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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM 8-K
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CURRENT REPORT
Pursuant to Section 13
or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): October 10, 1996
----------------
First Financial Caribbean Corporation
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(Exact name of registrant as specified in this charter)
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Puerto Rico 0-17224 66-0312162
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(State or other jurisdiction (Commission File No.) (IRS Employer Identification No.)
of incorporation)
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1159 Franklin D. Roosevelt Avenue, San Juan, Puerto Rico 00920
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (787) 749-7100
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ITEM 5. OTHER EVENTS
On October 10, 1996, First Financial Caribbean Corporation (the
"Company") issued $75,000,000 of its 7.84% Senior Notes due 2006 (the "Notes").
The Notes were issued pursuant to an Indenture, dated October 10, 1996, between
the Company and Bankers Trust Company, as trustee. The Notes were sold to the
public at a price of 100% by BT Securities Corporation, as underwriter.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA, FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
10.69 Indenture, dated as of October 10, 1996, between the
Company and Bankers Trust Company (including form of
Senior Note)
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2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
FIRST FINANCIAL CARIBBEAN CORPORATION
By: /s/ Ricardo Melendez
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Ricardo Melendez
Vice President and
Controller
Date: October 16, 1996
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EXHIBIT INDEX
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EXHIBIT NUMBER DESCRIPTION PAGE
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10.69 Indenture, dated as of October 10, 1996,
between the Company and Bankers Trust
Company (including form of Senior Note)
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FIRST FINANCIAL CARIBBEAN CORPORATION
and
BANKERS TRUST COMPANY,
Trustee
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INDENTURE
Dated as of October 10, 1996
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$75,000,000
7.84% Senior Notes Due 2006
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Reconciliation and tie between Trust Indenture Act of 1939 and Indenture,
dated as of September , 1996
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Trust Indenture Indenture
Act Section Section
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{ 310 ................................................ 604
(a)(1) ......................................... 607
(a)(2) ......................................... 607
(a)(3) ......................................... Not Applicable
(a)(4) ......................................... Not Applicable
(b) ............................................ 608, 610, 613
{ 311 ................................................ 604
(a) ............................................ 614(a)
(b) ............................................ 614(b)
(c) ............................................ Not Applicable
{ 312 (a) ............................................ 701, 702(a)
(b) ............................................ 702(b)
(c) ............................................ 702(c)
{ 313 (a) ............................................ 703(a)
(b) ............................................ 703(b)
(c) ............................................ 703(c)
(d) ............................................ 703(d)
{ 314 (a) ............................................ 704
(b) ............................................ Not Applicable
(c)(1) ......................................... 102
(c)(2) ......................................... 102
(c)(3) ......................................... Not Applicable
(d) ............................................ Not Applicable
(e) ............................................ 102
{ 315 ................................................ 602
(a) ............................................ 601(a)
(b) ............................................ 612, 703(a)(6)
(c) ............................................ 601(b)
(d) ............................................ 601(c)
(d)(1) ......................................... 601(a)(1),
601(c)(1)
(d)(2) ......................................... 601(c)(2)
(d)(3) .........................................
601(c)(3)
(e) ............................................ 514, 608
{ 316 (a)(1)(A) ...................................... 502, 512
(a)(1)(B) ...................................... 513
(a)(2) ......................................... Not Applicable
(b) ............................................ 508
{ 317 (a)(1) ......................................... 503
(a)(2) ......................................... 504
(b) ............................................ 1003
{ 318 (a) ............................................ 107
________________
Security: This reconciliation and tie shall not, for any
purpose be deemed to be a part of the Indenture.
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TABLE OF CONTENTS
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Parties........................................................... 1
Recitals of the Company........................................... 1
ARTICLE ONE
Definitions and Other Provisions of
General Application
SECTION 101. Definitions..................................... 1
Act............................................. 2
Affiliate....................................... 2
Asset Disposition............................... 2
Authenticating Agent............................ 3
Board of Directors.............................. 3
Board Resolution................................ 3
Book-Entry Security............................. 3
Business Day.................................... 3
Capital Stock................................... 3
Capitalized Lease Obligation.................... 3
Commission...................................... 4
Common Stock.................................... 4
Company......................................... 4
Company Request or Company Order................ 4
Consolidated EBITDA............................. 4
Consolidated Income Tax Expense................. 4
Consolidated Interest Coverage
Ratio......................................... 4
Consolidated Interest Expense................... 6
Consolidated Net Income or
Consolidated Net Loss......................... 6
Consolidated Net Tangible Assets................ 7
Consolidated Net Worth.......................... 7
Consolidated Non-cash Charges................... 7
Consolidated Non-cash Net Income
Contributions................................. 8
Convertible Subordinated
Debentures.................................... 8
Corporate Trust Office.......................... 8
Defaulted Interest.............................. 8
Depositary...................................... 8
Disqualified Stock.............................. 8
Event of Default................................ 9
Exchange Act.................................... 9
GAAP............................................ 9
Holder.......................................... 9
Indebtedness.................................... 9
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Indenture....................................... 10
Interest Payment Date........................... 10
Interest Protection Agreement................... 10
Lien............................................ 10
Maturity........................................ 10
Officers' Certificate........................... 10
Opinion of Counsel.............................. 11
Outstanding..................................... 11
Paying Agent.................................... 12
Permitted Indebtedness.......................... 12
Permitted Liens................................. 12
Person.......................................... 13
Predecessor Security............................ 14
Property........................................ 14
Redemption Date................................. 14
Redemption Price................................ 14
Refinancing Indebtedness........................ 14
Regular Record Date............................. 15
Responsible Officer............................. 15
Restricted Indebtedness......................... 15
Restricted Investment........................... 15
Restricted Payment.............................. 16
Security Register; Security
Registrar..................................... 16
Servicing Assets................................ 16
Special Record Date............................. 16
Stated Maturity................................. 16
Subsidiary...................................... 16
Subsidiary...................................... 17
Trust Indenture Act............................. 17
Trustee......................................... 17
U.S. Government Obligations..................... 17
Vice President.................................. 17
Voting Stock.................................... 18
Wholly-Owned Subsidiary......................... 18
SECTION 102. Compliance Certificates and
Opinions...................................... 18
SECTION 103. Form of Documents Delivered to
Trustee....................................... 19
SECTION 104. Acts of Holders................................. 19
SECTION 105. Notices, Etc., to Trustee and
Company....................................... 21
SECTION 106. Notice to Holders; Waiver....................... 22
SECTION 107. Conflict with Trust Indenture
Act........................................... 23
SECTION 108. Effect of Headings and Table of
Contents...................................... 23
SECTION 109. Successors and Assigns.......................... 23
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SECTION 110. Separability Clause............................. 23
SECTION 111. Benefits of Indenture........................... 23
SECTION 112. Governing Law................................... 23
SECTION 113. Legal Holidays.................................. 23
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally................................. 24
SECTION 202. Form of Face of Security........................ 24
SECTION 203. Form of Reverse of Security..................... 27
SECTION 204. Form of Trustee's Certificate
of Authentication............................. 33
ARTICLE THREE
The Securities
SECTION 301. Title and Terms................................. 34
SECTION 302. Denominations................................... 34
SECTION 303. Execution, Authentication,
Delivery and Dating........................... 34
SECTION 304. Temporary Securities............................ 36
SECTION 305. Registration, Registration of
Transfer and Exchange......................... 37
SECTION 306. Mutilated, Destroyed, Lost and
Stolen Securities............................. 40
SECTION 307. Payment of Interest; Interest
Rights Preserved.............................. 41
SECTION 308. Persons Deemed Owners........................... 43
SECTION 309. Cancellation.................................... 43
SECTION 310. Computation of Interest......................... 43
ARTICLE FOUR
Satisfaction and Discharge;
Defeasance
SECTION 401. Satisfaction and Discharge of
Indenture..................................... 44
SECTION 402. Defeasance of Certain
Obligations................................... 46
SECTION 403. Application of Trust Money...................... 47
SECTION 404. Reinstatement................................... 48
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ARTICLE FIVE
Remedies
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SECTION 501. Events of Default............................... 48
SECTION 502. Acceleration of Maturity;
Rescission and Annulment...................... 50
SECTION 503. Collection of Indebtedness and
Suits for Enforcement by
Trustee....................................... 51
SECTION 504. Trustee May File Proofs of
Claim......................................... 52
SECTION 505. Trustee May Enforce Claims
Without Possession of
Securities.................................... 53
SECTION 506. Application of Money Collected.................. 54
SECTION 507. Limitation on Suits............................. 54
SECTION 508. Unconditional Right of Holders
To Receive Principal,
Premium and Interest.......................... 55
SECTION 509. Restoration of Rights and
Remedies...................................... 56
SECTION 510. Rights and Remedies Cumulative.................. 56
SECTION 511. Delay or Omission Not Waiver.................... 56
SECTION 512. Control by Holders.............................. 56
SECTION 513. Waiver of Past Defaults......................... 57
SECTION 514. Undertaking for Costs........................... 57
SECTION 515. Waiver of Stay or Extension
Laws.......................................... 58
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and
Responsibilities............................ 58
SECTION 602. Certain Rights of
Trustee........................................ 60
SECTION 603. Not Responsible for Recitals
or Issuance of Securities.................... 61
SECTION 604. May Hold Securities............................ 61
SECTION 605. Money Held in Trust............................ 62
SECTION 606. Compensation and Reimbursement................. 62
SECTION 607. Corporate Trustee Required;
Eligibility.................................. 63
SECTION 608. Resignation and Removal;
Appointment of Successor..................... 63
SECTION 609. Acceptance of Appointment by
Successor.................................... 65
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SECTION 610. Merger, Conversion,
Consolidation or Succession
to Business.................................. 66
SECTION 611. Appointment of Authenticating
Agent........................................ 66
SECTION 612. Notice of Defaults.............................. 68
SECTION 613. Disqualification; Conflicting
Interests.................................... 68
SECTION 614. Preferential Collection of
Claims Against Company....................... 75
ARTICLE SEVEN
Holder's Lists and Reports
by Trustee and Company
SECTION 701. Company to Furnish Trustee
Names and Addresses of
Holders...................................... 81
SECTION 702. Preservation of Information;
Communications to Holders.................... 81
SECTION 703. Reports by Trustee.............................. 82
SECTION 704. Reports by Company.............................. 84
ARTICLE EIGHT
Consolidation, Merger, Conveyance,
Transfer or Lease
SECTION 801. Company May Consolidate, Etc.,
Only on Certain Terms........................ 85
SECTION 802. Successor Substituted........................... 86
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures
Without Consent of Holders................... 87
SECTION 902. Supplemental Indentures with
Consent of Holders...........................
