indenture, respectively. The term "Indenture" shall also
include the terms of particular series of Securities established as contemplated
by Section 301.
"interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an instalment of interest on such
Security.
"Material Banking Subsidiary" means any Controlled Subsidiary
of the Company chartered as a banking corporation under United States Federal,
State, or Puerto Rico law which is a significant subsidiary of the Company as
defined in 1-02 of Regulation S-X of the rules and regulations of the Securities
and Exchange Commission under the Securities Act of 1933, as amended.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an instalment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Company.
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<PAGE> 15
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of or counsel for the Company, or other counsel who shall be
acceptable to the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancella tion;
(ii) Securities for whose payment or redemp tion money in the
necessary amount has been there tofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursu ant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
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<PAGE> 16
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units shall be the
U.S. dollar equivalent, determined in the manner provided as contemplated by
Section 301 on the date of original issuance of such Security, of the principal
amount (or, in the case of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such Security of the amount
determined as provided in (i) above) of such Security, and (iii) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or any premium or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, part nership,
joint venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of and any premium
and interest on the Securities of
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that series are payable as specified as contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any instalment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such instalment of principal or interest is due and payable.
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"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidi aries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"Taxes has the meaning specified in Section 1010.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" means, with respect to any Person, Capital
Stock (however designated) having general voting power for the election of a
majority of the members of the board of directors, managers or trustees of such
Person (irrespective of whether or not at the time Capital Stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
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Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
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Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, cer tificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise
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expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
Without limiting the generality of the foregoing, a Holder,
including a Depositary that is a Holder of a Global Security, may make, give or
take, by a proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted in this Indenture to be made, given or taken by Holders, and a
Depositary that is a Holder of a Global Security may provide its proxy or
proxies to the beneficial owners of interest in any such Global Security.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) Except as provided in the next paragraph, the Company may,
in the circumstances permitted by the Trust Indenture Act, set any day as the
record date for the purpose of determining the Holders of Securities of any
series entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote
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<PAGE> 22
on any action, authorized or permitted to be given or taken by Holders of
Securities of such series. With regard to any record date set pursuant to this
paragraph, the Holders of Outstanding Securities of the relevant series on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to give or take the relevant action, whether or not such Holders remain
Holders after such record date. With regard to any action that may be given or
taken hereunder only by Holders of a requisite principal amount of Outstanding
Securities of any series (or their duly appointed agents) and for which a record
date is set pursuant to this paragraph, the Company may, at its option, set an
expiration date after which no such action purported to be given or taken by any
Holder shall be effective hereunder unless given or taken on or prior to such
expiration date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date (or their duly appointed agents).
On or prior to any expiration date set pursuant to this paragraph, the Company
may, on one or more occasions at its option, extend such date to any later date.
Nothing in this paragraph shall prevent any Holder (or any duly appointed agent
thereof) from giving or taking, after any expiration date, any action identical
to, or, at any time, contrary to or different from any action given or taken, or
purported to have been given or taken, hereunder by a Holder on or prior to such
date, in which event the Company may set a record date in respect hereof
pursuant to this paragraph.
Notwithstanding the foregoing, upon receipt by the Trustee,
with respect to Securities of any Series, of (i) any Notice of Default pursuant
to Section 501 (ii) any declaration of acceleration, or any rescission and
annulment of any such declaration pursuant to Section 502 or (iii) any direction
given pursuant to Section 512 (any such notice, declaration, rescission and
annulment, or direction being referred to herein as a "Direction"), a record
date shall automatically and without any other action by any Person be set for
the purpose of determining the Holders of Outstanding Securities of such series
entitled to join in such Direction, which record date shall be the close of
business on the day the Trustee receives such Direction. The Holders of
Outstanding Securities of such series on such record date (or their duly
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appointed agents), and only such Persons, shall be entitled to join in such
Direction whether or not such Holders remain Holders after such record date;
provided that, unless such Direction shall have become effective by virtue of
Holders of the requisite principal amount of Outstanding Securities of such
series on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such Direction shall
automatically and without any action by any Person be canceled and of no further
effect. Nothing in this paragraph shall prevent a Holder (or a duly appointed
agent thereof) from giving, before or after the expiration of such 90-day
period, a Direction contrary to or different from, or, after the expiration or
such period, identical to, a Direction that has been canceled pursuant to the
proviso to the preceding sentence, in which event a new record date in respect
thereof shall be set pursuant to this paragraph.
Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
(d) The ownership of Securities shall be proved by the
Security Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of Holders or other
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<PAGE> 24
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so sailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
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<PAGE> 25
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notifi cation as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or con flicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
pro vision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
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<PAGE> 26
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwith standing any other provision of this Indenture or of the
Securities (other than a Provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date or at the Stated Maturity, provided
that no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be.
Section 114. Appointment of Agent for Service.
The Company hereby appoints Orlando Berges of Banco Popular de
Puerto Rico at the office of Banco Popular de Puerto Rico located in The City of
New York as the Company's authorized agent (the "Authorized Agent") upon whom
service of process may be served in any action arising out of or based on the
Securities, or this Indenture (including any action based on or arising out of
the United States federal securities laws) that may be instituted in
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<PAGE> 27
New York State or United States Federal Courts sitting in The City of New York,
by the Trustee or the Holder of any Security, and the Company hereby expressly
accepts the jurisdiction of any such court in respect of any such action. Such
appointment shall be irrevocable unless and until the appointment of a successor
authorized agent for service of process, and such successor's acceptance of such
appointment, shall have occurred, and the Company and Authorized Agent will take
any and all actions, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment or appointments
in full force and effect as aforesaid. Service of process upon an Authorized
Agent will be deemed, in every respect effective service of process upon the
Company. Notwithstanding the foregoing, any action against the Company arising
out of or based on any Security, or this Indenture may also be instituted by the
Holder of such Security in any court in the Commonwealth of Puerto Rico, and the
Company hereby expressly accepts the jurisdiction of any such court in respect
of any such action.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in substan tially the
form set forth in this Article, or in such other form as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, con sistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution,
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<PAGE> 28
a copy of an appropriate record of such action shall be cer tified by the
Secretary or an Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 303
for the authentication and delivery of such Securities.
The definitive Securities shall be printed, litho graphed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
[Insert any legend required by the Internal
Revenue Code and the regulations thereunder.]
BANPONCE CORPORATION
............................................
No. ............ $ ............
BANPONCE CORPORATION, a corporation duly organized and
existing under the laws of the Commonwealth of Puerto Rico (herein called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
..............................................., or registered assigns, the
principal sum of .................. ................... Dollars on
............................ ........................... [if the Security is to
bear interest prior to Maturity, insert -- , and to pay interest thereon from
............. or from the most recent Interest Payment Date to which interest
has been paid or duly pro vided for, semi-annually on ............ and
.............. in each year, commencing ......., at the rate of ....% per annum,
until the principal hereof is paid or made available for payment. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities)
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<PAGE> 29
is registered at the close of business on the Regular Record Date for such
interest, which shall be the ........ or ....... (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said indenture].
[If the Security is not to bear interest prior to Maturity,
insert -- The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal of this Security shall
bear interest at the rate of ....% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such default in payment to the date payment of such princi pal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of ......% per annum (to the extent that the payment
of such interest shall be legally enforceable), which shall accrue from the date
of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert -- any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The
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City of New York, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts [if
applicable, insert -- ; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
BANPONCE CORPORATION
By
----------------------------
Attest:
- -------------------------------
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of October 1, 1991 (herein called
the "Indenture"), between the Company and The First National Bank of Chicago, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures
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supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof[, limited in aggregate principal
amount to $................].
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, [if
applicable, insert -- (1) on ........... in any year commencing with the year
...... and ending with the year ...... through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the prin cipal amount, and
(2)] at any time [on or after .........., 19..], as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before
...................., ___%, and if redeemed] during the 12-month period
beginning ............... of the years indicated,
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemp tion [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated
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Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.]
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1) on
............. in any year commencing with the year .... and ending with the year
.... through operation of the sinking fund for this series at the Redemp tion
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after ............], as a whole or in part, at the election of
the Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below: If redeemed during the 12-month period beginning
............. of the years indicated,
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ------------------ -----------------------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemp tion (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
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interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
............., redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than .....% per annum.]
[The sinking fund for this series provides for the redemption
on ............. in each year beginning with the year ....... and ending with
the year ....... of [not less than $.......... ("mandatory sinking fund") and
not more than] $.......... aggregate principal amount of Securities of this
series. Securities of this series acquired or redeemed by the Company otherwise
than through [mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made [in
the inverse order in which they become due].]
[If the Security is subject to redemption, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancella tion hereof.]
[If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
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[If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series shall
occur and be continuing, an amount of principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture. Such amount shall be equal to --insert formula for determining
the amount. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
prin cipal of and interest, if any, on the Securities of this series shall
terminate.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.
No reference herein to the Indenture and no provi sion of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
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As provided in the Indenture and subject to cer tain
limitations therein sat forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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Section 204. Form of Trustee's Certificate of
Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series desig nated
therein referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
As Trustee
By ................................
Authorized Signatory
SECTION 205. Additional Provisions Required in Global
Security.
Any Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee thereof. This Security may not be transferred
to, or registered or exchanged for Securities registered in the name
of, any Person other than the Depositary or a nominee thereof and no
such transfer may be registered, except in the limited circumstances
described in the Indenture. Every Security authenticated and delivered
upon registration or transfer of, or in exchange for or in lieu of,
this Security shall be a Global Security subject to the foregoing,
except in such limited circumstances."
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ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Inden ture is unlimited.
The Securities may be issued in one or more series. There
shall be established, with respect to the Securities of any series, in or
pursuant to a Board Resolu tion and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of such series,
(1) the title of the Securities of the series (which
shall distinguish the Securi ties of the series from
Securities of any other series);
(2) any limit upon the aggregate prin cipal amount of
the Securities of the series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the
series pur suant to Section 304, 305, 306, 906 or 1107 and
except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered
hereunder);
(3) the Person to whom any interest on a Security of
the series shall be payable, if other than the Person in whose
name that Security (or one or more Predecessor Securi ties) is
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registered at the close of business on the Regular Record Date
for such interest;
(4) the date or dates in which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the
series shall bear interest, if any, the date or dates from
which such interest shall accrue, the Interest Payment Dates
on which any such interest shall be payable and the Regular
Record Date for any interest payable on any Interest Payment
Date and the basis upon which interest shall be calculated, if
other than in 360-day year of twelve 30-day months;
(6) the place or places where the prin cipal of and
any premium and interest on Securities of the series shall be
payable;
(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 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
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<PAGE> 39
purchased, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which
Securities of the series shall be issuable;
(10) the currency, currencies or cur rency units in
which payment of the principal of and any premium and interest
on any Securities of the series shall be payable if other than
the currency of the United States of America and the manner of
determining the equivalent thereof in the currency of the
United States of America for purposes of the definition of
"Outstanding" in Section 101;
(11) if the amount of payments of prin cipal of or
any premium or interest on any Securities of the series may be
determined with reference to an index, the manner in which
such amounts shall be determined;
(12) if the principal of or any premium or interest
on any Securities of the series is to be payable, at the
election of the Company or a Holder thereof, in one or more
currencies or currency units other than that or those in which
the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the prin
cipal of and any premium and interest on Securities of such
series as to which such election is made shall be payable, and
the periods within which
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and the terms and conditions upon which such election is to
be made;
(13) 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 502;
(14) if and as applicable, that the Securities of the
series shall be issuable in whole or in part in the form of
one or more Global Securities and, in such case, the
Depositary or Depositaries for such Global Security or Global
Securities and any circum stances other than those set forth
in Sec tion 305 in which any such Global Security may be
transferred to, and registered and exchanged for Securities
registered in the name of, a Person other than the Depositary
for such Global Security or nominee thereof, and in which any
such transfer may be registered; and
(15) any other terms of the series (which terms shall
not be inconsistent with the provisions of this Indenture,
except as permitted by Section 901(5)).
All Securities of any one series shall be substan tially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above and (subject to Section
303) set forth, or determined in the manner provided, in the Officers' Certifi
cate referred to above or in any such indenture supplemental hereto.
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If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
The following indebtedness of the Company shall be issued
under, and entitled to the benefits of, this Indenture upon the authentication
and delivery by the Trustee of Securities evidencing such indebtedness in
accordance with the terms and provisions of this Indenture:
$50,000,000 aggregate principal amount floating rate notes issued
February 15, 1995 and due February 16, 1996;
$40,000,000 aggregate principal amount floating rate notes issued
February 16, 1995 and due February 3, 1997; and
$25,000,000 aggregate principal amount floating rate notes issued
February 28, 1995 and due February 28, 1996.
Section 302. Denominations.
The Securities of each series shall be issuable in registered
form without coupons in such denominations as shall be specified as contemplated
by Section 301. In the absence of any such provisions with respect to the Securi
ties of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral mul tiple thereof.
Section 303. Execution, Authentication, Delivery and
Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested by
its
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Secretary or one of its Assistant Secretaries. The signa ture of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signa tures of
individuals who were at any time the proper offi cers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the exe cution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company order for the authentication and delivery of such Securi ties, and the
Trustee in accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been estab
lished in or pursuant to one or more Board Resolutions as permitted by Sections
201 and 301, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Sec tion 601) shall be
fully protected in relying upon, an opinion of Counsel stating,
(a) if the form of such Securities has been
established by or pursuant to Board Resolution as permitted by
Section 201, that such form has been established in conformity
with the provisions of this Indenture;
(b) if the terms of such Securities have been
established by or pursuant to Board Resolution as permitted by
Section 301, that such terms have been established in conform
ity with the provisions of this Indenture; and
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(c) that such Securities, when authen ticated and
delivered by the Trustee and issued by the Company in the
manner and sub ject to any conditions specified in such
Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of
general applicability relat ing to or affecting creditors'
rights and to general equity principles and, if applicable, to
provisions of law which may require that a judgment for money
damages rendered by a court in the United States be expressed
in United States dollars.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such pre ceding paragraph at
or prior to the time of authentication of each Security of such series if such
documents are delivered at or prior to the authentication upon original issuance
of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
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<PAGE> 44
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory nor any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such cer tificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authen ticated and delivered hereunder. Notwithstanding
the fore going, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
309, for all purposes of this Indenture such Security shall be deemed never to
have been authenticated and delivered hereunder and shall never be entitled to
the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denom
ination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities say
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be prepared without
unreasonable delay. After the prep aration of definitive Securities of such
series, the tem porary Securities of such series of like tenor shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more
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<PAGE> 45
definitive Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
Section 305. Registration, Registration of
Transfer and Exchange.
The Company shall cause to be kept at the Corpo rate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of
any series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Secur ities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor and bearing a number not contemporaneously
outstanding.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of a like aggre gate principal amount and tenor, upon
surrender of the Securities to be exchanged at such office or agency. When ever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.
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<PAGE> 46
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obli gations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for regis tration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accom panied by a written instrument of transfer in form
satis factory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly autho rized in writing.
No service charge shall be made for any registra tion of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemp tion of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the date of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
Notwithstanding the foregoing and except as other wise
specified or contemplated by Section 301, no Global Security shall be
exchangeable pursuant to this Section 305 or Sections 304, 906 and 1107 for
Securities registered in the name of, and no transfer of a Global Security of
any series may be registered to, any Person other than the Depositary for such
Security or its nominee unless (1) such Depositary (A) notifies the Company that
it is unwilling or
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<PAGE> 47
unable to continue as Depositary for such Global Security or (B) ceases to be a
clearing agency registered under the Exchange Act, (2) the Company executes and
delivers to the Trustee a Company Order that such Global Security shall be so
exchangeable and the transfer thereof so registrable, or (3) there shall have
occurred and be continuing an Event of Default, or an event which with notice or
lapse of time or both would become an Event of Default, with respect to the
Securities evidenced by such Global Security. Upon the occurrence in respect of
any Global Security of any series of any one or more of the conditions specified
in clauses (1), (2) or (3) of the preceding sentence or such other conditions as
may be specified as contemplated by Section 302 for such series, such Global
Security may be exchanged for Securities registered in the names of, and the
transfer of such Global Security may be registered to, such Persons (including
Persons other than the Depositary with respect to such series and its nominees),
as such Depositary shall direct. Notwithstanding any other provision of this
Indenture, any Security authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, any Global Security shall also
be a Global Security and shall bear the legend specified in Section 205 except
for any Security authenticated and delivered in exchange for, or upon
registration of transfer of, a Global Security pursuant to the preceding
sentence.
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruc tion, loss or theft of any
Security and (ii) such Security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such
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<PAGE> 48
Security has been acquired by a bona fide purchaser, the Company shall execute
and the Trustee shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same series and of like tenor and
principal amount and bearing a number not contem poraneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum suffi cient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights
Preserved.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the
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<PAGE> 49
close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make pay ment of any
Defaulted Interest to the Persons in whose names the
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security of
such series and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount
of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest 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 be
not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than
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10 days after the receipt by the Trustee of the notice of the
proposed pay ment. 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
Holder of Securities of such series at his or her address as
it appears in the Security Regis ter, not less than 10 days
prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Securities of such
series (or their respective Predeces sor Securities) are
registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other lawful
manner not incon sistent with the requirements of any securi
ties 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 prac ticable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of
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any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for regis tration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Secu rity for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemp tion,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner whatso
ever, and may deliver to the Trustee (or to any other Person for delivery to the
Trustee) for cancellation any Securities previously authenticated hereunder
which the Company has not issued and sold, and all Securities so delivered shall
be promptly canceled by the Trustee. No Securities shall be authenticated in
lieu of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held by
the Trustee shall be destroyed and the Trustee, upon request by the Company,
shall deliver a certificate of destruction to the Company.
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Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301
for Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of
Indenture.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segre
gated and held in trust by the Company and thereafter repaid
to the Company or dis charged from such trust, as provided in
Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore
delivered to the Trustee for cancellation
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(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satis factory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to
pay and discharge the entire indebtedness on such Securities
not theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such
deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and, if
money
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shall have been deposited with the Trustee pursuant to subclause (B) of Clause
(1) of this Section, the obligations of the Trustee under Section 402 and the
last paragraph of Section 1003 shall survive.
Section 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regula tion of any
administrative or governmental body):
(1) default in the payment of any inter est upon any
Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days; or
(2) default in the payment of the prin cipal of (or
premium, if any, on)
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any Security of that series at its Maturity; or
(3) default in the deposit of any sink ing fund
payment, when and as due by the terms of a Security of that
series; or
(4) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture or the
Securities of such series (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly
been included in this Indenture solely for the benefit of
series of Securi ties other than that series), and continuance
of such default or breach for a period of 60 days after there
has been given, by regis tered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) a default under any bond, deben ture, note or
other evidence of indebtedness for money borrowed (including a
default with respect to Securities of any series other than
that series) or under any mortgage, indenture or instrument
under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by
the Company or any Material Banking Sub sidiary in excess of
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$10,000,000, whether such indebtedness now exists or shall
here after be created, which default shall have resulted in
such indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due
and payable, without such acceleration having been rescinded
or annulled within a period of 30 days after there shall have
been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders
of not less than 25% in principal amount of the Outstand ing
Securities of that series a written notice specifying such
default and requiring the Company or the Material Banking
Subsidi ary, as the case may be, to cause such acceleration to
be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder; provided, however, that if such
default shall be remedied or cured by the Company or the
Material Banking Subsidi ary or waived by the holders of such
indeb tedness, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon
remedied, cured or waived without any action on the part of
the Trustee or any of the Holders; or
(6) the entry by a court or, in the case of a
Material Banking Subsidiary, a govern mental authority having
jurisdiction in the premises of (A) a decree or order for
relief in respect of the Company or any Material Banking
Subsidiary in an involuntary case or proceeding under any
applicable Federal, state or Commonwealth of Puerto Rico bank
ruptcy, insolvency, reorganization
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or other similar law or (B) a decree or order adjudg ing the
Company or any Material Banking Subsidiary a bankrupt or
insolvent, or approving as properly filed a petition seek ing
reorganization, arrangement, adjustment or composition of or
in respect of the Company or any Material Banking Subsidiary
under any applicable Federal, state or Commonwealth of Puerto
Rico law, or appoint ing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of
the Company or any Material Banking Subsidiary or of any sub
stantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
(7) the commencement by the Company or any Material
Banking Subsidiary of a volun tary case or proceeding under
any applicable Federal, state or Commonwealth of Puerto Rico
bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company or any Material
Banking Subsidi ary in an involuntary case or proceeding under
any applicable Federal, state or Commonwealth of Puerto Rico
bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization
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or relief under any applicable Federal, state or Commonwealth
of Puerto Rico law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission
by it in writing, of its inability to pay its debts generally
as they become due, or the taking of corporate action by the
Company or any Material Banking Subsidiary in furtherance of
any such action; or
(8) any other Event of Default provided with respect
to Securities of that series.
Section 502. Acceleration of Maturity; Rescission
and Annulment.
If an Event of Default with respect to Securities of any
series at the time outstanding occurs and is continu ing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of accelera tion with
respect to Securities of any series has been made and before a judgement or
decree for payment of the money
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due has been obtained by the Trustee as hereinafter in this Article provided,
the Holders of a majority in principal amount of the Outstanding Securities of
that series, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if
(1) the Company has paid or deposited
with the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities
of that series,
(B) the principal of (and premium, if any,
on) any Securities of that series which have become
due otherwise than by such declaration of
acceleration and any interest thereon at the rate or
rates prescribed therefor in such Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue interest at
the rate or rates prescribed therefor in such
Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel;
and
(2) all Events of Default with respect to Securities
of that series, other than the non-payment of the principal of
Securities of that series which have become due solely by such
declaration of acceleration, have been
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cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on
any Security when such inter est becomes due and payable and
such default continues for a period of 30 days, or
(2) default is made in the payment of
the principal of (or premium, if any, on) any
Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue inter est, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of col lection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or
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agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securi ties or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 505. Trustee May Enforce Claims Without
Possession of Securities.
All rights of action and claims under this Inden ture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and
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any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disburse ments and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or any premium or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due
the Trustee under Section 607; and
SECOND: To the payment of the amounts then due and
unpaid for principal of and any premium and interest on the
Securities in respect of which or for the benefit of which
such money has been collected, ratably, with out preference or
priority of any kind, according to the amounts due and payable
on such Securities for principal and any premium and interest,
respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or other wise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice
to the Trustee of a
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continuing Event of Default with respect to the Securi ties of
that series;
(2) the Holders of not less than 25% in principal
amount of the outstanding Securi ties of that series shall
have made written request to the Trustee to institute proceed
ings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute
any such proceeding; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of the
outstand ing Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by vir tue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
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Section 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Inden ture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) any interest on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Inden ture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exer cising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in con
flict with any rule of law or with this
Indenture, and
(2) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
direction.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any
premium or interest on any Security of such series, or
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(2) in respect of a covenant or provision hereof
which under Article Nine cannot be modified or amended without
the consent of the Holder of each Outstanding Security of such
series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Inden ture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company.
Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwith standing the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided in the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
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Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolu tion, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Inden ture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
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(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, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; 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 an the part of any agent or attorney
appointed with due care by it hereunder.
Section 604. Not Responsible for Recitals or
Issuance of Securities.
The recitals contained herein and in the Securi ties, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee or any Authenticating Agent assumes no responsi
bility for their correctness. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities. The Trustee or
any Authen ticating Agent shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee,
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Authenticating Agent, Paying Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
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As security for the performance of the obligations of the
Company under this Section the Trustee shall have a lien prior to the Securities
upon all property or funds collected by the Trustee as such, except funds held
in trust for the benefit of the Holders of particular Securities.
Section 608. Disqualification; Conflicting
Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required;
Eligibility.
There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and a Corporate Trust
Office in the Borough of Manhattan, The City of New York. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
Section 610. Resignation and Removal;
Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
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(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resign ing Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Hold ers of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 609
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written request therefor by
the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolu tion may remove the
Trustee with respect to all securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal
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of the Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities of one or more series, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series) and shall comply with
the applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accord ance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of compe tent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resig nation and
each removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of any
series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the
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successor Trustee with respect to the Securities of such series and the address
of its Corporate Trust Office.
Section 611. Acceptance of Appointment by
Successor.
(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) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3)
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shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent pro vided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(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 suc cessor 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 suc cessor Trustee shall be qualified and
eligible under this Article.
Section 612. Merger, Conversion, Consolidation
or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any
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corporation succeeding to all or substantially all the cor porate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securi ties shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conver sion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims
Against the Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under
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the laws of the United States of America, any State thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to super
vision or examination by Federal or State authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for the pur
pose of this Section, the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent shall resign immediately in the manner and
with the effect speci fied in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which
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such Authenticating Agent will serve, as their names and addresses appear in
the Security Register. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK
OF CHICAGO
As Trustee
By____________________________,
As Authenticating Agent
By____________________________,
Authorized Officer
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee
Names and Addresses of Holders.
The Company will furnish or cause to be furnished
to the Trustee
(a) semi-annually, not later than June 30 and December 30 in
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of the preceding June 15
or December 15, as the case may be, 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 is furnished.
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information;
Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the Trustee, shall be
as provided by the Trust Indenture Act.
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(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant there to.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
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ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc.,
Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, expressly assume the due and
punctual payment of the principal and any premium and interest on all
the Securities and the performance or observance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or
a Subsidiary as a result of such transaction as having been incurred by
the Company or such Subsidiary at the time of transaction, no Event of
Default shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, proper ties or assets of the
Company would become subject to a mortgage, pledge, lien, security
interest or other
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encumbrance which would not be permitted by this Indenture, the Company
or such successor Person, as the case may be, shall take such steps as
shall be necessary effectively to secure the Securities equally and
ratably with (or prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
Section 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.
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ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without
Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or
to permit or facilitate the issuance of Securities in uncertificated
form; or
(5) to add or change any of the provisions of this Indenture
in respect of one or more series of Securities, provided that any such
addition, change or elimination (i) shall neither (A) apply to any
Security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of
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such provision nor (B) modify the rights of the Holder of any such
Security with respect to such provision or (ii) shall become effective
only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Inden ture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action
pursuant to this clause (9) shall not adversely affect the interests of
the Holders of Securities of any series in any material respect.
Section 902. Supplemental Indentures with Consent
of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental
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indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1011, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to the Trustee" and concomitant changes in this Section
and Section 1011, or the deletion of this proviso, in accordance with
the requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has
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expressly been included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of Securities of such
series with respect to such covenant or other provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Securities of any other
series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execu tion of such supplemental
indenture is authorized or permit ted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
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Section 906. Reference in Securities to
Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authen ticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such
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presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
Section 1003. Money for Securities Payments to
Be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of or any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, prior to each due date of the principal of or
interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of and any
premiums or interest on any Security of any series and remaining unclaimed for
two years after such principal and any premium or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security or
any coupon appertaining thereto shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and
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<PAGE> 90
observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge.
Section 1005. Existence.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter statutory) and franchises; provided, however, that
the Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 1006. Maintenance of Properties.
The Company will cause all properties used or use ful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
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Section 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 1008. Limitation upon Disposition of Voting Stock
of, and Merger and Sale of Assets of,
Banco Popular.
Subject to the provisions of Article Eight, the
Company will not
(1) sell, assign, transfer or otherwise dispose of any shares
of Voting Stock of Banco Popular or permit Banco Popular to issue,
sell, assign, transfer or otherwise dispose of any shares of, or
securities convertible into or options, warrants or rights to subscribe
for, its Voting Stock, unless, after giving effect to any such
transaction, Banco Popular remains a Controlled Subsidiary; or
(2) permit Banco Popular to
(a) merge or consolidate, unless the surviving
corporation is a Controlled Subsidiary; or
(b) convey, transfer, lease or sell its properties
and assets substantially as an entirety to any Person, except
to a Controlled Subsidiary.
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Section 1009. Limitation Upon Creation of Liens on Voting
Stock of Material Banking Subsidiaries.
The Company will not, and it will not permit any Material
Banking Subsidiary at any time directly or indirectly to, create, assume, incur
or permit to exist any indebtedness for borrowed money secured by a pledge, lien
or other encumbrance (any pledge, lien or other encumbrance being hereinafter in
this Section referred to as a "lien") on the Voting Stock of any Material
Banking Subsidiary without making effective provision whereby the Outstanding
Securities (and, if the Company so elects, any other indebtedness ranking on a
parity with the Securities) shall be secured equally and ratably with such
secured indebtedness so long as such other indebtedness shall be so secured;
provided, however, that the foregoing covenant shall not be applicable to liens
for taxes or assessments or governmental charges or levies not then due and
delinquent or the validity of which is being contested in good faith or which
are less than $10,000,000 in amount, liens created by or resulting from any
litigation or legal proceeding which is currently being contested in good faith
by appropriate proceedings or which involve claims of less than $10,000,000, or
deposits to secure (or in lieu of) surety, stay, appeal or customs bands.
