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As filed with the Securities and Exchange Commission on May 6, 1999
Registration No. 333-76259
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DORAL FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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COMMONWEALTH OF PUERTO RICO 66-0312162
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1159 FRANKLIN D. ROOSEVELT AVENUE
SAN JUAN, PUERTO RICO 00920
(787) 749-7100
(Address, including zip code, and telephone number,
including area code, of registrant's principal and executive offices)
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SALOMON LEVIS, CHIEF EXECUTIVE OFFICER
DORAL FINANCIAL CORPORATION
1159 FRANKLIN D. ROOSEVELT AVENUE
SAN JUAN, PUERTO RICO 00920
(787) 749-7100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------
COPIES TO:
IGNACIO ALVAREZ DANIEL M. ROSSNER
EDUARDO J. ARIAS BROWN & WOOD LLP
PIETRANTONI MENDEZ & ALVAREZ LLP ONE WORLD TRADE CENTER
SUITE 1901, BANCO POPULAR CENTER NEW YORK, NEW YORK 10048-0057
209 MUNOZ RIVERA AVENUE (212) 839-5300
SAN JUAN, PUERTO RICO 00918
(787) 274-1212
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
From time to time to time after the effective date of this Registration
Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended, other than securities offered only in
connection with dividend or interest reinvestment plans, please check the
following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. _____________
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. _______________
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box. [X]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 6, 1999
PROSPECTUS
DORAL FINANCIAL CORPORATION
(DORAL FINANCIAL LOGO)
MAY OFFER
$250,000,000
Debt Securities
Preferred Stock
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Doral Financial will provide the specific terms of these securities in
supplements
to this prospectus. You should read this prospectus and the accompanying
prospectus supplement carefully before you invest.
INVESTING IN THESE SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE 6 OF THIS PROSPECTUS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE OR
COMMONWEALTH OF PUERTO RICO SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF
THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS OR
ANY ACCOMPANYING PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
This prospectus is dated May , 1999
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
SUMMARY.................................... 3
RISK FACTORS............................... 6
Fluctuations in Interest Rates May Hurt
Doral Financial's Business............. 6
Doral Financial May Suffer Losses From
Mortgage Loans It Sells But Retains the
Credit Risk............................ 7
Increases in Doral Financial's
Originations of Commercial Loans Has
Increased Its Credit Risks............. 7
Doral Financial Is Exposed To Greater
Risk Because Its Business Is
Concentrated In Puerto Rico............ 7
Doral Financial's Business Would Be
Disrupted If Its Computer Systems
Cannot Work Properly With Year 2000
Data................................... 7
DORAL FINANCIAL............................ 7
USE OF PROCEEDS............................ 8
DESCRIPTION OF DEBT SECURITIES............. 9
General.................................. 9
Denominations............................ 10
Subordination............................ 10
Limitations on Liens and Disposition of
Stock of Principal Mortgage Banking
Subsidiaries........................... 11
Consolidation, Merger or Sale............ 13
Modification of Indentures............... 13
Events of Default........................ 14
</TABLE>
<TABLE>
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PAGE
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<S> <C>
Covenants................................ 15
Payment and Transfer..................... 15
Global Securities........................ 15
Defeasance............................... 16
The Trustee.............................. 16
DESCRIPTION OF PREFERRED STOCK............. 16
General.................................. 17
Rank..................................... 17
Dividends................................ 17
Conversion or Exchange................... 18
Redemption............................... 19
Liquidation Preference................... 19
Voting rights............................ 19
DESCRIPTION OF CAPITAL STOCK............... 20
Authorized Capital....................... 20
Outstanding Serial Preferred Stock....... 20
8% Preferred Stock....................... 20
7% Preferred Stock....................... 21
PLAN OF DISTRIBUTION....................... 22
By Agents................................ 23
By Underwriters.......................... 23
Direct Sales............................. 23
General Information...................... 24
WHERE YOU CAN FIND MORE
INFORMATION................................ 24
LEGAL OPINIONS............................. 25
EXPERTS.................................... 25
</TABLE>
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SUMMARY
This summary provides a brief overview of the key aspects of Doral
Financial and the most significant terms of the offered securities. For a more
complete understanding of the terms of the offered securities, before making
your investment decision, you should carefully read:
- this prospectus, which explains the general terms of the securities that
Doral Financial may offer;
- the accompanying prospectus supplement, which (1) explains the specific
terms of the securities being offered and (2) updates and changes
information in this prospectus; and
- the documents referred to in "Where You Can Find More Information" on page
24 for information on Doral Financial, including its financial statements.
DORAL FINANCIAL
Doral Financial is a bank holding company engaged in the mortgage banking,
banking and securities businesses.
Doral Financial's principal executive offices are located at 1159 Franklin
D. Roosevelt Avenue, San Juan, Puerto Rico, and its telephone number is (787)
749-7100.
THE SECURITIES DORAL
FINANCIAL MAY OFFER
Doral Financial may use this prospectus to offer up to $250,000,000 of:
- debt securities; and
- preferred stock.
A prospectus supplement will describe the specific types, amounts, prices, and
detailed terms of any of these offered securities.