SECTION 903. Execution of Supplemental
Indentures................................... 88
SECTION 904. Effect of Supplemental
Indentures................................... 89
SECTION 905. Conformity with Trust
Indenture Act................................ 89
SECTION 906. Reference in Securities to
Supplemental Indentures...................... 89
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ARTICLE TEN
Covenants
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SECTION 1001. Payment of Principal, Premium
and Interest................................. 89
SECTION 1002. Maintenance of Office or
Agency....................................... 90
SECTION 1003. Money for Security Payments to
Be Held in Trust............................. 90
SECTION 1004. Corporate Existence............................. 92
SECTION 1005. Maintenance of Properties....................... 92
SECTION 1006. Payment of Taxes and Other
Claims....................................... 93
SECTION 1007. Insurance....................................... 93
SECTION 1008. Limitation on Company and
Subsidiary Indebtedness and
Disqualified Stock........................... 93
SECTION 1009. Limitation on Restricted
Payments..................................... 94
SECTION 1010. Limitation on Liens............................. 95
SECTION 1011. Limitation on Dividends and
Other Payment Restrictions
Affecting Subsidiaries....................... 95
SECTION 1012. Limitation on Sales of Assets................... 96
SECTION 1013. Transactions with Affiliates.................... 96
SECTION 1014. Limitation on Capital Stock of
Subsidiaries................................. 97
SECTION 1015. Limitation on Line of Business.................. 97
SECTION 1016. Provision of Financial
Statements................................... 97
SECTION 1017. Statement by Officers as to
Default...................................... 98
SECTION 1018. Waiver of Certain Covenants..................... 98
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption............................. 99
SECTION 1102. Applicability of Article........................ 99
SECTION 1103. Election to Redeem; Notice to
Trustee...................................... 99
SECTION 1104. Selection by Trustee of
Securities to Be Redeemed.................... 99
SECTION 1105. Notice of Redemption............................ 100
SECTION 1106. Deposit of Redemption Price..................... 101
SECTION 1107. Securities Payable on
Redemption Date.............................. 101
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SECTION 1108. Securities Redeemed in Part..................... 101
TESTIMONIUM....................................................... 102
SIGNATURE......................................................... 102
ACKNOWLEDGMENTS................................................... 103
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INDENTURE, dated as of October 10, 1996, between First Financial
Caribbean Corporation, a corporation duly organized and existing under the laws
of Puerto Rico (herein called the "Company"), having its principal office at
1159 Franklin D. Roosevelt Avenue, San Juan, Puerto Rico 00920, and Bankers
Trust Company, a New York banking corporation, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its
7.84% Senior Notes due 2006 (herein called the "Securities") of substantially
the tenor and amount hereinafter set forth, and to provide therefor the Company
has duly authorized the execution and delivery of this Indenture.
All things necessary have been done to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms.
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 covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
Definitions and Other Provisions of
General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
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(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP, as hereinafter
defined; 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.
Certain terms used principally in Article Six are defined in that
Article.
"Act" when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person (i)
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person; (ii) which beneficially owns 10% or
more of the Voting Stock of such specified Person; or (iii) 10% or more of the
Voting Stock (or in the case of a Person which is not a corporate entity, 10%
of the equity interest) of which is owned by such specified Person or a
subsidiary thereof. 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.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) of
property or other assets (each referred to for the purposes of this definition
as a "disposition") by the Company or any of its Subsidiaries (other than (i) a
disposition by a Subsidiary to the Company or by the Company or a Subsidiary to
a Wholly-Owned Subsidiary, (ii) a disposition of any asset, including without
limitation, loans, mortgaged backed securities and Servicing Assets and other
securities, in the ordinary course of business and (iii) a disposition of
property or other assets having a fair market value (as determined in good
faith by the Company) of not more than $1,500,000. For purposes of this
definition, the term "Asset Disposition" shall include any disposition by means
of a merger, consolidation or similar transaction unless such merger,
consolidation or similar transaction is not in violation of the provisions of
Section 801.
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"Authenticating Agent" means any Person authorized by the Trustee
to act on behalf of the Trustee to authenticate Securities.
"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.
"Book-Entry Security" means a Security evidencing all or part of
the Securities that is executed by the Company and authenticated and delivered
by the Trustee to the Depositary or pursuant to the Depositary's instruction,
all in accordance with this Indenture and pursuant to a Company Request, that
shall be registered in the name of the Depositary or its nominee and that shall
represent, and shall be denominated in an amount equal to the principal of, all
of the Outstanding Securities or any portion thereof, and bearing the legend
prescribed in Section 303.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the City of New York
or the Commonweath of Puerto Rico are authorized or obligated by law or
executive order to close or otherwise a general bank holiday in either
jurisdiction.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than debt securities convertible into an
equity interest), warrants or options to acquire an equity interest in such
person.
"Capitalized Lease Obligation" means any obligation to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
real or personal property that is required to be classified and accounted for
as a capital lease obligation under GAAP, and, for the purposes of this
Indenture, the amount of such obligation at any date shall be the capitalized
amount thereof at such date, determined in accordance with such principles.
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"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 the 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.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to redemption by the Company and shall include
shares of the Company's common stock, par value $1.00 per share.
"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 or the Company by its 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.
"Consolidated EBITDA" means, with respect to the Company for any
period, (i) the sum of, without duplication, the amount for such period, taken
as a single accounting period, of (a) Consolidated Net Income, (b) Consolidated
Non-cash Charges, (c) Consolidated Interest Expense and (d) Consolidated Income
Tax Expense, less (ii) Consolidated Non-cash Net Income Contributions.
"Consolidated Income Tax Expense" means, with respect to the
Company for any period, the provision for federal, state, local and foreign
income taxes of the Company and its Subsidiaries for such period as determined
on a consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means, with respect to the
Company, the ratio of the aggregate amount of Consolidated EBITDA of the
Company for the four full fiscal quarters for which financial information in
respect thereof is available immediately preceding the date of the transaction
(for purposes of this definition, the "Transaction Date")
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giving rise to the need to calculate the Consolidated Interest Coverage Ratio
(such four full fiscal quarter period being referred to herein for purposes of
this definition as the "Four Quarter Period") to the aggregate amount of
Consolidated Interest Expense of the Company for the Four Quarter Period. In
addition to and without limitation of the foregoing, for purposes of this
definition "Consolidated EBITDA" and "Consolidated Interest Expense" shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to, without duplication, (a) the incurrence of any Indebtedness of
the Company or its Subsidiaries during the period commencing on the first day
of the Four Quarter Period to and including the Transaction Date (for purposes
of this definition, the "Reference Period"), including, without limitation, the
incurrence of the Indebtedness giving rise to the need to make such calculation
(and the application of the net proceeds thereof), as if such incurrence (and
application) occurred on the first day of the Reference Period, (b) an
adjustment to eliminate or include, as the case may be, the Consolidated EBITDA
and Consolidated Interest Expense of such Person directly or indirectly
attributable to assets which are the subject of any acquisition which gives
rise to the need to make such calculation occurring during the Reference Period
as if such acquisition occurred on the first day of the Reference Period and
(c) the retirement of Indebtedness during the Reference Period which cannot
thereafter be reborrowed under the agreement pursuant to which it was incurred
occurring as if retired on the first day of the Reference Period. For purposes
of calculating "Consolidated Interest Expense" for this "Consolidated Interest
Coverage Ratio," interest on Indebtedness incurred during the Four Quarter
Period under any revolving credit facility which can be borrowed and repaid
without reducing the commitments thereunder shall be the actual interest during
the Four Quarter Period. Furthermore, in calculating "Consolidated Interest
Expense" for purposes of determining the denominator (but not the numerator) of
this "Consolidated Interest Coverage Ratio", (i) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Transaction Date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date, (ii) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate,
a eurocurrency interbank offered rate, or other money market rates, then the
interest rate in effect on the Transaction Date will be deemed to have been in
effect during the Reference Period, and
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(iii) notwithstanding clauses (i) and (ii) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Rate Protection Obligations, shall be deemed to
have accrued at the rate per annum resulting after giving effect to the
operation of such agreements. If the Company or its Subsidiaries directly or
indirectly guaranteed Indebtedness of a third Person, the above clauses shall
give effect to the incurrence of such guaranteed Indebtedness as if the Company
or its Subsidiary had directly incurred or otherwise assumed such guaranteed
Indebtedness.
"Consolidated Interest Expense" means, with respect to the Company
for any period, without duplication, the sum of (i) the interest expense of the
Company and its Subsidiaries with respect to Indebtedness other than Permitted
Indebtedness and Refinancing Indebtedness (other than Indebtedness under this
Indenture and the Convertible Subordinated Debentures and Refinancing
Indebtedness thereon) for such period as determined on a consolidated basis in
accordance with GAAP, excluding the amortization of fees related to the
issuance of the Securities, but including, without limitation, (a) any
amortization of debt discount, (b) the net cost under Interest Rate Protection
Obligations (including any amortization of discounts), (c) the interest portion
of any deferred payment obligation which in accordance with GAAP is required to
be reflected on an income statement, (d) all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, and (e) all accrued interest and (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company and its Subsidiaries during such period as determined on
a consolidated basis in accordance with GAAP.
"Consolidated Net Income" or "Consolidated Net Loss" means, with
respect to the Company for any period, the consolidated net income (or loss) of
the Company and its Subsidiaries for such period as determined in accordance
with GAAP consistently applied and adjusted, to the extent included in
calculating such net income, by excluding, without duplication, (i) all
extraordinary gains or losses (net of fees and expenses relating to the
transaction giving rise thereto) and the non-recurring cumulative effect of
accounting charges, (ii) the portion of net income (or loss) of the Company and
its Subsidiaries allocable to minority interests in unconsolidated Persons to
the extent that cash dividends or distributions have not actually been received
by the Company, (iii) net income (or
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loss) of any Person combined with the Company or its Subsidiaries on a "pooling
of interests" basis attributable to any period prior to the date of
combination, (iv) any gain or loss realized upon the termination of any
employee pension benefit plan, on an after-tax basis, (v) gains (net of fees
and expenses relating to the transaction giving rise thereto) or losses in
respect of any Asset Dispositions by the Company or its Subsidiaries, on an
after-tax basis, and (vi) the net income of any Subsidiary of the Company to
the extent that the declaration of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary or its stockholders.
"Consolidated Net Tangible Assets" means, as of any date of
determination, the sum of the amounts that would appear on a consolidated
balance sheet of any Person and its subsidiaries as the total assets (less
accumulated depreciation and amortization, allowances for doubtful receivables,
other applicable reserves and other properly deductible items) of any Person
and its subsidiaries, determined on a consolidated basis in accordance with
GAAP, after giving effect to purchase accounting and after deducting therefrom,
to the extent otherwise included, the amounts of (without duplication): (i) the
excess of cost over fair market value of assets or businesses acquired; (ii)
any reevaluation or other write-up in book value of assets subsequent to the
last day of the fiscal quarter of such Person immediately preceding the date of
this Indenture as a result of a change in the method of valuation in accordance
with GAAP; and (iii) unamortized debt discount and expenses, other unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade names,
copyrights, licenses, organization or developmental expenses and other
intangible items (if included in total assets).
"Consolidated Net Worth" means the total stockholders' equity
(exclusive of any Disqualified Capital Stock) of any Person and its
subsidiaries determined on a consolidated basis in accordance with GAAP.
"Consolidated Non-cash Charges" means, with respect to the Company
for any period, the aggregate depreciation, amortization (including
amortization of excess servicing fees receivable, cost in excess of fair market
value of net assets acquired, amortization of debt issuance costs and mortgage
<PAGE> 17
-8-
servicing rights) and other non-cash expenses (including, without limitation,
allowance for loan and lease losses, non-cash reserves and non-cash charges) of
the Company and its Subsidiaries reducing Consolidated Net Income of the
Company and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Non-cash Net Income Contributions" means, with
respect to the Company for any period, the additions to excess servicing fees
receivable and the increase in originated mortgage servicing rights (OMSR) of
the Company and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.
"Convertible Subordinated Debentures" means the 8.25% Convertible
Subordinated Debentures due January 1, 2006, issued pursuant to the Debenture
Purchase Agreement, dated as of September 25, 1995, as amended and restated as
of December 15, 1995, between the Company and Banponce Corporation, a Puerto
Rico corporation.
"Corporate Trust Office" means the office of the Trustee at which,
at any particular time the corporate trust business of the Trustee shall be
administered, which, at the date of this Indenture, is located at the address
specified in Section 105.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities when issued in
whole or in part in the form of one or more Book-Entry Securities, The
Depository Trust Company, New York, New York, until a successor Person or
Persons shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean such successor Person or
Persons, as the case may be.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the option of the holder thereof, in whole or in part, on or
prior to October 10, 2006.