If the company shall hereafter be required to secure the
Securities equally and ratably with any other indebtedness pursuant to this
Section, (i) the Company will promptly deliver to the Trustee an Officers'
Certificate stating that the foregoing covenant has been complied with, and an
Opinion of Counsel stating that in the opinion of such counsel the foregoing
covenant has been complied with and that any instruments executed by the Company
or any Subsidiary in the performance of the foregoing covenant comply with the
requirements of the foregoing covenant and (ii) the Trustee is hereby authorized
to enter into an indenture or agreement supplemental hereto and to take such
action, if any, as it may deem advisable to enable it to enforce the rights of
the holders of the Securities so secured.
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Section 1010. Payment of Additional Amounts.
All payments of principal, premium, if any, and interest on
Securities of any series shall be made without set-off, counterclaim, fees,
liabilities or similar deductions, and free and clear of, and without deduction
or withholding for, taxes, levies, imposts, duties, charges or fees of
whatsoever nature now or hereafter imposed, levied, collected, deducted,
withheld or assessed by or on behalf of the Commonwealth of Puerto Rico or any
political subdivision or taxing authority thereof or therein ("Taxes"). If the
Company or any agent thereof is required by law or regulation to make any
deduction or withholding for or on account of Taxes, the Company shall pay such
additional amounts ("Additional Amounts") as shall be necessary in order that
the net amounts received by the Holders of the Securities of any series or the
holders or beneficial owners of any interest therein or rights in respect
thereof after such deduction or withholding shall equal the amount that would
have been receivable thereunder in the absence of such deduction or withholding,
except that no such Additional Amounts shall be payable:
(a) to any Holder of a Security or any interest therein or
rights in respect thereof where such deduction or withholding is
required by reason of such Holder having some connection with the
Commonwealth of Puerto Rico or any political subdivision or taxing
authority thereof or thereon other than the mere holding of a payment
in respect of such security;
(b) in respect of any deduction or withholding that would not
have been required but for the presentation by the Holder of a Security
for payment on a date more than 30 days after the Date of Maturity or
the date on which payment thereof is duly provided for, whichever
occurs later; or
(c) in respect of any deduction or withholding that would not
have been required but for the failure to comply with any
certification, identification or other reporting requirements
concerning the
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<PAGE> 94
nationality, residence, identity or connection with the Commonwealth of
Puerto Rico, or any political subdivision or taxing authority thereof
or therein, of the Holder of a Security or any interest therein or
rights in respect thereof, if compliance is required by the
Commonwealth of Puerto Rico, or any political subdivision or taxing
authority thereof or therein, as a precondition to exemption from such
deduction or withholding.
Any reference in the Indenture to principal or interest shall
be deemed also to refer to any Additional Amounts that may be payable under this
Section 1010.
Section 1011. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in Sections 1006 to 1009, inclusive,
with respect to the Securities of any series if before the time for such compli
ance the Holders of at least 66-2/3% in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effec tive, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accor dance with their terms and (except
as otherwise specified as
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contemplated by Section 301 for Securities of any series) in accordance with
this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securi ties shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities of any series, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date, of the principal amount of Securities of
such series to be redeemed and, if applicable, of the tenor of the Securities to
be redeemed. In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such Securities
or elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities
to Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series and of a specified tenor
are to be redeemed), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. If less than
all of the Securities of such series and of a specified tenor are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor
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<PAGE> 96
not previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, unless a shorter period is specified in the Securities to be
redeemed, to each Holder of Securities to be redeemed, at his address appearing
in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption of any Securities, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
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<PAGE> 97
(5) the place or places where such Securities are to
be surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if
such is the case.
Notice of Redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as afore said,
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
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<PAGE> 98
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and of
like tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 301 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 Securities of
any series, the cash amount of any sinking fund payment may be subject to
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reduction as provided in Section 1202. 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 1202. Satisfaction of Sinking Fund Payments
with Securities.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemp tion) and (2) may apply as a credit
Securities of a series which have been redeemed and so delivered 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 1203. 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 that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 1202 and will also 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 1103 and cause
notice of the redemption thereof to be given in the name of
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and at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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<PAGE> 101
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
BANPONCE CORPORATION
By/s/ David H. Chafey, Jr.
--------------------------
David H. Chafey, Jr.
Executive Vice President
By /s/ Roberto R. Herencia
--------------------------
Roberto R. Herencia
Senior Vice President
Attest:
/s/ Brunilda Santos de Alvarez
- ------------------------------
THE FIRST NATIONAL BANK
OF CHICAGO
By /s/ Melissa Weisman
----------------------
Melissa Weisman
Assistant Vice President
Affidavit No. 2654
Sworn and subscribed to before me by David H. Chafey, Jr., of legal
age, married and resident of San Juan, Puerto
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<PAGE> 102
Rico as Executive Vice President of BanPonce Corporation and by Roberto R.
Herencia, of legal age, married and resident of the city of Glenview, Illinois,
as Senior Vice President of BanPonce Corporation, both of whom are personally
known to me. In San Juan, Puerto Rico this 12th day of April, 1995.
/s/ Brunilda Santos de Alvarez
------------------------------
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<PAGE> 103
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 13th day of April, 1995, before me personally came
Melissa G. Weisman, to me known, who, being by me duly sworn, did depose and say
that she is an Assistant Vice President of The First National Bank of Chicago,
one of the corporations described in and which executed the foregoing
instrument; that she knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that she signed her name
thereto by like authority.
/s/ Edith M. Marino
- -------------------
Edith M. Marino
Notary Public, State of New York
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<PAGE> 104
POPULAR, INC.
Issuer
TO
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
-----------
FIRST SUPPLEMENTAL INDENTURE
Dated as of May 8, 1997
To Indenture dated as of February 15, 1995
-----------
<PAGE> 105
FIRST SUPPLEMENTAL INDENTURE, dated as of May 8, 1997 between
Popular, Inc. (formerly BanPonce Corporation), a Puerto Rico corporation (the
"Company"), and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association, as Trustee (the "Trustee").
RECITALS
The Company and the Trustee, as Trustee, are parties to an
Indenture, dated as of February 15 1995 (the "Original Indenture"), which
provides for the issuance from time to time of unsecured debt securities of the
Company.
Section 901(9) of the Original Indenture provides that without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental to the Original Indenture, in form satisfactory to the
Trustee, to cure any ambiguity, to correct or supplement any provision in the
Original Indenture which may be inconsistent with any other provision in the
Original Indenture, or to make any other provisions with respect to matters or
questions arising under the Original Indenture, provided that such action shall
not adversely affect the interests of the Holders of Securities of any series in
any material respect.
The Company believes that the definition of "Banco Popular" in
Section 101 of the Original Indenture should be amended.
The Board of Directors of the Company have duly authorized the
execution and delivery by the Company of this First Supplemental Indenture.
NOW, THEREFORE, THIS
FIRST SUPPLEMENTAL INDENTURE
WITNESSETH:
<PAGE> 106
For and in consideration of the premises and the other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Trustee mutually agree as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
Except as otherwise expressly provided or unless the context
otherwise requires, all terms used in this First Supplemental Indenture which
are defined in the Original Indenture shall have the meanings ascribed to them
by the Original Indenture.
Section 102. Effect of Headings.
The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
Section 103. Successors and Assigns.
All covenants and agreements in this First Supplemental
Indenture by the parties hereto shall bind their respective successors and
assigns, whether so expressed or not.
Section 104. Separability Clause.
In case any provision in this First Supplemental Indenture
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 105. Benefits of Instrument.
Nothing in this First Supplemental Indenture, express or
implied, shall give to any Person, other than the
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<PAGE> 107
parties hereto and their successors hereunder and the Holders, any benefit or
any legal or equitable right, remedy or claim under this First Supplemental
Indenture or the Original Indenture.
Section 106. Governing Law.
This First Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
ARTICLE TWO
Amendment of the Original Indenture
Section 201. Amendment of the definition of "Banco Popular in
Section 101 of the Original Indenture.
The definition of "Banco Popular" in Section 101 of the
Original Indenture is hereby amended and restated in its entirety as follows:
"Banco Popular means Banco Popular de Puerto Rico or any
successor and assign having its principal business operations
in Puerto Rico."
Section 202. Reaffirmation of Original Indenture.
Each of the Company and the Trustee hereby confirms, reaffirms
and agrees to the Original Indenture in every particular, as amended by this
First Supplemental Indenture.
Section 203. Trust Indenture Act.
If any provision of this First Supplemental Indenture limits,
qualifies or conflicts with a provision of the Trust Indenture Act of 1939, as
it may be amended from time to time, that is required under such Act to be a
part of and govern this First Supplemental Indenture, the latter provision shall
control. If any provision hereof modifies or excludes any provision of such Act
that may be so modified or excluded, the latter provision shall be deemed
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<PAGE> 108
to apply to this First Supplemental Indenture as so modified or excluded, as the
case may be.
* * *
This First Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
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<PAGE> 109
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
POPULAR, INC.
By: /s/ Jorge A. Junquera
-------------------------
Jorge A. Junquera
Senior Executive Vice President
By: /s/ Amilcar Jordan
-------------------------
Amilcar Jordan
Senior Vice President
Attest:
/s/ Brunilda Santos de Alvarez
- ------------------------------
Brunilda Santos de Alvarez
Assistant Secretary
Affidavit No. 1,674
Subscribed to before me by Jorge A. Junquera of legal age,
married and resident of San Juan, Puerto Rico, as Senior Executive Vice
President of Popular, Inc. and Amilcar Jordan, of legal age, married and
resident of San Juan, Puerto Rico as Senior Vice President of Popular, Inc. and
who are personally known to me, in San Juan, Puerto Rico, this 8th day of May,
1997.
[SEAL] /s/ Paulette Lavergne Cuyar
---------------------------
Notary Public
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<PAGE> 110
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Melissa Weisman
-----------------------
Name: Melissa Weisman
Title: Vice President
Attest:
/s/ Steve M. Husbands
- ---------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 8th day of May, 1997, before me personally came Melissa
Weisman, to me known, who, being by me duly sworn, did depose and say that she
is a Vice President of The First National Bank of Chicago, one of the
corporations described in and which executed the foregoing instrument; that she
knows the seal of said national banking association; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that she signed her name thereto
by like authority.
/s/ Lisa A. Brack
--------------------------------
Notary Public, State of New York
[SEAL]
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<PAGE> 1
EXHIBIT 4(e)
================================================================================
BANPONCE CORPORATION,
Issuer
TO
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
----------
SUBORDINATED
INDENTURE
Dated as of November 30, 1995
----------
================================================================================
<PAGE> 2
BANPONCE CORPORATION
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318, INCLUSIVE, OF THE
TRUST INDENTURE ACT OF 1939;
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C> <C>
ss. 310 (a)(1) ............................................ 609
(a)(2) ............................................ 609
(a)(3) ............................................ Not Applicable
(a)(4) ............................................ Not Applicable
(b) ............................................ 608
610
ss. 311 (a) ............................................ 613
(b) ............................................ 613
ss. 312 (a) ............................................ 701
702(a)
(b) ............................................ 702(b)
(c) ............................................ 702(c)
ss. 313 (a) ............................................ 703(a)
(b) ............................................ 703(a)
(c) ............................................ 703(a)
(d) ............................................ 703(b)
ss. 314 (a) ............................................ 704
(a)(4) ............................................ 101
1004
(b) ............................................ Not Applicable
(c)(1) ............................................ 102
(c)(2) ............................................ 102
(c)(3) ............................................ Not Applicable
(d) ............................................ Not Applicable
(e) ............................................ 102
ss. 315 (a) ............................................ 601
(b) ............................................ 602
(c) ............................................ 601
(d) ............................................ 601
(e) ............................................ 514
ss. 316 (a) ............................................ 101
(a)(1)(A) ............................................ 502
512
(a)(1)(B) ............................................ 513
(a)(2) ............................................ Not Applicable
(b) ............................................ 508
(c) ............................................ 104(c)
ss. 317 (a)(1) ............................................ 503
(a)(2) ............................................ 504
(b) ............................................ 1003
ss. 318 (a) ............................................ 107
</TABLE>
- -------------------------------
NOTE: This reconciliation and tie shall not, for
any purpose, be deemed to be a part of the
Indenture.
<PAGE> 3
TABLE OF CONTENTS
----------
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES................................................................... 1
RECITALS OF THE COMPANY................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions................................................ 1
Act........................................................ 2
Additional Amounts......................................... 2
Affiliate; control......................................... 2
Authenticating Agent....................................... 2
Board of Directors......................................... 2
Board Resolution........................................... 2
Business Day............................................... 3
Commission................................................. 3
Company.................................................... 3
Company Request; Company Order............................. 3
Controlled Subsidiary...................................... 3
Corporate Trust Office..................................... 3
corporation................................................ 4
Defaulted Interest......................................... 4
Depositary................................................. 4
Entitled Persons........................................... 4
Event of Default........................................... 4
Excess Proceeds............................................ 4
Exchange Act............................................... 4
Global Security............................................ 4
Holder..................................................... 4
indebtedness of the Company for
money borrowed............................................ 4
Indenture.................................................. 5
interest................................................... 5
Interest Payment Date...................................... 5
Material Banking Subsidiary................................ 5
Maturity................................................... 5
Officers' Certificate...................................... 6
Opinion of Counsel......................................... 6
Original Issue Discount Security........................... 6
Other Financial Obligations................................ 6
Outstanding................................................ 6
Paying Agent............................................... 8
Person..................................................... 8
</TABLE>
- --------------
NOTE: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
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<TABLE>
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Place of Payment........................................... 8
Predecessor Security....................................... 8
Redemption Date............................................ 8
Redemption Price........................................... 8
Regular Record Date........................................ 8
Securities................................................. 8
Security Register; Security Registrar...................... 8
Senior Indebtedness........................................ 8
Special Record Date........................................ 9
Stated Maturity............................................ 9
Subsidiary................................................. 9
Taxes...................................................... 9
Trustee.................................................... 9
Trust Indenture Act........................................ 9
Vice President............................................. 10
Voting Stock............................................... 10
Section 102. Compliance Certificates and Opinions....................... 10
Section 103. Form of Documents Delivered to Trustee..................... 11
Section 104. Acts of Holders; Record Dates.............................. 11
Section 105. Notices, Etc., to Trustee and Company...................... 14
Section 106. Notice to Holders; Waiver.................................. 14
Section 107. Conflict with Trust Indenture Act.......................... 15
Section 108. Effect of Headings and
Table of Contents......................................... 15
Section 109. Successors and Assigns..................................... 15
Section 110. Separability Clause........................................ 15
Section 111. Benefits of Indenture...................................... 16
Section 112. Governing Law.............................................. 16
Section 113. Legal Holidays............................................. 16
Section 114. Appointment of Agent for Service........................... 16
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally............................................ 17
Section 202. Form of Face of Security................................... 18
Section 203. Form of Reverse of Security................................ 20
Section 204. Form of Trustee's Certificates of
Authentication............................................ 26
Section 205. Additional Provisions Required in
Global Security........................................... 26
</TABLE>
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NOTE: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
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ARTICLE THREE
THE SECURITIES
<TABLE>
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Section 301. Amount Unlimited; Issuable in Series....................... 27
Section 302. Denominations.............................................. 31
Section 303. Execution, Authentication, Delivery
and Dating................................................ 31
Section 304. Temporary Securities....................................... 33
Section 305. Registration, Registration of Transfer
and Exchange.............................................. 34
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities................................................ 36
Section 307. Payment of Interest; Interest Rights
Preserved................................................. 37
Section 308. Persons Deemed Owners...................................... 38
Section 309. Cancellation............................................... 39
Section 310. Computation of Interest.................................... 39
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.................... 39
Section 402. Application of Trust Money................................. 41
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.......................................... 41
Section 502. Acceleration of Maturity; Rescission
and Annulment............................................. 43
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee................................ 44
Section 504. Trustee May File Proofs of Claim........................... 45
Section 505. Trustee May Enforce Claims Without
Possession of Securities.................................. 45
Section 506. Application of Money Collected............................. 46
Section 507. Limitation on Suits........................................ 46
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest.................................................. 47
Section 509. Restoration of Rights and Remedies......................... 47
Section 510. Rights and Remedies Cumulative............................. 48
Section 511. Delay or Omission Not Waiver............................... 48
</TABLE>
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NOTE: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
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<TABLE>
<S> <C> <C>
Section 512. Control by Holders......................................... 48
Section 513. Waiver of Past Defaults.................................... 48
Section 514. Undertaking for Costs...................................... 49
Section 515. Waiver of Usury, Stay or Extension
Laws...................................................... 49
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities........................ 50
Section 602. Notice of Defaults......................................... 50
Section 603. Certain Rights of Trustee.................................. 50
Section 604. Not Responsible for Recitals or
Issuance of Securities.................................... 52
Section 605. May Hold Securities........................................ 52
Section 606. Money Held in Trust........................................ 52
Section 607. Compensation and Reimbursement............................. 52
Section 608. Disqualification; Conflicting
Interests................................................. 53
Section 609. Corporate Trustee Required;
Eligibility............................................... 53
Section 610. Resignation and Removal; Appointment of
Successor................................................. 53
Section 611. Acceptance of Appointment by Successor..................... 55
Section 612. Merger, Conversion, Consolidation or
Succession to Business.................................... 57
Section 613. Preferential Collection of Claims
Against the Company....................................... 57
Section 614. Appointment of Authenticating Agent........................ 57
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
Addresses of Holders...................................... 59
Section 702. Preservation of Information;
Communications to Holders................................. 60
Section 703. Reports by Trustee......................................... 60
Section 704. Reports by Company......................................... 61
</TABLE>
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
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NOTE: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
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<TABLE>
<S> <C> <C>
Section 801. Company May Consolidate, Etc., Only on
Certain Terms............................................. 61
Section 802. Successor Substituted...................................... 62
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent
of Holders................................................ 63
Section 902. Supplemental Indentures With Consent of
Holders................................................... 64
Section 903. Execution of Supplemental Indentures....................... 66
Section 904. Effect of Supplemental Indentures.......................... 66
Section 905. Conformity with Trust Indenture Act........................ 66
Section 906. Reference in Securities to Supplemental
Indentures................................................ 67
Section 907. Subordination Unimpaired................................... 67
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and
Interest.................................................. 67
Section 1002. Maintenance of Office or Agency............................ 67
Section 1003. Money for Securities Payments to Be
Held in Trust............................................. 68
Section 1004. Statement by Officers as to Default........................ 69
Section 1005. Existence.................................................. 69
Section 1006. Maintenance of Properties.................................. 70
Section 1007. Payment of Taxes and Other Claims.......................... 70
Section 1008. Payment of Additional Amounts.............................. 70
Section 1009. Waiver of Certain Covenants................................ 71
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article................................... 72
Section 1102. Election to Redeem; Notice to Trustee...................... 72
Section 1103. Selection by Trustee of Securities to
Be Redeemed............................................... 72
Section 1104. Notice of Redemption....................................... 73
Section 1105. Deposit of Redemption Price................................ 74
Section 1106. Securities Payable on Redemption Date...................... 74
</TABLE>
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NOTE: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
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<TABLE>
<S> <C> <C>
Section 1107. Securities Redeemed in Part................................ 75
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article................................... 75
Section 1202. Satisfaction of Sinking Fund Payments
with Securities........................................... 75
Section 1203. Redemption of Securities for Sinking
Fund...................................................... 76
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
Section 1301. Securities Subordinate to Senior
Indebtedness.............................................. 76
Section 1302. Payment Over of Proceeds Upon
Dissolution, Etc.......................................... 77
Section 1303. Prior Payment to Senior Indebtedness
Upon Acceleration of Securities........................... 78
Section 1304. No Payment When Senior Indebtedness
Default................................................... 79
Section 1305. Payment Permitted If No Default............................ 80
Section 1306. Subrogation to Rights of Holders
of Senior Indebtedness.................................... 80
Section 1307. Provisions Solely to Define
Relative Rights........................................... 81
Section 1308. Trustee to Effectuate Subordination........................ 81
Section 1309. No Waiver of Subordination
Provisions................................................ 81
Section 1310. Notice to Trustee.......................................... 82
Section 1311. Reliance on Judicial Order or
Certificate of Liquidating Agent.......................... 83
Section 1312. Trustee Not Fiduciary for Holders
of Senior Indebtedness or
Entitled Persons.......................................... 84
Section 1313. Rights of Trustee as Holder of Senior
Indebtedness or Entitled Person;
Preservation of Trustee's Rights.......................... 84
Section 1314. Article Applicable to Paying Agents........................ 84
Section 1315. Payment of Proceeds in Certain Cases....................... 85
</TABLE>
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NOTE: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
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<PAGE> 9
INDENTURE, dated as of November 30, 1995, between BANPONCE
CORPORATION, a corporation duly organized and existing under the laws of the
Commonwealth of Puerto Rico (herein called the "Company"), having its principal
office at 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918, and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, as Trustee (herein
called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
and subordinated debentures, notes or other evidences of indebtedness (herein
called the "Securities"), to be issued in one or more series as in this
Indenture provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which
are defined in the Trust Indenture Act,
<PAGE> 10
either directly or by reference therein, have the meanings assigned
to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104(a).
"Additional Amounts" has the meaning assigned thereto in
Section 1008.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been
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<PAGE> 11
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day", except as may otherwise be provided herein or
in any Security, when used with respect to any Place of Payment or other
location, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Controlled Subsidiary" means any corporation more than 80
percent of the outstanding Voting Stock of which, except for directors'
qualifying shares, shall at the time be owned directly or indirectly by the
Company.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126, Attention:
Corporate Trust Services Division, except that for purposes of Section 1002,
such
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<PAGE> 12
term shall mean the office or agency of the Trustee in the Borough of Manhattan,
the City of New York, which office at the date hereof is located at 14 Wall
Street, Eighth Floor, New York, New York 10005.
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 301.
"Entitled Persons" means any person entitled to payment
pursuant to the terms of Other Financial Obligations.
"Event of Default" has the meaning specified in Section 501.
"Excess Proceeds" has the meaning specified in Section
1315(a).
"Exchange Act" means the Securities Exchange Act of 1934 and
any statutory successor thereto, in each case as amended from time to time.
"Global Security" means a Security bearing the legend
prescribed in Section 205 evidencing all or part of a series of Securities,
issued to the Depositary for such series or its nominee, and registered in the
name of such Depositary or nominee.
"Holder" means a Person in whose name a Security is
registered in the Security Register.
"indebtedness of the Company for money borrowed" when used
with respect to the Company means (i) any obligation of, or any obligation
guaranteed by, the Company for the repayment of borrowed money, whether or not
evidenced by bonds, debentures, notes or other written instruments, (ii) any
deferred payment obligation of, or any
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<PAGE> 13
such obligation guaranteed by, the Company for the payment of the purchase price
of property or assets evidenced by a note or similar instrument, and (iii) any
obligation of, or any such obligation guaranteed by, the Company for the
payment of rent or other amounts under a lease of property or assets which
obligation is required to be classified and accounted for as a capitalized lease
on the balance sheet of the Company under generally accepted accounting
principles.
"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 pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an instalment of interest on such
Security.
"Material Banking Subsidiary" means any Controlled Subsidiary
of the Company chartered as a banking corporation under United States Federal,
State, or Puerto Rico law which is a significant subsidiary of the Company as
defined in 1-02 of Regulation S-X of the rules and regulations of the Securities
and Exchange Commission under the Securities Act of 1933, as amended.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an instalment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
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<PAGE> 14
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of or counsel for the Company, or other counsel who shall be
acceptable to the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Other Financial Obligations" means, unless otherwise
determined with respect to any series of Securities pursuant to Section 301, all
obligations to make payment pursuant to the terms of financial instruments, such
as (i) securities contracts and currency and foreign exchange rate contracts,
(ii) derivative instruments, such as swap agreements (including interest rate
and currency and foreign exchange rate swap agreements), cap agreements, floor
agreements, collar agreements, interest rate agreements, foreign exchange
agreements, options, commodity futures contracts, commodity options contracts
and (iii) similar financial instruments; provided that the term Other Financial
Obligations shall not include (A) obligations on account of Senior Indebtedness
and (B) obligations on account of indebtedness for money borrowed ranking pari
passu with or subordinate to the Securities.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
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<PAGE> 15
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
(i) the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon acceleration
of the Maturity thereof pursuant to Section 502, (ii) the principal amount of a
Security denominated in one or more foreign currencies or currency units shall
be the U.S. dollar equivalent, determined in the manner provided as
contemplated by Section 301 on the date of original issuance of such Security,
of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
and (iii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
which the Trustee knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's
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<PAGE> 16
right so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or any premium or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership,
joint venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of and any premium
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Senior Indebtedness" means, unless otherwise determined with
respect to any series of Securities pursuant
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<PAGE> 17
to Section 301, the principal of, and premium, if any, and interest on (a) all
indebtedness of the Company for money borrowed, whether outstanding on the date
of execution of this Indenture or thereafter created, assumed or incurred,
except (i) such indebtedness as is by its terms expressly stated to be junior in
right of payment to the Securities, and (ii) such indebtedness as is by its
terms expressly stated to rank pari passu in right of payment with the
Securities, and (b) any deferrals, renewals or extensions of any such Senior
Indebtedness.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any instalment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such instalment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"Taxes" has the meaning specified in Section 1008.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
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<PAGE> 18
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" means, with respect to any Person, Capital
Stock (however designated) having general voting power for the election of a
majority of the members of the board of directors, managers or trustees of such
Person (irrespective of whether or not at the time Capital Stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
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<PAGE> 19
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any
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<PAGE> 20
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
Without limiting the generality of the foregoing, a Holder,
including a Depositary that is a Holder of a Global Security, may make, give or
take, by a proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted in this Indenture to be made, given or taken by Holders, and a
Depositary that is a Holder of a Global Security may provide its proxy or
proxies to the beneficial owners of interest in any such Global Security.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a cer tificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) Except as provided in the next paragraph, the Company may,
in the circumstances permitted by the Trust Indenture Act, set any day as the
record date for the purpose of determining the Holders of Securities of any
series entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders of Securities of such series. With
regard to any record date set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to give or take the
relevant action, whether or not such Holders remain Holders after such record
date. With regard to any action that may be given or taken hereunder only by
Holders of a requisite principal amount of Outstanding Securities of any series
(or their duly appointed agents) and for which a record date is set pursuant to
this paragraph, the Company may, at its option, set an expiration date after
which no such action purported to be given or taken by any Holder shall be
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<PAGE> 21
effective hereunder unless given or taken on or prior to such expiration date by
Holders of the requisite principal amount of Outstanding Securities of such
series on such record date (or their duly appointed agents). On or prior to any
expiration date set pursuant to this paragraph, the Company may, on one or more
occasions at its option, extend such date to any later date. Nothing in this
paragraph shall prevent any Holder (or any duly appointed agent thereof) from
giving or taking, after any expiration date, any action identical to, or, at any
time, contrary to or different from any action given or taken, or purported to
have been given or taken, hereunder by a Holder on or prior to such date, in
which event the Company may set a record date in respect hereof pursuant to this
paragraph.
Notwithstanding the foregoing, upon receipt by the Trustee,
with respect to Securities of any Series, of (i) any Notice of Default pursuant
to Section 501, (ii) any declaration of acceleration, or any rescission and
annulment of any such declaration pursuant to Section 502 or (iii) any direction
given pursuant to Section 512 (any such notice, declaration, rescission and
annulment, or direction being referred to herein as a "Direction"), a record
date shall automatically and without any other action by any Person be set for
the purpose of determining the Holders of Outstanding Securities of such series
entitled to join in such Direction, which record date shall be the close of
business on the day the Trustee receives such Direction. The Holders of
Outstanding Securities of such series on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to join in such
Direction, whether or not such Holders remain Holders after such record date;
provided that, unless such Direction shall have become effective by virtue of
Holders of the requisite principal amount of Outstanding Securities of such
series on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such Direction shall
automatically and without any action by any Person be canceled and of no further
effect. Nothing in this paragraph shall prevent a Holder (or a duly appointed
agent thereof) from giving, before or after the expiration of such 90-day
period, a Direction contrary to or different from, or, after the expiration or
such period, identical to, a Direction that has been canceled pursuant to the
proviso to the preceding sentence, in which event a new record date in respect
thereof shall be set pursuant to this paragraph.
Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security or by
one
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<PAGE> 22
or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
(d) The ownership of Securities shall be proved by the
Security Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where
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<PAGE> 23
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
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<PAGE> 24
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the holders of Senior Indebtedness, the Holders and,
subject to Section 907, Entitled Persons in respect of Other Financial
Obligations any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwith standing any other provision of this Indenture or of the
Securities (other than a provision of any Security which specifically states
that such provision shall apply in lieu of this Section)) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
Section 114. Appointment of Agent for Service.