DEBT SECURITIES
The debt securities are unsecured general obligations of Doral Financial in
the form of senior or subordinated debt. The senior debt will have the same rank
as all of Doral Financial's other unsecured and unsubordinated debt. The
subordinated debt will be subordinated to all Senior Indebtedness and Other
Financial Obligations, as these terms are defined below under "Description of
Debt Securities -- Subordination."
The senior and subordinated debt will be issued under separate indentures
between Doral Financial and Bankers Trust Company, as trustee. Below are
summaries of the general features of the debt securities from these indentures.
For a more detailed description of these features, see "Description of Debt
Securities" below. You are also encouraged to read the indentures, which are
filed as exhibits to the registration statement of which this prospectus is a
part. You can receive copies of these documents by following the directions on
page 24.
GENERAL INDENTURE PROVISIONS
THAT APPLY TO SENIOR AND
SUBORDINATED DEBT SECURITIES
- The indentures do not limit the amount of debt that Doral Financial may
issue or provide holders any protection should there be a highly leveraged
transaction, recapitalization or restructuring involving Doral Financial.
However, the senior debt indenture does limit Doral Financial's ability to
sell, transfer or pledge the stock of any mortgage banking subsidiary that
meets the financial thresholds in the indenture. These thresholds are
described below under "Description of Debt Securities."
- Each indenture allows for different types of debt securities, including
indexed securities, to be issued in series.
- The indentures allow Doral Financial to merge or to consolidate with
another company, or sell all or substantially all of
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its assets to another company. If any of these events occur, the other
company would be required to assume Doral Financial's responsibilities for
the debt securities. Unless the transaction results in an event of
default, Doral Financial will be released from all liabilities and
obligations under the debt securities when the successor company assumes
Doral Financial's responsibilities.
- The indentures provide that holders of a majority of the principal amount
of the senior debt securities and holders of a majority of the total
principal amount of the subordinated debt securities outstanding in any
series may vote to change Doral Financial's obligations or your rights
concerning those securities. However, some changes to the financial terms
of a security, including changes in the payment of principal or interest
on that security or the currency of payment, cannot be made unless every
holder of that security consents to the change.
- Doral Financial may satisfy its obligations under the senior debt
securities or be released from its obligation to comply with the
limitations discussed above at any time by depositing sufficient amounts
of cash or U.S. government securities with the trustee to pay Doral
Financial's obligations under the particular senior debt securities when
due.
- The indentures govern the actions of the trustee with regard to the debt
securities, including when the trustee is required to give notices to
holders of the securities and when lost or stolen debt securities may be
replaced.
EVENTS OF DEFAULT THAT
APPLY TO SENIOR DEBT
The events of default specified in the senior debt indenture include:
- failure to pay required interest for 30 days;
- failure to pay principal when due;
- failure to make a required sinking fund payment when due;
- failure to perform other covenants for 90 days after notice;
- acceleration of the senior debt securities of any other series or any
indebtedness for borrowed money of Doral Financial and certain
subsidiaries, in each case exceeding $5,000,000 in an aggregate principal
amount; and
- certain events of insolvency, bankruptcy or reorganization involving Doral
Financial, whether voluntary or not.
EVENTS OF DEFAULT THAT
APPLY TO SUBORDINATED DEBT
The only events of default specified in the subordinated debt indenture are
certain events of insolvency, bankruptcy or reorganization involving Doral
Financial.
REMEDIES
If there were an event of default, the trustee or holders of 25% of the
principal amount of debt securities outstanding in a series could demand that
the principal be paid immediately. However, holders of a majority in principal
amount of the securities in that series could rescind that acceleration of the
debt securities.
The subordinated debt indenture does not provide for any right of
acceleration of the payment of principal of a series of subordinated debt
securities upon a default in the payment of principal or interest or in the
performance of any covenant or agreement in the subordinated debt securities or
in the subordinated debt indenture. However, in the event of a default in the
payment of principal or interest, the holder of any debt security shall have the
right to institute a suit for the collection of such overdue payment.
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PREFERRED STOCK
Doral Financial may issue preferred stock with various terms to be
established by its board of directors or a committee designated by the board.
Each series of preferred stock will be more fully described in the particular
prospectus supplement that will accompany this prospectus, including redemption
provisions, rights in the event of liquidation, dissolution or winding up of
Doral Financial, voting rights and conversion rights.
Generally, each series of preferred stock will rank on an equal basis with
each other series of preferred stock and will rank prior to Doral Financial's
common stock. The prospectus supplement will also describe how and when
dividends will be paid on the series of preferred stock.
RATIO OF EARNINGS TO FIXED
CHARGES AND RATIO OF EARNINGS
TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table shows (1) the ratio of earnings to fixed charges and
(2) the ratio of earnings to combined fixed charges and preferred stock
dividends of Doral Financial for each of the five most recent fiscal years. The
ratio of earnings to fixed charges is a measure of Doral Financial's ability to
generate earnings to pay the fixed expenses of its debt. The ratio of earnings
to combined fixed charges and preferred stock dividends is a measure of Doral
Financial's ability to generate earnings to pay the fixed expenses of its debt
and dividends on its preferred stock.