<PAGE> 18
-9-
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indebtedness" of any Person means (i) any liability of such Person
(a) for borrowed money, (b) secured by any Lien, (c) evidenced by a bond, note,
debenture or similar instrument (including a purchase money instrument), other
than a trade payable or current liability arising in the ordinary course of
business, (d) created or arising under any conditional sale or other title
retention agreement, (e) which is a "take-or-pay" obligation, (f) for the
payment of money relating to a Capitalized Lease Obligation, (g) for
reimbursement in respect of letters of credit but only to the extent that the
letters of credit do not support an obligation of such Person already included
in Indebtedness or which would constitute Permitted Indebtedness of such
Person, or (h) under Interest Rate Protection Agreements (other than Interest
Rate Protection Agreements relating to or in connection with Permitted
Indebtedness); (ii) any liability of others described in the preceding clause
(i) that the Person has guaranteed or that is otherwise its legal liability;
and (iii) any amendment, supplement, modification, deferral, renewal, extension
or refunding of any liability of the types referred to in clauses (i) and (ii)
above, but excluding contingent recourse obligations or contingent recourse
liabilities related to the Company's mortgage servicing portfolio or mortgage
servicing rights of the Company and its Subsidiaries and obligations as a
servicer under mortgage servicing agreements to make advances on mortgage loans
in advance of receipt of payment from the underlying obligors. Notwithstanding
the foregoing, any securities issued in a securitization by a special purpose
trust or similar entity to which mortgage loans or mortgage-backed securities
have been
<PAGE> 19
-10-
sold or otherwise transferred by or on behalf of the Company or any Subsidiary
of the Company or by any person to which the Company or any Subsidiary shall
have sold mortgage loans or mortgage-backed securities in connection with such
securitization transaction shall not be treated as Indebtedness regardless of
whether such securities are treated as indebtedness for tax purposes.
"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 by the
Trust Indenture Act to be a part of and govern this instrument and any such
supplemental indenture, respectively.
"Interest Payment Date" means each semi-annual interest payment
date on April 10 and October 10 of each year, commencing April 10, 1997.
"Interest Protection Agreement" of any Person means any interest
rate swap agreement, interest rate collar agreement, option or futures contract
or other similar agreement or arrangement designed to protect such Person or
any of its subsidiaries against fluctuations in interest rates.
"Lien" means, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this definition, a Person shall be deemed to own
subject to a Lien any Property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such Property.
"Maturity" when used with respect to any Security, means the date
on which the principal of such Security 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, the President or a Vice President, and by the Treasurer or the
Secretary of the Company, and delivered to the Trustee.
<PAGE> 20
-11-
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Outstanding" when used with respect to the 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, or portions thereof, 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, in each
case pursuant to the terms of this Indenture; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provisions 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, 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
<PAGE> 21
-12-
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 (and premium, if any) or interest on any Securities on behalf
of the Company.
"Permitted Indebtedness" means (i) Indebtedness of the Company and
its Subsidiaries outstanding immediately following the issuance of the
Securities and the application of the proceeds thereof; (ii) deposit
liabilities of any Subsidiary, the deposits of which are insured by the Federal
Deposit Insurance Corporation or any successor agency to the fullest extent
permitted by law; (iii) Indebtedness of the Company or any Subsidiary incurred
in the ordinary course of business pursuant to overdraft facilities; (iv)
Indebtedness of the Company or any Subsidiary to the Federal Home Loan Bank of
New York or any successor thereto incurred in the ordinary course of business
and secured by mortgage loans, mortgage-backed securities or other permitted
collateral (including term notes payable to private investors collateralized by
letters of credit issued by the Federal Home Loan Bank of New York); (v)
Indebtedness of the Company or any Subsidiary incurred in the ordinary course
of business and secured by mortgage loans, mortgage-backed securities,
asset-backed securities or Servicing Assets (other than term facilities secured
by Servicing Assets) or any other type of security in the case of AAA Financial
Services Corporation, including commercial paper notes that are credit enhanced
pursuant to credit facilities which are secured by any such assets; (vi)
Indebtedness of the Company or any Subsidiary under any mortgage loan
repurchase agreements or securities repurchase agreements entered into in the
ordinary course of business; (vii) Indebtedness of the Company or any
Subsidiary under, or incurred to finance or settle, any put obligation entered
into in the ordinary course of business in connection with the sale or
financing of mortgage loans or mortgage-backed securities; (viii) Indebtedness
of the Company or any Subsidiary under Interest Rate Protection Agreements
related to or in connection with (i) through (vii) above.
"Permitted Liens" means (i) any purchase money Lien on any Property
acquired after the date of this Indenture by the Company or any Subsidiary or
constructed or improved after the date of this Indenture by the Company or any
<PAGE> 22
-13-
Subsidiary to secure or provide for the payment of all or a part of the
purchase price thereof, or any Indebtedness incurred to finance the purchase
thereof or cost of construction or cost of improvement of such property;
provided that (a) such Liens shall not extend to any other Property of the
Company or any Subsidiary, and (b) any Indebtedness secured by any such Lien
shall not exceed an amount equal to 100% of the lesser of the purchase price or
fair market value at the time ofacquisition of the Property (the amount to be
determined in good faith by the Company); (ii) all Liens on Property of the
Company or any Subsidiary existing on the date of this Indenture; (iii) Liens
created in connection with property taxes and assessments or governmental
charges or levies and Liens securing claims of mechanics and materialmen in the
ordinary course of business; (iv) Liens in favor of the Company or a Subsidiary
securing Indebtedness of a Subsidiary; (v) Liens on Property existing at the
time of acquisition thereof (including acquisition through merger or
consolidation); provided that (a) such Liens shall not extend to any other
Property of the Company or any Subsidiary, and (b) such Liens shall not have
been created, incurred or assumed in contemplation of such Property being
acquired by the Company or any Subsidiary; (vi) Liens securing the Securities;
(vii) Liens incidental to the conduct of business or the ownership of
properties (including warehousemen's and attorney's liens and statutory
landlord's liens and liens to secure the deposit of public funds or trust funds
in the case of Doral Federal); (viii) Liens arising by reason of any judgment,
decree or order of any court, so long as such Lien is adequately bonded, any
appropriate legal proceedings which may have been duly initiated for the review
of such judgment, decree or order shall not have been finally terminated and
the period within which such proceedings may be initiated shall not have
expired; (ix) Liens securing Indebtedness referred to in clauses (i) and
(iii)-(viii) of the definition of "Permitted Indebtedness" above; (x) Liens
securing residential mortgage servicing assets; (xi) Liens in favor of
Financial Security Assurance or other insurance or credit enhancement providers
on residual certificates or interests of mortgage trusts; and (xii) any
extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any Lien referred to in the foregoing
subparagraphs (i) through (xi); provided that any of the foregoing are limited
to the same Property subject to, and securing no more Indebtedness than, the
Lien so extended, renewed or replaced.
"Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint
stock company, trust, unincorporated organization or government or any agency
or political subdivision thereof.
<PAGE> 23
-14-
"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.
"Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
subsidiaries under GAAP.
"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 such Security is to be redeemed pursuant to
this Indenture.
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances or extends any Indebtedness of the Company or its Subsidiaries
outstanding on the date of this Indenture or other Indebtedness permitted to be
incurred by the Company or its Subsidiaries pursuant to the terms of this
Indenture, but only to the extent that (i) such newly incurred Indebtedness is
subordinated to the Securities to the same extent as the Indebtedness being
refunded, refinanced or extended; (ii) the Refinancing Indebtedness is
scheduled to mature either (a) no earlier than the Indebtedness being refunded,
refinanced or extended, or (b) after the Stated Maturity of the Securities;
(iii) the portion, if any, of the Refinancing Indebtedness that is scheduled to
mature on or prior to the Stated Maturity of the Securities has a weighted
average life to maturity at the time such Refinancing Indebtedness is incurred
that is equal to or greater than the weighted average life to maturity of the
portion of the Indebtedness being refunded, refinanced or extended that is
scheduled to mature on or prior to the Stated Maturity of the Securities; (iv)
such Refinancing Indebtedness is in an aggregate principal amount that is equal
to or less than the sum of (a) the aggregate principal amount then outstanding
under the Indebtedness being refunded, refinanced or extended, (b) the amount
of accrued and unpaid interest, if any, on such Indebtedness being refunded,
refinanced or extended and (c) the amount of customary fees, expenses and
<PAGE> 24
-15-
costs related to the incurrence of such Refinancing Indebtedness; and (v) such
Refinancing Indebtedness is incurred by the same Person that initially incurred
the Indebtedness being refunded, refinanced or extended, except that (a) the
Company may incur Refinancing Indebtedness to refund, refinance or extend
Indebtedness of any Subsidiary and (b) any Subsidiary may incur Refinancing
Indebtedness to refund, refinance or extend Indebtedness of any other
Subsidiary.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the March 25 or September 25 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"Responsible Officer" when used with respect to the Trustee means
any officer assigned to and working in the corporate trust and agency group (or
any successor group) of the Trustee, including any Vice President, Assistant
Vice President, Assistant Secretary, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Indebtedness" means any Indebtedness that (i) is
subordinated in right of payment to the Securities; and (ii) requires any
principal payment, redemption payment or sinking fund payment thereon, in whole
or in part, to be made on or prior to the Stated Maturity of the Securities;
provided that any Indebtedness which qualifies as Refinancing Indebtedness
shall not be deemed to constitute Restricted Indebtedness.
"Restricted Investment" shall mean any investment in, loan or
advance to, guarantee on behalf of, directly or indirectly, or other transfer
of assets to, (i) any Person, whether in corporate, partnership or other legal
form, in which the Company or any of its Subsidiaries holds a 50% or less
interest; or (ii) any Subsidiary that is subject to restrictions, direct or
indirect, on the declaration or payment of dividends or similar distributions,
or the making of intercompany loans or advances, by that Subsidiary to the
Company or to any other Subsidiary under the terms of its certificate of
incorporation or any agreement, instrument, judgment, order, decree, statute
(other than Puerto Rico or any State corporate law or any equivalent
restriction relating to federal savings
<PAGE> 25
-16-
associations), rule or governmental regulation binding upon such Subsidiary.
"Restricted Payment" means (i) any declaration or payment of any
dividend or other distribution on Capital Stock of the Company or any of its
Subsidiaries (other than Wholly- Owned Subsidiaries), other than dividends or
distributions payable in Capital Stock (other than Disqualified Stock) or
options, warrants or other rights to acquire Capital Stock (other than
Disqualified Stock); (ii) any redemption, purchase, retirement or other
acquisition for value (other than value represented by Capital Stock (other
than Disqualified Stock) or options, warrants or other rights to acquire
Capital Stock (other than Disqualified Stock)) of the Capital Stock of the
Company or any of its Subsidiaries (other than Wholly-Owned Subsidiaries);
(iii) the making of any principal payment on, or the purchase, defeasance,
repurchase, redemption or other acquisition or retirement for value, prior to
any scheduled maturity, scheduled repayment or scheduled sinking fund payment,
of, any Indebtedness of the Company which is subordinated in right of payment
to the Securities other than (a) with the proceeds from the incurrence of
Refinancing Indebtedness related thereto or (b) in exchange for Capital Stock
(other than Disqualified Stock) or options, warrants or other rights to acquire
Capital Stock (other than Disqualified Stock or (c) with respect to the
Convertible Subordinated Debentures); or (iv) any Restricted Investment.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Servicing Assets" means, at any time, the portfolio of outstanding
residential mortgage loans with respect to which the Company has direct
servicing rights.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
A "subsidiary" of any Person means (i) a corporation a majority of
whose Voting Stock is at the time, directly or
<PAGE> 26
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indirectly, owned by such Person, by one or more subsidiaries of such Person or
by such Person and one or more subsidiaries of such Person or (ii) any other
Person in which such Person, directly or indirectly, at the date of
determination thereof, has (x) at least a majority ownership interest or (y)
the power to elect or direct the election of a majority of the directors or
other governing body of such Person.
"Subsidiary" means any subsidiary of the Company.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended by the Trust Indenture Reform Act of 1990, as in force at the date as
of which this instrument was executed, except as provided in Section 905.
"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 such successor Trustee.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depositary receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depositary receipt;
provided, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on or principal of
the U.S. Government Obligation evidenced by such depositary receipt.
"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".
<PAGE> 27
-18-
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior or class of stock has voting
power by reason of any contingency) to vote in the election of members of the
Board of Directors or other governing body of such Person.