The Company hereby appoints the Vice President of Banco
Popular de Puerto Rico at the office of Banco Popular de Puerto Rico located in
The City of New York as the Company's authorized agent (the "Authorized Agent")
upon whom service of process may be served in any action arising out of or based
on the Securities, or this Indenture (including any action based on or arising
out of the United States federal securities laws) that may be instituted in New
York State or United States Federal Courts sitting in The City of New York, by
the Trustee or the Holder of any Security, and the Company hereby expressly
accepts the jurisdiction of any such court in respect of any such action. Such
appointment shall be irrevocable unless and until the appointment of a successor
authorized agent for service of process, and such successor's acceptance of such
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<PAGE> 25
appointment, shall have occurred, and the Company and such Authorized Agent will
take any and all actions, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment or appointments
in full force and effect as aforesaid. Service of process upon an Authorized
Agent will be deemed, in every respect, effective service of process upon the
Company. Notwithstanding the foregoing, any action against the Company arising
out of or based on any Security, or this Indenture may also be instituted by the
Holder of such Security in any court in the Commonwealth of Puerto Rico, and the
Company hereby expressly accepts the jurisdiction of any such court in respect
of any such action.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in substantially the
form set forth in this Article, or in such other form as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
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<PAGE> 26
Section 202. Form of Face of Security.
[Insert any legend required by the Internal
Revenue Code and the regulations thereunder.]
THIS SECURITY IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER
OBLIGATION OF ANY BANK OR NONBANK SUBSIDIARY OF THE COMPANY, THE BANK INSURANCE
FUND OR ANY OTHER GOVERNMENTAL AGENCY.
BANPONCE CORPORATION
............................................
No. ......... $ ........
BANPONCE CORPORATION, a corporation duly organized and existing under
the laws of the Commonwealth of Puerto Rico (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to .................................,
or registered assigns, the principal sum of ....................................
Dollars on ............................ ........................... [if the
Security is to bear interest prior to Maturity, insert -- , and to pay interest
thereon from ............. or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on
............ and ............ in each year, commencing ........., at the rate of
....% per annum, until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the ....... or ....... (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
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<PAGE> 27
required by such exchange, all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity,
insert -- The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal of this Security shall
bear interest at the rate of ....% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of ......% per annum (to the extent that the payment
of such interest shall be legally enforceable), which shall accrue from the date
of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert -- any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert -- ; provided, however, that at the option
of the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register].
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
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<PAGE> 28
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
BANPONCE CORPORATION
By
-------------------------------
Name:
Title:
By
-------------------------------
Name:
Title:
Attest:
- ---------------------------
By
-------------------------
Name:
Title:
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of November 30, 1995 (herein called
the "Indenture"), between the Company and The First National Bank of Chicago, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, holders
of Senior Indebtedness and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof[, limited in
aggregate principal amount to $...........].
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of
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<PAGE> 29
all Senior Indebtedness (as defined in the Indenture), and this Security is
issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Security, by accepting the same, agrees that each holder of
Senior Indebtedness, whether created or acquired before or after the issuance of
the Securities of this series, shall be deemed conclusively to have relied on
such provisions in acquiring and continuing to hold, or in continuing to hold,
such Senior Indebtedness. The Indenture also provides that if, upon the
occurrence of certain events of bankruptcy or insolvency relating to the
Company, there remains, after giving effect to such subordination provisions,
any amount of cash, property or securities available for payment or distribution
in respect of Securities of this series (as defined in the Indenture, "Excess
Proceeds"), and if, at such time, any Entitled Person (as defined in the
Indenture) has not received payment in full of all amounts due or to become due
on or in respect of Other Financial Obligations (as defined in the Indenture),
then such Excess Proceeds shall first be applied to pay or provide for the
payment in full of such Other Financial Obligations before any payment or
distribution may be made in respect of Securities of this series.
This Security is also issued subject to the provisions of the
Indenture regarding payments to Entitled Persons in respect of Other Financial
Obligations. Each Holder of this Security, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination of this Security and payment of Excess Proceeds as provided in
the Indenture and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes.
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, [if
applicable, insert -- (1) on ........... in any year commencing with the year
...... and ending with the year ...... through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [on or after .........., 19..], as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before ...............,
__%, and if redeemed] during the 12-month period beginning ............. of the
years indicated,
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<PAGE> 30
Redemption Redemption
Year Price Year Price
- ---- ----- ---- -----
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1) on
............ in any year commencing with the year .... and ending with the year
.... through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after ............], as a whole or in part, at the election of
the Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below: If redeemed during the 12-month period beginning
............ of the years indicated,
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<PAGE> 31
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ------------ -------------------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
............., redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than .....% per annum.]
[The sinking fund for this series provides for the redemption
on ............ in each year beginning with the year ....... and ending with the
year ...... of [not less than $.......... ("mandatory sinking fund") and not
more than] $......... aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory sinking fund payments otherwise required to be made [in the
inverse order in which they become due].]
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<PAGE> 32
[If the Security is subject to redemption, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, an amount of principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to -- insert formula for
determining the amount. Upon payment (i) of the amount of principal so declared
due and payable and (ii) of interest on any overdue principal and overdue
interest (in each case to the extent that the payment of such interest shall be
legally enforceable), all of the Company's obligations in respect of the
payment of the principal of and interest, if any, on the Securities of this
series shall terminate.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security.
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<PAGE> 33
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Security.
[If applicable, insert -- In the event that the Company shall
be obligated to pay any Additional Amounts due to a change in law, regulation or
interpretation, the Company may, at its option, redeem this Security as a whole
at a redemption price of 100% of the principal amount thereof (or, if such
Security is an Original Issue Discount Security, the portion of the principal
amount of such Security as may be specified by the terms thereof) together with
accrued interest to the date fixed for redemption.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registerable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue,
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<PAGE> 34
and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Section 204. Form of Trustee's Certificates of
Authentication.
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
As Trustee
By...........................
Authorized Signatory
SECTION 205. Additional Provisions Required in Global
Security.
Any Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee thereof. This Security may not be transferred
to, or registered or exchanged, in whole or in part, for Securities
registered in the name of, any Person other than the Depositary or a
nominee thereof and no such transfer may be registered, except in the
limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration or transfer of, or in
exchange for or in lieu of, this Security shall be a Global Security
subject to the foregoing, except in such limited circumstances."
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<PAGE> 35
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established, with respect to the Securities of any series, in or
pursuant to a Board Resolution and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certifi cate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of such series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate prin cipal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or 1107
and except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of any
Securities of the series is payable;
(5) the rate or rates at which any Securities of the series
shall bear interest, if any, the date or dates from which such interest
shall accrue, the Interest Payment
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<PAGE> 36
Dates on which any such interest shall be payable and the Regular
Record Date for any such interest payable on any Interest Payment Date
and the basis upon which interest shall be calculated, if other than in
360-day year of twelve 30-day months;
(6) the place or places where the principal of and any
premium and interest on Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which any Securities of the
series may be redeemed, in whole or in part, at the option of the
Company;
(8) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions 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) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(10) the currency, currencies or currency units in which
payment of the principal of and any premium and interest on any
Securities of the series shall be payable if other than the currency of
the United States of America and the manner of determining the
equivalent thereof in the currency of the United States of America for
purposes of the definition of "Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium
or interest on any Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
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(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies or currency
units other than that or those in which the Securities are stated to be
payable, the currency, currencies or currency units in which payment of
the principal of and any premium and interest on Securities of such
series as to which such election is made shall be payable, and the
periods within which and the terms and conditions upon which such
election is to be made;
(13) 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 502;
(14) if and as applicable, that the Securities of the series
shall be issuable in whole or in part in the form of one or more Global
Securities and, in such case, the Depositary or Depositaries for such
Global Security or Global Securities and any circumstances other than
those set forth in Section 305 in which any such Global Security may be
transferred to, and registered and exchanged for Securities registered
in the name of, a Person other than the Depositary for such Global
Security or nominee thereof, and in which any such transfer may be
registered;
(15) if other than as specified in Section 501, the Events of
Default applicable with respect to the Securities of the series;
(16) the Events of Default set forth in Section 501 applicable
with respect to the Securities of the series, if fewer than all of the
Events of Default set forth in Section 501;
(17) if other than as specified in Section 502, the Events of
Default the occurrence of which would permit the declaration of the
acceleration of Maturity pursuant to Section 502;
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(18) any other covenant or warranty included for the benefit
of Securities of the series in addition to (and not inconsistent with)
those included in this Indenture for the benefit of Securities of all
series, or any other covenant or warranty included for the benefit of
Securities of the series in lieu of any covenant or warranty included
in this Indenture for the benefit of Securities of all series, or any
provision that any covenant or warranty included in this Indenture for
the benefit of Securities of all series shall not be for the benefit of
Securities of such series, or any combination of such covenants,
warranties or provisions;
(19) if other than as specified in Article Thirteen, the
subordination provisions applicable with respect to the Securities of
the series, including a different definition of the terms "Senior
Indebtedness," "Entitled Persons" or "Other Financial Obligations"; and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted
by Section 901(5)).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above and (subject to Section
303) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto.
Unless otherwise provided with respect to the interest on the
Securities, at the option of the Company, interest on the Securities of any
series that bears interest may be paid by mailing a check to the address of the
person entitled thereto as such address shall appear in the Security Register.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
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Section 302. Denominations.
The Securities of each series shall be issuable in registered
form without coupons in such denominations as shall be specified as contemplated
by Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such Securities
or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
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(b) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles and, if applicable, to provisions of law
which may require that a judgment for money damages rendered by a court
in the United States be expressed in United States dollars.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the time of authentica tion of each Security of such series if such
documents are delivered at or prior to the authentication upon original issuance
of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
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No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of auth entication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
309, for all purposes of this Indenture such Security shall be deemed never to
have been authenticated and delivered hereunder and shall never be entitled to
the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series of like tenor shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more definitive Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor. Until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series and tenor.
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Section 305. Registration, Registration of
Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of
any series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and tenor and bearing a number not contemporaneously
outstanding.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
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No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the date of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
Notwithstanding the foregoing and except as otherwise
specified or contemplated by Section 301, no Global Security shall be
exchangeable pursuant to this Section 305 or Sections 304, 906 and 1107 for
Securities registered in the name of, and no transfer of a Global Security of
any series may be registered to, any Person other than the Depositary for such
Security or its nominee unless (1) such Depositary (A) notifies the Company that
it is unwilling or unable to continue as Depositary for such Global Security or
(B) ceases to be a clearing agency registered under the Exchange Act, (2) the
Company executes and delivers to the Trustee a Company Order that such Global
Security shall be so exchangeable and the transfer thereof so registerable, or
(3) there shall have occurred and be continuing an Event of Default, or an event
which with notice or lapse of time or both would become an Event of Default,
with respect to the Securities evidenced by such Global Security. Upon the
occurrence in respect of any Global Security of any series of any one or more of
the conditions specified in clauses (1), (2) or (3) of the preceding sentence or
such other conditions as may be specified as contemplated by Section 301 for
such series, such Global Security may be exchanged for Securities registered in
the names of, and the transfer of such Global Security may be registered to,
such Persons (including Persons other than the Depositary with respect to such
series and its nominees), as such Depositary shall direct. Notwithstanding any
other provision of this Indenture, any Security authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, any Global
Security shall also be a Global Security and shall bear the legend specified in
Section 205 except for any Security
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authenticated and delivered in exchange for, or upon registration of transfer
of, a Global Security pursuant to the preceding sentence.
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
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Section 307. Payment of Interest; Interest Rights
Preserved.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.
Any interest on any Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest 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 be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such
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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 Holder of Securities of such series at his address as
it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
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Section 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner whatso
ever, and may deliver to the Trustee (or to any other Person for delivery to the
Trustee) for cancellation any Securities previously authenticated hereunder
which the Company has not issued and sold, and all Securities so delivered shall
be promptly canceled by the Trustee. No Securities shall be authenticated in
lieu of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held by
the Trustee shall be destroyed and the Trustee, upon request by the Company,
shall deliver a certificate of destruction to the Company.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301
for Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of
Indenture.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
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(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable,
or
(ii) will become due and payable at their Stated
Maturity within one year,
or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal and any premium and interest to
the date of such deposit (in the case of Securities which have become
due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the
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Trustee under Section 607, the obligations of the Trustee to any Authenticating
Agent under Section 614 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
Section 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be occasioned by the
provisions of Article Thirteen or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) the entry by a court, or in the case of a Material Banking
Sub sidiary, a governmental authority having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
or any Material Banking Subsidiary in an involuntary case or proceeding
under any applicable Federal, state or Commonwealth of Puerto Rico
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company or any Material Banking
Subsidiary a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization,
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arrangement, adjustment or composition of or in respect of the Company
or any Material Banking Subsidiary under any applicable Federal, state
or Commonwealth of Puerto Rico law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Material Banking Subsidiary or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; or
(2) the commencement by the Company or any Material Banking
Subsidiary of a voluntary case or proceeding under any applicable
Federal, state or Commonwealth of Puerto Rico bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company or any
Material Banking Subsidiary in an involuntary case or proceeding under
any applicable Federal, state or Commonwealth of Puerto Rico
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal, state or
Commonwealth of Puerto Rico law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or
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the taking of corporate action by the Company or any Material Banking
Subsidiary in furtherance of any such action; or
(3) any other Event of Default provided with respect to
Securities of that series.
Section 502. Acceleration of Maturity; Rescission
and Annulment.
If an Event of Default specified in Sections 501(1) or 501(2)
with respect to Securities of any series at the time Outstanding occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
25% in principal amount of the Outstanding Securities of that series may declare
the principal amount (or, if any of the Securities of that series are Original
Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified in the terms thereof) of all of the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or specified amount) shall become immediately due and
payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise
than by such declaration of acceleration and any interest
thereon at the rate or rates prescribed therefor in such
Securities,
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(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or
rates prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
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If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securi ties or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other similar committee.
Section 505. Trustee May Enforce Claims Without
Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be
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brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
Section 506. Application of Money Collected.
Subject to the provisions of Article Thirteen, any money
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or any premium or interest,
upon presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and any
premium and interest, respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securitees of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) any interest on such Security on the Stated Maturity
or Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the
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Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
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Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of
or any premium or interest on any Security of
such series, or
(2) in respect of a covenant or provision
hereof which under Article Nine cannot be modified
or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company.
Section 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee,
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but will suffer and permit the execution of every such power as though no such
law had been enacted.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protec tion
to the Trustee shall be subject to the provisions of this Section.
Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided in the Trust Indenture Act.
For the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolu tion, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a
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Company Request or Company Order and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Inden ture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(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, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; 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 604. Not Responsible for Recitals or
Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense,
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disbursement or advance as may be attributable to its negligence or
bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
Section 608. Disqualification; Conflicting
Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required;
Eligibility.
There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and a Corporate Trust
Office in the Borough of Manhattan, The City of New York. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee with respect to the Securities of any
series shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 610. Resignation and Removal;
Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
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(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply
with Section 608 after written request therefor
by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall cease to be eligible
under Section 609 and shall fail to resign after
written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable
of acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer
shall take charge or control of the Trustee or
of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolu tion may remove the
Trustee with respect to all securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
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(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Trustee
for any cause, with respect to the Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of any
series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust
Office.
Section 611. Acceptance of Appointment by
Successor.
(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
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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) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
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(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 suc cessor Trustee all such rights, powers and trusts
referred to in paragraph (a) and (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.
Section 612. Merger, Conversion, Consolidation
or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims
Against the Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all
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purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consoli dated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
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Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
As Trustee
By
---------------------------,
As Authenticating Agent
By
---------------------------,
Authorized Officer
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee
Names and Addresses of Holders.
The Company will furnish or cause to be furnished
to the Trustee
(a) semi-annually, not later than June 30 and December 30 in
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of the preceding June 15
or December 15, as the case may be, 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,
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained
in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders received by the
Trustee in its capacity as Security Registrar. The Trustee may destroy
any list furnished to it as provided in Section 701 upon receipt of a
new list so furnished.
(b) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the
Trustee, shall be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to names and
addresses of Holders made pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are
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listed, with the Commission and with the Company. The Company will notify the
Trustee when any Securities are listed on any stock exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc.,
Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties
and assets of the Company substantially as an entirety shall, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, expressly assume the due and
punctual payment of the principal and any premium and interest on all
the Securities and the performance or observance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company
or a Subsidiary as a
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result of such transaction as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event of Default,
and no event which, after notice or lapse of time or both, would
become an Event of Default shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the
Company would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not be permitted by this
Indenture, the Company or such successor Person, as the case may be,
shall take such steps as shall be necessary effectively to secure the
Securities equally and ratably with (or prior to) all indebtedness
secured thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
Section 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.
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ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without
Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of
Default; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or
to permit or facilitate the issuance of Securities in uncertificated
form; or
(5) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities, provided
that any such addition, change or elimination (i) shall neither (A)
apply to any Security of any series created prior to the execution of
such supplemental indenture and entitled to the benefit of such
provision nor (B) modify the rights of the Holder of any such Security
with respect to such
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provision or (ii) shall become effective only when there is no such
Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any
series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611(b); or
(9) subject to Section 907, to add to, change or eliminate
any of the provisions of Article Thirteen in respect of any series of
Securities, including Outstanding Securities, provided that any such
action pursuant to this clause (9) shall not adversely affect the
interests of the Holders of Securities of any series in any material
respect; or
(10) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that such
action pursuant to this clause (10) shall not adversely affect the
interests of the Holders of Securities of any series in any material
respect.
Section 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures
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supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date) or
modify the provisions of the Indenture with respect to the
subordination of the Securities of any series in a manner adverse to
the Holders of the Securities, or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1009, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this
Section and Section 1009, or the deletion of
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this proviso, in accordance with the requirements of Sections 611(b)
and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execu tion of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
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Section 906. Reference in Securities to
Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
Section 907. Subordination Unimpaired.
No provision in any supplemental indenture that affects the
superior position of the holders of Senior Indebtedness shall be effective
against any holder of Senior Indebtedness unless such holder shall have
consented thereto. Notwithstanding any provisions in this Indenture or
otherwise, the rights of Entitled Persons in respect of Other Financial
Obligations under this Indenture and otherwise in respect of the Securities or
any series of the Securities may, at any time and from time to time, be modified
in any respect or eliminated without the consent of any Entitled Person in
respect of Other Financial Obligations.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the
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Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 1003. Money for Securities Payments to
Be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of or any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, premium and interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so
to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, prior to each due date of the principal of or
any premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be
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held by the Trustee upon the same trusts as those upon which such sums were held
by the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of and any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal and any premium or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
or any coupon appertaining thereto shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
Section 1005. Existence.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or
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franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
Section 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 1008. Payment of Additional Amounts.
All payments of principal, premium, if any, and interest on
Securities of any series shall be made without set-off, counterclaim, fees,
liabilities or similar deductions, and free and clear of, and without deduction
or withholding for, taxes, levies, imposts, duties, charges or fees of
whatsoever nature now or hereafter imposed, levied, collected, deducted,
withheld or assessed by or on behalf of the Commonwealth of Puerto Rico or any
political subdivision or taxing authority thereof or therein ("Taxes"). If the
Company or any agent thereof is required by law or regu-
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lation to make any deduction or withholding for or on account of Taxes, the
Company shall pay such additional amounts ("Additional Amounts") as shall be
necessary in order that the net amounts received by the Holders of the
Securities of any series or the holders or beneficial owners of any interest
therein or rights in respect thereof after such deduction or withholding shall
equal the amount that would have been receivable thereunder in the absence of
such deduction or withholding, except that no such Additional Amounts shall be
payable:
(a) to any Holder of a Security or any interest therein or
rights in respect thereof where such deduction or withholding is
required by reason of such Holder having some connection with the
Commonwealth of Puerto Rico or any political subdivision or taxing
authority thereof or thereon other than the mere holding of and payment
in respect of such security;
(b) in respect of any deduction or withholding that would not
have been required but for the presentation by the Holder of a
Security for payment on a date more than 30 days after the Date of
Maturity or the date on which payment thereof is duly provided for,
whichever occurs later; or
(c) in respect of any deduction or withholding that would not
have been required but for the failure to comply with any
certification, identification or other reporting requirements
concerning the nationality, residence, identity or connection with the
Commonwealth of Puerto Rico, or any political subdivision or taxing
authority thereof or therein, of the Holder of a Security or any
interest therein or rights in respect thereof, if compliance is
required by the Commonwealth of Puerto Rico, or any political
subdivision or taxing authority thereof or therein, as a precondition
to exemption from such deduction or withholding.
Any reference in the Indenture to principal or interest shall
be deemed also to refer to any Additional Amounts that may be payable under this
Section 1008.
Section 1009. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in Sections 1006 to 1008, inclusive,
with respect to the Securities of any series if before the time for such
compliance the Holders of at least 66-2/3% in principal amount of
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the Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and
the duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities of any series, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date, of the principal amount of Securities of
such series to be redeemed and, if applicable, of the tenor of the Securities to
be redeemed. In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such Securities
or elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities
to Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series and of a specified tenor
are to be redeemed), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem
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fair and appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series. If less than all of the Securities of such series
and of a specified tenor are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series and specified tenor
not previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, unless a shorter period is specified in the Securities to be
redeemed, to each Holder of Securities to be redeemed, at his address appearing
in the Security Registrar.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all of the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of
partial redemption of any Securities, the principal amounts) of the
particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that
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interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is
the case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
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Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and of
like tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 301 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 Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
Section 1202. Satisfaction of Sinking Fund Payments
with Securities.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed and so delivered 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 Secur-
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ities, 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 1203. 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 that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 1202 and will also 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 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
Subordination of Securities
Section 1301. Securities Subordinate to
Senior Indebtedness.
The Company covenants and agrees, and each Holder of a
Security of any series, by his acceptance thereof, likewise covenants and
agrees, that, to the extent and in the manner hereinafter set forth in this
Article, the indebtedness represented by the Securities of such series and the
payment of the principal of (and premium, if any) and interest on each of all of
the Securities of such series are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all Senior Indebtedness.
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Section 1302. Payment Over of Proceeds Upon
Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company,
then and in any such event the holders of Senior Indebtedness shall be entitled
to receive payment in full of all amounts due or to become due on or in respect
of all Senior Indebtedness, or provision shall be made for such payment in
money or money's worth, before the Holders of the Securities of any series are
entitled to receive any payment on account of principal of (or premium, if any)
or interest on the Securities of such series, and to that end the holders of
Senior Indebtedness shall be entitled to receive, for application to the
payment hereof, any payment or distribution of any kind or character, whether in
cash, property or securities, which may be payable or deliverable in respect of
the Securities of any series in any such case, proceeding, dissolution,
liquidation or other winding up or event.
In the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the holder of any Security of any series shall have
received any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, before all Senior
Indebtedness is paid in full or payment thereof provided for, and if such fact
shall, at or prior to the time of such payment or distribution have been made
known to the Trustee or, as the case may be, such Holder, then and in such event
such payment or distribution shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other Person making payment or distribution of assets of the Company for
application to the payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all Senior Indebtedness in full, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
For purposes of this Article only, the words "cash, property
or securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
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corporation provided for by a plan of reorganization or readjustment which are
subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to the same extent as, or to a greater extent than, the
Securities are so subordinated as provided in this Article. The consolidation of
the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the sale, conveyance,
transfer or lease of its properties and assets substantially as an entirety to
another Person upon the terms and conditions set forth in Article Eight shall
not be deemed a dissolution, winding up, liquidation, reorganization, assignment
for the benefit of creditors or marshalling of assets and liabilities of the
Company for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by sale, conveyance, transfer or lease such properties and assets substantially
as an entirety, as the case may be, shall, as a part of such sale,
consolidation, merger, conveyance, transfer or lease, comply with the conditions
set forth in Article Eight.
Section 1303. Prior Payment to Senior Indebtedness
Upon Acceleration of Securities.
In the event that any Securities of any series are declared
due and payable before their Stated Maturity, then and in such event the holders
of Senior Indebtedness shall be entitled to receive payment in full of all
amounts due or to become due on or in respect of all Senior Indebtedness, or
provision shall be made for such payment in cash, before the Holders of the
Securities of such series are entitled to receive any payment of the principal
of, premium, if any, or interest on the Securities of such series or on account
of the purchase or other acquisition of Securities of such series; provided,
however, that if, as specified as contemplated by Section 301, Article Twelve is
applicable to any series of Securities, nothing in this Section shall prevent
the satisfaction of any sinking fund payment in accordance with Article Twelve
by delivering and crediting pursuant to Section 1202 Securities of such series
which have been acquired (upon redemption or otherwise) prior to such
declaration of acceleration.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Security of any
series prohibited by the foregoing provisions of this Section, and if such fact
shall, at or prior to the time of such payment, have been made known to the
Trustee or, as the case may be, such Holder, then and
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in such event such payment shall be paid over and delivered forthwith to the
Company.
The provisions of this Section shall not apply to any payment
with respect to which Section 1302 would be applicable.
Section 1304. No Payment When Senior Indebtedness
Default.
(a) In the event and during the continuation of any default in
the payment of principal of (or premium, if any) or interest on any Senior
Indebtedness beyond any applicable grace period with respect thereto, or in the
event that any event of default with respect to any Senior Indebtedness shall
have occurred and be continuing permitting the holders of such Senior
Indebtedness (or a trustee on behalf of the holders thereof) to declare such
Senior Indebtedness due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such event of default
shall have been cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled, or (b) in the event any
judicial proceeding shall be pending with respect to any such default in
payment, or event of default, then no payment shall be made by the Company on
account of principal of (or premium, if any) or interest on the Securities of
any series or on account of the purchase or other acquisition of Securities of
any series; provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with Article Twelve by
delivering and crediting pursuant to Section 1202 Securities of such series
which have been acquired (upon redemption or otherwise) prior to such default in
payment or event of default.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Security of any
series prohibited by the foregoing provisions of this Section, and if such fact
shall, at or prior to the time of such payment, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such payment
shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment
with respect to which Section 1302 would be applicable.
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Section 1305. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this
Indenture or in any of the Securities of any series shall prevent (a) the
Company, at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshalling of assets and liabilities of the Company
referred to in Section 1302 or under the conditions described in Section 1303 or
1304, from making payments at any time of principal of (and premium, if any) or
interest on the Securities of any series, or (b) the application by the Trustee
of any money deposited with it hereunder to the payment of or on account of the
principal of (and premium, if any) or interest on the Securities of any series
or the retention of such payment by the Holder, if, at the time of such
application by the Trustee, it did not have actual knowledge that such payment
would have been prohibited by the provisions of this Article.
Section 1306. Subrogation to Rights of Holders
of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities of a series shall be subrogated (equally and ratably
with the holders of all indebtedness of the Company which by its express terms
is subordinated to indebtedness of the Company to substantially the same extent
as the Securities of such service are subordinated and is entitled to like
rights of subrogation) to the extent of the payments or distributions made to
the holders of such Senior Indebtedness pursuant to the provisions of this
Article to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Securities of such series shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities of a series or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the provisions of
this Article to the holders of Senior Indebtedness by Holders of the Securities
of a series or the Trustee, shall, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Securities of such
series, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
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Section 1307. Provisions Solely to Define
Relative Rights.
The provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders of the Securities of
a series on the one hand and the holders of Senior Indebtedness (and, in the
case of Section 1315, Entitled Persons in respect of Other Financial
Obligations) on the other hand. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities of any series is intended to or shall (a)
impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities of any series, the obligation of
the Company, which is absolute and unconditional (and which, subject to the
rights under this Article of the holders of Senior Indebtedness and the rights
under Section 1315 of Entitled Persons in respect of Other Financial
Obligations, is intended to rank equally with all other obligations of the
Company), to pay to the Holders of the Securities of a series the principal of
(and premium, if any) and interest on the Securities of such series as and when
the same shall become due and payable in accordance with their terms; or (b)
affect the relative rights against the Company of the Holders of the Securities
of a series and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security of any
series from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
of the holders of Senior Indebtedness, and under Section 1315 of Entitled
Persons in respect of Other Financial Obligations, to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
Section 1308. Trustee to Effectuate Subordination.
Each holder of a Security of any series by his acceptance
thereof authorizes and directs the Trustee on his behalf to take such action as
may be necessary or appropriate to effectuate the subordination and payment
provisions provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
Section 1309. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by
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any such holder, or by any non-compliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities of any series, without incurring responsibility to the Holders of the
Securities of any series and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of the
Securities to the holders of Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (iii) release any Person liable in any
manner for the collection of Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.
Section 1310. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment or
distribution to or by the Trustee in respect of the Securities of any series.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment or distribution to or
by the Trustee in respect of the Securities of a series, unless and until the
Trustee shall have received written notice thereof from the Company or a holder
of Senior Indebtedness or from any trustee therefor or from any Entitled Person
in respect of Other Financial Obligations; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 601, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section at least two Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal (and premium, if any) or interest on
any Security), then, anything herein contained to the contrary notwithstanding,
the
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Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within two
Business Days prior to such date.