These computations include Doral Financial and its subsidiaries. For
purposes of computing these ratios, earnings consist of pre-tax income from
continuing operations plus fixed charges and amortization of capitalized
interest, less interest capitalized. Fixed charges consist of interest expensed
and capitalized, amortization of debt issuance costs, and Doral Financial's
estimate of the interest component of rental expense. Ratios are presented both
including and excluding interest on deposits. The term "preferred stock
dividends" is the amount of pre-tax earnings that is required to pay dividends
on Doral Financial's outstanding preferred stock.
<TABLE>
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TWELVE MONTHS ENDED DEC. 31,
--------------------------------
1998 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Combined Fixed Charges
Including Interest on Deposits............................ 1.51 1.61 1.66 1.50 1.78
Excluding Interest on Deposits............................ 1.61 1.72 1.75 1.54 1.82
Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends
Including Interest on Deposits............................ 1.50 1.61 1.67 1.49 1.76
Excluding Interest on Deposits............................ 1.59 1.72 1.76 1.53 1.79
</TABLE>
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RISK FACTORS
You should carefully consider the following factors and other information
in this prospectus, including the information incorporated by reference in this
prospectus, before deciding to invest in any of the offered securities.
FLUCTUATIONS IN INTEREST RATES MAY HURT DORAL FINANCIAL'S BUSINESS
Interest rate fluctuations is the primary market risk affecting Doral
Financial. Changes in interest rates affect the following areas of its business:
- the number of mortgage loans originated and purchased;
- the interest income earned on loans and securities;
- gain on sale of loans;
- the value of securities holdings; and
- the value of its servicing asset.
Increases in Interest Rates Reduce Demand for Mortgage Loans. Higher
interest rates increase the cost of mortgage loans to consumers and reduce
demand for mortgage loans, which hurts Doral Financial's profits. Reduced demand
for mortgage loans results in reduced loan originations by Doral Financial and
lower mortgage origination income. Demand for refinance loans is particularly
sensitive to increases in interest rates. Doral Financial has for many years
relied on refinance loans for a large portion of its mortgage loan production.
Increases in Interest Rates Reduce Net Interest Income. Increases in
short-term interest rates reduce net interest income, which is an important part
of Doral Financial's earnings. Net interest income is the difference between the
interest received by Doral Financial on its assets and the interest paid on its
borrowings. Most of Doral Financial's assets, like its mortgage loans and
mortgage-backed securities are long-term assets with fixed interest rates. In
contrast, most of Doral Financial's borrowings are short-term. When interest
rates rise, Doral Financial must pay more in interest while interest earned on
its assets does not rise as quickly. This causes profits to decrease.
Increases in Interest Rates May Reduce or Eliminate Gain on Sale of
Mortgage Loans. If long-term interest rates increase between the time Doral
Financial commits to or establishes an interest rate on a mortgage loan and the
time it sells the loan, Doral Financial may realize a reduced gain or a loss on
such sale.
Increases in Interest Rates May Reduce the Value of Mortgage Loans and
Securities' Holdings. Increases in interest rates may reduce the value of Doral
Financial's financial assets and have an adverse impact on its earnings and
financial condition. Doral Financial owns a substantial portfolio of mortgage
loans, mortgage-backed securities and other debt securities with fixed interest
rates. The market value of an obligation with a fixed interest rate generally
decreases when prevailing interest rates rise.
Decreases in Interest Rates May Adversely Affect Value of Servicing
Asset. Decreases in interest rates lead to increases in the prepayment of
mortgages by borrowers, which may reduce the value of Doral Financial's
servicing asset. The servicing asset is the estimated present value of the fees
Doral Financial expects to receive on the mortgages it services over their
expected term. Doral Financial assigns this value based on what other persons
have paid for similar servicing rights in recent transactions. If prepayments
increase above expected levels, the value of the servicing asset decreases
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because the amount of future fees expected to be received by Doral Financial
decreases. Doral Financial may be required to recognize this decrease in value
by taking a charge against its earnings, which causes its profits to decrease.
DORAL FINANCIAL MAY SUFFER LOSSES FROM MORTGAGE LOANS IT SELLS BUT RETAINS THE
CREDIT RISK
Doral Financial often retains all or part of the credit risk on sales of
mortgage loans that do not qualify for the sale or exchange programs of GNMA,
FNMA or FHLMC and may suffer losses on these loans. Doral Financial suffers
losses on these arrangements when foreclosure sale proceeds of the property
underlying a defaulted mortgage loan are less than the outstanding principal
balance of these loans and the costs of holding and disposing of the related
property.
INCREASES IN DORAL FINANCIAL'S ORIGINATIONS OF COMMERCIAL LOANS HAS INCREASED
ITS CREDIT RISKS
Doral Financial's recent increase in originations of mortgage loans secured
by income producing residential buildings and commercial properties has
increased its credit risks. These loans involve greater credit risks than
residential mortgage loans because they are larger in size and more risk is
concentrated in a single borrower. The properties securing these loans are also
harder to dispose of in foreclosure.
DORAL FINANCIAL IS EXPOSED TO GREATER RISK BECAUSE ITS BUSINESS IS CONCENTRATED
IN PUERTO RICO
Because most of Doral Financial's mortgage loans are secured by properties
located in Puerto Rico, Doral Financial is exposed to a greater risk of
delinquency or default on these mortgage loans resulting from adverse economic,
political or business developments and natural hazard risks, such as hurricanes,
that affect Puerto Rico. If Puerto Rico's real estate market experiences an
overall decline in property values, the rates of foreclosure loss on the
mortgage loans would probably increase substantially. This would cause Doral
Financial's profitability to decrease.