"Wholly-Owned Subsidiary" means a Subsidiary of which all issued
and outstanding Capital Stock (other than directors' qualifying shares) is owned
beneficially and of record by the Company and/or one or more Wholly-Owned
Subsidiaries of the Company.
SECTION 102. Compliance Certificate 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 an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture (including any covenant
compliance that constitutes a condition precedent) relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than annual
certificates delivered pursuant to Section 1017) 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
<PAGE> 28
-19-
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 certified by an opinion of, any specified Person, it is not necessary that
all such matters be certified, 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 of
opinion of, or representations by, any 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.
(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
<PAGE> 29
-20-
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 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 104. The Company may
set a record date for purposes of determining the identity of Holders entitled
to vote or consent to any action by vote or consent authorized or permitted
under this Indenture, which record date shall be the later of 10 days prior to
the first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee pursuant to Section 701 of this Indenture
prior to such solicitation. If a record date is fixed, those persons who were
Holders of Securities at such record date (or their duly designated proxies),
and only those persons, shall be entitled to take such action by vote or
consent or to revoke any vote or consent previously given, whether or not such
persons continue to be Holders after such record date. No such vote or consent
shall be valid or effective for more than 120 days after such record date.
Without limiting the generality of this Section 104, a Holder,
including a Depositary that is a Holder of one or more Book-Entry Securities,
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 in this Indenture to be made, given or taken by Holders, and a
Depositary that is a Holder of one or more Book-Entry Securities may provide
its proxy or proxies to the beneficial owners of interests in any such
Book-Entry Securities through such Depositary's standing instructions and
customary practices.
The Company may fix a record date for the purpose of determining
the Persons who are beneficial owners of interests in any Book-Entry Security
held by a Depositary entitled under the procedures of such Depositary to 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 in this Indenture to be made, given or
<PAGE> 30
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taken by Holders. If such a record date is fixed, the Persons who are such
beneficial owners at the close of business on such record date or their duly
appointed proxy or proxies shall be entitled to make, give or take such
request, demand, authorization, direction, notice, consent, waiver, or other
action, whether or not such Persons remain such beneficial owners after such
record date. No such request, demand, authorization, direction, notice,
consent, waiver or other action shall be valid or effective if made, given or
taken more than six months after such record date.
(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) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver, Act or other action 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 or transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee, any Paying Agent 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,
<PAGE> 31
-22-
given, furnished or filed in writing to or with the Trustee at Bankers
Trust Company, 4 Albany Street, New York, NY 10006, Telecopier No. (212)
250-6961, Attention: Corporate Trust and Agency Group.
(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, Attention: Secretary, 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, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Any notice when mailed to a Holder
shall be conclusively deemed to have been received by such Holder. 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 any method of giving such notice as shall be satisfactory to 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 another
provision hereof that is automatically
<PAGE> 32
-23-
included in this Indenture by any of the provisions of the Trust Indenture Act,
such automatically included provision shall control.
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 provision 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, any Paying Agent and the Holders of Securities), 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 internal laws of the State of New York,
without regard to the principles of conflicts of law.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date of
Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date or
<PAGE> 33
-24-
Redemption Date, or at the Stated Maturity; provided that no
interest shall accrue for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as
the case may be, to the next succeeding Business Day.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of authentication
shall be in substantially the forms set forth in this Article, 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. Any portion of
the text of any Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange or automated
quotation system of any registered securities association on which the
securities may be listed or designated for inclusion, as the case may be, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 202. Form of Face of Security.
First Financial Caribbean Corporation
7.84% Senior Note due 2006
No. $
--------------------- ---------------------
First Financial Caribbean 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
<PAGE> 34
-25-
____________________, or registered assigns the principal sum of ____________
Dollars on October 10, 2006, and to pay interest thereon from October 10, 1996
or from the most recent Interest Payment Date to which interest has been paid
or duly provided for, semi-annually on April 10 and October 10 in each year,
commencing April 10, 1997, at the rate of 7.84% per annum, computed on the
basis of the actual number of days elapsed in a 360-day year of twelve 30-day
months, 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 March 25 or September 25 (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 to be fixed by the Trustee
for the payment of such Defaulted Interest, notice whereof shall be given to
Holders of Securities not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange or automated quotation system of any
registered securities association on which the Securities may be listed, and
upon such notice as may be required by such exchange or automated quotation
system, all as more fully provided in said Indenture. Payment of the principal
of (and premium, if any) and interest on this Security will be made at the
office or agency of the Company maintained for that purpose in the City of New
York and at any other office or agency maintained by the Company for such
purpose, 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;
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.
<PAGE> 35
-26-
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 this corporate seal.
Dated:
FIRST FINANCIAL CARIBBEAN CORPORATION
By
-----------------------------------
Attest:
- ------------------------------
Authorized Signature
<PAGE> 36
-27-
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of
the Company designated as its 7.84% Senior Notes due 2006 (herein called the
"Securities"), limited in aggregate principal amount to $75,000,000, issued and
to be issued under an Indenture, dated as of October 10, 1996 (herein called
the "Indenture"), between the Company and Bankers Trust Company, 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.
The Securities will be redeemable as a whole or in part, at the
option of the Company at any time, and from time to time, at a Redemption Price
equal to the greater of (i) 100% of their principal amount and (ii) the sum of
the present values of the remaining scheduled payments of principal and interest
thereon discounted to the date of redemption on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Yield plus 25
basis points, plus in each case accrued interest to the Redemption Date.
"Treasury Yield" means, with respect to any Redemption Date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Independent Investment Banker as having a maturity
comparable to the remaining term of the Securities that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Securities. "Independent Investment Banker" means BT
Securities Corporation or, if such firm is unwilling or unable to select the
Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Company.
<PAGE> 37
-28-
"Comparable Treasury Price" means, with respect to any Redemption
Date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is
not published or does not contain such prices on such Business Day, the
Reference Treasury Dealer Quotation for such Redemption Date, in each case, as
calculated by the Company. "Reference Treasury Dealer Quotation" means the
average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Company and the Trustee by such Reference Treasury Dealer at
5:00 p.m. on the third Business Day preceding such Redemption Date. The
Company will provide the Trustee with an Officers' Certificate setting forth
the Redemption Price prior to 11:00 a.m. on the second Business Day preceding
such Redemption Date.
"Reference Treasury Dealer" means BT Securities Corporation, and
its respective successors; provided, however, that if BT Securities Corporation
shall cease to be a primary U.S. Government securities dealer in New York City
(a "Primary Treasury Dealer"), the Company shall substitute therefore another
Primary Treasury Dealer.
Holders of Notes to be redeemed will receive notice thereof by
first-class mail at least 30 and not more than 60 days prior to the date fixed
for redemption.
In the case of any partial redemption, selection of the Securities
for redemption will be made by the Trustee on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Security of $1,000 in original principal amount or
less shall be redeemed in part. If any Security is to be redeemed in part
only, the notice of redemption relating to such Security shall state the
portion of the principal amount thereof to be redeemed. A new Security in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Security.
<PAGE> 38
-29-
If an Event of Default shall occur and be continuing, the principal
of all the Securities may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (i)
the entire indebtedness of this Security or (ii) certain restrictive covenants
and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
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 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 aggregate principal amount of the Securities at the
time Outstanding. The Indenture also permits the Company and the Trustee to
amend the Indenture or the Securities, without the consent of any Holder, to
cure any ambiguity or inconsistency or to make any other change provided the
same does not adversely affect the interests of the Holders. The Indenture
also contains provisions permitting the Holders of not less than a majority in
aggregate principal amount of the Securities at the time Outstanding, on behalf
of the Holders of all the Securities, 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 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
premium, if any) 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 registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the City of New York and at any other office
<PAGE> 39
-30-
or agency maintained by the Company for such purpose, 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 authorized denominations and for the same aggregate principal amount, will
be issued to the designated transferee or transferees.
The Securities 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, the
Securities are exchangeable for a like aggregate principal amount of Securities
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 may 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.
<PAGE> 40
-31-
ASSIGNMENT FORM
(To be executed by the registered holder
if such holder desires to transfer this Security)
Bankers Trust Company,
as Trustee
4 Albany Street
New York, NY 10006
FOR VALUE RECEIVED ___________________ hereby sells, assigns and
transfers unto
- --------------------------------------------------------------------------------
(Please insert social security or other
tax identifying number of transferee)
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
this Security, together with all right, title and interest herein, and does
hereby irrevocably constitute and appoint ___________________ attorney to
transfer this Security on the Security Register, with full power of
substitution.
Dated:
------------, ----.
---------------------------------
Signature
---------------------------------
Signature Guaranteed
NOTICE: The signature to the foregoing Assignment must correspond
to the name as written upon the face of this Security in every particular,
without alteration or any change whatsoever; signature(s) must be guaranteed by
an eligible guarantor institution (banks, stock brokers, savings and loan
<PAGE> 41
-32-
associations and credit unions with membership in an approved
signature guarantee medallion program) pursuant to Securities
and Exchange Commission Rule 17Ad-15.
<PAGE> 42
-33-
SECTION 204. Form of Trustee's Certificate
of Authentication
This is one of the Securities referred to in the within-mentioned
Indenture.
Bankers Trust Company,
as Trustee
Date: By
------------------- -------------------------------------
Authorized Signatory
<PAGE> 43
-34-
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $75,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section
303, 304, 305, 306, 906 or 1108.
The Securities shall be known and designated as the "7.84% Senior
Notes due 2006" of the Company. Their Stated Maturity shall be October 10,
2006, and they shall bear interest at the rate of 7.84% per annum, from
October 10, 1996, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable
semi-annually on April 10 and October 10, commencing April 10, 1997, until the
principal thereof is paid or made available for payment.
The principal of, premium, if any, and interest on the Securities
shall be payable at the office or agency of the Company in the City of New York
maintained for such purpose and at any other office or agency maintained by the
Company for such purpose; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Persons
entitled thereto as such addresses shall appear in the Security Register.
The Securities shall be redeemable as provided in Article Eleven.
SECTION 302. Denominations.
The Securities shall be issuable only in registered form without
coupons and only 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 President or one of its Vice Presidents, under its
corporate seal impressed or reproduced thereon attested by its Secretary or one
of its
<PAGE> 44
-35-
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 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 such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
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.
The Company shall execute and the Trustee shall, in accordance with
this Section and the Company Order with respect to the Securities, for so long
as the Securities are to be issued in whole or in part in the form of one or
more Book- Entry Securities, authenticate and deliver one or more Book- Entry
Securities in definitive form that (i) shall represent and shall be denominated
in an amount equal to the aggregate principal amount of the Outstanding
Securities to be represented by such Book-Entry Security or Securities, (ii)
shall be registered in the name of the Depositary for such Book-Entry Security
or Securities or the nominee of such Depositary, (iii) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's instructions
and (iv) shall bear a legend substantially to the following effect:
Unless and until it is exchanged in whole or in part for Securities in
certificated form, this Security may not be
<PAGE> 45
-36-
transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Each Depositary appointed pursuant to Section 305 for a Book-Entry
Security in registered form must, at the time of its appointment and at all
times while it serves as Depositary, be a clearing agency registered under the
Exchange Act and any other applicable statute or regulation.
In case the Company, pursuant to Article Eight, shall be
consolidated or merged with or into any other Person or shall convey, transfer
or lease all or substantially all of its Property to any Person, and the
successor Person resulting from such consolidation, or surviving such merger,
or into which the Company shall have been merged, or the Person which shall
have received a conveyance, transfer or lease as aforesaid, shall have executed
an indenture supplemental hereto with the Trustee pursuant to Article Eight,
any of the Securities authenticated or delivered prior to such consolidation,
merger, conveyance, transfer or lease may, from time to time, at the request of
the successor Person, be exchanged for other Securities executed in the name of
the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Request of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of
a successor Person pursuant to this Section in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person, at the
option of the Holders but without expense to them, shall provide for the
exchange of all Securities at the time Outstanding for Securities authenticated
and delivered in such new name.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, 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
<PAGE> 46
-37-
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to
Section 1002, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
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 designated pursuant to Section 1002 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 at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, 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 any authorized denominations and of a like aggregate
principal amount.