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) or an Entitled Person in respect of Other Financial Obligations to
establish that such notice has been given by a holder of Senior Indebtedness (or
a trustee therefor) or an Entitled Person in respect of Other Financial
Obligations. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness or an Entitled Person in respect of Other Financial
Obligations to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
or Other Financial Obligations held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment or distribution to
such Person pending judicial determination as to the right of such Person to
receive such payment or distribution.
Section 1311. Reliance on Judicial Order or Certificate
of Liquidating Agent.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Section
601, and the Holders of the Securities of any series shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities of such series, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company and the Entitled Persons in
respect of Other Financial Obligations, the amount thereof or payable
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thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article.
Section 1312. Trustee Not Fiduciary for Holders
of Senior Indebtedness or Entitled Persons.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness or Entitled Persons in respect of Other
Financial Obligations and shall not be liable to any such holders or Entitled
Persons if it shall in good faith mistakenly pay over or distribute to Holders
of Securities of any series or to the Company or to any other Person cash,
property or securities to which any holders of Senior Indebtedness or Entitled
Persons in respect of Other Financial Obligations shall be entitled by virtue of
this Article or otherwise.
Section 1313. Rights of Trustee as Holder of
Senior Indebtedness or Entitled Person; Pres-
ervation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Indebtedness
which may at any time be held by it and with respect to any Other Financial
Obligations owed to the Trustee as an Entitled Person, to the same extent as
any other holder of Senior Indebtedness or Entitled Person in respect of Other
Financial Obligations, as the case may be, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder or Entitled Person.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607.
Section 1314. Article Applicable to
Paying Agents.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1313 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
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Section 1315. Payment of Proceeds in Certain Cases.
(a) If, after giving effect to the provisions of Section 1302
and Section 1306, any amount of cash, property or securities shall be available
for payment or distribution in respect of the Securities ("Excess Proceeds"),
and any Entitled Persons in respect of Other Financial Obligations shall not
have received payment in full of all amounts due or to become due on or in
respect of such Other Financial Obligations (and provision shall not have been
made for such payment in money or money's worth), then such Excess Proceeds
shall first be applied (ratably with any amount of cash, property or securities
available for payment or distribution in respect of any other indebtedness of
the Company that by its express terms provides for the payment over of amounts
corresponding to Excess Proceeds to Entitled Persons in respect of Other
Financial Obligations) to pay or provide for the payment of the Other Financial
Obligations remaining unpaid, to the extent necessary to pay all Other Financial
Obligations in full, after giving effect to any concurrent payment or
distribution to or for Entitled Persons in respect of Other Financial
Obligations. Any Excess Proceeds remaining after the payment (or provision for
payment) in full of all Other Financial Obligations shall be available for
payment or distribution in respect of the Securities.
(b) In the event that, notwithstanding the foregoing
provisions of subsection (a) of this Section, the Trustee or Holder of any
Security shall have received any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities,
before all Other Financial Obligations are paid in full or payment thereof duly
provided for, and if such fact shall, at or prior to the time of such payment or
distribution have been made known to the Trustee or, as the case may be, such
Holder, then and in such event, subject to any obligation that the Trustee or
such Holder may have pursuant to Section 1302, such payment or distribution
shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company for payment in accordance with
subsection (a).
(c) Subject to the payment in full of all Other Financial
Obligations, the Holders of the Securities shall be subrogated (equally and
ratably with the holders of all indebtedness of the Company that by its express
terms provides for the payment over of amounts corresponding to Excess Proceeds
to Entitled Persons in respect of Other Financial Obligations and is entitled to
like rights of
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subrogation) to the rights of the Entitled Persons in respect of Other Financial
Obligations to receive payments and distributions of cash, property and
securities applicable to the Other Financial Obligations until the principal of
and interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to Entitled Persons in respect of
Other Financial Obligations of any cash, property or securities to which
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Section, and no payments over pursuant to the provisions of
this Section to Entitled Persons in respect of Other Financial Obligations by
Holders of Securities or the Trustee, shall, as among the Company, its creditors
other than Entitled Persons in respect of Other Financial Obligations and the
Holders of Securities be deemed to be a payment or distribution by the Company
to or on account of the Other Financial Obligations.
(d) The provisions of subsections (a), (b) and (c) of this
Section are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the Entitled
Persons in respect of Other Financial Obligations, on the other hand, after
giving effect to the rights of the holders of Senior Indebtedness, as provided
in this Article. Nothing contained in subsections (a), (b) and (c) of this
Section is intended to or shall affect the relative rights against the Company
of the Holders of the Securities and (1) the holders of Senior Indebtedness or
(2) other creditors of the Company other than Entitled Persons in respect of
Other Financial Obligations.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
-----------------------------
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
BANPONCE CORPORATION
By /s/ David H. Chafey
------------------------------------------
David H. Chafey, Jr.
[SEAL] Senior Executive Vice President
By /s/ Jorge A. Junquera
------------------------------------------
Jorge A. Junquera
Senior Executive Vice President
Attest:
Brunilda Santos de Alvarez
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Melissa Weisman
-----------------------------------------
Melissa Weisman
Assistant Vice President
Affidavit No. 2706
Sworn and subscribed to before me by David H. Chafey, Jr., of
legal age, married and resident of San Juan, Puerto Rico as Senior Executive
Vice President of BanPonce Corporation and by Jorge A. Junquera, of legal age,
married and resident of the city of Guaynabo, Puerto Rico, as Senior Executive
Vice President of BanPonce Corporation, both of whom are personally known to me.
In San Juan, Puerto Rico this 1st day of December, 1995.
/s/ Brunilda Santos de Alvarez
------------------------------
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<PAGE> 96
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of November, 1995 before me personally came
Melissa G. Weisman, to me known, who, being by me duly sworn, did depose and say
that she is an Assistant Vice President of The First National Bank of Chicago,
one of the corporations described in and which executed the foregoing
instrument; that she knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that she signed her name
thereto by like authority.
/s/ Lisa A. Brack
------------------------------------
[SEAL]
Lisa A. Brack
Notary Public, State of New York
No. 01BR5029515
Qualified in New York County
Commission Expires June 20, 1996
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<PAGE> 1
EXHIBIT (4)(f)
================================================================================
BANPONCE FINANCIAL CORP.,
Issuer
and
BANPONCE CORPORATION,
Guarantor
TO
CITIBANK, N.A.,
Trustee
__________
INDENTURE
Dated as of October 1, 1991
__________
================================================================================
<PAGE> 2
Banponce Financial Corp.
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 608
610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . 701
702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . 101
1004
(b) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . 502
512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 104(c)
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . 107
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
-----------
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions: . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate; control . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . 2
Banco Popular . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request; Company Order . . . . . . . . . . . . . . . . . . 3
Controlled Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . 4
Material Banking Subsidiary . . . . . . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . 7
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Security Register and Security
Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . 7
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Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Subsidiary; voting stock . . . . . . . . . . . . . . . . . . . . . 8
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . 8
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . 8
Section 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . 9
Section 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . . . . 10
Section 105. Notices, Etc., to Trustee, Company
and the Guarantor . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . 13
Section 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . 14
Section 108. Effect of Headings and
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 14
Section 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . 14
Section 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 114. Appointment of Agent for Service . . . . . . . . . . . . . . . . . 15
ARTICLE TWO
-----------
SECURITY FORMS AND GUARANTEES
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 202. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . 17
Section 203. Form of Reverse of Security . . . . . . . . . . . . . . . . . . . . 19
Section 204. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 205. Form of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 206. Form of Legend for
Global Securities . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE THREE
-------------
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . 26
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 303. Execution, Authentication, Delivery
and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . 31
Section 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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Section 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . 37
Section 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . 38
Section 311. Guarantee of Debt Securities . . . . . . . . . . . . . . . . . . . 38
Section 312. Execution of Guarantees . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE FOUR
------------
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . 40
Section 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . 41
ARTICLE FIVE
------------
REMEDIES
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 502. Acceleration of Maturity; Rescission
and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . 46
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . 47
Section 505. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . . . . . . . . . . . . . . 47
Section 506. Application of Money Collected . . . . . . . . . . . . . . . . . . 48
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . 49
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . 50
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . 50
Section 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . 51
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . 51
Section 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . 51
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ARTICLE SIX
-----------
THE TRUSTEE
Section 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . 52
Section 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . 52
Section 604. Not Responsible for Recitals or
Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . 54
Section 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . 55
Section 608. Disqualification; Conflicting
Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 609. Corporate Trustee Required;
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 610. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 611. Acceptance of Appointment by Successor . . . . . . . . . . . . . . 58
Section 612. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . . . . . . . 59
Section 613. Preferential Collection of Claims
Against the Company or the Guarantor . . . . . . . . . . . . . . . 60
Section 614. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . 60
ARTICLE SEVEN
-------------
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company and the Guarantor to Furnish
Trustee Names and Addresses of Holders . . . . . . . . . . . . . . 62
Section 702. Preservation of Information;
Communications to Holders . . . . . . . . . . . . . . . . . . . . 63
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 704. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . 64
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ARTICLE EIGHT
-------------
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company and Guarantor May Consolidate,
Etc., Only on Certain Terms . . . . . . . . . . . . . . . . . . . 64
Section 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE NINE
------------
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 902. Supplemental Indentures with Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . 69
Section 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . 70
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . 70
Section 906. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE TEN
-----------
COVENANTS
Section 1001. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . 70
Section 1003. Money for Securities Payments to Be
Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 1004. Statement by Officers as to Default . . . . . . . . . . . . . . . . 72
Section 1005. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . 73
Section 1007. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . 73
Section 1008. Statement by Officers as to the
Default of the Guarantor . . . . . . . . . . . . . . . . . . . . . 74
Section 1009. Existence of the Guarantor . . . . . . . . . . . . . . . . . . . . 74
Section 1010. Limitation Upon Disposition of
Voting Stock of, and Merger and
Sale of Assets of, Banco Popular . . . . . . . . . . . . . . . . . 74
Section 1011. Limitation Upon Creation of Liens
on Voting Stock of Material
Banking Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 75
Section 1012. Payment of Additional Amounts . . . . . . . . . . . . . . . . . . . 76
Section 1013. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . 77
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ARTICLE ELEVEN
--------------
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . 77
Section 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . 77
Section 1103. Selection by Trustee of Securities to
Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . 78
Section 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . 79
Section 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . 79
Section 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . 80
ARTICLE TWELVE
--------------
SINKING FUNDS
Section 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . 80
Section 1202. Satisfaction of Sinking Fund Payments
with Securities . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 1203. Redemption of Securities for Sinking
Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
</TABLE>
<PAGE> 9
INDENTURE, dated as of October 1, 1991 among Banponce
Financial Corp., a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), having its principal
office at 521 Fellowship Road, Mt. Laurel, New Jersey 08054, Banponce
Corporation, a corporation duly organized and existing under the laws of the
Commonwealth of Puerto Rico (the "Guarantor"), having its principal offices at
209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918, and Citibank, N.A., a
national banking association, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY AND THE GUARANTOR
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
The Guarantor has duly authorized the execution and delivery
of this Indenture to provide for the issuance of Guarantees with respect to the
Securities.
All things necessary to make this Indenture a valid agreement
of the Company and the Guarantor, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
<PAGE> 10
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles in effect; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" has the meaning assigned thereto in
Section 1012.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Banco Popular" means Banco Popular de Puerto Rico and its
successors and assigns.
"Board of Directors" means either the board of directors of
the Company or the Guarantor, as the context requires, or any duly authorized
committee of that board.
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"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company or the Guarantor, as the
case may be, to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day", except as may otherwise be provided herein or
in any security, when used with respect to any Place of Payment or other
location, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Controlled Subsidiary" means any corporation more than 80
percent of the outstanding Voting Stock of which, except for directors'
qualifying shares, shall at the time be owned directly or indirectly by the
Guarantor.
"Corporate Trust Office" means the principal office of the
Trustee in the Borough of Manhattan, The City of New York, at which at any
particular time its corporate trust business shall be administered.
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in Section 307.
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"Depositary" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 301.
"Event of Default" has the meaning specified in Section 501.
"Global Security" means a Security bearing the legend
prescribed in Section 206 evidencing all or part of a series of Securities,
issued to the Depository for such series or its nominee, and registered in the
name of such Depository or nominee.
"Guarantees" means the guarantees of the Guarantor to be
endorsed on the Securities authenticated and delivered hereunder.
"Guarantor" means Banponce Corporation, a corporation
organized under the laws of the Commonwealth of Puerto Rico and its successors
and assigns.
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"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 pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an instalment of interest on such
Security.
"Material Banking Subsidiary" means any Controlled Subsidiary
of the Guarantor chartered as a banking corporation under United States
Federal, State or Puerto Rico law which is a significant subsidiary of the
Guarantor as defined in 1-02 of Regulation S-X of the Rules and
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Regulations of the Securities and Exchange Commission under the Securities Act
of 1933, as amended.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an instalment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, or the Guarantor, as the context requires,
and delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 1004 shall be the principal executive,
financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of or counsel for the Company or the Guarantor, as the case
may be, or other counsel who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company or the Guarantor) in trust or
set aside and segregated in trust by the Company (if the Company or
the Guarantor shall act as Paying Agent) for the Holders of such
Securities; provided that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or
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<PAGE> 14
provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 502, (ii) the principal amount of a
Security denominated in one or more foreign currencies or currency units shall
be the U.S. dollar equivalent, determined in the manner provided as
contemplated by Section 301 on the date of original issuance of such Security,
of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
and (iii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
which the Trustee knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or any premium or interest on any Securities on behalf of
the Company.
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<PAGE> 15
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of and any premium
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any instalment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such instalment of principal or interest is due and payable.
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<PAGE> 16
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or the Guarantor, as the context requires or by one or more other
Subsidiaries, or by the Company or the Guarantor, as the context requires and
one or more other Subsidiaries. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.
"Taxes" has the meaning specified in Section 1012.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Vice President", when used with respect to the Company, the
Guarantor or the Trustee, means any vice president, whether or not designated
by a number or a word or words added before or after the title "vice
president".
"Voting Stock" means, with respect to any Person, Capital
Stock (however designated) having general voting power for the election of a
majority of the members of the board of directors, managers or trustees of such
Person (irrespective of whether or not at the time Capital Stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company or the
Guarantor to the Trustee to take any action under any provision of this
Indenture, the Company or the Guarantor, as the case may be, shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
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<PAGE> 17
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company or the
Guarantor, as the case may be, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust Indenture Act and
any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or the
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or
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<PAGE> 18
in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or the
Guarantor, as the case may be, stating that the information with respect to
such factual matters is in the possession of the Company or the Guarantor, as
the case may be, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company and
the Guarantor. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Section 601) conclusive in favor
of the Trustee, the Company and the Guarantor, if made in the manner provided
in this Section.
Without limiting the generality of the foregoing, a Holder,
including a Depositary that is a Holder of a Global Security, may make, give or
take, by a proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted in this Indenture to be made, given or taken by Holders, and a
Depositary that is a Holder of a Global Security may provide its proxy or
proxies to the beneficial owners of interest in any such Global Security.
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<PAGE> 19
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) Except as provided in the next paragraph, the Company
may, in the circumstances permitted by the Trust Indenture Act, set any day as
the record date for the purpose of determining the Holders of Outstanding
Securities of any series entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote
on any action provided or permitted by this Indenture to be given or taken by
Holders of Registered Securities of such series. With regard to any record
date set pursuant to this paragraph, the Holders of Outstanding Securities of
the relevant series on such record date (or their duly appointed agents), and
only such Persons, shall be entitled to give or take the relevant action,
whether or not such Holders remain Holders after such record date. With regard
to any action that may be given or taken hereunder only by Holders of a
requisite principal amount of appointed agents, and for which a record date is
set pursuant to this paragraph, the Company may, at its option, set an
expiration date after which no such action purported to be given or taken by
any Holder shall be effective hereunder unless given or taken on or prior to
such expiration date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date (or their duly
appointed agents). On or prior to any expiration date set pursuant to this
paragraph, the Company may, on one or more occasions at its option, extend such
date to any later date. Nothing in this paragraph shall prevent any Holder (or
any duly appointed agent thereof) from giving or taking, after any expiration
date, any action identical to, or, at any time, contrary to or different from,
any action given or taken, or purported to have been given or taken, hereunder
by a Holder on or prior to such date, in which event the Company may set a
record date in respect thereof pursuant to this paragraph.
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<PAGE> 20
Notwithstanding the foregoing, upon receipt by the Trustee,
with respect to Securities of any Series, of (i) any Notice of Default pursuant
to Section 501; (ii) any declaration of acceleration, or any rescission and
annulment of any such declaration pursuant to Section 502; or (iii) any
direction given pursuant to Section 512 (any such notice, declaration,
rescission and annulment, or direction being referred to herein as a
"Direction"), a record date shall automatically and without any other action by
any Person be set for the purpose of determining the Holders of Outstanding
Securities of such series entitled to join in such Direction, which record date
shall be the close of business on the day the Trustee receives such Director.
The Holders of Outstanding Securities of such series on such record date (or
their duly appointed agents), and only such Persons, shall be entitled to join
in such Direction, whether or not such Holders remain Holders after such record
date; provided that, unless such Direction shall have become effective by
virtue of Holders of the requisite principal amount of Outstanding Securities
of such series on such record date (or their duly appointed agents) having
joined therein on or prior to the 90th day after such record date, such
direction shall automatically and without any action by any Person be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder (or
a duly appointed agent thereof) from giving, before or after the expiration of
such 90-day period, a direction contrary to or different from, or, after the
expiration of such period, identical to, from, or, after the expiration or such
period, identical to, a direction that has been canceled pursuant to the proviso
to the preceding sentence, in which event a new record date in respect thereof
shall be set pursuant to this paragraph.
Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security or
by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
(d) The ownership of Securities shall be proved by the
Security Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee, the
Company or the
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<PAGE> 21
Guarantor in reliance thereon, whether or not notation of such action is made
upon such Security.
Section 105. Notices, Etc., to Trustee, Company and the Guarantor.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or Guarantor
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at 120 Wall
Street, New York, New York 10043, Attention: Corporate Trust
Administration, or
(2) the Company or Guarantor by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first-class
postage prepaid, to the Company or Guarantor, as the case may be,
addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company or
Guarantor.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not
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<PAGE> 22
be a condition precedent to the validity of any action taken in reliance upon
such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
and the Guarantor shall bind their respective successors and assigns, whether
so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
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<PAGE> 23
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity, provided
that no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be.
Section 114. Appointment of Agent for Service.
The Guarantor hereby appoints the Senior Vice President of
Banco Popular at the office of Banco Popular located in the City of New York as
the Guarantor's authorized agent (the "Authorized Agent") upon whom service of
process may be served in any action arising out of or based on the Securities,
the Guarantees or this Indenture (including any action based on or arising out
of the United States federal securities laws) that may be instituted in New
York State or United States Federal Courts sitting in The City of New York, by
the Trustee or the Holder of any Security, and the Guarantor hereby expressly
accepts the jurisdiction of any such court in respect of any such action. Such
appointment shall be irrevocable unless and until the appointment of a
successor authorized agent for service of process, and such successor's
acceptance of such appointment, shall have occurred, and the Guarantor and such
Authorized Agent will take any and all actions, including the filing of any and
all documents and instruments, that may be necessary to continue such
appointment or appointments in full force and effect as aforesaid. Service of
process upon an Authorized Agent will be deemed, in every respect, effective
service of process upon the Guarantor. Notwithstanding the foregoing, any
action against the Guarantor arising out of or based on any Security, the
Guarantees or this Indenture may also be instituted by the
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<PAGE> 24
Holder of such Security in any court in the Commonwealth of Puerto Rico, and
the Guarantor hereby expressly accepts the jurisdiction of any such court in
respect of any such action.
ARTICLE TWO
Security Forms and Guarantees
Section 201. Forms Generally.
The Securities of each series shall be in substantially the
form set forth in this Article, or in such other form as shall be established
by or pursuant to a Board Resolution of the Company or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If the form of Securities
of any series is 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 Company Order contemplated by
Section 303 for the authentication and delivery of such Securities.
The Guarantees to be endorsed on the Securities of each series
shall be in substantially the form set forth in this Article, or in such other
form as shall be established by or pursuant to a Board Resolution of the
Guarantor or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. If the form of
the guarantees to be endorsed on the Securities of any series is established by
action taken pursuant to a Board Resolution of the Guarantor, a copy of an
appropriate record of such action shall be certified by the Secretary or an
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<PAGE> 25
Assistant Secretary of the Guarantor and delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and
the regulations thereunder.]
Banponce Financial Corp.
............................................
No. ......... $ ........
Banponce Financial Corp., a corporation duly organized and
existing under the laws of the state of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ...................
............................, or registered assigns, the principal sum of
..................................... Dollars on ..............................
........................... [if the Security is to bear interest prior to
Maturity, insert -- , and to pay interest thereon from ............. or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on ............ and ............ in each year,
commencing ........., at the rate of ....% per annum, until the principal hereof
is paid or made available for payment. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the ....... or .......
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed
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<PAGE> 26
by the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture].
[If the Security is not to bear interest prior to Maturity,
insert -- The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal of this Security
shall bear interest at the rate of ....% per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of ......% per annum (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such demand for payment to the date payment of
such interest has been made or duly provided for, and such interest shall also
be payable on demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert -- any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert -- ; provided, however, that at the option
of the Company payment of interest may be made by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register].
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be
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<PAGE> 27
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
Banponce Financial Corp.
By.....................
Attest:
...........................
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of October 1, 1991 (herein
called the "Indenture"), among the Company, Banponce Corporation, as Guarantor,
and, Citibank, N.A., as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof[, limited in
aggregate principal amount to $...........].
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, [if
applicable, insert -- (1) on ........... in any year commencing with the year
...... and ending with the year ...... through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount,
and (2)] at any time [on or after .........., 19..], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before
..............., __%, and if redeemed] during the 12-month period beginning
............. of the years indicated,
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<PAGE> 28
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
- ---- ----- ---- -----
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1) on
............ in any year commencing with the year .... and ending with the year
.... through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after ............], as a whole or in part, at the election of
the Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ............ of the years indicated,
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<PAGE> 29
<TABLE>
<CAPTION>
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ----------------- ----------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
............., redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than .....% per annum.]
[The sinking fund for this series provides for the redemption
on ............ in each year beginning with the year ....... and ending with
the year ...... of [not less than $.......... ("mandatory sinking fund") and
not more than] $......... aggregate principal amount of Securities of this
series. Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited
against subsequent [mandatory] sinking fund payments otherwise required to be
made [in the inverse order in which they become due].]
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[If the Security is subject to redemption, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.]
[If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, an amount of principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to -- insert formula for
determining the amount. Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on the Securities of this
series shall terminate.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the Securities at the time Outstanding of each
series to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company and the Guarantor with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security.
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<PAGE> 31
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registerable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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Section 204. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Citibank, N.A.,
As Trustee
By..............................
Authorized Signatory
Section 205. Form of Guarantee.
Banponce Corporation (the "Guarantor") hereby unconditionally
guarantees to the Holder of this Security duly authenticated and delivered by
the Trustee, the due and punctual payment of the principal, and premium, if
any, of (including any amount in respect of original issue discount), and
interest, if any (together with any additional amounts payable pursuant to the
terms of this Security), on this Security and the due and punctual payment of
the sinking fund payments, if any, and analogous obligations, if any, provided
for pursuant to the terms of this Security, when and as the same shall become
due and payable, whether at Stated Maturity or upon redemption, repayment or
upon declaration of acceleration or otherwise according to the terms of this
Security and of the Indenture. In case of default by the Company in the payment
of any such principal (including any amount in respect of original issue
discount), and any premium or interest (together with any Additional Amounts
payable pursuant to the terms of this Security), sinking fund payment, or
analogous obligation, the Guarantor agrees duly and punctually to pay the same
when and as the same shall become due and payable. The Guarantor hereby agrees
that its obligations hereunder shall be as principal and not merely as surety,
and shall be absolute and unconditional irrespective of any extension of the
time for payment of this Security, any modification of this Security, any
invalidity, irregularity or unenforceability of this Security or the Indenture,
any failure to enforce the same or any waiver, modification, consent or
indulgence granted to the Company with respect thereto by the holder of this
Security or the Trustee, or any other
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<PAGE> 33
circumstances which may otherwise constitute a legal or equitable discharge of
a surety or guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a demand or proceeding first
against the Company, protest or notice with respect to this Security or the
indebtedness evidenced thereby and all demands whatsoever, and covenants that
this guarantee will not be discharged as to this Security except by payment in
full of the principal of (including any amount payable in respect of original
issue discount), and any premium or interest (together with any Additional
Amounts payable pursuant to the terms of this Security), thereon.
The Guarantor irrevocably waives any and all rights to which
it may be entitled, by operation of law or otherwise, upon making any payment
hereunder (i) to be subrogated to the rights of a Holder against the Company
with respect to such payment or otherwise to be reimbursed, indemnified or
exonerated by the Company in respect thereof or (ii) to receive any payment, in
the nature of contribution or for any other reason, from any other obligor with
respect to such payment.
This guarantee shall not be valid or become obligatory for any
purpose with respect to this Security until the certificate of authentication
on this Security shall have been signed by the Trustee.
This guarantee is governed by and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, Banponce Corporation has caused this
Guarantee to be signed by facsimile by its duly authorized officers and has
caused a facsimile of its corporate seal to be affixed hereunto or imprinted
hereon.
BANPONCE CORPORATION
By _______________________
By _______________________
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<PAGE> 34
Section 206. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the
name of a Depositary or a nominee thereof. This Security may
not be transferred to, or registered or exchanged for
Securities registered in the name of, any Person other than
the Depositary or a nominee thereof and no such transfer may
be registered, except in the limited circumstances described
in the Indenture. Every Security authenticated and delivered
upon registration of transfer of, or in exchange for or in
lieu of, this Security shall be a Global Security subject to
the foregoing, except in such limited circumstances."
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established, with respect to the securities of any series, in or
pursuant to a Board Resolution of the Company and, subject to Section 303, set
forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the
issuance of Securities of such series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration
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<PAGE> 35
of transfer of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Section 304, 305, 306, 906 or 1107 and except
for any Securities which, pursuant to Section 303, are deemed never to
have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any interest
payable on any Interest Payment Date; and the basis upon which
interest shall be calculated, if other than a 360-day year of twelve
30-day months;
(6) the place or places where the principal of and any
premium and interest on Securities of the series shall be payable;
(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 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;
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<PAGE> 36
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(10) the currency, currencies or currency units in which
payment of the principal of and any premium and interest on any
Securities of the series shall be payable if other than the currency
of the United States of America and the manner of determining the
equivalent thereof in the currency of the United States of America for
purposes of the definition of "Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium
or interest on any Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies or currency
units other than that or those in which the Securities are stated to
be payable, the currency, currencies or currency units in which
payment of the principal of and any premium and interest on Securities
of such series as to which such election is made shall be payable, and
the periods within which and the terms and conditions upon which such
election is to be made;
(13) 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 502; and
(14) if and as applicable, that the Securities of the series
shall be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary or Depositaries
for such Global Security or Global Securities and any circumstances
other than those set forth in Section 305 in which any such Global
Security
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<PAGE> 37
may be transferred to, and registered and exchanged for Securities
registered in the name of, a Person other than the Depositary for such
Global Security or a nominee thereof and in which any such transfer
may be registered; and
(15) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as
permitted by Section 901(5)).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above and (subject to Section
303) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
Section 302. Denominations.
The Securities of each series shall be issuable in registered
form without coupons in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such provisions with
respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding
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<PAGE> 38
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Securities or did not hold such offices
at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any Series
executed by the Company, having endorsed thereon Guarantees duly executed by
the Guarantor, to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will
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<PAGE> 39
affect the Trustee's own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at
or prior to the time of authentication of each Security of such series if such
documents are delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities, having endorsed thereon
Guarantees duly executed by the Guarantor, which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of that series,
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<PAGE> 40
having endorsed thereon Guarantees duly executed by the Guarantor, to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series of like
tenor shall be exchangeable for definitive Securities of such series, having
endorsed thereon Guarantees duly executed by the Guarantor, upon surrender of
the temporary Securities of such series at the office or agency of the Company
in a Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any
series the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor one or more definitive Securities of the same series,
having endorsed thereon Guarantees duly executed by the Guarantor, of any
authorized denominations and of a like aggregate principal amount and tenor.
Until so exchanged the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and
in any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of
any series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, having endorsed thereon Guarantees duly executed by the
Guarantor, of any authorized denominations and of a like aggregate principal
amount and tenor and bearing a number not contemporaneously outstanding.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, having endorsed thereon
Guarantees duly executed by the Guarantor, of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the
Securities to be exchanged at such office or agency.