DORAL FINANCIAL'S BUSINESS WOULD BE DISRUPTED IF ITS COMPUTER SYSTEMS CANNOT
WORK PROPERLY WITH YEAR 2000 DATA
Doral Financial could experience a significant disruption to its business
operations that could have an adverse effect on its profitability if its
computer systems and the computer systems provided by third party vendors on
which it relies are not able to properly use date calculations in the year 2000.
Doral Financial is taking steps that it believes are adequate to make sure this
does not happen. However, Doral Financial cannot assure you that these efforts
will be completely successful. Problems suffered by providers of basic services
such as telephone, water, sewer and electricity could also have an adverse
impact on Doral Financial's daily operations. Doral Financial is in the process
of revising its existing business interruption contingency plans to address any
disruptions of these basic services.
DORAL FINANCIAL
Doral Financial Corporation is a bank holding company organized under the
laws of the Commonwealth of Puerto Rico. Its main lines of business are
described below.
- Mortgage banking -- Doral Financial is the leading mortgage banking
institution in Puerto Rico based on the volume of origination of first
mortgage loans secured by single family residences and the size of its
mortgage servicing portfolio. Doral Financial conducts this business
in Puerto Rico primarily through a division of Doral Financial, HF
Mortgage
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Bankers, and its subsidiaries, Doral Mortgage Corporation and Centro
Hipotecario, Inc. Doral Financial also conducts mortgage banking
activities in the mainland United States through Doral Mortgage and
its indirect subsidiary, Doral Money, Inc.
- Banking services -- Doral Financial conducts this business in Puerto
Rico through its subsidiary, Doral Bank. Doral Financial is in the
process of opening a new federal savings bank subsidiary in the New
York City metropolitan area which it expects will commence operations
during the third quarter of 1999.
- Securities services -- Doral Financial conducts this business in
Puerto Rico through its broker-dealer subsidiary, Doral Securities,
Inc.
Because Doral Financial is a holding company, the claims of creditors and
any preferred stockholders of Doral Financial's subsidiaries will have a
priority over Doral Financial's equity rights and the rights of Doral
Financial's creditors, including the holders of debt securities, and preferred
stockholders to participate in the assets of the subsidiary upon the
subsidiary's liquidation.
Doral Financial's subsidiaries that operate in the banking and securities
business can only pay dividends if they are in compliance with the applicable
regulatory requirements of federal and state bank regulatory authorities and
securities regulators. Doral Financial must also maintain the required capital
levels of a bank holding company before it may pay dividends on its stock.
There are various statutory and regulatory limitations on the extent to
which Doral Bank or any other banking subsidiary (including a federal savings
association) can finance or otherwise transfer funds to Doral Financial or its
nonbanking subsidiaries, either in the form of loans, extensions of credit,
investments or asset purchases.
- Such transfers by Doral Bank or any other banking subsidiary to Doral
Financial or any nonbanking subsidiary are limited to 10% of the
banking subsidiary's capital and surplus, and with respect to Doral
Financial and all such nonbanking subsidiaries, to an aggregate of 20%
of the banking subsidiary's capital and surplus.
- Furthermore, loans and extensions of credit are required to be secured
in specified amounts and are required to be on terms and conditions
consistent with safe and sound banking practices.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to Doral Financial. Federal and Puerto Rico authorities
also have the right to further limit Doral Bank's payment of dividends.
Under the policy of the Board of Governors of the Federal Reserve System, a
bank holding company is required to act as a source of strength to its
subsidiary banks and to commit resources to support such banks. As a result of
that policy, Doral Financial may be required to commit resources to Doral Bank
or any other banking subsidiary created in the future in circumstances in which
it might not do so absent such policy. Further, federal bankruptcy law provides
that in the event of the bankruptcy of Doral Financial, any commitment by Doral
Financial to regulators to maintain the capital of a banking subsidiary will be
assumed by the bankruptcy trustee and entitled to priority of payment.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, Doral
Financial will use the net proceeds from the sale of the offered securities for
general corporate purposes, including
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(1) funding its mortgage banking activities, (2) making capital contributions or
extensions of credit to its existing and future banking and non-banking
subsidiaries, (3) funding possible acquisitions of mortgage banking and other
financial institutions, and (4) repayment of outstanding borrowings. Doral
Financial does not at present have any plans to use the proceeds from any
offering for an acquisition.
DESCRIPTION OF DEBT SECURITIES
The debt securities will be direct unsecured general obligations of Doral
Financial and will be either senior or subordinated debt. The debt securities
will be issued under separate indentures between Doral Financial and Bankers
Trust Company. Senior debt securities will be issued under a senior debt
indenture and subordinated debt securities will be issued under a subordinated
debt indenture. The senior debt indenture and the subordinated debt indenture
are sometimes referred to in this prospectus individually as an "indenture" and
collectively as the "indentures." The forms of the indentures have been filed
with the SEC as exhibits to the registration statement of which this prospectus
forms a part.