At the option of the Holder, the Securities (except when they are
in the form of one or more Book-Entry Securities representing all or a portion
of the Securities) may be exchanged for other Securities of authorized
denominations of the same series containing identical terms and provisions, of
like aggregate principal amount, upon surrender of the
<PAGE> 47
-38-
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.
Notwithstanding any other provision of this Section, unless and
until it is exchanged in whole for Securities in certificated form, a
Book-Entry Security representing all or a portion of the Securities may not be
transferred except as a whole by the Depositary to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or by such Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
If at any time the Depositary for the Securities is unwilling or
unable to continue as Depositary for the Securities or if at any time the
Depositary for the Securities shall no longer be eligible under Section 303,
the Company shall appoint a successor Depositary with respect to the
Securities. If a successor Depositary for the Securities is not appointed by
the Company within 90 days after the Company receives notice from the
Depositary or otherwise becomes aware of such unwillingness, inability or
ineligibility, the Company will execute and deliver to the Trustee as promptly
as practicable certificated Securities, together with a Company Order for the
authentication and delivery of certificated Securities, and the Trustee, as
promptly as practicable after the receipt of such certificated Securities and
Company Order, will authenticate and deliver Securities in certificated form in
an aggregate principal amount equal to the principal amount of, and containing
terms and provisions identical to, the Book-Entry Security or Securities in
exchange for such Book-Entry Security or Securities.
The Company may at any time and in its sole discretion determine
that the Securities issued in the form of one or more Book-Entry Securities
shall no longer be represented by such Book-Entry Security or Securities. In
such event the Company will execute and deliver to the Trustee certificated
Securities, together with a Company Order for the authentication and delivery
of certificated Securities, and the Trustee, as promptly as practicable after
the receipt of such certificated Securities and Company Order, will
authenticate and deliver Securities in certificated form and in an aggregate
principal amount equal to the principal amount of, and containing terms
<PAGE> 48
-39-
and provisions identical to, the Book-Entry Security or Securities in exchange
for such Book-Entry Security or Securities.
Upon the exchange of a Book-Entry Security in whole or in part for
Securities in certificated form, such Book-Entry Security shall be cancelled by
the Trustee. Securities issued in exchange for a Book-Entry Security pursuant
to this Section shall be registered in such names and in such authorized
denominations as the Depositary for such Book-Entry Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee in writing. The Trustee shall deliver such Securities to
the Persons in whose names such Securities are so registered or as it may
otherwise be directed by such Depositary. Upon the exchange of less than the
entire principal amount of a Book-Entry Security for Securities in certificated
registered form, the Company shall also execute, and the Trustee, upon Company
Order shall also authenticate and deliver a new Book-Entry Security in
aggregate principal amount equal to the difference between the principal amount
of the surrendered Book-Entry Security and the aggregate principal amount of
the certificated Securities issuable upon such exchange.
In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee will authenticate and
deliver Securities in certificated registered form in authorized denominations.
If a Security in certificated form is issued in exchange for any
portion of a Book-Entry Security after the close of business at the office or
agency where such exchange occurs on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment of interest or
Defaulted Interest, as the case may be, interest will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Security in certificated form, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such Book-Entry
Security is payable in accordance with the provisions of this Indenture.
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
<PAGE> 49
-40-
benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption 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 or
redemption of Securities, other than exchanges pursuant to Section 304, 906 or
1108 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 1104 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.
None of the Company, the Trustee, any agent of the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or
liability for any aspect of the records relating to or payments on account of
beneficial ownership interests of a Book-Entry Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
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 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 mutilation, destruction, loss or theft of
any Security and (ii) such
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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 upon its request the Trustee shall authenticate
and deliver, in lieu of any such destroyed, lost or stolen Security, a new
Security 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 issued pursuant to this Section in lieu of any
mutilated, 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 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.
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 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
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Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Subsection 307(1) or 307(2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Subsection 307(1) 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. In the name and
at the expense of the Company, the Trustee 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 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 (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 Subsection 307(2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system of any registered
securities association on which the Securities may be listed, and upon
such notice as may be required by such exchange or automated quotation
system, if, after notice given by the Company to
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the Trustee of the proposed payment pursuant to this Subsection 307(2),
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Subsection 307, 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
premium, if any) and (subject to Section 307) 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 shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by the
Trustee. The Company may at any time deliver to the Trustee for cancellation
any Securities previously authenticated and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be disposed of in accordance
with the Trustee's normal procedure and a certificate of such disposal shall be
delivered to the Company.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of the
actual number of days elapsed in a 360-day year of twelve 30-day months.
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ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Securities, and
any right of the Trustee to compensation and reimbursement, herein expressly
provided for), and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(1) either
(A) all Outstanding Securities have been delivered to the
Trustee for cancellation and the Company has paid all sums payable
by it hereunder; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and
at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount of money sufficient
to pay and discharge the entire indebtedness due on such date on
such Securities not theretofore delivered to the Trustee for
cancellation, and which amount, when invested in short-term U.S.
Government Obligations (as required below) will be sufficient (in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered
to the Trustee), without consideration of any reinvestment of
interest, on any
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date from the date of such deposit to the Stated Maturity or
Redemption Date (as applicable), to pay and discharge the entire
amount due on any such date on such Securities. The Trustee shall
(until all amounts due on the Securities are paid, as described
above) invest and reinvest such deposited amount in short-term U.S.
Government Obligations;
(2) such deposits shall not cause the Trustee to have a
conflicting interest as defined in and for purposes of the Trust
Indenture Act;
(3) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other instrument to
which the Company is a party or by which it or its property is bound;
(4) the Company shall deliver to the Trustee an Opinion of
Counsel in form and substance satisfactory to the Trustee to the effect
that Holders of the Securities will not recognize income, gain or loss
for Federal income tax pu rposes as a result of such deposit and the
satisfaction and discharge contemplated hereby and will be subject to
Federal income tax in the same amounts and in the same manner and at the
same times as would have been the case if such deposit and satisfaction
and discharge of the Indenture had not occurred;
(5) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(6) 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 under Sections 305, 606, 607, 703, 704, 1001, 1002,
1003 and 1017 and the obligations of the Trustee under Sections 610, 611 and
703 shall survive and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of Subsection (1) of this Section 401, the
obligations of the Trustee under other provisions of this Indenture (including
Section 403 and the last paragraph of Section 1003) shall survive.
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SECTION 402. Defeasance of Certain Obligations.
The Company may omit to comply with any term, provision or
condition set forth in Sections 1008 through 1015 of this Indenture, and clause
(3) of Section 501 of this Indenture shall be deemed not to be an Event of
Default with respect to any such provision or condition, in each case, with
respect to the Outstanding Securities if:
(a) with reference to this Section 402, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 607 of
this Indenture) and conveyed all right, title and interest to the Trustee
for the benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust
funds in trust, specifically pledged to the Trustee for the benefit of
the Holders as security for payment of the principal of, premium, if any,
and interest on the Securities, and dedicated solely to the benefit of
the Holders, in and to (i) money in an amount, (ii) U.S. Government
Obligations that, through the payment of interest, principal and premium,
if any, in respect thereof in accordance with their terms, will provide,
not later than one day before the due date of any payment referred to in
this subsection (a), money in an amount or (iii) a combination thereof in
an amount, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium, if
any, and interest on the outstanding Securities on the Stated Maturity or
Redemption Date (as applicable) of any such payment; provided that the
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of such
principal, premium, if any, and interest with respect to the Securities;
(b) such deposit will not, if the Securities are then listed on
any securities exchange, cause the Securities to be de-listed or result
in a breach or violation of, or constitute a default under, this
Indenture or any
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other material agreement or instrument to which the Company is a party or
by which it is bound;
(c) no Event of Default shall have occurred and be continuing on
the date of such deposit and no Event of Default of the type specified in
Section 501(6) or Section 501(7) shall have occurred during the period
ending on the 123rd day after such date of deposit;
(d) the Company has delivered to the Trustee an Opinion of
Counsel, subject to such qualifications, exceptions, assumptions and
limitations as are reasonably deemed necessary by such counsel and are
reasonably satisfactory to counsel for the Trustee, to the effect that
(i) the creation of the trust resulting from the deposit referred to in
subsection (a) above does not violate the Investment Company Act of 1940,
(ii) the Holders have a valid first-priority security interest in the
trust funds, and (iii) the Holders will not recognize income, gain or
loss for United States federal income tax purposes as a result of such
deposit and defeasance of certain obligations and will be subject to
United States federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred;
(e) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit referred to in subsection (a) above
was not made by the Company with the intent of preferring the Holders
over the other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and
(f) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 402 have been complied with.
SECTION 403. 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 or Section 402
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
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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
premium, if any) and interest for whose payment such money has been deposited
with the Trustee.
SECTION 404. Reinstatement
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 401, 402 or 403 of this
Indenture, as the case may be, by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 401 or 402 of
this Indenture, as the case may be, until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 401 or 402 of this Indenture, as the case may be;
provided that, if the Company has made any payment of principal of, premium, if
any, or interest on any Securities because of the reinstatement of its
obligations, then the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default," wherever used herein, 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 when
it becomes due and payable, and continuance of such default for a period
of 30 days; or
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(2) default in the payment of the principal of (or premium, if
any, on) any Security at its Maturity or in the payment of any Redemption
Price; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default of whose performance or whose breach is elsewhere in
this Section specifically dealt with), and continuance of such default or
breach for a period of 60 days; in either case after there has been
given, by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities 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
(4) a default under any bond, debenture, note or other evidence
of indebtedness for money borrowed by the Company or any Subsidiary 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 Subsidiary, whether such
indebtedness now exists or shall hereafter be created, which default (i)
shall consist of a failure to pay all or any portion of the principal
amount of such indebtedness at the later of its stated maturity or upon
the expiration of any applicable period of grace, or (ii) shall have
resulted in the acceleration of the maturity of such indebtedness, and
the aggregate principal amount then outstanding of all such indebtedness
referred to in (i) or (ii) above exceeds $10 million; or
(5) a final judgment or final judgments for the payment of money
are entered against the Company or any Subsidiary in an aggregate amount
in excess of $10,000,000 (to the extent not covered by insurance) by a
court or courts of competent jurisdiction, which judgments remain
undischarged or unbonded for a period (during which execution shall not
be effectively stayed) of 60 days after the right to appeal all such
judgments has expired; or
(6) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency,
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reorganization or other similar law or (B) a decree or order adjudging
the Company a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable Federal or State
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of the Company's property, or ordering the winding up or
liquidation of the affairs of the Company 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 of a voluntary case or
proceeding under any applicable Federal or State 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 the Company to
the entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
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 the Company of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State
law, or the consent by the Company to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or of any substantial part of the Company's property, or the
making by the Company of an assignment for the benefit of creditors, or
the admission by the Company in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the
Company in furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Securities may declare the principal and all accrued but
unpaid interest of all the Securities to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given
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by Holders), and upon any such declaration such principal and interest shall
become immediately due and payable.
At any time after such a declaration of acceleration 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, 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;
(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate borne by the
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the 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, other than the non- payment of the
principal of Securities 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
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(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 or in the
payment of any Redemption Price,
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 premium, if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the
rate borne by the 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.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders 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 the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Securities or the property of the Company or of such other obligor or their
<PAGE> 62
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creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities and take such other actions, including participating as a
member, voting or otherwise, of any official committee of creditors
appointed in such matter, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding, and
(2) 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 606.
Nothing herein contained 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 may be prosecuted and enforced by the Trustee
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without the possession of any of the Securities or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal (or
premium, if any) 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 606 (including payment of all compensation, expenses and
liabilities incurred, and all advances made by the Trustee, and the
costs and expenses of collection); and
SECOND: To the payment of the amounts then due and unpaid
for principal of (and premium, if any) 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 premium, if any) and interest,
respectively.