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<PAGE> 41
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities (having
Guarantees duly endorsed thereon) which the Holder making the exchange is
entitled to receive.
All Securities and the Guarantees endorsed thereon issued upon
any registration of transfer or exchange of Securities shall be the valid
obligations of the Company and the Guarantor, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities and the
Guarantees surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906 or 1107 not
involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
Notwithstanding the foregoing and except as otherwise
specified or contemplated by Section 301, no Global Security shall be
exchangeable pursuant to this Section 305 or Sections 304, 906 and 1107 for
Securities registered in the name of, and no transfer of a Global Security of
any series may be registered to, any Person other than the Depositary for such
Security or its nominee, unless (1) such Depositary (A) notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or (B) ceases to be a clearing agency
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<PAGE> 42
registered under the Securities Exchange Act of 1934, as amended, (2) the
Company executes and delivers to the Trustee a Company Order that such Global
Security shall be so exchangeable and the transfer thereof so registerable, or
(3) there shall have occurred and be continuing an Event of Default, or an
event which with notice or lapse of time or both would become an Event of
Default, with respect to the Securities evidenced by such Global Security.
Upon the occurrence in respect of any Global Security of any series of any one
or more of the conditions specified in clauses (1), (2) or (3) of the preceding
sentence or such other conditions as may be specified as contemplated by
Section 301 for such series, such Global Security may be exchanged for
Securities registered in the names of, and the transfer of such Global Security
may be registered to, such Persons, (including Persons other than the
Depository with respect to such series and its nominees) as such Depository
shall direct. Notwithstanding any other provision of this Indenture, any
Security authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, any Global Security shall also be a Global
Security and shall bear the legend specified in Section 206 except for any
Security authenticated and delivered in exchange for, or upon registration of
transfer of, a Global Security pursuant to the preceding sentence.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series (having Guarantees duly
endorsed thereon) and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them, the Guarantor and any agent of either of them harmless, then, in
the absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series (having Guarantees duly endorsed
thereon) and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
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<PAGE> 43
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series and the related Guarantees
issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual obligation of the
Company and the Guarantor, respectively, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.
Any interest on any Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons
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in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Security of such series and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest 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 be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to
each Holder of Securities of such series at his or her address as it
appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names
the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securi-
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<PAGE> 45
ties exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Guarantor, the Trustee and any agent of the Company,
the Guarantor or the Trustee may treat the Person in whose name such Security
is registered as the owner of such Security for the purpose of receiving
payment of principal of and any premium and (subject to Section 307) any
interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company or the
Guarantor may have acquired in any manner whatsoever, and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for cancellation
any Securities previously authenticated hereunder which the Company has not
issued and sold, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall
be destroyed and the Trustee shall, upon request from the Company, deliver a
certificate of destruction to the Company.
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Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301
for Securities of any series, interest on the Securities of each series shall
be computed on the basis of a 360-day year of twelve 30-day months.
Section 311. Guarantee of Debt Securities.
The Guarantor hereby unconditionally guarantees to each holder
of a Security of each series authenticated and delivered by the Trustee, the
due and punctual payment of the principal of (including any amount in respect
of original issue discount), and any premium and interest (together with any
Additional Amounts payable pursuant to the terms of such Security), on such
Security and the due and punctual payment of the sinking fund payments, if any,
and analogous obligations, if any, provided for pursuant to the terms of such
Security, when and as the same shall become due and payable, whether at Stated
Maturity or upon redemption or upon declaration of acceleration or otherwise
according to the terms of such Security and of this Indenture. In case of
default by the Company in the payment of any such principal (including any
amount in respect of original issue discount), interest (together with any
Additional Amounts payable pursuant to the terms of such Security), sinking
fund payment, or analogous obligation, the Guarantor agrees duly and punctually
to pay the same. The Guarantor hereby agrees that its obligations hereunder
shall rank pari passu with all other unsecured and unsubordinated obligations
of the Guarantor, shall be as principal and not merely as surety, and shall be
absolute and unconditional irrespective of any extension of the time for
payment of any such Security, any modification of any such Security, any
invalidity, irregularity or unenforceability of any such Security or this
Indenture, any failure to enforce the same or any waiver, modification, consent
or indulgence granted to the Company with respect thereto by the Holder of such
Security or the Trustee, or any other circumstances which may otherwise
constitute a legal or equitable discharge of a surety or guarantor. The
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Company, any
right to require a demand or proceeding first against the Company, protest or
notice with respect to any such Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that this guarantee will not be
discharged as to any such Security except by payment in full of the principal
of (including any amount payable in respect of original issue discount), and
any premium and interest (together with any Additional
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Amounts payable pursuant to the terms of such Security), thereon.
The Guarantor irrevocably waives any and all rights to which
it may be entitled, by operation of law or otherwise, upon making any payment
hereunder (i) to be subrogated to the rights of a Holder against the Company
with respect to such payment or otherwise to be reimbursed, indemnified or
exonerated by the Company in respect thereof or (ii) to receive any payment, in
the nature of contribution or for any other reason, from any other obligor with
respect to such payment.
The guarantee set forth in this Section shall not be valid or
become obligatory for any purpose with respect to a Security of any series
until the certificate of authentication on such Security shall have been signed
by the Trustee.
Section 312. Execution of Guarantees.
To evidence its guarantee specified in Section 311 to the
Holders of Securities of any series, the Guarantor hereby agrees to execute the
Guarantees in substantially the form above recited to be endorsed on each
Security of such series authenticated and delivered by the Trustee. Such
Guarantees shall be executed on behalf of the Guarantor by both (a) its
Chairman or its Vice Chairman or its President or any Vice President and (b)
its Treasurer or any Assistant Treasurer or its Secretary or any Assistant
Secretary, under its corporate seal which may, but need not, be attested, prior
to the authentication of the Security on which it is endorsed, and the delivery
of such Security by the Trustee, after the authentication thereof hereunder,
shall constitute due delivery of such Guarantees on behalf of the Guarantor.
The seal of the Guarantor may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Guarantees.
Typographical and other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or enforceability of
any Guarantee that has been duly authenticated and delivered by the Trustee.
Such signatures may be the manual or facsimile signatures of
such officers and may be imprinted or otherwise reproduced on the Guarantees.
In case any officer of the Guarantor who shall have signed any of the
Guarantees shall cease to be an officer before the Security on which such
Guarantees are endorsed shall have been authenticated and delivered by the
Trustee or disposed of by the Company, such Security nevertheless may be
authenticated and
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delivered or disposed of as though the person who signed such Guarantees had
not ceased to be such officer, and any Guarantees may be signed on behalf of
the Guarantor by such persons as, at the actual date of the execution of such
Guarantees, shall be the proper officers of the Guarantor, although at the date
of such Security or of the execution of this Indenture any such person was not
such an officer.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer
or exchange of Securities herein expressly provided for), and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company or the
Guarantor and thereafter repaid to the Company or the Guarantor or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the
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giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company,
and the Company or the Guarantor, as the case may be, in the case of
(i), (ii) or (iii) above, has deposited or caused to be deposited with
the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation,
for principal and any premium and interest to the date of such deposit
(in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Company or the Guarantor, as the case may be, has
paid or caused to be paid all other sums payable hereunder by the
Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company and the Guarantor to the Trustee
under Section 607, the obligations of the Trustee to any Authenticating Agent
under Section 614 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
Section 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and Guarantees and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
any premium and interest for whose payment such money has been deposited with
the Trustee.
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ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuance of
such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium,
if any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company or the Guarantor in this Indenture, the
Securities of such series or the Guarantees endorsed thereon (other
than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which
has expressly been included in this Indenture solely for the benefit
of series of Securities other than that series), and continuance of
such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company and the
Guarantor by the Trustee or to the Company, the Guarantor and the
Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
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(5) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed (including a default with
respect to Securities of any series other than that series) or under
any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company, any Material Banking Subsidiary or the
Guarantor in excess of $10,000,000, whether such indebtedness now
exists or shall hereafter be created, which default shall have
resulted in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise have become due
and payable, without such acceleration having been rescinded or
annulled within a period of 30 days after there shall have been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series a
written notice specifying such default and requiring the Company, the
Guarantor or the Material Banking Subsidiary, as the case may be, to
cause such acceleration to be rescinded or annulled and stating that
such notice is a "Notice of Default" hereunder; provided, however,
that if such default shall be remedied or cured by the Company, the
Material Banking Subsidiary or the Guarantor or waived by the holders
of such indebtedness, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without any action on the part of the Trustee or any
of the Holders; or
(6) the entry by a court or, in the case of a Material Banking
Subsidiary, a governmental authority having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
or any Material Banking Subsidiary in an involuntary case or
proceeding under any applicable Federal, State or Commonwealth of
Puerto Rico bankruptcy, insolvency, reorganization or other similar
law or in respect of the Guarantor in
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any involuntary case or proceeding under any applicable Federal or
Commonwealth of Puerto Rico bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company, any
Material Banking Subsidiary or the Guarantor a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
or any Material Banking Subsidiary, under any applicable Federal,
State or Commonwealth of Puerto Rico law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company, any Material Banking Subsidiary or the
Guarantor or of any substantial part of their respective property, or
ordering the winding up or liquidation of their respective affairs,
and the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 60
consecutive days; or
(7) the commencement by the Company, any Material Banking
Subsidiary or the Guarantor of a voluntary case or proceeding under
any applicable Federal, State, or Commonwealth of Puerto Rico
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of the Company, any Material Banking Subsidiary or the
Guarantor in an involuntary case or proceeding under any applicable
Federal, State, or Commonwealth of Puerto Rico bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or
relief under any applicable Federal, State, or Commonwealth of Puerto
Rico law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or the Guarantor or of any substantial part of their
respective property, or
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the making by either of them of an assignment for the benefit of
creditors, or the admission by either of them in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Company, any Material Banking Subsidiary or
the Guarantor in furtherance of any such action; or
(8) any other Event of Default provided with respect to
Securities of that series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company and the Guarantor
(and to the Trustee if given by Holders), and upon any such declaration such
principal amount (or specified amount) shall become immediately due and
payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company, the Guarantor and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the Company or the Guarantor has paid or deposited with
the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration
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and any interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company and the Guarantor covenant that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company and the Guarantor will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal and any premium and interest and, to
the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal and premium and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and
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expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company or
the Guarantor (or any other obligor upon the Securities), its property or its
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities or the Guarantees may be prosecuted and enforced by the Trustee
without the possession of any
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of the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or any premium or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and any
premium and interest, respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceed-
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ings in respect of such Event of Default in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) any interest on such Security on the Stated Maturity
or Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the
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Company, the Guarantor, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
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Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all
the Securities of such series waive any past default hereunder with respect to
such series and its consequences, except a default
(1) in the payment of the principal of or any premium or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the
Company.
Section 515. Waiver of Stay or Extension Laws.
The Company and the Guarantor covenant (to the extent that
they may lawfully do so) that they will not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
and the Guarantor (to the extent that they may lawfully do so) hereby expressly
waive all benefit or advantage of any such law and covenants that they will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and
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permit the execution of every such power as though no such law had been
enacted.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided by the Trust Indenture
Act; provided, however, that in the case of any default of the character
specified in Section 501(4) with respect to Securities of such series, no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document
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believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company or the Guarantor
mentioned herein shall be sufficiently evidenced by a Company Request
or Company or Guarantor Order and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(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, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit,
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and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company and the Guarantor, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee or any Authenticating Agent shall not be accountable
for the use or application by the Company of Securities or the proceeds
thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company or the Guarantor, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 608 and 613, may otherwise deal with the Company or
the Guarantor with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
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Section 607. Compensation and Reimbursement.
Each of the Company and the Guarantor agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such
and has a combined capital and surplus of at least $50,000,000 and its
Corporate Trust Office in the Borough of Manhattan, The City of New York. If
such Person publishes reports of condition
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at least annually, pursuant to law or to the requirements of said supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to
the Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company and the Guarantor.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company and the Guarantor or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
and the Guarantor or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or
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insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company and the Guarantor by a Board Resolution
may remove the Trustee with respect to all securities, or (ii) subject to
Section 514, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
with respect to all Securities and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities of one or more series, the Company
and the Guarantor, by a Board Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series delivered to
the Company, the Guarantor and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company and the
Guarantor. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company and the Guarantor or the
Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
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(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of any
series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust
Office.
Section 611. Acceptance of Appointment by Successor.
(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 the
Guarantor 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, the Guarantor 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 Guarantor, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to
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provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company, the Guarantor, or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
and the Guarantor 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) and (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.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so
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authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
Section 613. Preferential Collection of Claims Against the Company or the
Guarantor.
If and when the Trustee shall be or become a creditor of the
Company or the Guarantor (or any other obligor upon the Securities), the
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of claims against the Company or the Guarantor (or any such
other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
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Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company and the Guarantor.
The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company
and the Guarantor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall mail written notice of such appointment by first-class mail,
postage prepaid, to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, as their names and addresses appear
in the Security Register. Any successor Authenticating Agent upon acceptance
of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally
named as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the
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Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Citibank, N.A.,
As Trustee
By.........................,
As Authenticating Agent
By.........................
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company and the Guarantor to Furnish Trustee Names and
Addresses of Holders.
The Company and the Guarantor will furnish or cause to be
furnished to the Trustee
(a) semi-annually, not later than June 30 and December 30 in
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of the preceding June 15
or December 15, as the case may be, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company or the
Guarantor of any such request, a list of similar form and content as
of a date not more than 15 days prior to the time such list is
furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
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Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the Trustee, shall
be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company, the Guarantor and the Trustee that neither the
Company, the Guarantor nor the Trustee nor any agent of either of them shall be
held accountable by reason of any disclosure of information as to names and
addresses of Holders made pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.
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Section 704. Reports by Company and Guarantor.
The Company and Guarantor shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company and Guarantor May Consolidate, Etc., Only Certain
Terms.
Neither the Guarantor nor the Company shall consolidate with
or merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and neither the Guarantor
nor the Company shall permit any Person to consolidate with or merge into the
Guarantor or the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Guarantor or the Company, unless:
(1) in case the Guarantor or the Company shall consolidate
with or merge into another Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, the
Person formed by such consolidation or into which the Guarantor or the
Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Guarantor
or the Company substantially as an entirety shall by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, (i) in the case of the Guarantor,
expressly guarantee, or (ii) in the case of the Company, expressly
assume the due and punctual payment of the principal of and any
premium and interest on all the Securities and the performance or
observance of every covenant of this Indenture on the
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part of the Guarantor or the Company, as the case may be, to be
performed or observed;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Guarantor
or the Company, as the case may be, or a Subsidiary as a result of
such transaction as having been incurred by the Guarantor or the
Company, as the case may be, or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing;
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the
Guarantor or the Company, as the case may be, would become subject to
a mortgage, pledge, lien, security interest or other encumbrance which
would not be permitted by this Indenture, the Guarantor or the
Company, as the case may be, or such successor Person, as the case may
be, shall take such steps as shall be necessary effectively to secure
the Securities equally and ratably with (or prior to) all indebtedness
secured thereby; and
(4) the Guarantor or the Company, as the case may be, has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
Section 802. Successor Substituted.
Upon any consolidation of the Guarantor or the Company, as the
case may be, with, or merger of the Guarantor or the Company, as the case may
be, into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Guarantor or the Company, as the case may be,
substantially as an entirety in accordance with Section 801, the successor
Person formed by such
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consolidation or into which the Guarantor or the Company, as the case may be,
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Guarantor or the Company, as the case may be, under this Indenture with the
same effect as if such successor Person had been named as the Guarantor or the
Company, as the case may be, herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company and the
Guarantor, when authorized by Board Resolutions, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company or the Guarantor and the assumption by any such successor of
the covenants of the Company or the Guarantor herein, in the
Securities and in the Guarantees; or
(2) to add to the covenants of the Company or the Guarantor
for the benefit of the Holders of all or any series of Securities (and
if such covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
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the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or
to permit or facilitate the issuance of Securities in uncertificated
form; or
(5) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities,
provided that any such addition, change or elimination (i) shall
neither (A) apply to any Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit
of such provision nor (B) modify the rights of the Holder of any such
Security with respect to such provision or (ii) shall become effective
only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities or
Guarantees of any series as permitted by Sections 201, 205, 301 and
312; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action
pursuant to this clause (9) shall not adversely affect the interests
of the Holders of Securities of any series in any material respect.
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Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company, the
Guarantor and the Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of Securities of such series under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change the Stated Maturity of the principal of, or any
instalment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of
the principal of an Original Issue Discount Security that would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1013, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived
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without the consent of the Holder of each Outstanding Security
affected thereby, provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this
Section and Section 1013, or the deletion of this proviso, in
accordance with the requirements of Sections 611(b) and 901(8), or
(4) modify or effect in any manner adverse to the Holders
the terms and conditions of the obligations of the Guarantor in
respect of the due and punctual payments of principal of, or premium,
if any, interest or sinking fund requirements, if any, on, or
Additional Amounts in respect of, the Securities.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
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Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with
the terms of the Securities and this Indenture.
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Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company or the Guarantor shall at any time act as its
own Paying Agent with respect to any series of Securities, it will, on or
before each due date of the principal of or any premium or interest on any of
the Securities of that series, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal and any
premium and interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, prior to each due date of the principal of
or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provi-
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sions of this Section, that such Paying Agent will (i) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment in respect of
the Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and
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observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
Section 1005. Existence.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.
Section 1006. Maintenance of Properties.
The Company and the Guarantor will cause all properties used
or useful in the conduct of its respective business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company or the Guarantor, as the case
may be, may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company or the
Guarantor from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company or the
Guarantor, as the case may be, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
Section 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or
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discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
Section 1008. Statement by Officers as to Default of the Guarantor.
The Guarantor will deliver to the Trustee, within 120 days
after the end of each fiscal year of the Guarantor ending after the date
hereof, an Officers' Certificate, stating whether or not to the best of
knowledge of the signers thereof the Guarantor is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period or grace or requirement of notice provided
hereunder) and, if the Guarantor shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
Section 1009. Existence of the Guarantor.
Subject to Article Eight, the Guarantor will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Guarantor shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Guarantor
and that the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 1010. Limitation Upon Disposition of Voting Stock of, and Merger and
Sale of Assets of, Banco Popular.
Subject to the provisions of Article Eight, the Guarantor will
not
(1) sell, assign, transfer or otherwise dispose of any
shares of Voting Stock of Banco Popular or permit Banco Popular to
issue, sell, assign, transfer or otherwise dispose of any shares of,
or securities convertible into or options, warrants or rights to
subscribe for, its Voting Stock, unless, after giving effect to any
such transaction, Banco Popular remains a Controlled Subsidiary; or
(2) permit Banco Popular to
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(a) merge or consolidate, unless the surviving
corporation is a Controlled Subsidiary; or
(b) convey, transfer, lease or sell its
properties and assets substantially as an entirety to any
Person, except to a Controlled Subsidiary.
Section 1011. Limitation Upon Creation of Liens on Voting Stock of Material
Banking Subsidiaries.
The Guarantor will not, and it will not permit any Material
Banking Subsidiary at any time directly or indirectly to create, assume, incur
or permit to exist any indebtedness for borrowed money secured by a pledge,
lien or other encumbrance (any pledge, lien or other encumbrance being
hereinafter in this Section referred to as a "lien") on the Voting Stock of any
Material Banking Subsidiary without making effective provisions whereby the
Outstanding Guarantees (and, if the Guarantor so elects, any other indebtedness
ranking on a parity with the Guarantees) shall be secured equally and ratably
with such secured indebtedness so long as such other indebtedness shall be so
secured, provided, however, that the foregoing covenant shall not be applicable
to liens for taxes or assessments or governmental charges or levies not then
due and delinquent of the validity of which is being contested in good faith or
which are less than $10,000,000 in amount, liens created by or resulting from
any litigation or legal proceeding which is currently being contested in good
faith by appropriate proceedings or which involve claims of less than
$10,000,000, or deposits to secure (or in lieu of) surety, stay, appeal or
customs bonds.
If the Guarantor shall hereafter be required to secure the
Guarantees equally and ratably with any other indebtedness pursuant to this
Section, (i) the Guarantor will promptly deliver to the Trustee an Officers'
Certificate stating that the foregoing covenant has been complied with, and an
Opinion of Counsel stating that in the opinion of such counsel the foregoing
covenant has been complied with and that any instruments executed by the
Guarantor or any Subsidiary in the performance of the foregoing covenant comply
with the requirements of the foregoing covenant and (ii) the Trustee is hereby
authorized to enter into an indenture or agreement supplemental hereto and to
take such action, if any, as it may deem advisable to enable it to force the
rights of the holders of the Guarantees so secured.
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Section 1012. Payment of Additional Amounts.
All payments of principal, premium, if any, and interest in
respect of the Guarantees shall be made without set-off, counterclaim, fees,
liabilities or similar deductions, and free and clear of, and without deduction
or withholding for, taxes, levies, imposts, duties, charges or fees of
whatsoever nature now or hereafter imposed, levied, collected, deducted,
withheld or assessed by or on behalf of the Commonwealth of Puerto Rico or any
political subdivision or taxing authority thereof or therein ("Taxes"). If the
Guarantor or any agent thereof is required by law or regulation to make any
deduction or withholding for or on account of Taxes, the Guarantor shall pay
such additional amounts ("Additional Amounts") as shall be necessary in order
that the net amounts received by the Holders of the Securities or any series or
the holders or beneficial owners of any interest therein or rights in respect
thereof after such deduction or withholding shall equal the amount that would
have been receivable thereunder in the absence of such deduction or
withholding, except that no such Additional Amounts shall be payable:
(a) to any Holder of a Security or any interest therein
or rights in respect thereof where such deduction or withholding is
required by reason of such Holder having some connection with the
Commonwealth of Puerto Rico or any political subdivision or taxing
authority thereof or therein other than the mere holding of and
payment in respect of such Security;
(b) in respect of any deduction or withholding that would
not have been required but for the presentation by the Holder of a
Security for payment on a date more than 30 days after the Date of
Maturity or the date on which payment thereof is duly provided for,
whichever occurs later; or
(c) in respect of any deduction or withholding that would
not have been required but for the failure to comply with any
certification, identification or other reporting requirements
concerning the nationality, residence, identity or connection with the
Commonwealth of Puerto Rico, or any political subdivision of taxing
authority thereof or therein, of the Holder of a Security or any
interest therein or rights in respect thereof, if compliance is
required by the Commonwealth of Puerto Rico, or any political
subdivision or taxing authority thereof or therein, as a precondition
to exemption from such deduction or withholding.
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Any reference in the Indenture to principal or interest shall
be deemed also to refer to any Additional Amounts that may be payable under
this Section 1011.
Section 1013. Waiver of Certain Covenants.
The Company and the Guarantor may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
1006, 1007 and 1009 to 1011, inclusive, with respect to the Securities of any
series if before the time for such compliance the Holders of at least 66-2/3%
in principal amount of the Outstanding Securities of such series shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the Guarantor and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at
the election of the Company of less than all the Securities of any series, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date, of the principal amount of Securities of
such series to be redeemed and, if applicable, of the tenor of the Securities
to be redeemed. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall
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furnish the Trustee with an Officers' Certificate evidencing compliance with
such restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series and of a specified tenor
are to be redeemed), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral multiple
thereof) of the principal amount of Securities of such series of a denomination
larger than the minimum authorized denomination for Securities of that series.
If less than all of the Securities of such series and of a specified tenor are
to be redeemed, the particular Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, unless a shorter period is specified in the Securities to be
redeemed, to each Holder of Securities to be redeemed, at his address appearing
in the Security Register.
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All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption of any Securities, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for
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redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same
series and of like tenor with the Guarantee or Guarantee endorsed therein, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 301 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
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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 1202. 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 1202. Satisfaction of Sinking Fund Payments
with Securities.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed and so delivered 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 1203. 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 that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 1202 and will also 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
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
_____________________________
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This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
BANPONCE FINANCIAL CORP.
By /s/ David H. Chafey, Jr.
--------------------------------
David H. Chafey, Jr.
Executive Vice President
Attest:
/s/ Ernesto N. Mayoral
- ------------------------
Ernesto N. Mayoral, Esq
Secretary
BANPONCE CORPORATION
By /s/ David H. Chafey, Jr.
--------------------------------
David H. Chafey, Jr.
Executive Vice President
Attest:
/s/ Ernesto N. Mayoral
- ------------------------
Ernesto N. Mayoral, Esq.
Assistant Secretary
CITIBANK, N.A.
By /s/ Robert Eddy
--------------------------------
Robert Eddy
Assistant Vice President
Attest:
/s/ Laura Pushkarsh
- -----------------------
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<PAGE> 91
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 11th day of October, 1991, before me personally came
David H. Chafey, Jr., to me known, who, being by me duly sworn, did depose and
say that he is Executive Vice President of BanPonce Financial Corp., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
/s/ James Gallagher
-------------------------------------
JAMES GALLAGHER
Notary Public, State of New York
Qualified in Westchester County
Westchester County Clerk's No. 4949761
Certificate Filed in New York County
Commission Expires April 17, 1993
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 11th day of October, 1991, before me personally came
David H. Chafey, Jr., to me known, who, being by me duly sworn, did depose and
say that he is Executive Vice President of BanPonce Corporation, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
/s/ James Gallagher
-------------------------------------
JAMES GALLAGHER
Notary Public, State of New York
Qualified in Westchester County
Westchester County Clerk's No. 4949761
Certificate Filed in New York County
Commission Expires April 17, 1993
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<PAGE> 92
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 11th day of October, 1991, before me personally came
Robert Eaddy, to me known, who, being by me duly sworn, did depose and say that
he is Corporate Trust Officer of Citibank, N.A., one of the corporations
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation, and that he signed his name thereto by like authority.
/s/ James Gallagher
--------------------------------------
JAMES GALLAGHER
Notary Public, State of New York
Qualified in Westchester County
Westchester County Clerk's No. 4949761
Certificate Filed in New York County
Commission Expires April 17, 1993
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<PAGE> 93
BANPONCE FINANCIAL CORP.,
Issuer
and
BANPONCE CORPORATION,
Guarantor
TO
CITIBANK, N.A.,
Trustee
___________
FIRST SUPPLEMENTAL INDENTURE
Dated as of February 28, 1995
To Indenture dated as of October 1, 1991
___________
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FIRST SUPPLEMENTAL INDENTURE, dated as of February 28, 1995 between
BanPonce Financial Corp., a Delaware corporation, BanPonce Corporation, a
Puerto Rico corporation (the "Guarantor"), and Citibank, N.A., a national
banking association (the "Company"), as Trustee (the "Trustee").
RECITALS
The Company, the Guarantor and the Trustee, as Trustee, are parties
to an Indenture, dated as of October 1, 1991 (the "Original Indenture"), which
provides for the issuance from time to time of unsecured debt securities of the
Company, unconditionally guaranteed as to the payment of principal, premium (if
any) and interest by the Guarantor.
Section 901(9) of the Original Indenture provides that without the
consent of any Holders, the Company and the Guarantor, when authorized by Board
Resolutions, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental to the Original Indenture, in form
satisfactory to the Trustee, to cure any ambiguity, to correct or supplement
any provision in the Original Indenture which may be inconsistent with any
other provision in the Original Indenture, or to make any other provisions with
respect to matters or questions arising under the Original Indenture, provided
that such action shall not adversely affect the interests of the Holders of
Securities of any series in any material respect.
The Company and the Guarantor believe that Section 609 of the
Original Indenture should be amended to substitute the word "a" for the word
"its" in the fourth line of such Section, that paragraph (1) of Section 105 of
the Original Indenture should be amended to provide that notices to the Trustee
shall be addressed to the Trustee at the Corporate Trust Office, and that such
amendments will not adversely affect the Holders of Securities in any material
respect.
The respective Boards of Directors of the Company and the Guarantor
have duly authorized the execution and delivery by the Company and the
Guarantor, respectively, of this First Supplemental Indenture.
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NOW, THEREFORE, THIS
FIRST SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company, the Guarantor and the Trustee mutually agree as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
Except as otherwise expressly provided or unless the context
otherwise requires, all terms used in this First Supplemental Indenture which
are defined in the Original Indenture shall have the meanings ascribed to them
by the Original Indenture.
Section 102. Effect of Headings.
The Article and Section headings herein are for convenience only
and shall not affect the construction hereof.
Section 103. Successors and Assigns.
All covenants and agreements in this First Supplemental
Indenture by the parties hereto shall bind their respective successors and
assigns, whether so expressed or not.
Section 104. Separability Clause.
In case any provision in this First Supplemental Indenture shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 105. Benefits of Instrument.
Nothing in this First Supplemental Indenture, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this First Supplemental Indenture or the Original Indenture.
-3-
<PAGE> 96
Section 106. Governing Law.