The following briefly summarizes the material provisions of the indentures
and the debt securities, other than pricing and related terms disclosed in the
accompanying prospectus supplement. The summary is not complete. You should read
the more detailed provisions of the applicable indenture for provisions that may
be important to you. So that you can easily locate these provisions, the numbers
in parenthesis below refer to sections in the applicable indenture or, if no
indenture is specified, to sections in each of the indentures. Whenever
particular sections or defined terms of the applicable indenture are referred
to, such sections or defined terms are incorporated into this prospectus by
reference, and the statement in this prospectus is qualified by that reference.
GENERAL
The senior debt securities will be unsecured and rank equally with all of
Doral Financial's other senior and unsubordinated debt. The subordinated debt
securities will be unsecured and will be subordinated to all of Doral
Financial's Senior Indebtedness (as defined below under "-- Subordination"). In
certain events of insolvency, the subordinated debt securities will also be
subordinated to all of Doral Financial's Other Financial Obligations (as defined
below under "-- Subordination"). As of March 31, 1999, Doral Financial had
approximately $1.6 billion of Senior Indebtedness and Other Obligations
outstanding.
A prospectus supplement relating to any series of debt securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
- The title of the debt securities and whether the debt securities will be
senior or subordinated debt;
- The total principal amount of the debt securities;
- The percentage of the principal amount at which the debt securities will
be issued and any payments due if the maturity of the debt securities is
accelerated;
- The dates on which the principal of the debt securities will be payable;
- The interest rate which the debt securities will bear, or the method for
determining the rate, and the interest payment dates for the debt
securities;
- Any mandatory or optional redemption provisions;
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- Any sinking fund or other provisions that would obligate Doral Financial
to repurchase or otherwise redeem the debt securities;
- Any provisions granting special rights to holders when a specified event
occurs;
- Any changes to or additional events of defaults or covenants;
- Any special tax implications of the debt securities, including provisions
for original issue discount securities, if offered; and
- Any other terms of the debt securities.
The indentures do not limit the amount of debt securities that may be
issued. Each indenture allows debt securities to be issued up to the principal
amount that may be authorized by Doral Financial and may be in any currency or
currency unit designated by Doral Financial. (Sections 3.01 and 3.03.)
DENOMINATIONS
Unless otherwise provided in the accompanying prospectus supplement, debt
securities will be issued in registered form in denominations of $1,000 each and
any multiples thereof. (Section 3.02.)
SUBORDINATION
Under the subordinated indenture, payment of the principal, interest and
any premium on the subordinated debt securities will generally be subordinated
and junior in right of payment to the prior payment in full of all Senior
Indebtedness (as defined below). The subordinated indenture provides that no
payment of principal, interest or any premium on the subordinated debt
securities may be made unless Doral Financial pays in full the principal,
interest, any premium or any other amounts on any Senior Indebtedness then due.
Also, no payment of principal, interest or any premium on the subordinated debt
securities may be made if there shall have occurred and be continuing an event
of default with respect to any Senior Indebtedness permitting the holders
thereof to accelerate the maturity thereof, or if any judicial proceeding shall
be pending with respect to any such default.
If there is any insolvency, bankruptcy, liquidation or other similar
proceeding relating to Doral Financial, then all Senior Indebtedness must be
paid in full before any payment may be made to any holders of subordinated debt
securities. If after payment of the Senior Indebtedness there remains any
amounts available for distribution and any person entitled to payment pursuant
to the terms of Other Financial Obligations has not been paid in full all
amounts due or to become due on the Other Financial Obligations, then these
remaining amounts shall first be used to pay in full the Other Financial
Obligations before any payment may be made to the holders of subordinated debt
securities. Holders of subordinated debt securities must deliver any payments
received by them to the holders of Senior Indebtedness and Other Financial
Obligations until all Senior Indebtedness and Other Financial Obligations are
paid in full. (Subordinated debt indenture, Section 16.02.)
The Subordinated Indenture will not limit the amount of Senior Indebtedness
and Other Financial Obligations that Doral Financial may incur.
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"Senior Indebtedness" means any of the following, whether incurred before
or after the execution of the subordinated debt indenture:
(1) all obligations of Doral Financial for the repayment of borrowed money,
(2) all obligations of Doral Financial for the deferred purchase price of
property, but excluding trade accounts payable in the ordinary course
of business,
(3) all capital lease obligations of Doral Financial, and
(4) all obligations of the type referred to in clauses (1) through (3) of
other persons that Doral Financial has guaranteed or that is otherwise
its legal liability;
but Senior Indebtedness does not include:
(a) the subordinated debt securities; and
(b) indebtedness that by its terms is subordinated to, or ranks on an
equal basis with, the subordinated debt securities.
"Other Financial Obligations" means all obligations of Doral Financial to
make payment pursuant to the terms of financial instruments, such as:
(1) securities contracts and foreign currency exchange contracts,
(2) derivative instruments, like swap agreements, cap agreements, floor
agreements, collar agreements, interest rate agreements, foreign
exchange agreements, options, commodity futures contracts, and
commodity option contracts, and
(3) similar financial instruments;
but Other Financial Obligations does not include:
(a) Senior Indebtedness, and
(b) indebtedness that by its terms is subordinated to, or ranks on an
equal basis with, the subordinated debt securities.