The Trustee may fix a record date and payment date for any payment
to Holders pursuant to this Section, notice of which the Company shall mail to
each Holder.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
action, suit or 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
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(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities 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 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 action,
suit or 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;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders, or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
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 premium, if any) and (subject to
Section 307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
<PAGE> 65
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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 has 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
Security 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 not less than a majority in principal amount of the
Outstanding Securities 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; provided, that
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(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it
in personal liability or be unjustly prejudicial to the Holders not
consenting.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holders of each Outstanding Security 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.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by
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any Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
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.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default of which
the Trustee has actual knowledge,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
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(b) In case an Event of Default of which the Trustee has actual
knowledge has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(1) this Subsection 601(c) shall not be construed to limit the
effect of Subsection 601(a);
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(4) 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.
(d) The Trustee shall not be deemed to have knowledge of an Event
of Default or of any event or condition which, with the giving of notice, the
passage of time or both, might constitute an Event of Default unless (i) the
Trustee has received written notice thereof from the Company or any Holder or
(ii) an officer of the Trustee having primary responsibility for the Trustee's
duties hereunder shall have actual knowledge thereof; provided, however, that
the Trustee shall be deemed to have knowledge of the occurrence of an Event of
Default described in Section 501(1) or 502(2) hereof if the Trustee is acting
as Paying Agent at the time of the event giving rise to such Event of Default.
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(e) 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. Certain Rights of Trustee.
Except as otherwise provided in Section 315 of the Trust Indenture
Act and subject to the provisions of Section 601 hereof:
(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;
(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;
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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, or 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;
(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; and
(h) the permissive right of the Trustee to take or refrain from
taking any actions enumerated in this Indenture shall not be construed as
a duty and the Trustee shall not be answerable in such actions other than
for its own negligence or willful misconduct.
SECTION 603. 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 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 shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 604. 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 310 and 311 of the Trust Indenture Act, may otherwise deal with the
Company with the same rights it would have if it were not
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Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other
agent.
SECTION 605. 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 606. 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 as shall be agreed
upon in writing (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;
(3) to indemnify the Trustee and each of the Trustee's directors,
officers, employees, agents, successors and assigns (collectively, the
"Indemnitees") for, and to hold them harmless against, any loss,
liability or expense incurred without negligence or bad faith on any of
their part, arising out of or in connection with the acceptance or
administration of this trust, including the costs, expenses and
reasonable attorneys' fees of defending the Indemnitees against any claim
or liability in connection with the exercise or performance of any of
their powers or duties hereunder as Trustee, Authenticating Agent, Paying
Agent or Security Registrar.
If the Trustee incurs expenses or renders services in connection
with an Event of Default under Section 501(6) or 501(7), the Trustee's expenses
(including reasonable attorney's fees and expenses) and its compensation for
such services are
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intended to constitute expenses of administration under applicable Federal or
State bankruptcy, insolvency or other laws.
As security for the performance of the obligations of the Company
under this Section 606 the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by it, except funds held in trust
for the payment of principal of (and premium, if any) or interest, if any, on
the Securities.
The provisions of this Section 606 shall survive satisfaction and
discharge of this Indenture in accordance with Article Four and the resignation
or removal of the Trustee in accordance with Section 608 hereof.
SECTION 607. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall 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 exercise corporate trust powers, having a combined capital and surplus
of at least $10,000,000 and subject to supervision or examination by Federal,
State or District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. 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.
Neither the Company, nor any person directly or indirectly controlling,
controlled by, or under common control with the Company shall serve as Trustee.
SECTION 608. 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 under Section 609.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of
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acceptance by a successor Trustee 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.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in principal amount of the Outstanding Securities, delivered to
the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(2) the Trustee shall fail to comply with Section 613(a) after
written requests therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, 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 Resolution may remove the
Trustee, or (ii) subject to Section 514 hereof and Section 315(e) of the Trust
Indenture Act, 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 and
the appointment of a successor Trustee.
(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,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment,
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become the successor Trustee and supersede the successor Trustee appointed by
the Company. If no successor Trustee shall have been so appointed by the
Company or the Holders and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Security for at least
six months may, subject to Section 514, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first class mail, postage prepaid, to all
Holders as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder 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 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. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts. Notwithstanding replacement of the Trustee,
the Company's obligations under Section 606 hereof shall continue for the
benefit of the retiring Trustee.
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.
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SECTION 610. 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 611. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding, the
Trustee may appoint an Authenticating Agent or Agents which shall be authorized
to act on behalf of the Trustee to authenticate Securities issued upon original
issue and upon exchange, registration of transfer, partial redemption 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
subject to acceptance by 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, the Commonwealth of Puerto Rico or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital surplus of not less than $10,000,000 and subject to supervision or
examination by Federal, Commonwealth and State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirement of said supervising or examining authority,
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then for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon 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 subject to acceptance by the Company and shall mail
written notice of such appointment by first class mail, postage prepaid to all
Holders 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 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 606.
The provisions of Sections 308, 603 and 604 shall be applicable to
each Authenticating Agent.
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If any appointment is made pursuant to this Section, the Securities
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
------------------------------------
as Trustee
By
----------------------------------
As Authenticating Agent
By
----------------------------------
Authorized Signatory
SECTION 612. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder, the
Trustee shall transmit by mail to all Holders, as provided in Section 703(c)
hereunder, notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; provided, however, that, except in the
case of a default in the payment of the principal of (or premium, if any) or
interest on any Security, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders; and provided, further, that in the case of any default of the
character specified in Section 501(3) no such notice to Holders shall be given
until at least 60 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.
SECTION 613. Disqualification: Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, it shall within 90 days after ascertaining that it has
such conflicting interest, and
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if an Event of Default (as such term is defined hereunder but exclusive of any
period of grace or requirement of notice) to which such conflicting interest
relates has not been cured or duly waived or otherwise eliminated before the
end of such 90-day period, either eliminate such conflicting interest or resign
in the manner and with the effect hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection 613(a), the Trustee shall, within 10 days after the
expiration of such 90-day period, transmit by mail to all Holders, as their
names and addresses appear in the Security Register, notice of such failure.
Subject to Section 514, any Holder who has been a bona fide Holder of
Securities 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 such Trustee, and the appointment of a successor, if such Trustee
fails, after written request thereof by such Holder to comply with the
provisions of Section 614(a).
(c) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest if an Event of Default (as such term is defined
hereunder but exclusive of any period of grace or requirement of notice) has
occurred and
(1) the Trustee is trustee under another indenture under which
any other securities, or certificates of interest or participation in any
other securities, of the Company are outstanding, unless such other
indenture is a collateral trust indenture under which the only collateral
consists of Securities issued under this Indenture, provided that there
shall be excluded from the operation of this paragraph any indenture or
indentures under which other securities, or certificates of interest or
partici- pation in other securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or indentures
are wholly unsecured and rank equally and such other indenture or
indentures are hereafter qualified under the Trust Indenture Act,
unless the Commission shall have found and declared by order
pursuant to Section 305(b) or Section 307(c) of the Trust Indenture
Act that differences exist between the provisions of this Indenture
and the provisions of such other indenture or indentures which are
so
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likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors
to disqualify the Trustee from acting as such under this Indenture
or such other indenture or indentures, or
(ii) the Company shall have sustained the burden of proving,
on application to the Commission and after opportunity for hearing
thereon, that trusteeship under this Indenture and such other
indenture or indentures is not so likely to involve a material
conflict of interest as to make it necessary in the public interest
or for the protection of investors to disqualify the Trustee from
acting as such under one of such indentures;
(2) the Trustee or any of its directors or executive officers is
an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control
with an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is
a director, officer, partner, employee, appointee or representative of
the Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (i) one individual may be a director or an executive officer, or
both, of the Company but may not be at the same time an executive officer
of both the Trustee and the Company; (ii) if and so long as the number of
directors of the Trustee in office is more than nine, one additional
individual may be a director or an executive officer, or both, of the
Trustee and a director of the Company; and (iii) the Trustee may be
designated by the Company or by any underwriter for the Company to act in
the capacity of transfer agent, registrar, custodian, paying agent,
fiscal agent, escrow agent or depositary, or in any other similar
capacity, or, subject to the provisions of paragraph (1) of this
Subsection 613(c), to act as trustee, whether under an indenture or
otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner or
executive officer thereof, or 20%
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or more of such voting securities is beneficially owned, collectively, by
any two or more of such persons; or 10% or more of the voting securities
of the Trustee is beneficially owned either by an underwriter for the
Company or by any director, partner or executive officer thereof, or is
beneficially owned, collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter
in this Subsection 613(c) defined), (i) 5% or more of the voting
securities, or 10% or more of any other class of security, of the Company
not including the Securities issued under this Indenture and securities
issued under any other indenture under which the Trustee is also trustee,
or (ii) 10% or more of any class of security of an underwriter for the
Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter
in this Subsection 613(c) defined), 5% or more of the voting securities
of any person who, to the knowledge of the Trustee, owns 10% or more of
the voting securities of, or controls directly or indirectly or is under
direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter
in this Subsection 613(c) defined), 10% or more of any class of security
of any person who, to the knowledge of the Trustee, owns 50% or more of
the voting securities of the Company;
(9) the Trustee owns, on the date of an Event of Default (as such
term is defined hereunder but exclusive of any period of grace or
requirement of notice) or any anniversary of such date while such Event
of Default continues, in the capacity of executor, administrator,
testamentary or inter vivos trustee, guardian, committee or conservator,
or in any other similar capacity, an aggregate of 25% or more of the
voting securities, or of any class of security, of any person, the
beneficial ownership of a specified percentage of which would have
constituted a conflicting interest under paragraph (6), (7) or (8) of
this Subsection 613(c). As to any such securities of which the Trustee
acquired ownership through becoming
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executor, administrator or testamentary trustee of an estate which
included them, the provisions of the preceding sentence shall not apply,
for a period of not more than two years from the date of such
acquisition, to the extent that such securities included in such estate
do not exceed 25% of such voting securities or 25% of any such class of
security. Promptly after the date of any such Event of Default and
annually in each succeeding year that an Event of Default continues, the
Trustee shall make a check of its holdings of such securities in any of
the above-mentioned capacities as of such date. If the Company fails to
make full payment in full of the principal of, or the premium, if any, or
interest on, any of the Securities when and as the same becomes due and
payable, and such failure continues for 30 days thereafter, the Trustee
shall make a prompt check of its holdings of such securities in any of
the above-mentioned capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by the Trustee,
with sole or joint control over such securities vested in it, shall, but
only so long as such failure shall continue, be considered as though
beneficially owned by the Trustee for the purposes of paragraphs (6), (7)
and (8) of this Subsection 613(c); or
(10) except under the circumstances described in paragraphs (1),
(3), (4), (5) or (6) of this Subsection 613(c), the Trustee shall be or
become a creditor of the Company.
The specification of percentages in paragraphs (5) and (9),
inclusive, of this Subsection 613(c) shall not be construed as indicating that
the ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of paragraph (3) or (7) of this Subsection 613(c).
For the purposes of paragraphs (6), (7), (8) and (9) of this
Subsection 613(c) only, (i) the terms "security" and "securities" shall include
only such securities as are generally known as corporate securities, but shall
not include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed
to be "in
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default" when a default in payment of principal shall have continued for 30
days or more and shall not have been cured; and (iii) the Trustee shall not be
deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (C) any security which it holds as agent for collection, or as
custodian, escrow agent, or depositary, or in any similar representative
capacity.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to the
Company means every person who, within three years prior to the time as
of which the determination is made, has purchased from the Company with a
view to, or has offered or sold for the Company in connection with, the
distribution of any security of the Company outstanding at such time, or
has participated or has had a direct or indirect participation in any
such undertaking, or has participated, or has had a participation in the
direct or indirect underwriting of any such undertaking, but such term
shall not include a person whose interest was limited to a commission
from an underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" means any director of a corporation, or
any individual performing similar functions with respect to any
organization whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only
a trust where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security.