This First Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
ARTICLE TWO
Amendment of the Original Indenture
Section 201. Amendment of Section 609 of the Original Indenture.
Section 609 of the Original Indenture is hereby amended and
restated in its entirety as follows:
"There shall at all times be a Trustee
hereunder which shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such
and has a combined capital and surplus of at least
$50,000,000 and a Corporate Trust Office in the
Borough of Manhattan, The City of New York. If such
Person publishes reports of condition at least
annually, pursuant to law or to the requirements of
said supervising or examining authority, then for
the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its
most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it
shall resign immediately in the manner and with the
effect hereinafter specified in this Article."
Section 202. Amendment of Section 105 of the Original Indenture.
Paragraph (1) of Section 105 of the Original Indenture is hereby
amended and restated in its entirety as follows:
"(1) the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the
Trustee at its Corporate Trust Office, or".
-4-
<PAGE> 97
Section 203. Reaffirmation of Original Indenture.
Each of the Company, the Guarantor and the Trustee hereby
confirms, reaffirms and agrees to the Original Indenture in every particular,
as amended by this First Supplemental Indenture.
Section 204. Trust Indenture Act.
If any provision of this First Supplemental Indenture limits,
qualifies or conflicts with a provision of the Trust Indenture Act of 1939, as
it may be amended from time to time, that is required under such Act to be a
part of and govern this First Supplemental Indenture, the latter provision
shall control. If any provision hereof modifies or excludes any provision of
such Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this First Supplemental Indenture as so modified or
excluded, as the case may be.
* * *
This First Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
-5-
<PAGE> 98
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and year first
above written.
BANPONCE FINANCIAL CORP.
By: /s/ David H. Chafey, Jr.
David H. Chafey, Jr.
Executive Vice President
By: /s/ Jose Luis Lopez Calderon
Jose Luis Lopez Calderon
Senior Vice President
Attest:
/s/ Brunilda Santos de Alvarez
Brunilda Santos de Alvarez
Assistant Secretary
Affidavit No. 177
Subscribed to before me by David H. Chafey, Jr. of legal age,
married and resident of San Juan, Puerto Rico, as Executive Vice President of
BanPonce Financial Corp. and Jose Luis Lopez Calderon, of legal age, married
and resident of San Juan, Puerto Rico as Senior Vice President of BanPonce
Financial Corp. and who are personally known to me, in San Juan, Puerto Rico,
this 28 day of February, 1995.
[SEAL] /s/ Estela Martinez de Miranda
Notary Public
-6-
<PAGE> 99
BANPONCE CORPORATION
By: /s/ David H. Chafey, Jr.
David H. Chafey, Jr.
Executive Vice President
By: /s/ Jose Luis Lopez Calderon
Jose Luis Lopez Calderon
Senior Vice President
Attest:
/s/ Brunilda Santos de Alvarez
Brunilda Santos de Alvarez
Assistant Secretary
Affidavit No. 176
Subscribed to before me by David H. Chafey, Jr. of legal age,
married and resident of San Juan, Puerto Rico, as Executive Vice President of
BanPonce Corporation and Jose Luis Lopez Calderon, of legal age, married and
resident of San Juan, Puerto Rico as Senior Vice President of BanPonce
Corporation and who are personally known to me, in San Juan, Puerto Rico, this
28 day of February, 1995.
[SEAL] /s/ Estela Martinez de Miranda
Notary Public
-7-
<PAGE> 100
CITIBANK, N.A.
By: /s/ F. Mills
Name: F. Mills
Title: Senior Trust Officer
Attest:
/s/ Louis A. Piscitelli
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 1st day of MAR, 1995, before me personally came F. Mills, to
me known, who, being by me duly sworn, did depose and say that she is a
Corporate Trust Officer of Citibank, N.A., the national banking association
described in and which executed the foregoing instrument; that she knows
the seal of said national banking association; that the seal affixed to said
instrument is such seal; that it was so affixed by authority of the Board of
Directors of said national banking association, and that he signed his name
thereto by like authority.
[SEAL] /s/ Peter M. Pavlyshin
-8-
<PAGE> 101
POPULAR NORTH AMERICA, INC.
Issuer
and
POPULAR, INC.,
Guarantor
TO
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
-----------
SECOND SUPPLEMENTAL INDENTURE
Dated as of May 8, 1997
To Indenture dated as of October 1, 1991
-----------
<PAGE> 102
SECOND SUPPLEMENTAL INDENTURE, dated as of May 8, 1997 among
Popular North America, Inc. (formerly BanPonce Financial Corp.), a Delaware
corporation (the "Company"), Popular, Inc. (formerly BanPonce Corporation), a
Puerto Rico corporation (the "Guarantor"), and THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association, as Trustee (the "Trustee").
RECITALS
The Company, the Guarantor and the Trustee, as successor
Trustee, are parties to an Indenture, dated as of October 1, 1991 (the
"Original Indenture"), which provides for the issuance from time to time of
unsecured debt securities of the Company, unconditionally guaranteed as to the
payment of principal, premium (if any) and interest by the Guarantor, and are
parties to a First Supplemental Indenture thereto, dated as of February 28,
1995.
Section 901(9) of the Original Indenture provides that without
the consent of any Holders, the Company and the Guarantor, when authorized by
Board Resolutions, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental to the Original Indenture, in
form satisfactory to the Trustee, to cure any ambiguity, to correct or
supplement any provision in the Original Indenture which may be inconsistent
with any other provision in the Original Indenture, or to make any other
provisions with respect to matters or questions arising under the Original
Indenture, provided that such action shall not adversely affect the interests
of the Holders of Securities of any series in any material respect.
The Company and the Guarantor believe that the definition of
"Banco Popular" in Section 101 of the Original Indenture should be amended.
The respective Boards of Directors of the Company and the
Guarantor have duly authorized the execution and delivery by the Company and
the Guarantor, respectively, of this Second Supplemental Indenture.
NOW, THEREFORE, THIS
SECOND SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company, the Guarantor and the Trustee mutually agree as
follows:
<PAGE> 103
ARTICLE ONE
Definitions and Other Provisions of
General Application
Section 101. Definitions.
Except as otherwise expressly provided or unless the context
otherwise requires, all terms used in this Second Supplemental Indenture which
are defined in the Original Indenture shall have the meanings ascribed to them
by the Original Indenture.
Section 102. Effect of Headings.
The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
Section 103. Successors and Assigns.
All covenants and agreements in this Second Supplemental
Indenture by the parties hereto shall bind their respective successors and
assigns, whether so expressed or not.
Section 104. Separability Clause.
In case any provision in this Second Supplemental Indenture
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 105. Benefits of Instrument.
Nothing in this Second Supplemental Indenture, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Second Supplemental Indenture or the Original
Indenture.
Section 106. Governing Law.
This Second Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
ARTICLE TWO
Amendment of the Original Indenture
-2-
<PAGE> 104
Section 201. Amendment of the definition of "Banco Popular in
Section 101 of the Original Indenture.
The definition of "Banco Popular" in Section 101 of the
Original Indenture is hereby amended and restated in its entirety as follows:
"Banco Popular means Banco Popular de Puerto Rico or any
successor and assign having its principal business operations
in Puerto Rico."
Section 202. Reaffirmation of Original Indenture.
Each of the Company, the Guarantor and the Trustee hereby
confirms, reaffirms and agrees to the Original Indenture in every particular,
as amended by this Second Supplemental Indenture.
Section 203. Trust Indenture Act.
If any provision of this Second Supplemental Indenture limits,
qualifies or conflicts with a provision of the Trust Indenture Act of 1939, as
it may be amended from time to time, that is required under such Act to be a
part of and govern this Second Supplemental Indenture, the latter provision
shall control. If any provision hereof modifies or excludes any provision of
such Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Second Supplemental Indenture as so modified or
excluded, as the case may be.
* * *
This Second Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
-3-
<PAGE> 105
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and year first
above written.
POPULAR NORTH AMERICA, INC.
By: /s/ Jorge A. Junquera
-----------------------------------
Jorge A. Junquera
President
By: /s/ Amilcar Jordan
-----------------------------------
Amilcar Jordan
Senior Vice President
Attest:
/s/ Brunilda Santos de Alvarez
- ------------------------------
Brunilda Santos de Alvarez
Assistant Secretary
Affidavit No. 1,675
-----
Subscribed to before me by Jorge A. Junquera of legal age,
married and resident of San Juan, Puerto Rico, as Senior Executive Vice
President of Popular North America, Inc. and Amilcar Jordan, of legal age,
married and resident of San Juan, Puerto Rico as Senior Vice President of
Popular North America, Inc. and who are personally known to me, in San Juan,
Puerto Rico, this 8th day of May, 1997.
[SEAL] /s/ Paulette Lavergne Cuyar
----------------------------------
Notary Public
-4-
<PAGE> 106
POPULAR, INC.
By: /s/ Jorge A. Junquera
------------------------------------
Jorge A. Junquera
Senior Executive Vice President
By: /s/ Amilcar Jordan
------------------------------------
Amilcar Jordan
Senior Vice President
Attest:
/s/ Brunilda Santos de Alvarez
- -------------------------------
Brunilda Santos de Alvarez
Assistant Secretary
Affidavit No. 1,676
-----
Subscribed to before me by Jorge A. Junquera of legal age,
married and resident of San Juan, Puerto Rico, as Senior Executive Vice
President of Popular, Inc. and Amilcar Jordan, of legal age, married and
resident of San Juan, Puerto Rico as Senior Vice President of Popular, Inc. and
who are personally known to me, in San Juan, Puerto Rico, this 8th day of May,
1997.
[SEAL]
/s/ Paulette Lavergne Cuyar
------------------------------------
Notary Public
-5-
<PAGE> 107
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Melissa Weisman
-------------------------------
Name: Melissa Weisman
Title: Vice President
Attest:
/s/ Steve M. Husbands
- ---------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 8th day of May, 1997, before me personally came Melissa
Weisman, to me known, who, being by me duly sworn, did depose and say that she
is a Vice President of The First National Bank of Chicago, one of the
corporations described in and which executed the foregoing instrument; that she
knows the seal of said national banking association; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that she signed her name
thereto by like authority.
/s/ Lisa A. Brack
--------------------------------
Notary Public, State of New York
[SEAL]
-6-
<PAGE> 1
EXHIBIT 4(h)
=====================================================================
POPULAR INTERNATIONAL BANK, INC.,
Issuer
and
POPULAR, INC.,
Guarantor
TO
,
Trustee
----------
SENIOR
INDENTURE
Dated as of ,
---------
----------
=====================================================================
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
-----------
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions: . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate; control . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . 2
Banco Popular . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request; Company Order . . . . . . . . . . . . . . . . . . 3
Controlled Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . 3
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . 4
Material Banking Subsidiary . . . . . . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
- --------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 3
-ii-
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Security Register and Security
Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . 7
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . 8
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . 8
Section 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . 9
Section 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . . . . 10
Section 105. Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . 12
Section 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . 13
Section 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . 14
Section 108. Effect of Headings and
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 14
Section 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . 14
Section 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 114. Appointment of Agent for Service . . . . . . . . . . . . . . . . . 15
ARTICLE TWO
-----------
SECURITY FORMS
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 202. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . 17
Section 203. Form of Reverse of Security . . . . . . . . . . . . . . . . . . . . 19
Section 204. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 205. Form of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 206. Form of Legend for Global Securities . . . . . . . . . . . . . . . 25
</TABLE>
- --------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 4
-iii-
<TABLE>
<CAPTION>
Page
----
ARTICLE THREE
-------------
THE SECURITIES
<S> <C> <C>
Section 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . 26
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 303. Execution, Authentication, Delivery
and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . 31
Section 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . 36
Section 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . 37
Section 311. Guarantee of Debt Securities . . . . . . . . . . . . . . . . . . . 37
Section 312. Execution of Guarantees . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE FOUR
------------
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . 39
Section 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . 41
ARTICLE FIVE
------------
REMEDIES
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 502. Acceleration of Maturity; Rescission
and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . 46
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . 46
Section 505. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
- --------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 5
-iv-
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 506. Application of Money Collected . . . . . . . . . . . . . . . . . . 47
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . 49
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . 49
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . 50
Section 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . 50
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . 51
Section 515. Waiver of Stay or Extension
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE SIX
-----------
THE TRUSTEE
Section 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . 51
Section 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . 52
Section 604. Not Responsible for Recitals or
Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . 53
Section 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . 54
Section 608. Disqualification; Conflicting
Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 609. Corporate Trustee Required;
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 610. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 611. Acceptance of Appointment by Successor . . . . . . . . . . . . . . 57
Section 612. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . . . . . . . 59
Section 613. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 614. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . 59
</TABLE>
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NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 6
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<TABLE>
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ARTICLE SEVEN
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HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
<S> <C> <C>
Section 701. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . . . . . . . . . . . . . 61
Section 702. Preservation of Information;
Communications to Holders . . . . . . . . . . . . . . . . . . . . 62
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 704. Reports by Company and Guarantor . . . . . . . . . . . . . . . . . 63
ARTICLE EIGHT
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CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Guarantor May Consolidate, Etc., Only on
Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE NINE
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SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 902. Supplemental Indentures With Consent of Holders . . . . . . . . . . 67
Section 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . 68
Section 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . 69
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . 69
Section 906. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
</TABLE>
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NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 7
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<TABLE>
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ARTICLE TEN
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COVENANTS
<S> <C> <C>
Section 1001. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . 69
Section 1003. Money for Securities Payments to Be
Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 1004. Statement by Officers as to Default . . . . . . . . . . . . . . . . 71
Section 1005. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . 72
Section 1007. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . 72
Section 1008. Statement by Officers as to Default
of the Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 1009. Existence of the Guarantor . . . . . . . . . . . . . . . . . . . . 73
Section 1010. Limitation Upon Disposition of Voting
Stock of, and Merger and Sale of
Assets of Banco Popular . . . . . . . . . . . . . . . . . . . . . . 73
Section 1011. Limitation Upon Creation of Liens
on Voting Stock of Material
Banking Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 74
Section 1012. Payment of Additional Amounts . . . . . . . . . . . . . . . . . . . 75
Section 1013. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . 76
ARTICLE ELEVEN
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REDEMPTION OF SECURITIES
Section 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . 76
Section 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . 76
Section 1103. Selection by Trustee of Securities to
Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . 77
Section 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . 78
Section 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . 78
Section 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . 79
</TABLE>
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NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 8
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<TABLE>
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ARTICLE TWELVE
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SINKING FUNDS
<S> <C> <C>
Section 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . 79
Section 1202. Satisfaction of Sinking Fund Payments
with Securities . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 1203. Redemption of Securities for Sinking
Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
</TABLE>
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NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 9
INDENTURE, dated as of _____________, 199_ among Popular
International Bank, Inc., a corporation duly organized and existing under the
laws of the Commonwealth of Puerto Rico (herein called the "Company"), having
its principal office at 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918,
Popular, Inc., a corporation duly organized and existing under the laws of the
Commonwealth of Puerto Rico (the "Guarantor"), and
______________________________________________, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
The Guarantor has duly authorized the execution and delivery
of this Indenture to provide for the issuance of Guarantees with respect to the
Securities.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this
<PAGE> 10
Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" has the meaning assigned thereto in
Section 1011.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Banco Popular" means Banco Popular de Puerto Rico or any
successor and assign having its principal business operations in Puerto Rico.
"Board of Directors" means either the board of directors of
the Company or the Guarantor, as the context requires, or any duly authorized
committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the
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<PAGE> 11
Company or the Guarantor, as the case may be, to have been duly adopted by the
Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", except as may otherwise be provided herein or
in any security, when used with respect to any Place of Payment or other
location, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Controlled Subsidiary" means any corporation more than 80
percent of the outstanding Voting Stock of which, except for directors'
qualifying shares, shall at the time be owned directly or indirectly by the
Guarantor.
"Corporate Trust Office" means the principal office of the
Trustee in the Borough of Manhattan, The City of New York at which at any
particular time its corporate trust business shall be administered.
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any
series issuable or issued in whole or in part in the
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<PAGE> 12
form of one or more Global Securities, the Person designated as Depositary by
the Company pursuant to Section 301.
"Event of Default" has the meaning specified in Section 501.
"Global Security" means a Security bearing the legend
prescribed in Section 206 evidencing all or part of a series of Securities,
issued to the Depositary for such series or its nominee, and registered in the
name of such Depositary or nominee.
"Guarantees" means the guarantees of the Guarantor to be
endorsed on the Securities authenticated and delivered hereunder.
"Guarantor" means Popular, Inc., a corporation organized under
the laws of the Commonwealth of Puerto Rico and its successors and assigns.
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"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 pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an instalment of interest on such
Security.
"Material Banking Subsidiary", means any Controlled Subsidiary
of the Guarantor chartered as a banking corporation under United States
Federal, State or Puerto Rico law which is a significant subsidiary of the
Guarantor as defined in 1-02 of Regulation S-X of the Rules and Regulations of
the Securities and Exchange Commission under the Securities Act of 1933, as
amended.
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<PAGE> 13
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an instalment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company or the Guarantor, as the context requires,
and delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 1004 shall be the principal executive,
financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company or the Guarantor, and who shall be acceptable to
the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; provided that,
if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or
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<PAGE> 14
in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 502, (ii) the principal amount of a
Security denominated in one or more foreign currencies or currency units shall
be the U.S. dollar equivalent, determined in the manner provided as
contemplated by Section 301 on the date of original issuance of such Security,
of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
and (iii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
which the Trustee knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or any premium or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
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<PAGE> 15
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of and any premium
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any instalment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such instalment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or the Guarantor, as the contract requires, or by one or more other
Subsidiaries, or by the Company or the Guarantor, as the contract requires, and
one or more other Subsidiaries. For the purposes of this
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<PAGE> 16
definition, "voting stock" means stock which ordinarily has voting power for
the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
"Taxes" has the meaning specified in Section 1012.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Vice President", when used with respect to the Company, the
Guarantor or the Trustee, means any vice president, whether or not designated
by a number or a word or words added before or after the title "vice
president".
"Voting Stock" means, with respect to any Person, Capital
Stock (however designated) having general voting power for the election of a
majority of the members of the board of directors, managers or trustees of such
Person (irrespective of whether or not at the time Capital Stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company or the
Guarantor to the Trustee to take any action under any provision of this
Indenture, the Company or the Guarantor, as the case may be, shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company or the
Guarantor, as the case may be, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust
-8-
<PAGE> 17
Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or the
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
of counsel may be based, insofar as it relates to factual matters, upon
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<PAGE> 18
a certificate or opinion of, or representations by, an officer or officers of
the Company or the Guarantor, as the case may be, stating that the information
with respect to such factual matters is in the possession of the Company or the
Guarantor, as the case may be, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company and
the Guarantor. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Section 601) conclusive in favor
of the Trustee, the Company and the Guarantor, if made in the manner provided
in this Section.
Without limiting the generality of the foregoing, a Holder,
including a Depositary that is a Holder of a Global Security, may make, give or
take, by a proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted in this Indenture to be made, given or taken by Holders, and a
Depositary that is a Holder of a Global Security may provide its proxy or
proxies to the beneficial owners of interest in any such Global Security.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the
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<PAGE> 19
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than
his individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) Except as provided in the next paragraph, the Company
may, in the circumstances permitted by the Trust Indenture Act, set any day as
the record date for the purpose of determining the Holders of Outstanding
Securities of any series entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote
on any action provided or permitted by this Indenture to be given or taken by
Holders of Registered Securities of such series. With regard to any record
date set pursuant to this paragraph, the Holders of Outstanding Securities of
the relevant series on such record date (or their duly appointed agents), and
only such Persons, shall be entitled to give or take the relevant action,
whether or not such Holders remain Holders after such record date. With regard
to any action that may be given or taken hereunder only by Holders of a
requisite principal amount of Outstanding Securities of any series (or their
duly appointed agents) and for which a record date is set pursuant to this
paragraph, the Company may, at its option, set an expiration date after which
no such action purported to be given or taken by any Holder shall be effective
hereunder unless given or taken on or prior to such expiration date by Holders
of the requisite principal amount of Outstanding Securities of such series on
such record date (or their duly appointed agents). On or prior to any
expiration date set pursuant to this paragraph, the Company may, on one or more
occasions at its option, extend such date to any later date. Nothing in this
paragraph shall prevent any Holder (or any duly appointed agent thereof) from
giving or taking, after any expiration date, any action identical to, or, at
any time, contrary to or different from, any action given or taken, or
purported to have been given or taken, hereunder by a Holder on or prior to
such date, in which event the Company may set a record date in respect thereof
pursuant to this paragraph.
Notwithstanding the foregoing, upon receipt by the Trustee,
with respect to Securities of any Series, of (i) any Notice of Default pursuant
to Section 501; (ii) any declaration of acceleration, or any rescission and
annulment of any such declaration pursuant to Section 502; or (iii)
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<PAGE> 20
any direction given pursuant to Section 512 (any such notice, declaration,
rescission and annulment, or direction (being referred to herein as a
"Direction")), a record date shall automatically and without any other action
by any Person be set for the purpose of determining the Holders of Outstanding
Securities of such series entitled to join in such Direction, which record date
shall be the close of business on the day the Trustee receives such Direction.
The Holders of Outstanding Securities of such series on such record date (or
their duly appointed agents), and only such Persons, shall be entitled to join
in such Direction, whether or not such Holders remain Holders after such record
date; provided that, unless such Direction shall have become effective by
virtue of Holders of the requisite principal amount of Outstanding Securities
of such series on such record date (or their duly appointed agents) having
joined therein on or prior to the 90th day after such record date, such
Direction shall automatically and without any action by any Person be cancelled
and of no further effect. Nothing in this paragraph shall prevent a Holder (or
a duly appointed agent thereof) from giving, before or after the expiration of
such 90-day period, a Direction contrary to or different from, or, after the
expiration or such period, identical to, a Direction that has been cancelled
pursuant to the proviso to the preceding sentence, in which event a new record
date in respect thereof shall be set pursuant to this paragraph.
Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security or
by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
(d) The ownership of Securities shall be proved by the
Security Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee, the
Company or the Guarantor in reliance thereon, whether or not notation of such
action is made upon such Security.
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<PAGE> 21
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or Guarantor
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate
Trust Office, Attention: ................., or
(2) the Company or Guarantor by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first-class
postage prepaid, to the Company or Guarantor, as the case may be,
addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company or
Guarantor.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such
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<PAGE> 22
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
and the Guarantor shall bind their respective successors and assigns, whether
so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
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<PAGE> 23
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity, provided
that no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be.
Section 114. Appointment of Agent for Service.
The Company and the Guarantor each hereby appoints the
_________________ of Banco Popular de Puerto Rico at the office of Banco
Popular de Puerto Rico located in The City of New York as the Company's and the
Guarantor's authorized agent (the "Authorized Agent") upon whom service of
process may be served in any action arising out of or based on the Securities,
the Guarantees or this Indenture (including any action based on or arising out
of the United States federal securities laws) that may be instituted in New
York State or United States Federal Courts sitting in The City of New York, by
the Trustee or the Holder of any Security, and the Company and the Guarantor
each hereby expressly accepts the jurisdiction of any such court in respect of
any such action. Such appointment shall be irrevocable unless and until the
appointment of a successor authorized agent for service of process, and such
successor's acceptance of such appointment, shall have occurred, and the
Company, the Guarantor and such Authorized Agent will take any and all actions,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment or appointments in full force and effect
as aforesaid. Service of process upon an Authorized Agent will be deemed, in
every respect, effective service of process upon the Company and the Guarantor.
Notwithstanding the foregoing, any action against the Company or the Guarantor
arising out of or based on any Security or Guarantee, or this Indenture may
also be instituted by the Holder of such Security in any court in the
Commonwealth of Puerto Rico, and the Company and the Guarantor each hereby
expressly accepts the jurisdiction of any such court in respect of any such
action.
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<PAGE> 24
ARTICLE TWO
Security Forms and Guarantees
Section 201. Forms Generally.
The Securities of each series shall be in substantially the
form set forth in this Article, or in such other form as shall be established
by or pursuant to a Board Resolution of the Company or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If the form of Securities
of any series is 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 Company Order contemplated by
Section 303 for the authentication and delivery of such Securities.
The Guarantees to be endorsed on the Securities of each series
shall be in substantially the form set forth in this Article, or in such other
form as shall be established by or pursuant to a Board Resolution of the
Guarantor or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. If the form of
the Guarantees to be endorsed on the Securities of any series is established by
action taken pursuant to a Board Resolution of the Guarantor, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Guarantor and delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
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<PAGE> 25
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and
the regulations thereunder.]
Popular International Bank, Inc.
............................................
No. ......... $ ........
Popular International Bank, Inc., a corporation duly organized
and existing under the laws of the Commonwealth of Puerto Rico (herein called
the "Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
..............................................., or registered assigns, the
principal sum of .................. ................... Dollars on
............................ ........................... [if the Security is to
bear interest prior to Maturity, insert -- , and to pay interest thereon from
............. or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on ............ and
............ in each year, commencing ........., at the rate of ....% per
annum, until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the ....... or ....... (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any
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<PAGE> 26
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture].
[If the Security is not to bear interest prior to Maturity,
insert -- The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal of this Security
shall bear interest at the rate of ....% per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of ......% per annum (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such demand for payment to the date payment of
such interest has been made or duly provided for, and such interest shall also
be payable on demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert -- any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert -- ; provided, however, that at the option
of the Company payment of interest may be made by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register].
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse
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<PAGE> 27
hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
Popular International Bank, Inc.
By...........................
Attest:
...........................
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of _____________ (herein called
the "Indenture"), among the Company, Popular, Inc., as Guarantor, and,
______________, as Trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof[, limited in
aggregate principal amount to $...........].
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, [if
applicable, insert -- (1) on ........... in any year commencing with the year
...... and ending with the year ...... through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount,
and (2)] at any time [on or after .........., 19..], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or
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<PAGE> 28
before ..............., __%, and if redeemed] during the 12-month period
beginning ............. of the years indicated,
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
- ---- ----- ---- -----
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1) on
............ in any year commencing with the year .... and ending with the year
.... through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after ............], as a whole or in part, at the election of
the Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ............ of the years indicated,
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<PAGE> 29
<TABLE>
<CAPTION>
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ----------------- ----------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
............., redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than .....% per annum.]
[The sinking fund for this series provides for the redemption
on ............ in each year beginning with the year ....... and ending with
the year ...... of [not less than $.......... ("mandatory sinking fund") and
not more than] $......... aggregate principal amount of Securities of this
series. Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited
against subsequent [mandatory]
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<PAGE> 30
sinking fund payments otherwise required to be made [in the inverse order in
which they become due].]
[If the Security is subject to redemption, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.]
[If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, an amount of principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to -- insert formula for
determining the amount. Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on the Securities of this
series shall terminate.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company and the Guarantor with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and
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<PAGE> 31
of any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registerable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
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<PAGE> 32
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Section 204. Form of Trustee's Certificate of
Authentication.
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
---------------,
As Trustee
By...........................
Authorized Officer
Section 205. Form of Guarantee.
Popular, Inc. (the "Guarantor") hereby unconditionally
guarantees to the holder of this Security duly authenticated and delivered by
the Trustee, the due and punctual payment of the principal, and premium, if
any, of (including any amount in respect of original issue discount), and
interest, if any (together with any Additional Amounts payable pursuant to the
terms of this Security), on this Security and the due and punctual payment of
the sinking fund payments, if any, and analogous obligations, if any, provided
for pursuant to the terms of this Security, when and as the same shall become
due and payable, whether at maturity or upon redemption or upon declaration of
acceleration or otherwise according to the terms of this Security and of the
Indenture. In case of default by the Company in the payment of any such
principal (including any amount in respect of original issue discount),
interest (together with any Additional Amounts payable pursuant to the terms of
this Security), sinking fund payment, or analogous obligation, the Guarantor
agrees duly and punctually to pay the same. The Guarantor hereby agrees that
its obligations hereunder shall be absolute and unconditional irrespective of
any extension of the time for payment of this Security, any modification of
this Security, any invalidity, irregularity or unenforceability of this
Security or the Indenture, any failure to enforce the same or any waiver,
modification or indulgence granted to the Company with respect thereto by the
holder of this Security
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<PAGE> 33
or the Trustee, or any other circumstances which may otherwise constitute a
legal or equitable discharge of a surety or guarantor. The Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of merger or bankruptcy of the Company, any right to require a
demand or proceeding first against the Company, protest or notice with respect
to this Security or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this guarantee will not be discharged as to this
Security except by payment in full of the principal of (including any amount
payable in respect of original issue discount), and interest, if any (together
with any additional amounts payable pursuant to the terms of this Security),
thereon.
The Guarantor irrevocably waives any and all rights to which
it may be entitled, by operation of law or otherwise, upon making any payment
hereunder (i) to be subrogated to the rights of a Holder against the Company
with respect to such payment or otherwise to be reimbursed, indemnified or
exonerated by the Company in respect thereof or (ii) to receive any payment, in
the nature of contribution or for any other reason, from any other obligor with
respect to such payment.