LIMITATIONS ON LIENS AND DISPOSITION OF STOCK OF PRINCIPAL MORTGAGE BANKING
SUBSIDIARIES
The senior debt indenture provides that Doral Financial will not, and will
not permit any Subsidiary to, incur, issue, assume or guarantee any indebtedness
for money borrowed if such indebtedness is secured by a pledge of, lien on, or
security interest in any shares of Voting Stock of any Principal Mortgage
Banking Subsidiary, without providing that each series of senior debt securities
and, at Doral Financial's option, any other senior indebtedness ranking equally
with the senior debt securities, shall be secured equally and ratably with such
indebtedness. This limitation shall not apply to indebtedness secured by a
pledge of, lien on or security interest in any shares of Voting Stock of any
corporation at the time it becomes a Principal Mortgage Banking Subsidiary.
(Senior debt indenture, Section 12.06.)
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The senior debt indenture also provides that Doral Financial will not sell,
assign, transfer or otherwise dispose of any shares of, securities convertible
into or options, warrants or rights to subscribe for or purchase shares of,
Voting Stock (other than directors' qualifying shares) of any Principal Mortgage
Banking Subsidiary and will not permit any Principal Mortgage Banking Subsidiary
to issue (except to Doral Financial) any shares of, securities convertible into
or options, warrants or rights to subscribe for or purchase shares of, Voting
Stock of any Principal Mortgage Banking Subsidiary, except for sales,
assignments, transfers or other dispositions that:
are for fair market value on the date thereof, as determined by the
Board of Directors of Doral Financial (which determination shall be
conclusive) and, after giving effect to such disposition and to any
possible dilution, Doral Financial will own not less than 80% of the
shares of Voting Stock of such Principal Mortgage Banking Subsidiary
then issued and outstanding free and clear of any security interest;
are made in compliance with an order of a court or regulatory authority
of competent jurisdiction, as a condition imposed by any such court or
authority permitting the acquisition by Doral Financial, directly or
indirectly, of any other mortgage banking institution or entity the
activities of which are legally permissible for a bank holding company
or a subsidiary thereof to engage in, or as an undertaking made to such
authority in connection with such an acquisition;
are made where such Principal Mortgage Banking Subsidiary, having
obtained any necessary regulatory approvals, unconditionally guarantees
payment when due of the principal of and premium, if any, and interest
on the debt securities; or
are made to Doral Financial or any wholly-owned subsidiary if such
wholly-owned subsidiary agrees to be bound by this covenant and Doral
Financial agrees to maintain such wholly-owned subsidiary as a
wholly-owned subsidiary.
Notwithstanding the foregoing, any Principal Mortgage Banking Subsidiary
may be merged into or consolidated with another mortgage banking institution
organized if, after giving effect to such merger or consolidation, Doral
Financial or any wholly-owned subsidiary owns at least 80% of the Voting Stock
of such other mortgage banking institution then issued and outstanding free and
clear of any security interest and if, immediately after giving effect thereto
and treating any such resulting institution thereafter as a Principal Mortgage
Banking Subsidiary and as a Subsidiary for purposes of the senior debt
indenture, no event of default, and no event that, after the giving of notice or
lapse of time or both, would become an event of default under the senior debt
indenture, has occurred and is continuing.
The subordinated debt indenture does not contain any of the foregoing
limitations on the creation of liens or disposition of Principal Mortgage
Banking Subsidiaries and these limitations are not for the benefit of any series
of subordinated debt securities.
"Principal Mortgage Banking Subsidiary" means a Subsidiary, including its
Subsidiaries, that is principally engaged in the mortgage banking business and
meets any of the following conditions:
- Doral Financial's and its other Subsidiaries' investments in and advances
to the Subsidiary exceed 10 percent of the total assets of Doral
Financial and its Subsidiaries consolidated as of the end of the most
recently completed fiscal year;
- Doral Financial's and its other Subsidiaries' proportionate share of the
total assets of the Subsidiary after intercompany eliminations exceeds 10
percent of the total assets of Doral Financial and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; or
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- Doral Financial's and its other Subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items
and cumulative effect of a change in accounting principles of the
Subsidiary exceeds 10 percent of such income of Doral Financial and
its Subsidiaries consolidated for the most recently completed fiscal
year.
"Principal Mortgage Banking Subsidiary" does not include, however, any
Subsidiary that is a bank or savings association unless Doral Financial
transfers to such bank or savings association the mortgage banking business
conducted by Doral Mortgage Corporation or Doral Financial's HF Mortgage Bankers
Division as of the date of this prospectus.
"Subsidiary" means any corporation of which securities entitled to elect at
least a majority of the corporation's directors shall at the time be owned,
directly or indirectly, by Doral Financial, and/or one or more Subsidiaries.
"Voting Stock" means capital stock the holders of which have general voting
power under ordinary circumstances to elect at least a majority of the board of
directors of a corporation, except capital stock that carries only the right to
vote conditioned on the happening of an event regardless of whether such event
shall have happened. (Senior debt indenture, Sections 1.01 and 12.06.)
CONSOLIDATION, MERGER OR SALE
Each indenture generally permits a consolidation or merger between Doral
Financial and another corporation. They also permit Doral Financial to sell all
or substantially all of its property and assets. If this happens, the remaining
or acquiring corporation shall assume all of Doral Financial's responsibilities
and liabilities under the indentures including the payment of all amounts due on
the debt securities and performance of the covenants in the indentures.