(4) The term "voting security" means any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security are
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presently entitled to vote in the direction or management of the affairs
of a person.
(5) The term "Company" means any obligor upon the Securities.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization, whether incorporated
or unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means such
amount of the outstanding voting securities of such person as entitles
the holder or holders thereof to cast such specified percentage of the
aggregate votes which the holders of all the outstanding voting
securities of such person are entitled to cast in the direction or
management of the affairs of such person.
(2) A specified percentage of a class of securities of a person
means such percentage of the aggregate amount of securities of the class
outstanding;
(3) The term "amount", when used in regard to securities, means
the principal amount if relating to evidences of indebtedness, the number
of shares if relating to capital shares, and the number of units if
relating to any other kind of security.
(4) The term "outstanding" means issued and not held by or for
the account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
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(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not in
default as to the principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as security
for an obligation of the issuer not in default as to principal or
interest or otherwise; and
(iv) securities held in escrow if placed in escrow by the
issuer thereof;
provided, however, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes and provided, further, that, in
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient
to constitute them securities of different classes, whether or not they
are issued under a single indenture.
SECTION 614. Preferential Collection of Claims Against Company.
(a) Subject to Subsection 614(b), if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within three months prior to a default, as defined in Subsection
614(c), or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities (as defined in Subsection 614(c)):
(1) an amount equal to any and all reductions in the amount due
and owing upon any claim as such creditor in
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respect of principal or interest, effected after the beginning of such
three-month period and valid as against the Company and its other
creditors, except any such reduction resulting from the receipt or
disposition of any property described in paragraph (2) of this Subsection
614(a), or from the exercise of any right of set-off which the Trustee
could have exercised if a petition in bankruptcy had been filed by or
against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim
as such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such
three-month period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any, of the
Company and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on account of
any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim by
the Trustee to a third Person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal bankruptcy law or applicable State
law.
(B) to realize, for its own account, upon any property held by it
as security for any such claim, if such property was so held prior to the
beginning of such three-month period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as security
for any such claim, if such claim was created after the beginning of such
three- month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall
sustain the burden of proving that at the time such property was so
received the Trustee had no reasonable cause to believe that a default as
defined in Subsection 614(c) would occur within three months; or
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(D) to receive payment on any claim referred to in paragraph (B)
or (C), against the release of any property held as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three-month period for property held as
security at the time of such substitution shall, to the extent of the fair
value of the property released, have the same status as the property released,
and, to the extent that any claim referred to in any of such paragraphs is
created in renewal of or in substitution for or for the purpose of repaying or
refunding any pre-existing claim of the Trustee as such creditor, such claim
shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Holders and the holders of other indenture securities
in such manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on
account of the receipt by it from the Company of the funds and property in such
special account and before crediting to the respective claims of the Trustee
and the Holders of the Securities and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for
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reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, whether such distribution is made in cash, securities, or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion between the Trustee and the Holders and the
holders of other indenture securities, in accordance with the provisions of
this paragraph, the funds and property held in such special account and
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part,
to give to the provisions of this paragraph due consideration in determining
the fairness of the distributions to be made to the Trustee and the Holders and
the holders of other indenture securities, with respect to their respective
claims, in which event it shall not be necessary to liquidate or to appraise
the value of any securities or other property held in such special account or
as security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning
of such three-month period shall be subject to the provisions of this
Subsection 614(a) as though such resignation or removal had not occurred. If
any Trustee has resigned or been removed prior to the beginning of such
three-month period, it shall be subject to the provisions of this Subsection
614(a) if and only if the following conditions exist:
(i) the receipt of property or reduction of claim, which
would have given rise to the obligation to account, if such Trustee
had continued as Trustee, occurred after the beginning of such
three-month period; and
(ii) such receipt of property or reduction of claim
occurred within three months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection
614(a) a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year
or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of
preserving any property which
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shall at any time be subject to the lien of this Indenture or of
discharging tax liens or other prior liens or encumbrances thereon, if
notice of such advances and of the circumstances surrounding the making
thereof is given to the Holders at the time and in the manner provided in
this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection 614(c).
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptance or obligations which fall within
the classification of self-liquidating paper as defined in Subsection
614(c).
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in full
of the principal of or interest on any of the Securities or upon the
other indenture securities when and as such principal or interest becomes
due and payable;
(2) the term "other indenture securities" means securities upon
which the Company is an obligor outstanding under any other indenture (i)
under which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section 614, and (iii)
under which a default exists at the time of the apportionment of the
funds and property held in such special account;
(3) the term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or
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securities in currency or in checks or other orders drawn upon banks
and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation;
(5) the term "Company" means any obligor upon the Securities; and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act or
Title 11 of the United States Code.
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 more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of such Regular Record Date,
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;
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provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.
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) If three or more Holders (herein referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee reasonable proof
that each such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders with respect to their
rights under this Indenture or under the Securities and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall, within five business days after receipt of
such application, at its election, either
(i) afford such applicants access to the information preserved at
the time by the Trustee in accordance with Subsection 702(a), or
(ii) inform such applicants as to the approximate number of Holders
whose names and addresses appear in the information preserved at the time
by the Trustee in accordance with Subsection 702(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appear in the
information preserved at the time by the Trustee in accordance with Subsection
702(a) a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee
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shall mail to such applicants and file with the Commission, together with a
copy of the material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such a mailing would be contrary to the best
interest of the Holders or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) 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
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Subsection 702(b), regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Subsection 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the
first May 15 after the first issuance of Securities, the Trustee shall transmit
by mail, as provided in Section 703(c), a brief report dated as of such May 15
with respect to any of the following events which may have occurred within the
previous 12 months (but if no such event has occurred within such period no
report need be transmitted):
(1) any change to its eligibility under Section 607 and its
qualifications under Section 613;
(2) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof)
made by the Trustee (as such) which remain unpaid on the date of such
report, and for the reimbursement of which it claims or may claim a lien
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or charge, prior to that of the Securities, on any property or funds held
or collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such advances so
remaining unpaid aggregate not more than 1/2 of 1% of the principal
amount of the Securities Outstanding on the date of such report;
(3) any change to the amount, interest rate and maturity date of
all other indebtedness owing by the Company (or by any other obligor on
the Securities) to the Trustee in its individual capacity, on the date of
such report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 614(b)(2), (3),
(4) or (6);
(4) any change to the property and funds, if any, physically in
the possession of the Trustee as such on the date of such report;
(5) any additional issue of Securities which the Trustee has not
previously reported;
(6) any action taken by the Trustee in the performance of its
duties hereunder which it has not previously reported and which in its
opinion materially affects the Securities, except action in respect of a
default, notice of which has been or is to be withheld by the Trustee in
accordance with Section 612; and
(7) the creation of or any material change to a relationship
specified in Section 613(c).
(b) The Trustee shall transmit by mail, as provided in Section
703(c), a brief report with respect to the character and amount of any advances
(and if the Trustee elects to so state, the circumstances surrounding the
making thereof) made by the Trustee (as such) since the date of the last report
transmitted pursuant to Subsection 703(a) (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that
of the Securities, on property or funds held or collected by it as Trustee and
which it has not previously reported pursuant to this Subsection 703(b), except
that the Trustee shall not be required (but may elect) to report such advances
if such advances remaining unpaid at any time aggregate 10% or less of the
principal
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amount of the Securities Outstanding at such time, such report
to be transmitted within 90 days after such time.
(c) Reports pursuant to this Section 703 shall be transmitted by
mail to all registered Holders of Securities, as the names and addresses of
such Holders appear upon the Security Register, to such Holders of Securities
as have, within the two years preceding such transmission, filed their names
and addresses with the Trustee for that purpose, and, except in the case of
reports pursuant to Section 703(b), to all Holders of Securities whose names
and addresses have been furnished to or received by the Trustee pursuant to
Section 701 and 702.
(d) A copy of each such report shall, at the time of such
transmission to the Holders, be filed by the Trustee with each stock exchange
upon which the Securities are listed, with the Commission and also with the
Company. The Company will notify the Trustee when the Securities are listed on
any stock exchange.
SECTION 704. Reports by Company.
The Company shall:
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents
and reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information,
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documents and reports with respect to compliance by the Company with the
conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations;
(c) transmit by mail to all Holders, as provided in Section
703(c), within 30 days after the filing thereof with the Trustee, such
summaries of any information, documents and reports required to be filed
by the Company pursuant to Subsections 704(a) and 704(b) as may be
required by rules and regulations prescribed from time to time by the
Commission; and
(d) file with the Trustee the statement required by Section 1017
hereof.
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 all or substantially all of its Property to
any Person, and the Company shall not permit any Person to consolidate with or
merge into the Company or convey, transfer or lease all or substantially all of
its Property to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease all or substantially all of
its Property 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, all or substantially all of the
Property of the Company shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United
States of America, any State thereof, the Commonwealth of Puerto Rico or
the District of Columbia and shall 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 premium, if any) and interest on all the Securities and
the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
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(2) immediately after giving effect to 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 occurred and be continuing;
(3) immediately after giving effect to such transaction on a pro
forma basis, the Company or such surviving entity would be able to incur
$1.00 of additional Indebtedness under the covenant contained in Section
1008;
(4) immediately after giving effect to such transaction, the
Company or such surviving entity shall have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction; and
(5) 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, or to surrender any right or power herein conferred upon the
Company; or
(3) to secure the Securities; or
(4) 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
Subsection 901(4) shall not adversely affect the interests of the
Holders; or
(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities 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.
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, 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
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in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders 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 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 change the place of payment where, or the coin or
currency in which, any Security or any premium or the 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, 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 1018, 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.
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 and, when executed and delivered,
will constitute a valid
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and binding obligation of the Company in accordance with its terms. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which, in the Trustee's sole discretion, 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 as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities 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 so modified as to conform, in the opinion of the
Trustee and the Board of Directors, 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.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities 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 the City of New York, and at any other
office or agency maintained by the Company for such purpose, an office or
agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange, where
Securities may be surrendered for conversion and where notices and demands to
or upon the Company in respect of the Securities 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 any 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 (in or outside the City of New York) where the Securities
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 the City of New York 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 Security Payments to Be Held in
Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of (and premium, if any) or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or 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, it will,
prior to each due date of the principal of
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(and premium, if any) or interest on any Securities, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent 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 1003,
that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities in trust for the benefit
of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
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 premium,
if any) or interest on any Security and remaining unclaimed for three years
after such principal (and premium, if any) or interest has become due and
payable shall, subject to applicable escheat and abandoned
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property law, 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, shall at
the direction 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 Borough of Manhattan, 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. Corporate 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 Company 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 1005. 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 1005 shall prevent the Company from
discontinuing the operation or maintenance of any such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or in the judgment of any Subsidiary desirable in the conduct of
the business of such
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Subsidiary and in either such case not disadvantageous in any material respect
to the Holders.
SECTION 1006. 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 1007. Insurance.
The Company will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company to be responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties.
SECTION 1008. Limitation on Company and Subsidiary Indebtedness and
Disqualified Stock.
The Company will not, and will not permit any of its Subsidiaries,
directly or indirectly to create, incur, assume, become liable for or guarantee
the payment of (collectively, "incur") any Indebtedness or issue or become
obligated with respect to any Disqualified Stock unless at the time of such
event and after giving pro forma effect thereto (including the application of
the proceeds, if any, thereof) (i) the Consolidated Interest Coverage Ratio of
the Company is greater than 3.0 to 1.0, (ii) no Event of Default, or event
which, after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing, and (iii) such Indebtedness is not
Restricted Indebtedness.
The limitations contained in the previous paragraph will not apply
to (i) Permitted Indebtedness, (ii) Refinancing Indebtedness, and (iii)
Indebtedness owed to and held by the Company or a Subsidiary; provided, however,
that any subsequent issuance or transfer of Capital Stock which results in any
such Subsidiary ceasing to be a Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or another Subsidiary) shall be deemed
in each case, to constitute the incurence of such Indebtedness by the Company.