This guarantee shall not be valid or become obligatory for any
purpose with respect to this Security until the certificate of authentication
on this Security shall have been signed by the Trustee.
IN WITNESS WHEREOF, Popular, Inc. has caused this Guarantee to
be signed by facsimile by its duly authorized officers and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.
POPULAR, INC.
By
----------------------
By
----------------------
Section 206. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
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<PAGE> 34
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the
name of a Depositary or a nominee thereof. This Security may
not be transferred to, or registered or exchanged for
Securities registered in the name of, any Person other than
the Depositary or a nominee thereof and no such transfer may
be registered, except in the limited circumstances described
in the Indenture. Every Security authenticated and delivered
upon registration of transfer of, or in exchange for or in
lieu of, this Security shall be a Global Security subject to
the foregoing, except in such limited circumstances."
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established with respect to the Securities of any series in or
pursuant to a Board Resolution of the Company and, subject to Section 303, set
forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the
issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 304, 305,
306, 906 or 1107 and except for any Securities which, pursuant to
Section 303, are deemed never to
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<PAGE> 35
have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any interest
payable on any Interest Payment Date;
(6) the place or places where the principal of and any
premium and interest on Securities of the series shall be payable;
(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 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) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(10) the currency, currencies or currency units in which
payment of the
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<PAGE> 36
principal of and any premium and interest on any Securities of the
series shall be payable if other than the currency of the United
States of America and the manner of determining the equivalent thereof
in the currency of the United States of America for purposes of the
definition of "Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium
or interest on any Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies or currency
units other than that or those in which the Securities are stated to
be payable, the currency, currencies or currency units in which
payment of the principal of and any premium and interest on Securities
of such series as to which such election is made shall be payable, and
the periods within which and the terms and conditions upon which such
election is to be made;
(13) 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 502;
(14) if and as applicable, that the Securities of the series
shall be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary or Depositaries
for such Global Security or Global Securities and any circumstances
other than those set forth in Section 305 in which any such Global
Security may be transferred to, and registered and exchanged for
Securities registered in the name of, a Person other than the
Depositary for such Global Security or a nominee thereof and in which
any such transfer may be registered; and
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<PAGE> 37
(15) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as
permitted by Section 901(5)).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above and (subject to Section
303) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
Section 302. Denominations.
The Securities of each series shall be issuable in registered
form without coupons in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such provisions with
respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and
Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may
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deliver Securities of any Series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established in or pursuant to one or
more Board Resolutions as permitted by Sections 201 and 301, in authenticating
such Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise
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required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities, having endorsed thereon
Guarantees duly executed by the Guarantor, which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of that series, having endorsed thereon
Guarantees duly executed by the Guarantor, to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series, having endorsed thereon Guarantees duly executed by the Guarantor, at
the office or agency of the Company in a Place of Payment for
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that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, having endorsed thereon Guarantees
duly executed by the Guarantor, of any authorized denominations and of a like
aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
Section 305. Registration, Registration of
Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and
in any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of
any series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, having endorsed thereon Guarantor duly executed by the
Guarantor, of any authorized denominations and of a like aggregate principal
amount and tenor.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, having endorsed thereon
Guarantees duly executed by the Guarantor, of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities (having Guarantees duly endorsed
thereon) which the Holder making the exchange is entitled to receive.
All Securities and Guarantees issued upon any registration of
transfer or exchange of Securities shall be
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the valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Securities and Guarantees
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906 or 1107 not
involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
Notwithstanding the foregoing and except as otherwise
specified or contemplated by Section 301, no Global Security shall be
exchangeable pursuant to this Section 305 or Sections 304, 906 and 1107 for
Securities registered in the name of, and no transfer of a Global Security of
any series may be registered to, any Person other than the Depositary for such
Security or its nominee, unless (1) such Depositary (A) notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or (B) ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (2) the Company executes and delivers to the
Trustee a Company Order that such Global Security shall be so exchangeable and
the transfer thereof so registerable, (3) there shall have occurred and be
continuing an Event of Default, or an event which after notice or lapse of time
would be an Event of Default, with respect to the Securities evidenced by such
Global Security. Upon the occurrence in respect of any Global Security of any
series of any one or
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more of the conditions specified in clauses (1), (2) or (3) of the preceding
sentence or such other conditions as may be specified as contemplated by
Section 301 for such series, such Global Security may be exchanged for
Securities registered in the names of, and the transfer of such Global Security
may be registered to, such Persons, (including Persons other than the
Depositary with respect to such series and its nominees) as such Depositary
shall direct. Notwithstanding any other provision of this Indenture, any
Security authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, any Global Security shall also be a Global
Security and shall bear the legend specified in Section 304 except for any
Security authenticated and delivered in exchange for, or upon registration of
transfer of, a Global Security pursuant to the preceding sentence.
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them, the Guarantor and any agent of either of them harmless, then, in
the absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series (having Guarantees duly endorsed
thereon) and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
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Every new Security of any series and the related Guarantees
issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual obligation of the
Company and the Guarantor, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights
Preserved.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.
Any interest on any Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such
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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 be not more than 15
days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close
of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest
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accrued and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Guarantor, the Trustee and any agent of the Company,
the Guarantor or the Trustee may treat the Person in whose name such Security
is registered as the owner of such Security for the purpose of receiving
payment of principal of and any premium and (subject to Section 307) any
interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Guarantor, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company or the
Guarantor may have acquired in any manner whatsoever, and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for cancellation
any Securities previously authenticated hereunder which the Company has not
issued and sold, and all Securities so delivered shall be promptly cancelled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange
for any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall
be destroyed and the Trustee shall, upon request from the Company, deliver a
certificate of destruction to the Company.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301
for Securities of any series, interest on the Securities of each series shall
be computed on the basis of a 360-day year of twelve 30-day months.
Section 311. Guarantee of Debt Securities.
The Guarantor hereby unconditionally guarantees to each holder
of a Security of each series authenticated and delivered by the Trustee, the
due and punctual payment of
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the principal of (including any amount in respect of original issue discount),
and interest, if any (together with any Additional Amounts payable pursuant to
the terms of such Security), on such Security and the due and punctual payment
of the sinking fund payments, if any, and analogous obligations, if any,
provided for pursuant to the terms of such Security, when and as the same shall
become due and payable, whether at maturity or upon redemption or upon
declaration of acceleration or otherwise according to the terms of such
Security and of this Indenture. In case of default by the Company in the
payment of any such principal (including any amount in respect of original
issue discount), interest (together with any additional amounts payable
pursuant to the terms of such Security), sinking fund payment, or analogous
obligation, the Guarantor agrees duly and punctually to pay the same. The
Guarantor hereby agrees that its obligations hereunder shall be absolute and
unconditional irrespective of any extension of the time for payment of any such
Security, any modification of any such Security, any invalidity, irregularity
or unenforceability of any such Security or this Indenture, any failure to
enforce the same or any waiver, modification or indulgence granted to the
Company with respect thereto by the holder of such Security or the Trustee, or
any other circumstances which may otherwise constitute a legal or equitable
discharge of a surety or guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
merger or bankruptcy of the Company, any right to require a demand or
proceeding first against the Company, protest or notice with respect to any
such Security or the indebtedness evidenced thereby and all demands whatsoever,
and covenants that this guarantee will not be discharged as to any such
Security except by payment in full of the principal of (including any amount
payable in respect of original issue discount), and interest, if any (together
with any additional amounts payable pursuant to the terms of such Security),
thereon.
The Guarantor irrevocably waives any and all rights to which
it may be entitled, by operation of law or otherwise, upon making any payment
hereunder (i) to be subrogated to the rights of a Holder against the Company
with respect to such payment or otherwise to be reimbursed, indemnified or
exonerated by the Company in respect thereof or (ii) to receive any payment, in
the nature of contribution or for any other reason, from any other obligor with
respect to such payment.
The guarantee set forth in this Section shall not be valid or
become obligatory for any purpose with respect to a Security of any series
until the certificate of
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authentication on such Security shall have been signed by the Trustee.
Section 312. Execution of Guarantees.
To evidence its guarantee specified in Section 311 to the
holders of Securities of any series, the Guarantor hereby agrees to execute the
Guarantees in substantially the form above recited to be endorsed on each
Security of such series authenticated and delivered by the Trustee. Such
Guarantees shall be executed on behalf of the Guarantor by both (a) its
Chairman or its Vice Chairman or its President or any Vice President and (b)
its Treasurer or any Assistant Treasurer or its Secretary or any Assistant
Secretary, under its corporate seal which may, but need not, be attested, prior
to the authentication of the Security on which it is endorsed, and the delivery
of such Security by the Trustee, after the authentication thereof hereunder,
shall constitute due delivery of such Guarantees on behalf of the Guarantor.
The seal of the Guarantor may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Guarantees.
Typographical and other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or enforceability of
any Guarantee that has been duly authenticated and delivered by the Trustee.
Such signatures may be the manual or facsimile signatures of
such officers and may be imprinted or otherwise reproduced on the Guarantees.
In case any officer of the Guarantor who shall have signed any of the
Guarantees shall cease to be an officer before the Security on which such
Guarantees are endorsed shall have been authenticated and delivered by the
Trustee or disposed of by the Company, such Security nevertheless may be
authenticated and delivered or disposed of as though the person who signed such
Guarantees had not ceased to be such officer, and any Guarantees may be signed
on behalf of the Guarantor by such persons as, at the actual date of the
execution of such Guarantees, shall be the proper officers of the Guarantor,
although at the date of such Security or of the execution of this Indenture any
such person was not such an officer.
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ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of
Indenture.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer
or exchange of Securities herein expressly provided for), and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company or the
Guarantor and thereafter repaid to the Company or the Guarantor or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company or the Guarantor, as the case may be, in the case of
(i), (ii) or (iii) above, has deposited or caused to be deposited with
the Trustee as trust funds in trust for the purpose an amount
sufficient to
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pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal
and any premium and interest to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company or the Guarantor, as the case may be, has
paid or caused to be paid all other sums payable hereunder by the
Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company and the Guarantor to the Trustee
under Section 607, the obligations of the Trustee to any Authenticating Agent
under Section 614 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
Section 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and Guarantees and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
any premium and interest for whose payment such money has been deposited with
the Trustee.
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ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuance of
such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium,
if any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company or the Guarantor in this Indenture, the
Securities of such series or the Guarantees endorsed thereon (other
than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which
has expressly been included in this Indenture solely for the benefit
of series of Securities other than that series), and continuance of
such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company and the
Guarantor by the Trustee or to the Company, the Guarantor and the
Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder; or
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(5) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed (including a default with
respect to Securities of any series other than that series) or under
any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company, any Material Banking Subsidiary or the
Guarantor in excess of $10,000,000, whether such indebtedness now
exists or shall hereafter be created, which default shall have
resulted in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise have become due
and payable, without such acceleration having been rescinded or
annulled within a period of 30 days after there shall have been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series a
written notice specifying such default and requiring the Company, the
Guarantor or the Material Banking Subsidiary, as the case may be, to
cause such acceleration to be rescinded or annulled and stating that
such notice is a "Notice of Default" hereunder; provided, however,
that if such default shall be remedied or cured by the Company, the
Material Banking Subsidiary or the Guarantor or waived by the holders
of such indebtedness, then the Event of Default hereunder by reason
thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without any action on the part of the Trustee or any
of the Holders; or
(6) the entry by a court or, in the case of a Material Banking
Subsidiary, a governmental authority having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
or any Material Banking Subsidiary in an involuntary case or
proceeding under any
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applicable Federal, State or Commonwealth of Puerto Rico bankruptcy,
insolvency, reorganization or other similar law or in respect of the
Guarantor in any involuntary case or proceeding under any applicable
Federal or Commonwealth of Puerto Rico bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging
the Company, any Material Banking Subsidiary or the Guarantor a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or
in respect of the Company or any Material Banking Subsidiary under any
applicable Federal, State or Commonwealth of Puerto Rico law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company, any Material
Banking Subsidiary or the Guarantor or of any substantial part of
their respective property, or ordering the winding up or liquidation
of their respective affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; or
(7) the commencement by the Company, any Material Banking
Subsidiary or the Guarantor of a voluntary case or proceeding under
any applicable Federal, State, or Commonwealth of Puerto Rico
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of the Company, any Material Banking Subsidiary or the
Guarantor in an involuntary case or proceeding under any applicable
Federal, State, or Commonwealth of Puerto Rico bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or
relief under any applicable Federal, State, or Commonwealth of Puerto
Rico law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or the Guarantor or of any substantial part of their
respective property, or the making by either of them of an assignment
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for the benefit of creditors, or the admission by either of them in
writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company, any Material
Banking Subsidiary or the Guarantor in furtherance of any such action.
Section 502. Acceleration of Maturity; Rescission
and Annulment.
If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company and the
Guarantor(and to the Trustee if given by Holders), and upon any such
declaration such principal amount (or specified amount) shall become
immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company, the Guarantor and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the Company or the Guarantor has paid or deposited with
the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefor in such Securities,
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(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default with respect to Securities of
that series, other than the non-payment of the principal of Securities
of that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of
(or premium, if any, on) any Security at the Maturity thereof,
the Company and the Guarantor will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal and any premium and interest and, to
the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal and premium and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company or
the Guarantor (or any other obligor upon the Securities), its property or its
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 505. Trustee May Enforce Claims Without
Possession of Securities.
All rights of action and claims under this Indenture or the
Securities or the Guarantees may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment
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shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or any premium or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and any
premium and interest, respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against
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the costs, expenses and liabilities to be incurred in compliance with
such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60- day period by the Holders of
a majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) any interest on such Security on the Stated Maturity
or Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
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Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all
the Securities of such series waive any past default hereunder with respect to
such series and its consequences, except a default
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(1) in the payment of the principal of or any premium or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the
Company.
Section 515. Waiver of Stay or Extension Laws.
The Company and the Guarantor covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
and the Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
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ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided by the Trust Indenture
Act; provided, however, that in the case of any default of the character
specified in Section 501(4) with respect to Securities of such series, no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
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(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(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, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
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(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.
Section 604. Not Responsible for Recitals or
Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law
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in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
Section 608. Disqualification; Conflicting
Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required;
Eligibility.
There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such
and has a combined capital and surplus of at least $50,000,000 and its
Corporate Trust Office in the Borough of Manhattan, The City of New York. If
such Person publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of
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this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 610. Resignation and Removal;
Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to
the Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
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then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities of one or more series, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood
that any such successor Trustee may be appointed with respect to the Securities
of one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 611. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any Series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 611, become the successor Trustee with respect to the Securities of
such series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any Series
shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611, any Holder who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of any
series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust
Office.
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Section 611. 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 the
Guarantor 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, the Guarantor 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 Guarantor, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall
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become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company, the Guarantor, or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
and the Guarantor 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) and (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.
Section 612. Merger, Conversion, Consolidation
or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims
Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions
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of the Trust Indenture Act regarding the collection of claims against the
Company (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
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An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
--------------,
As Trustee
By......................,
As Authenticating Agent
By......................
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Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee
Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not later than June 30 and December 30 in
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of the preceding June 15
or December 15, as the case may be, 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;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information;
Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the Trustee, shall
be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company, the Guarantor and
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the Trustee that neither the Company nor the Trustee nor any agent of either of
them shall be held accountable by reason of any disclosure of information as to
names and addresses of Holders made pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.
Section 704. Reports by Company and Guarantor.
The Company and Guarantor shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Guarantor May Consolidate, Etc., Only
on Certain Terms.
Neither the Guarantor nor the Company shall consolidate with
or merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and neither the Guarantor
nor the Company shall permit any Person to consolidate with or merge into the
Guarantor or the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Guarantor or the Company, unless:
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(1) in case the Guarantor or the Company shall consolidate
with or merge into another Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, the
Person formed by such consolidation or into which the Guarantor or the
Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Guarantor
or the Company substantially as an entirety shall (i) in the case of
the Guarantor, expressly guarantee, or (ii) in the case of the
Company, expressly assume by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and any
premium and interest on all the Securities and the performance or
observance of every covenant of this Indenture on the part of the
Guarantor or the Company, as the case may be, to be performed or
observed;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Guarantor
or the Company, as the case may be, or a Subsidiary as a result of
such transaction as having been incurred by the Guarantor or the
Company, as the case may be, or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing; and
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the
Guarantor or the Company, as the case may be, would become subject to
a mortgage, pledge, lien, security interest or other encumbrance which
would not be permitted by this Indenture, the Guarantor or the
Company, as the case may be, or such successor Person, as the case may
be, shall take such steps as shall be necessary effectively to secure
the Securities equally and ratably with (or prior to) all indebtedness
secured thereby; and
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(4) the Guarantor or the Company, as the case may be, has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
Section 802. Successor Substituted.
Upon any consolidation of the Guarantor or the Company, as the
case may be, with, or merger of the Guarantor or the Company, as the case may
be, into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Guarantor or the Company, as the case may be,
substantially as an entirety in accordance with Section 801, the successor
Person formed by such consolidation or into which the Guarantor or the Company,
as the case may be, is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Guarantor or the Company, as the case may be, under this
Indenture with the same effect as if such successor Person had been named as
the Guarantor or the Company, as the case may be, herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without
Consent of Holders.
Without the consent of any Holders, the Company and the
Guarantor, when authorized by Board Resolutions, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company or the Guarantor and the assumption by any such
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successor of the covenants of the Company or the Guarantor herein, in
the Securities and in the Guarantees; or
(2) to add to the covenants of the Company or the Guarantor
for the benefit of the Holders of all or any series of Securities (and
if such covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or
to permit or facilitate the issuance of Securities in uncertificated
form; or
(5) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities,
provided that any such addition, change or elimination (i) shall
neither (A) apply to any Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit
of such provision nor (B) modify the rights of the Holder of any such
Security with respect to such provision or (ii) shall become effective
only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities or
Guarantees of any series as permitted by Sections 201, 205, 301 and
312; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or
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change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of
Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action
pursuant to this clause (9) shall not adversely affect the interests
of the Holders of Securities of any series in any material respect.
Section 902. Supplemental Indentures with Consent
of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company, the
Guarantor and the Trustee, the Company, when authorized by a Board Resolution,
the Guarantor, when authorized by a Board Resolution, and the Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
instalment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of
the principal of an Original Issue Discount Security that would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case
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of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1010, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this
Section and Section 1010, or the deletion of this proviso, in
accordance with the requirements of Sections 611(b) and 901(8), or
(4) modify or effect in any manner adverse to the Holders
the terms and conditions of the obligations of the Guarantor in
respect of the due and punctual payments of principal of, or premium,
if any, interest or sinking fund requirements, if any, on, or
Additional Amounts in respect of, the Securities.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
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Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to
Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.
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ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with
the terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
Section 1003. Money for Securities Payments to
Be Held in Trust.
If the Company or the Guarantor shall at any time act as its
own Paying Agent with respect to any series of Securities, it will, on or
before each due date of the principal of or any premium or interest on any of
the Securities of that series, segregate and hold in trust for
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the benefit of the Persons entitled thereto a sum sufficient to pay the
principal and any premium and interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, prior to each due date of the principal of
or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will (i) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment in respect of
the Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such
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Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard
to any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
Section 1005. Existence.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.
Section 1006. Maintenance of Properties.
The Company and the Guarantor will cause all properties used
or useful in the conduct of its business or the business of any Subsidiary to
be maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company or the Guarantor may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however,
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that nothing in this Section shall prevent the Company or the Guarantor from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
Section 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings.
Section 1008. Statement by Officers as to Default of the Guarantor.
The Guarantor will deliver to the Trustee, within 120 days
after the end of each fiscal year of the Guarantor ending after the date
hereof, an Officers' Certificate, stating whether or not to the best knowledge
of the signers thereof the Guarantor is in default in the performance and
observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Guarantor shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
Section 1009. Existence of the Guarantor.
Subject to Article Eight, the Guarantor will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Guarantor shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Guarantor
and that the loss thereof is not disadvantageous in any material respect to the
Holders.
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Section 1010. Limitation Upon Disposition of Voting Stock of, and Merger and
Sale of Assets of Banco Popular
Subject to the provisions of Article Eight, the Guarantor
will not
(1) sell, assign, transfer or otherwise dispose of any
shares of Voting Stock of Banco Popular or permit Banco Popular to
issue, sell, assign, transfer or otherwise dispose of any shares of,
or securities convertible into, or options, warrants or rights to
subscribe for, its Voting Stock, unless, after giving effect to any
such transaction, Banco Popular remains a Controlled Subsidiary; or
(2) permit Banco Popular to
(a) merge or consolidate, unless the surviving
corporation is a Controlled Subsidiary; or
(b) convey, transfer, lease or sell its
properties and assets substantially as an entirety to any
Person, except to a Controlled Subsidiary.
Section 1011. Limitation Upon Creation of Liens on Voting Stock of Material
Banking Subsidiaries.
The Guarantor will not, and it will not permit any Material
Banking Subsidiary at any time directly or indirectly to create, assume, incur
or permit to exist any indebtedness for borrowed money secured by a pledge,
lien or other encumbrance (any pledge, lien or other encumbrance being
hereinafter in this Section referred to as a "lien") on the Voting Stock of any
Material Banking Subsidiary without making effective provisions whereby the
Outstanding Guarantees (and, if the Guarantor so elects, any other indebtedness
ranking on a parity with the Guarantees) shall be secured equally and ratably
with such secured indebtedness so long as such other indebtedness shall be so
secured, provided, however, that the foregoing covenant shall not be applicable
to liens for taxes or assessments or governmental charges or levies not then
due and delinquent of the validity of which is being contested in good faith or
which are less than $10,000,000 in amount, liens created by or resulting from
any litigation or legal proceeding which is currently being contested in good
faith by appropriate proceedings or which involve claims of less than
$10,000,000, or deposits to secure (or in lieu of) surety, stay, appeal or
customs bonds.
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If the Guarantor shall hereafter be required to secure the
Guarantees equally and ratably with any other indebtedness pursuant to this
Section, (i) the Guarantor will promptly deliver to the Trustee an Officers'
Certificate stating that the foregoing covenant has been complied with, and an
Opinion of Counsel stating that in the opinion of such counsel the foregoing
covenant has been complied with and that any instruments executed by the
Guarantor or any Subsidiary in the performance of the foregoing covenant comply
with the requirements of the foregoing covenant and (ii) the Trustee is hereby
authorized to enter into an indenture or agreement supplemental hereto and to
take such action, if any, as it may deem advisable to enable it to force the
rights of the holders of the Guarantees so secured.
Section 1012. Payment of Additional Amounts.
All payments of principal, premium, if any, and interest on
Securities of any series, and all payments on the Guarantees shall be made
without set-off, counterclaim, fees, liabilities or similar deductions, and
free and clear of, and without deduction or withholding for, taxes, levies,
imposts, duties, charges or fees of whatsoever nature now or hereafter imposed,
levied, collected, deducted, withheld or assessed by or on behalf of the
Commonwealth of Puerto Rico or any political subdivision or taxing authority
thereof or therein ("Taxes"). If the Company, Guarantor, or any agent thereof
is required by law or regulation to make any deduction or withholding for or on
account of Taxes, the Company or Guarantor, as the case may be, shall pay such
additional amounts ("Additional Amounts") as shall be necessary in order that
the net amounts received by the Holders of the Securities of any series or the
holders or beneficial owners of any interest therein or rights in respect
thereof after such deduction or withholding shall equal the amount that would
have been receivable thereunder in the absence of such deduction or
withholding, except that no such Additional Amounts shall be payable:
(a) to any Holder of a Security or any interest therein or
rights in respect thereof where such deduction or withholding is
required by reason of such Holder having some connection with the
Commonwealth of Puerto Rico or any political subdivision or taxing
authority thereof or thereon other than the mere holding of a payment
in respect of such security;
(b) in respect of any deduction or withholding that would not
have been required but for the presentation by the Holder of a
Security for payment on a date
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more than 30 days after the Date of Maturity or the date on which
payment thereof is duly provided for, whichever occurs later; or
(c) in respect of any deduction or withholding that would not
have been required but for the failure to comply with any
certification, identification or other reporting requirements
concerning the nationality, residence, identity or connection with the
Commonwealth of Puerto Rico, or any political subdivision or taxing
authority thereof or therein, of the Holder of a Security or any
interest therein or rights in respect thereof, if compliance is
required by the Commonwealth of Puerto Rico, or any political
subdivision or taxing authority thereof or therein, as a precondition
to exemption from such deduction or withholding.
Any reference in the Indenture to principal or interest shall
be deemed also to refer to any Additional Amounts that may be payable under
this Section 1012.
Section 1013. Waiver of Certain Covenants.
The Company and the Guarantor may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
1006, 1007 and 1009 to 1011, inclusive, with respect to the Securities of any
series if before the time for such compliance the Holders of at least 66-2/3%
in principal amount of the Outstanding Securities of such series shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the Guarantor and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as
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contemplated by Section 301 for Securities of any series) in accordance with
this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date, of the principal amount of Securities of such series to
be redeemed and, if applicable, of the tenor of the Securities to be redeemed.
In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities
to Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series and of a specified tenor
are to be redeemed), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral multiple
thereof) of the principal amount of Securities of such series of a denomination
larger than the minimum authorized denomination for Securities of that series.
If less than all of the Securities of such series and of a specified tenor are
to be redeemed, the particular Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
-77-
<PAGE> 86
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption of any Securities, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and
-78-
<PAGE> 87
hold in trust as provided in Section 1003) an amount of money sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest on, all the Securities which are to be
redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same
series and of like tenor, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
-79-
<PAGE> 88
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 301 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 Securities
of any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
Section 1202. Satisfaction of Sinking Fund Payments
with Securities.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to 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 1203. Redemption of Securities for Sinking Fund.
Not less than 30 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
-80-
<PAGE> 89
series pursuant to the terms of that series, the portion thereof, if any, which
is to be satisfied by payment of cash and the portion thereof, if any, which is
to be satisfied by delivering and crediting Securities of that series pursuant
to Section 1202 and will also 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 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given,
the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
--------------------------
-81-
<PAGE> 90
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Popular International
Bank, Inc.
By......................
Attest:
........................
Popular, Inc.
By......................
Attest:
........................
--------------
By......................
Attest:
........................
-82-
<PAGE> 91
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the .... day of ..........., ...., before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................. of ...........................,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
........................
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the .... day of ..........., ...., before me personally
came ..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of ............................,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
........................
-83-
<PAGE> 1
EXHIBIT 5(A)
POPULAR, INC.
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
May 12, 1997
The Board of Directors
Popular, Inc.
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
The Board of Directors
Popular international Bank, Inc.
c/o BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
The Board of Directors
Popular North America, Inc.
521 Fellowship Road
Mt. Laurel, New Jersey 08054
Ladies and Gentlemen:
This opinion is delivered in connection with the registration under the
Securities Act of 1933 (the "Act") of (i) senior debt securities (the "Popular
Senior Debt Securities"), subordinated debt securities (the "Popular
Subordinated Debt Securities") and shares of preferred stock, without par value
(the "Popular Preferred Stock"), of Popular, Inc., a Puerto Rico corporation
(the "Corporation"), (ii) senior debt securities (the "PNA Senior Debt
Securities") of Popular North America, Inc., a Delaware corporation ("PNA"),
bearing the unconditional guarantees (the "PNA Senior Debt Guarantees") of the
Corporation, subordinated debt securities (the "PNA Subordinated Debt
Securities") of PNA, bearing the unconditional guarantees (the "PNA
Subordinated Debt Guarantees") of the Corporation, and shares of preferred
stock, par value $.0l per share (the "PNA Preferred Stock") of PNA, bearing the
unconditional guarantees (the "PNA Preferred Stock Guarantees") of the
Corporation, and (iii) senior debt securities (the "PIB Senior Debt
Securities") of Popular International Bank,
<PAGE> 2
Inc., a Puerto Rico corporation ("PIB"), bearing the unconditional guarantees
(the "PIB Senior Debt Guarantees") of the Corporation, subordinated debt
securities (the "PIB Subordinated Debt Securities") of PIB, bearing the
unconditional guarantees (the "PIB Subordinated Debt Guarantees") of the
Corporation, and shares of preferred stock, par value $25.00 per share (the
"PIB Preferred Stock") of PIB, bearing the unconditional guarantees (the "PIB
Preferred Stock Guarantees") of the Corporation (the Popular Senior Debt
Securities, the Popular Subordinated Debt Securities, the PNA Senior Debt
Securities, the PNA Subordinated Debt Securities, the PIB Senior Debt
Securities and the PIB Subordinated Debt Securities are sometimes collectively
referred to herein as the "Debt Securities"; the PNA Senior Debt Guarantees,
the PNA Subordinated Debt Guarantees, the PNA Preferred Stock Guarantees, the
PIB Senior Debt Guarantees, the PIB Subordinated Debt Guarantees and the PIB
Preferred Stock Guarantees are sometimes collectively referred to herein as the
"Guarantees"; and the Debt Securities, the Popular Preferred Stock, the PNA
Preferred Stock and the PIB Preferred Stock are sometimes collectively referred
to herein as the "Securities"). The Securities are limited to an aggregate
initial offering price not to exceed $1,000,000,000. I, as Counsel to the
Corporation, have examined such corporate records, certificates and other
documents, and such questions of law, as I have considered necessary or
appropriate for the purposes of this opinion. On the basis of such examination,
I advise you that, in my opinion:
(i) Each of the Corporation and PIB has been duly incorporated and is
an existing corporation in good standing under the laws of the Commonwealth of
Puerto Rico.