However, Doral Financial will only consolidate or merge with or into any
other corporation or sell all or substantially all of its assets according to
the terms and conditions of the indentures. The remaining or acquiring
corporation will be substituted for Doral Financial in the indentures with the
same effect as if it had been an original party to the indenture. Thereafter,
the successor corporation may exercise Doral Financial's rights and powers under
any indenture, in Doral Financial's name or in its own name. Any act or
proceeding required or permitted to be done by Doral Financial's board of
directors or any of its officers may be done by the board or officers of the
successor corporation. If Doral Financial merges with or into any other
corporation or sells all or substantially all of its assets, it shall be
released from all liabilities and obligations under the indentures and under the
debt securities. (Sections 10.01 and 10.02.)
MODIFICATION OF INDENTURES
Under each indenture, Doral Financial's rights and obligations and the
rights of the holders may be modified with the consent of the holders of a
majority in aggregate principal amount of the outstanding Debt Securities of
each series affected by the modification. No modification of the principal or
interest payment terms, and no modification reducing the percentage required for
modifications, is effective against any holder without its consent. (Sections
11.01 and 11.02.)
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EVENTS OF DEFAULT
The senior debt indenture provides that an "event of default" regarding any
series of senior debt securities will be any of the following:
- failure to pay interest on any debt security of such series for 30 days;
- failure to pay the principal or any premium on any debt security of such
series when due;
- failure to deposit any sinking fund payment when due by the terms of a
debt security of such series;
- failure to perform any other covenant in the indenture that continues for
90 days after being given written notice;
- acceleration of the senior debt securities of any other series or any
other indebtedness for borrowed money of Doral Financial or any
Significant Subsidiary (as defined below), in each case exceeding
$5,000,000 in an aggregate principal amount;
- certain events involving bankruptcy, insolvency or reorganization of
Doral Financial or any Significant Subsidiary; or
- any other event of default included in any indenture or supplemental
indenture. (Section 5.01.)
"Significant Subsidiary" means a Subsidiary, including its Subsidiaries,
that meets any of the following conditions:
- Doral Financial's and its other Subsidiaries' investments in and advances
to the Subsidiary exceed 10 percent of the total assets of Doral
Financial and its Subsidiaries consolidated as of the end of the most
recently completed fiscal year;
- Doral Financial's and its other Subsidiaries' proportionate share of the
total assets of the Subsidiary after intercompany eliminations exceeds 10
percent of the total assets of Doral Financial and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; or
- Doral Financial's and its other Subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the Subsidiary
exceeds 10 percent of such income of Doral Financial and its Subsidiaries
consolidated for the most recently completed fiscal year.
The subordinated debt indenture provides that an "event of default"
regarding any series of subordinated debt securities will occur only upon
certain events involving bankruptcy, insolvency or reorganization of Doral
Financial. A default in the payment of principal or interest or in the
performance of any covenant or agreement in the subordinated debt securities of
any series or in the subordinated indenture is not an event of default under the
subordinated debt indenture and does not provide for any right of acceleration
of the payment of principal of a series of subordinated debt securities.
However, in the event of a default in the payment of principal or interest, the
holder of any debt security shall have the right to institute a suit for the
collection of such overdue payment.
An event of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under an indenture. The Trustee may withhold notice to the
holders of Debt Securities of any default (except in the payment of principal
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or interest) if it considers such withholding of notice to be in the best
interests of the holders. (Section 6.02.)
If an event of default for any series of debt securities occurs and
continues, the trustee or the holders of at least 25% in aggregate principal
amount of the debt securities of the series may declare the entire principal of
all the debt securities of that series to be due and payable immediately. If
this happens, subject to certain conditions, the holders of a majority of the
aggregate principal amount of the debt securities of that series can void the
declaration. (Section 5.02.)
Other than its duties in case of a default, a trustee is not obligated to
exercise any of its rights or powers under any Indenture at the request, order
or direction of any holders, unless the holders offer the trustee reasonable
indemnity. (Section 6.01.) If they provide this reasonable indemnification, the
holders of a majority in principal amount of any series of debt securities may
direct the time, method and place of conducting any proceeding or any remedy
available to the trustee, or exercising any power conferred upon the trustee,
for any series of debt securities. (Section 5.12.)
COVENANTS
Under the indentures, Doral Financial will agree to:
- pay the principal, interest and any premium on the debt securities
when due;
- maintain a place of payment;
- deliver a report to the trustee at the end of each fiscal year
certifying as to the absence of events of default and to Doral
Financial's compliance with the terms of the indentures; and
- deposit sufficient funds with any paying agent on or before the due
date for any principal, interest or any premium.
PAYMENT AND TRANSFER
Principal, interest and any premium on fully registered securities will be
paid at designated places. Payment will be made by check mailed to the persons
in whose names the debt securities are registered on days specified in the
indentures or any prospectus supplement. Debt securities payments in other forms
will be paid at a place designated by Doral Financial and specified in a
prospectus supplement. (Section 3.07.)
Fully registered securities may be transferred or exchanged at the
corporate trust office of the Trustee or at any other office or agency
maintained by Doral Financial for such purposes, without the payment of any
service charge except for any tax or governmental charge. (Section 3.05.)