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SECTION 1009. Limitation on Restricted Payments.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, make any Restricted Payment unless (i) at the time
of and after giving effect to the proposed Restricted Payment, no Event of
Default, or event which, after notice or lapse of time or both, would become an
Event of Default, shall have occurred and be continuing; and (ii) at the time
of and after giving effect to the proposed Restricted Payment, the aggregate
amount of all Restricted Payments made after the date of original issuance of
the Securities shall not exceed the sum of (a) 50% of the aggregate
Consolidated Net Income (or, in the case of a Consolidated Net Loss, minus 100%
of such Loss) of the Company for the period (taken as one accounting period)
commencing on October 1, 1996 to and including the last day of the fiscal
quarter ended immediately prior to the date of the proposed Restricted Payment,
plus (b) the aggregate net proceeds, including the fair market value of
property other than cash (as determined by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution filed
with the Trustee), received by the Company from the issuance or sale (other
than to a Subsidiary) after the date of original issuance of the Securities, of
(A) shares of its Capital Stock (other than Disqualified Stock) or (B)
Indebtedness of the Company which has been converted into or exchanged for
shares of its Capital Stock (other than Disqualified Stock) plus (c)
$15,000,000.
The provisions of the previous paragraph shall not be deemed to
prohibit (i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such declaration complied with
the provisions of this Indenture, (ii) the redemption, repurchase or other
acquisition or retirement of any shares of any class of Capital Stock of the
Company or of any Subsidiary in exchange for (including any such exchange
pursuant to the exercise of a conversion right or privilege in connection with
which cash is paid in lieu of the issuance of fractional shares or scrip), or
out of the proceeds of a substantially concurrent issue and sale (other than to
a Subsidiary) of, other shares of Capital Stock (other than Disqualified Stock)
of the Company; or (iii) the declaration or payment of any dividend payable
exclusively in shares of Capital Stock (other than Disqualified Stock) of the
Company.
The Restricted Payments described in clauses (ii) and (iii) of the
previous paragraph shall not be applied to reduce the amount available under
clause (ii) of the first paragraph
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of this Section, nor shall the proceeds from any issuance and sale of Capital
Stock referred to in such clause (ii) be included in "aggregate net proceeds"
for purposes of subclause (ii)(b) of the first paragraph of this Section. The
payment of dividends under clause (i) of the previous paragraph shall not
reduce the amount available under clause (ii) of such first paragraph, but the
amount available under such clause (ii) shall be reduced when such dividends
are declared.
SECTION 1010. Limitation on Liens.
The Company will not, nor will it permit any Subsidiary to, at any
time create, assume, guarantee or suffer to exist any Indebtedness of the
Company or any Subsidiary secured by any Lien (other than a Permitted Lien) on
any Property, shares of Capital Stock or Indebtedness of the Company or of any
Subsidiary, whether now owned or acquired after the date of this Indenture,
without in any such case effectively providing, concurrently with the creation,
assumption or guarantee of such Indebtedness, that the Securities shall, so
long as any such other Indebtedness shall be so secured (and, if the Company
shall so determine, any other existing indebtedness (or Indebtedness thereafter
in existence) created, assumed or guaranteed by the Company or any Subsidiary),
be secured by any such Lien equally and ratably with or prior to any and all
other Indebtedness thereby secured.
SECTION 1011. Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries.
The Company will not, and will not permit any Subsidiary to, create
or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to (i)
pay dividends or make any other distributions on its Capital Stock; (ii) pay
any Indebtedness owed to the Company or any other Subsidiary; (iii) make loans,
advances or capital contributions to the Company or any other Subsidiary; or
(iv) sell, lease or transfer any of its property or assets to the Company or
any other Subsidiary. The foregoing limitations shall not apply to
encumbrances or restrictions existing under or by reason of (a) any
encumbrances or restrictions pursuant to an agreement in effect on the date of
this Indenture, (b) any restrictions, with respect to a Person that is not a
Subsidiary on the date of this Indenture, under any agreement in existence at
the time such Person becomes a Subsidiary (unless such agreement was entered
into in connection with, or in contemplation of, such
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Person becoming a Subsidiary on or after the date of this Indenture), (c) any
restrictions existing under any agreement that amends, refinances or replaces
the agreement containing restrictions described in the foregoing clauses (a)
and (b) and this clause (c), provided that the terms and conditions of any such
restrictions are no less favorable to the Holders of the Securities than those
under the agreement so amended, refinanced or replaced, (d) customary
non-assignment or sublease provisions of any lease governing a leasehold
interest of any Subsidiary, (e) those imposed by applicable law or regulation,
(f) those imposed by an agreement with a regulatory authority, and (g) any
restrictions with respect to a Subsidiary imposed pursuant to an agreement
which has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary.
SECTION 1012. Limitation on Sales of Assets.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, effect any Asset Disposition unless the Company or such
Subsidiary, as the case may be, receives consideration for such Asset
Disposition at least equal to the fair market value of the property or other
assets sold or disposed (as determined by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution filed
with the Trustee). The restrictions contained in this Section shall not apply
to or prevent the consolidation or merger of a Wholly Owned Subsidiary with, or
a conveyance or transfer of its properties and assets as an entirety or
substantially as an entirety to, the Company or another then existing Wholly
Owned Subsidiary.
SECTION 1013. Transactions with Affiliates.
The Company will not, and will not permit any Subsidiary to, enter
into or be a party to any material transaction or arrangement or series of
transactions or arrangements with any Affiliate (including, without limitation,
the purchase from, sale to, or exchange of assets or property with, or the
rendering of any service by or for, any Affiliate and excluding any transaction
or arrangement between the Company and any Wholly-Owned Subsidiary or between
Wholly-Owned Subsidiaries), unless (i) such transaction or arrangement is
entered into pursuant to the reasonable requirement of the Company's or such
Subsidiary's existing or proposed business, upon fair and reasonable terms no
less favorable to the Company or such Subsidiary than it would obtain in a
comparable arm's-length
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transaction with a person other than an Affiliate, (ii) with respect to a
transaction or arrangement or series of transactions or arrangements involving
aggregate value in excess of $2,000,000, such transaction is approved by a
majority of the members of the Board of Directors having no personal stake in
such transaction or arrangement as evidenced by a Board Resolution filed with
the Trustee; provided that the provisions of clause (ii) shall not be
applicable to the transactions or arrangements between the Company and HRU,
Inc.
SECTION 1014. Limitation on Capital Stock of Subsidiaries.
The Company will not (i) sell, pledge, hypothecate or otherwise
convey or dispose of any Capital Stock of a Subsidiary or (ii) permit a
Subsidiary to issue or sell any Capital Stock or other equity interest to any
person (other than to the Company or to a Wholly-Owned Subsidiary of the
Company); provided that the foregoing restrictions shall not apply (x) to any
such sale, disposition or issuance which does not exceed $5,000,000 in fair
market value (as determined in good faith by the Company) or (y) to the
issuance and sale of nonvoting, nonconvertible preferred stock of any
Subsidiary, provided that the aggregate liquidation or stated value of all such
nonvoting, nonconvertible preferred stock does not exceed 5% of the
Consolidated Net Tangible Assets of the Company.
SECTION 1015. Limitation on Line of Business.
The Company and its Subsidiaries shall continue to engage in the
business of mortgage banking and lending, servicing mortgage loans and other
financial services (including banking, consumer finance and broker-dealer
operations and any other activity that would be permissible for a federal
savings association, a national or Puerto Rico chartered commercial bank or a
bank or savings and loan holding company) as their principal business.
SECTION 1016. Provision of Financial Statements.
So long as any of the Securities are Outstanding, whether or not
the Company is subject to the reporting requirements of Section 13(a) or 15(d)
of the Exchange Act, the Company will file with the Commission the annual
reports, quarterly reports and other documents which the Company is required to
file or would have been required to file with the Commission pursuant to
Section 13(a) or 15(d) if the Company were so required. The Company will also
file with the Trustee copies
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of the annual reports, quarterly reports and other documents which the Company
is required to file or would have been required to file with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act if the Company were
subject to the reporting requirements of such Sections and, if filing such
documents by the Company with the Commission is not permitted under the
Exchange Act, promptly upon written request supply copies of such documents to
any Holder or prospective Holder.
SECTION 1017. 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, and from
time to time as reasonably requested by the Trustee, a certificate of the
principal executive officer, the principal financial officer or the principal
accounting officer, stating whether or not to the best knowledge of the signers
thereof the Company is in compliance with all conditions and covenants of this
Indenture, and if the Company shall not be in compliance, specifying all
defaults and the nature and status thereof of which they may have knowledge.
For purposes of this Section 1017, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture. The Company will deliver to the Trustee within thirty days after
the occurrence thereof written notice of any event which with the giving of
notice and lapse of time would become an Event of Default under Section 501.
SECTION 1018. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1001 to 1017, inclusive, if before
the time for such compliance the Holders of a majority in principal amount of
the Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant 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 covenant or condition shall remain in full force
and effect.
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ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption.
The Securities may be redeemed at the election of the Company, as a
whole or from time to time in part, at any time at the Redemption Price
specified in the form of Security hereinbefore set forth, together with accrued
interest to the Redemption Date as specified in the form of Security.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall
be made in accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, 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 and of the principal amount of Securities to be redeemed and deliver an
Officers' Certificate stating that such redemption will comply with the
conditions contained herein and in the Securities.
SECTION 1104. Selection by Trustee of Securities
to Be Redeemed.
If less than all the Securities 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 not previously
called for redemption, pro rata, by lot or by such other method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $1,000 or any integral multiple thereof) of
the principal amount of Securities of a denomination larger than $1,000.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected
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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 1105. 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 latest address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the calculation of the Redemption Price, including the amount
of accrued interest, if any, to be paid,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption, 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 that interest
thereon will cease to accrue on and after said date, and
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
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.
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SECTION 1106. Deposit of Redemption Price.
Prior to 11:00 a.m. on 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 other than any
Securities called for redemption on that date which have been converted prior
to the date of such deposit.
SECTION 1107. Securities Payable on Redemption Date.
Notice of redemption having been giving 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 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 Regular
Record Dates and Special 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 premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 1002 (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
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Holder of such Security without service charge, a new Security or Securities,
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, except that if a Book Entry Security
is so surrendered, the Company shall execute and the Trustee shall authenticate
and deliver to the Depositary for such Book Entry Security, without service
charge, a new Book Entry Security in a denomination equal to and in exchange
for the unredeemed portion of the principal of the Book Entry Security so
surrendered.
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 attested, all as of the day and year first above
written.
FIRST FINANCIAL CARIBBEAN
CORPORATION
By: /s/ Richard F. Bonini
----------------------------
Name: Richard F. Bonini
Title: Senior Executive
Vice President
Attest:
By: /s/ Luis Alvarado
----------------------------
Name: Luis Alvarado
Title: Assistant Secretary
BANKERS TRUST COMPANY,
as Trustee
By: /s/ Susan Johnson
----------------------------
Name: Susan Johnson
Title: Assistant Vice President
Attest:
By: /s/ K. Wendy Kumar
----------------------------
Name: K. Wendy Kumar
Title: Assistant Treasurer
<PAGE> 113
-103-
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
On the 10th day of October, 1996, before me personally came Richard F.
Bonini, to be known, who, being by me duly sworn, did depose and say that he
resides at No. 2 Adele Court, Amowalk, New York 10501; that he is the Senior
Executive Vice President and Secretary of First Financial Caribbean
Corporation, one of the entities described in and which executed the above
instrument; that he knows the corporate seal of such corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
pursuant to authority of the Board of Directors of such corporation; and that
he signed his name thereto pursuant to like authority.
(NOTARIAL SEAL)
By: /s/ Maureen P. Murphy
----------------------------
Notary Public
Maureen P. Murphy
Notary Public, State of New York
No. 24-4798844
Qualified in Richmond County
Certificate Filed in New York County
Commission Expires March 30, 1997