(ii) When the registration statement relating to the Securities and
the Guarantees (the "Registration Statement") has become effective under the
Act, the terms of the Popular Senior Debt Securities and of their issuance and
sale have been duly established in conformity with the indenture relating to
the Popular Senior Debt Securities, as supplemented (the "Popular Senior
Indenture"), so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Corporation and
so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Corporation, and the Popular
Senior Debt Securities have been duly executed and authenticated in accordance
with the Popular Senior Indenture and issued and
-2-
<PAGE> 3
sold as contemplated in the Registration Statement, the Popular Senior Debt
Securities will constitute valid and legally binding obligations of the
Corporation, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
(iii) When the Registration Statement has become effective under the Act,
the terms of the Popular Subordinated Debt Securities and of their issuance and
sale have been duly established in conformity with the indenture relating to
the Popular Subordinated Debt Securities (the "Popular Subordinated Indenture")
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Corporation, and the Popular Subordinated Debt
Securities have been duly executed and authenticated in accordance with the
Popular Subordinated Indenture and issued and sold as contemplated in the
Registration Statement, the Popular Subordinated Debt Securities will
constitute valid and legally binding obligations of the Corporation, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(iv) When the Registration Statement has become effective under the Act,
the terms of the PNA Senior Debt Securities and of the PNA Senior Debt
Guarantees and of their issuance and sale have been duly established in
conformity with the indenture relating to the PNA Senior Debt Securities and
the PNA Senior Debt Guarantees, as supplemented (the "PNA Senior Indenture"),
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon PNA or the Corporation and so as to
comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over PNA or the Corporation, the PNA Senior Debt
Securities have been duly executed and authenticated and the PNA Senior Debt
Guarantees have been duly executed, each in accordance with the PNA Senior
Indenture, and the PNA Senior Debt Securities and the PNA Senior Debt
Guarantees have been issued and sold as contemplated in the Registration
Statement, the PNA Senior Debt Securities will constitute valid and legally
binding obligations of PNA and
-3-
<PAGE> 4
the PNA Senior Debt Guarantees will constitute valid and legally binding
obligations of the Corporation, in each case subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(v) When the Registration Statement has become effective under the
Act, the indenture relating to the PNA Subordinated Debt Securities and the PNA
Subordinated Debt Guarantees (the "PNA Subordinated Indenture") has been duly
executed and delivered, the terms of the PNA Subordinated Debt Securities and
of the PNA Subordinated Debt Guarantees and of their issuance and sale have
been duly established in conformity with the PNA Subordinated Indenture so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PNA or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PNA or the Corporation, the PNA Subordinated Debt
Securities have been duly executed and authenticated and the PNA Subordinated
Debt Guarantees have been duly executed, each in accordance with the PNA
Subordinated Indenture, and the PNA Subordinated Debt Securities and the PNA
Subordinated Debt Guarantees have been issued and sold as contemplated in the
Registration Statement, the PNA Subordinated Debt Securities will constitute
valid and legally binding obligations of PNA and the PNA Subordinated Debt
Guarantees will constitute valid and legally binding obligations of the
Corporation, in each case subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(vi) When the Registration Statement has become effective under the
Act, the indenture relating to the PIB Senior Debt Securities and the PIB
Senior Debt Guarantees (the "PIB Senior Indenture") has been duly executed and
delivered, the terms of the PIB Senior Debt Securities and of the PIB Senior
Debt Guarantees and of their issuance and sale have been duly established in
conformity with the PIB Senior Indenture so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon PIB or the Corporation and so as to comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction over
PIB or the Corporation, the PIB Senior Debt Securities have been duly
-4-
<PAGE> 5
executed and authenticated and the PIB Senior Debt Guarantees have been duly
executed, each in accordance with the PIB Senior Indenture, and the PIB Senior
Debt Securities and the PIB Senior Debt Guarantees have been issued and sold as
contemplated in the Registration Statement, the PIB Senior Debt Securities will
constitute valid and legally binding obligations of PIB and the PIB Senior Debt
Guarantees will constitute valid and legally binding obligations of the
Corporation, in each case subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(vii) When the Registration Statement has become effective under the
Act, the indenture relating to the PIB Subordinated Debt Securities and the PIB
Subordinated Guarantees (the "PIB Subordinated Indenture") has been duly
executed and delivered, the terms of the PIB Subordinated Debt Securities and
of the PIB Subordinated Debt Guarantees and of their issuance and sale have
been duly established in conformity with the PIB Subordinated Indenture so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PIB or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PIB or the Corporation, and the PIB Subordinated Debt
Securities have been duly executed and authenticated and the PIB Subordinated
Debt Guarantees have been duly executed, each in accordance with the PIB
Subordinated Indenture, and the PIB Subordinated Debt Securities and the PIB
Subordinated Debt Guarantees have been issued and sold as contemplated in the
Registration Statement, the PIB Subordinated Debt Securities will constitute
valid and legally binding obligations of PIB and the PIB Subordinated Debt
Guarantees will constitute valid and legally binding obligations of the
Corporation, in each case subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(viii) When the Registration Statement has become effective under the
Act, a certificate with respect to the Popular Preferred Stock has been duly
filed and recorded with the Department of State of the Commonwealth of Puerto
Rico as required by the General Corporation Law of the Commonwealth of Puerto
Rico, the terms of the Popular
-5-
<PAGE> 6
Preferred Stock and of its issue and sale have been duly established in
conformity with the Corporation's restated certificate of incorporation so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Corporation and so as to comply with
any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Corporation, all regulatory consents or approvals for the
issuance and sale of the Popular Preferred Stock have been obtained and the
Popular Preferred Stock has been duly issued and sold as contemplated by the
Registration Statement, the Popular Preferred Stock will be validly issued,
fully paid, and nonassessable.
(ix) When the Registration Statement has become effective under the
Act, a certificate with respect to the PIB Preferred Stock has been duly filed
and recorded with the Department of State of the Commonwealth of Puerto Rico as
required by the General Corporation Law of the Commonwealth of Puerto Rico, the
terms of the PIB Preferred Stock and of its issue and sale have been duly
established in conformity with PIB's certificate of incorporation so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PIB or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PIB or the Corporation, all regulatory consents or
approvals for the issuance and sale of the PIB Preferred Stock and for the
issuance of the PIB Preferred Stock Guarantees have been obtained, and the PIB
Preferred Stock has been duly issued and sold as contemplated by the
Registration Statement, the PIB Preferred Stock will be validly issued, fully
paid and nonassessable, and when the terms of the PIB Preferred Stock
Guarantees have been duly approved by the Board of Directors or other
authorized officials of the Corporation and the PIB Preferred Stock Guarantees
have been duly executed, the PIB Preferred Stock Guarantees will constitute
valid and legally binding obligations of the Corporation, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(x) When the Registration Statement has become effective under the
Act, a certificate of designations with respect to the PNA Preferred Stock has
been duly filed and recorded with the Secretary of State of the State of
-6-
<PAGE> 7
Delaware, the terms of the PNA Preferred Stock and of its issue and sale have
been duly established in conformity with PNA's certificate of incorporation, as
amended, so as not to violate any applicable law or result in a default under
or breach of any agreement or instrument binding upon PNA or the Corporation
and so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over PNA or the Corporation, all
regulatory consents or approvals for the issuance and sale of the PNA Preferred
Stock and for the issuance of the PNA Preferred Stock Guarantees have been
obtained, when the terms of the PNA Preferred Stock Guarantees have been duly
approved by the Board of Directors or other authorized officials of the
Corporation and the PNA Preferred Stock Guarantees have been duly executed, and
the PNA Preferred Stock and the PNA Preferred Stock Guarantees have been duly
issued and sold as contemplated by the Registration Statement, the PNA
Preferred Stock Guarantees will constitute valid and legally binding
obligations of the Corporation, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
I note that, as of the date of this opinion, a judgment for money in
an action based on a Debt Security denominated in a foreign currency or
currency unit, or on a related Guarantee, in a Federal or state court in the
United States ordinarily would be enforced in the United States only in United
States dollars. The date used to determine the rate of conversion of the
foreign currency or currency unit in which a particular Debt Security is
denominated into United States dollars will depend on various factors,
including which court renders the judgment. In the case of a Debt Security
denominated in a foreign currency, or a related Guarantee, a state court in the
State of New York rendering a judgment on a Debt Security, or on a related
Guarantee, would be required under Section 27 of the New York Judiciary Law to
render such judgment in the foreign currency in which the Debt Security is
denominated, and such judgment would be converted into United States dollars at
the exchange rate prevailing on the date of entry of the judgment.
The foregoing opinion is limited to the Federal laws of the United
States, the General Corporation Law of the State of Delaware and the laws of
the State of New York and the Commonwealth of Puerto Rico, and I am expressing
no opinion as to the effect of the laws of any other jurisdiction.
-7-
<PAGE> 8
With respect to all matters of the laws of the State of New York, I have relied
upon the opinion, dated the date hereof, of Sullivan & Cromwell, and my opinion
is subject to the same assumptions, qualifications and limitations with respect
to such matters as are contained in such opinion of Sullivan & Cromwell.
Also, I have relied as to certain matters on information obtained from
public officials, officers of the Corporation, PNA and PIB, and other sources
believed by me to be responsible, and I have assumed that each of the Popular
Senior Indenture, the Popular Subordinated Indenture and the PNA Senior
Indenture has been duly authorized, executed and delivered by the respective
Trustee thereunder, assumptions which I have not independently verified.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Validity
of Offered Securities" in the Prospectus contained in the Registration
Statement. In giving such consent, I do not thereby admit that I am in the
category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Brunilda Santos de Alvarez
Brunilda Santos de Alvarez
-8-
<PAGE> 1
EXHIBIT 5(b)
Sullivan & Cromwell
125 Brand Street
New York, New York 10004
May 12, 1997
Popular, Inc.,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
Popular International Bank, Inc.,
c/o Popular, Inc.,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
Popular North America, Inc.,
521 Fellowship Road,
Mt. Laurel, New Jersey 08054.
Ladies and Gentlemen:
This opinion is delivered in connection with the registration under the
Securities Act of 1933 (the "Act") of (i) senior debt securities (the "Popular
Senior Debt Securities"), subordinated debt securities (the "Popular
Subordinated Debt Securities") and shares of preferred stock, without par value
(the "Popular Preferred Stock"), of Popular, Inc., a Puerto Rico corporation
(the "Corporation"), (ii) senior debt securities (the "PNA Senior Debt
Securities") of Popular North America, Inc., a Delaware corporation ("PNA"),
bearing the unconditional guarantees (the "PNA Senior Debt Guarantees") of the
Corporation,
<PAGE> 2
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -2-
subordinated debt securities of PNA (the "PNA Subordinated Debt Securities"),
bearing the unconditional guarantees (the "PNA Subordinated Debt Guarantees")
of the Corporation, and shares of preferred stock, par value $.0l per share, of
PNA (the "PNA Preferred Stock"), bearing the unconditional guarantees (the "PNA
Preferred Stock Guarantees") of the Corporation, and (iii) senior debt
securities (the "PIB Senior Debt Securities") of Popular International Bank,
Inc., a Puerto Rico corporation ("PIB"), bearing the unconditional guarantees
(the "PIB Senior Debt Guarantees") of the Corporation, subordinated debt
securities of PIB (the "PIB Subordinated Debt Securities"), bearing the
unconditional guarantees (the "PIB Subordinated Debt Guarantees") of the
Corporation and shares of preferred stock, par value $25.00 per share, of PIB
(the "PIB Preferred Stock"), bearing the unconditional guarantees (the "PIB
Preferred Stock Guarantees") of the Corporation (the Popular Senior Debt
Securities, the Popular Subordinated Debt Securities, the PNA Senior Debt
Securities, the PNA. Subordinated Debt Securities, the PIB Senior Debt
Securities and the PIB Subordinated Debt Securities are sometimes collectively
referred to herein as the "Debt Securities"; the PNA Senior Debt Guarantees,
the PNA Subordinated Debt
<PAGE> 3
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -3-
Guarantees, the PNA Preferred Stock Guarantees, the PIB Senior Debt Guarantees,
the PIB Subordinated Debt Guarantees and the PIB Preferred Stock Guarantees are
sometimes collectively referred to herein as the "Guarantees"; and the Debt
Securities, the Popular Preferred Stock, the PNA Preferred Stock and the PIB
Preferred Stock are sometimes collectively referred to herein as the
"Securities"). The Securities are limited to an aggregate initial offering
price not to exceed $1,000,000,000. We, as your counsel, have examined such
corporate records, certificates and other documents, and such questions of law,
as we have considered necessary or appropriate for the purposes of this
opinion. On the basis of such examination, we advise you that, in our opinion:
(1) When the registration statement relating to the
Securities and the Guarantees (the "Registration Statement") has
become effective under the Act, the terms of the Popular Senior Debt
Securities and of their issuance and sale have been duly established
in conformity with the indenture relating to the Popular Senior Debt
Securities, as supplemented (the "Popular Senior Indenture"), so as
not to violate any applicable law or result in a default under or
breach of any
<PAGE> 4
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -4-
agreement or instrument binding upon the Corporation and so as to comply with
any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Corporation, and the Popular Senior Debt Securities have
been duly executed and authenticated in accordance with the Popular Senior
Indenture and issued and sold as contemplated in the Registration Statement,
the Popular Senior Debt Securities will constitute valid and legally binding
obligations of the Corporation, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(2) When the Registration Statement has become effective under the Act,
the terms of the Popular Subordinated Debt Securities and of their issuance and
sale have been duly established in conformity with the indenture relating to
the Popular Subordinated Debt Securities (the "Popular Subordinated Indenture")
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon the Corporation and so as to comply
with
<PAGE> 5
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -5-
any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Corporation, and the Popular Subordinated Debt
Securities have been duly executed and authenticated in accordance with the
Popular Subordinated Indenture and issued and sold as contemplated in the
Registration Statement, the Popular Subordinated Debt Securities will
constitute valid and legally binding obligations of the Corporation, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(3) When the Registration Statement has become effective under the Act,
the terms of the PNA Senior Debt Securities and of the PNA Senior Debt
Guarantees and of their issuance and sale have been duly established in
conformity with the indenture relating to the PNA Senior Debt Securities and
the PNA Senior Debt Guarantees, as supplemented (the "PNA Senior Indenture"),
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon PNA or the Corporation and so
<PAGE> 6
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -6-
as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over PNA or the Corporation, the PNA
Senior Debt Securities have been duly executed and authenticated and the PNA
Senior Debt Guarantees have been duly executed, each in accordance with the PNA
Senior Indenture, and the PNA Senior Debt Securities and the PNA Senior Debt
Guarantees have been issued and sold as contemplated in the Registration
Statement, the PNA Senior Debt Securities will constitute valid and legally
binding obligations of PNA and the PNA Senior Debt Guarantees will constitute
valid and legally binding obligations of the Corporation, in each case subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(4) When the Registration Statement has become effective under the Act,
the indenture relating to the PNA Subordinated Debt Securities and the PNA
Subordinated Debt Guarantees (the "PNA Subordinated Indenture") has been duly
executed and delivered, the terms of the PNA Subordinated Debt Securities and
of
<PAGE> 7
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -7-
the PNA Subordinated Debt Guarantees and of their issuance and sale have been
duly established in conformity with the PNA Subordinated Indenture so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PNA or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PNA or the Corporation, the PNA Subordinated Debt
Securities have been duly executed and authenticated and the PNA Subordinated
Debt Guarantees have been duly executed, each in accordance with the PNA
Subordinated Indenture, and the PNA Subordinated Debt Securities and the PNA
Subordinated Debt Guarantees have been issued and sold as contemplated in the
Registration Statement, the PNA Subordinated Debt Securities will constitute
valid and legally binding obligations of PNA and the PNA Subordinated Debt
Guarantees will constitute valid and legally binding obligations of the
Corporation, in each case subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
<PAGE> 8
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -8-
(5) When the Registration Statement has become effective under the Act, the
indenture relating to the PIB Senior Debt Securities and the PIB Senior Debt
Guarantees (the "PIB Senior Indenture") has been duly executed and delivered,
the terms of the PIB Senior Debt Securities and of the PIB Senior Debt
Guarantees and of their issuance and sale have been duly established in
conformity with the PIB Senior Indenture so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon PIB or the Corporation and so as to comply with any requirement
or restriction imposed by any court or governmental body having jurisdiction
over PIB or the Corporation, the PIB Senior Debt Securities have been duly
executed and authenticated and the PIB Senior Debt Guarantees have been duly
executed, each in accordance with the PIB Senior Indenture, and the PIB Senior
Debt Securities and the PIB Senior Debt Guarantees have been issued and sold as
contemplated in the Registration Statement, the PIB Senior Debt Securities will
constitute valid and legally binding obligations of PIB and the PIB Senior Debt
Guarantees will constitute valid and legally binding obligations
<PAGE> 9
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -9-
of the Corporation, in each case subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(6) When the Registration Statement has become effective under the Act,
the indenture relating to the PIB Subordinated Debt Securities and the PIB
Subordinated Guarantees (the "PIB Subordinated Indenture") has been duly
executed and delivered, the terms of the PIB Subordinated Debt Securities and
of the PIB Subordinated Debt Guarantees and of their issuance and sale have
been duly established in conformity with the PIB Subordinated Indenture so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PIB or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PIB or the Corporation, the PIB Subordinated Debt
Securities have been duly executed and authenticated and the PIB Subordinated
Debt Guarantees have been duly executed, each in accordance with the PIB
Subordinated
<PAGE> 10
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -10-
Indenture, and the PIB Subordinated Debt Securities and the PIB Subordinated
Debt Guarantees have been issued and sold as contemplated in the Registration
Statement, the PIB Subordinated Debt Securities will constitute valid and
legally binding obligations of PIB and the PIB Subordinated Debt Guarantees
will constitute valid and legally binding obligations of the Corporation, in
each case subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
(7) When the Registration Statement has become effective under the Act, a
certificate of designations with respect to the PNA Preferred Stock has been
duly filed and recorded with the Secretary of State of the State of Delaware,
the terms of the PNA Preferred Stock and of its issue and sale have been duly
established in conformity with PNA's certificate of incorporation, as amended,
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon PNA or the Corporation and so as to
comply with any requirement or restriction imposed by any court or governmental
body having
<PAGE> 11
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -11-
jurisdiction over PNA or the Corporation, all regulatory consents or
approvals for the issuance and sale of the PNA Preferred Stock and for
the issuance of the PNA Preferred Stock Guarantees have been obtained,
and the PNA Preferred Stock and the PNA Preferred Stock Guarantees
have been duly issued and sold as contemplated by the Registration
Statement, the PNA Preferred Stock will be validly issued, fully paid
and nonassessable, and when the terms of the PNA Preferred Stock
Guarantees have been duly approved by the Board of Directors or other
authorized officials of the Corporation and the PNA Preferred Stock
Guarantees have been duly executed, the PNA Preferred Stock Guarantees
will constitute valid and legally binding obligations of the
Corporation, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
We note that, as of the date of this opinion, a judgment for money in
an action based on a Debt Security denominated in a foreign currency or
currency unit, or on a related Guarantee, in a Federal or state court in the
United
<PAGE> 12
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -12-
States ordinarily would be enforced in the United States only in United States
dollars. The date used to determine the rate of conversion of the foreign
currency or currency unit in which a particular Debt Security is denominated
into United States dollars will depend on various factors, including which
court renders the judgment. In the case of a Debt Security denominated in a
foreign currency, or a related Guarantee, a state court in the State of New
York rendering a judgment on a Debt Security, or on a related Guarantee, would
be required under Section 27 of the New York Judiciary Law to render such
judgment in the foreign currency in which the Debt Security is denominated, and
such judgment would be converted into United States dollars at the exchange
rate prevailing on the date of entry of the judgment.
The foregoing opinion is limited to the Federal laws of the United States,
the laws of the State of New York and the Commonwealth of Puerto Rico, and the
General Corporation Law of the State of Delaware, and we are expressing no
opinion as to the effect of the laws of any other jurisdiction. With respect to
all matters of the laws of the Commonwealth of Puerto Rico, we have relied upon
the opinion, dated the date hereof, of Brunilda Santos de
<PAGE> 13
Popular, Inc.
Popular International Bank, Inc.
Popular North America, Inc. -13-
Alvarez, Counsel to the Corporation, and our opinion is subject to the same
assumptions, qualifications and limitations with respect to such matters as are
contained in such opinion of Brunilda Santos de Alvarez.
Also, we have relied as to certain matters on information obtained from
public officials, officers of the Corporation, PNA and PIB, and other sources
believed by us to be responsible, and we have assumed that each of the Popular
Senior Indenture, the Popular Subordinated Indenture and the PNA Senior
Indenture has been duly authorized, executed and delivered by the respective
Trustee thereunder, assumptions that we have not independently verified.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Validity
of Offered Securities" in the Prospectus contained in the Registration
Statement. In giving such consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Sullivan & Cromwell
<PAGE> 1
EXHIBIT (12)
POPULAR, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
FIRST YEAR ENDED DECEMBER 31,
QUARTER ----------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Income before income taxes......... $ 69,087 $256,028 $206,130 $175,177 $132,140 $100,145
Fixed charges:
Interest expense................. 153,621 591,540 521,624 351,633 280,008 300,136
Estimated interest component of
net rental payments........... 1,766 7,065 6,012 5,568 4,827 4,691
Total fixed charges including
interest on deposits.......... 155,387 598,605 527,636 357,201 284,835 304,826
Less: Interest on deposits....... 86,195 350,221 329,783 247,726 219,447 253,375
Total fixed charges excluding
interest on deposits.......... 69,192 248,384 197,853 109,475 65,388 51,451
Income before income taxes and
fixed charges (including interest
on deposits)..................... $224,474 $854,633 $733,766 $532,378 $416,975 $404,971
Income before income taxes and
fixed charges (excluding interest
on deposits)..................... $138,279 $504,412 $403,983 $284,652 $197,528 $151,596
Preferred stock dividends.......... $ 2,087 $ 8,350 $ 8,350 $ 4,630 $ 770 $ 770
Ratio of earnings to fixed charges
Including Interest on Deposits... 1.4 1.4 1.4 1.5 1.5 1.3
Excluding Interest on Deposits... 2.0 2.0 2.0 2.6 3.0 2.9
Ratio of earnings to fixed charges
& Preferred Stock Dividends
Including Interest on Deposits... 1.4 1.4 1.4 1.5 1.5 1.3
Excluding Interest on Deposits... 1.9 2.0 2.0 2.5 3.0 2.9
</TABLE>
<PAGE> 1
EXHIBIT (23)(A)
PRICE WATERHOUSE
THE CHASE MANHATTAN BANK BUILDING
P.O. BOX 363566
SAN JUAN, PR 00936-3566
CONSENT OF INDEPENDENT ACCOUNTANTS
May 9, 1997
To the Board of Directors
Popular, Inc.
(formerly BanPonce Corporation)
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 21, 1997, appearing on page F-35 of BanPonce Corporation's Annual
Report on Form 10-K for the year ended December 31, 1996. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse
- --------------------
PRICE WATERHOUSE
<PAGE> 1
EXHBITIT (25)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
---
-----------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------
POPULAR, INC.
(EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS CHARTER)
PUERTO RICO 66-0416582
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
POPULAR NORTH AMERICA, INC.
(Exact name of co-registrant as specified in its charter)
Delaware 66-0476353
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
521 Fellowship Road 08054
Mt. Laurel, New Jersey (Zip Code)
(Address of principal executive offices)
DEBT SECURITIES AND GUARANTEES
(TITLE OF INDENTURE SECURITIES)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART
OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 9th day of May, 1997.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY: /s/ Melissa G. Weismam
----------------------
MELISSA G. WEISMAN
VICE PRESIDENT
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 12 OF THE FORM T-1 OF THE FIRST NATIONAL BANK
OF CHICAGO, FILED AS EXHIBIT 26 TO THE REGISTRATION STATEMENT ON FORM S-3 OF
ITT CORPORATION, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER
15, 1996 (REGISTRATION NO. 333-07221).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
May 9, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of indentures between Popular, Inc.,
Popular North America, Inc. and The First National Bank of Chicago, the
undersigned, in accordance with Section 321(b) of the Trust Indenture Act of
1939, as amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /s/ Melissa G. Weisman
----------------------
MELISSA G. WEISMAN
VICE PRESIDENT
4
<PAGE> 5
EXHIBIT 7
<TABLE>
<S> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/96 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400 <-
DOLLAR AMOUNTS IN ------------ ---------
THOUSANDS RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)............. 0081 4,586,399 1.a.
b. Interest-bearing balances(2)...................................... 0071 5,224,838 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)......... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)...... 1773 3,335,304 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold................................................ 0276 4,157,626 3.a.
b. Securities purchased under agreements to resell................... 0277 96,125 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)................................................................ RCFD 2122 23,448,929 4.a.
b. LESS: Allowance for loan and lease losses......................... RCFD 3123 419,373 4.b.
c. LESS: Allocated transfer risk reserve............................. RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).............................. 2125 23,029,556 4.d.
5. Assets held in trading accounts...................................... 3545 7,888,514 5.
6. Premises and fixed assets (including capitalized leases)............. 2145 701,700 6.
7. Other real estate owned (from Schedule RC-M)......................... 2150 11,061 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)....................................... 2130 62,681 8.
9. Customers' liability to this bank on acceptances outstanding......... 2155 480,933 9.
10. Intangible assets (from Schedule RC-M)............................... 2143 303,014 10.
11. Other assets (from Schedule RC-F).................................... 2160 1,745,155 11.
12. Total assets (sum of items 1 through 11)............................. 2170 51,622,906 12.
</TABLE>
- --------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE> 6
<TABLE>
<S> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/96 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
Thousands BIL MIL THOU
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)..................................... RCON 2200 22,032,796 13.a.
(1) Noninterest-bearing(1)...................................... RCON 6631 9,190,670 13.a.1
(2) Interest-bearing............................................ RCON 6636 12,842,126 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).............................. RCFN 2200 10,861,857 13.
(1) Noninterest bearing......................................... RCFN 6631 285,745 13.b.1
(2) Interest-bearing............................................ RCFN 6636 10,576,382 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of
its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased......................................... RCFD 0278 2,639,255 14.a.
b. Securities sold under agreements to repurchase.................. RCFD 0279 66,564 14.b.
15. a. Demand notes issued to the U.S. Treasury........................ RCON 2840 121,352 15.a.
b. Trading Liabilities............................................. RCFD 3548 5,793,742 15 b.
16. Other borrowed money:
a. With original maturity of one year or less...................... RCFD 2332 2,665,232 16.a.
b. With original maturity of more than one year................... RCFD 2333 58,105 16 b.
17. Mortgage indebtedness and obligations under capitalized
leases............................................................. RCFD 2910 285,671 17.
18. Bank's liability on acceptance executed and outstanding............ RCFD 2920 480,933 18.
19. Subordinated notes and debentures.................................. RCFD 3200 1,400,000 19.
20. Other liabilities (from Schedule RC-G)............................. RCFD 2930 1,199,147 20.
21. Total liabilities (sum of items 13 through 20)..................... RCFD 2948 47,604,654 21.
22. Limited-Life preferred stock and related surplus................... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus...................... RCFD 3838 0 23.
24. Common stock....................................................... RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,934,523 25.
26. a. Undivided profits and capital reserves.......................... RCFD 3632 865,652 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities...................................................... RCFD 8434 18,441 26.b.
27. Cumulative foreign currency translation adjustments................ RCFD 3284 (1,222) 27.
28. Total equity capital (sum of items 23 through 27).................. RCFD 3210 4,018,252 28.
29. Total liabilities, limited-life preferred stock, and equity........
capital (sum of items 21, 22, and 28).............................. RCFD 3300 51,622,906 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below
that best describes the most comprehensive level of auditing work
performed for the bank by independent external
<TABLE>
<CAPTION>
Number
<S> <C> <C> <C>
auditors as of any date during 1995........................................ RCFD 6724 N/A M.1.
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4.= Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required
by state chartering authority)
</TABLE>
- --------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