GLOBAL SECURITIES
The debt securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with a depositary
identified in a prospectus supplement. Unless it is exchanged in whole or in
part for debt securities in definitive form, a global certificate may generally
be transferred only as a whole unless it is being transferred to certain
nominees of the depositary. (Section 2.03.)
Unless otherwise stated in any prospectus supplement, The Depository Trust
Company, New York, New York ("DTC") will act as depositary. Beneficial interests
in global certificates will be
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shown on, and transfers of global certificates will be effected only through
records maintained by DTC and its participants.
DEFEASANCE
Doral Financial will be discharged from its obligations on the senior debt
securities of any series at any time if it deposits with the trustee sufficient
cash or government securities to pay the principal, interest, any premium and
any other sums due to the stated maturity date or a redemption date of the
senior debt securities of the series. Doral Financial must also deliver to the
trustee an opinion of counsel to the effect that the holders of the senior debt
securities of that series will have no federal income tax consequences as a
result of such deposit. If this happens, the holders of the senior debt
securities of the series will not be entitled to the benefits of the senior debt
indenture except for registration of transfer and exchange of senior debt
securities and replacement of lost, stolen or mutilated senior debt securities.
(Senior debt indenture, Section 15.02.)
The subordinated debt indenture does not contain provisions for the
defeasance and discharge of Doral Financial's obligations on the subordinated
debt securities and the subordinated indenture.
THE TRUSTEE
Bankers Trust Company will be the trustee under the indentures. It is also
trustee under another indenture with Doral Financial pursuant to which Doral
Financial's 7.84% Senior Notes due 2006 were issued. In addition, it is the
administrative and syndicate agent and a lender under syndicated credit
agreements which provide for credit facilities to Doral Financial. The trustee
and its affiliates may have other relations with Doral Financial in the ordinary
course of business.
The occurrence of any default under either the senior debt indenture or the
indenture relating to the 7.84% Senior Notes and the subordinated debt indenture
could create a conflicting interest for the trustee under the Trust Indenture
Act. If such default has not been cured or waived within 90 days after the
trustee has or acquired a conflicting interest, the trustee would generally be
required by the Trust Indenture Act to eliminate such conflicting interest or
resign as trustee with respect to both the 7.84% Senior Notes and the debt
securities issued under the senior indenture or with respect to the subordinated
debt securities issued under the subordinated indenture. In the event of the
trustee's resignation, Doral Financial shall promptly appoint a successor
trustee with respect to the affected securities.
The Trust Indenture Act also imposes certain limitations on the right of
the trustee, as a creditor of Doral Financial, to obtain payment of claims in
certain cases, or to realize on certain property received in respect to any such
claim or otherwise. The trustee will be permitted to engage in other
transactions with Doral Financial, provided that if it acquires a conflicting
interest within the meaning of Section 310 of the Trust Indenture Act, it must
generally either eliminate such conflict or resign.
DESCRIPTION OF PREFERRED STOCK
The following briefly summarizes the material terms of Doral Financial's
preferred stock, other than pricing and related terms which will be disclosed in
a prospectus supplement. You should read the particular terms of any series of
preferred stock offered by Doral Financial which will be described in more
detail in any prospectus supplement relating to such series, together with the
more detailed provisions of Doral Financial's restated certificate of
incorporation and the certificate of designation relating to each particular
series of preferred stock for provisions that may be important to you. The
restated certificate of incorporation is filed as an exhibit to the registration
statement of
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which this prospectus forms a part. The certificate of designation with respect
to any series of preferred stock will be filed with the SEC as an exhibit to a
document incorporated by reference in this prospectus concurrently with the
offering of such preferred stock. The prospectus supplement will also state
whether any of the terms summarized below do not apply to the series of
preferred stock being offered. For a description of Doral Financial's
outstanding preferred stock, see "Description of Capital Stock."
GENERAL
Under Doral Financial's restated certificate of incorporation, the board of
directors of Doral Financial is authorized to issue shares of preferred stock in
one or more series, and to establish from time to time a series of preferred
stock with the following terms specified:
- the number of shares to be included in the series;
- the designation, powers, preferences and rights of the shares of the
series; and
- the qualifications, limitations or restrictions of such series, except
as otherwise stated in the restated certificate of incorporation.
Prior to the issuance of any series of preferred stock, the board of
directors of Doral Financial will adopt resolutions creating and designating the
series as a series of preferred stock and the resolutions will be filed in a
certificate of designation as an amendment to the restated certificate of
incorporation. The term "board of directors of Doral Financial" includes any
duly authorized committee.
The preferred stock will be, when issued, fully paid and nonassessable.
Holders of preferred stock will not have any preemptive or subscription rights
to acquire more stock of Doral Financial.
The transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of each series of preferred stock will be named in the
prospectus supplement relating to such series.
The rights of holders of the preferred stock offered may be adversely
affected by the rights of holders of any shares of preferred stock that may be
issued in the future. The board of directors may cause shares of preferred stock
to be issued in public or private transactions for any proper corporate purpose.
Examples of proper corporate purposes include issuances to obtain additional
financing in connection with acquisitions or otherwise, and issuances to
officers, directors and employees of Doral Financial and its subsidiaries
pursuant to benefit plans or otherwise. Shares of preferred stock issued by
Doral Financial may have the effect of rendering more difficult or discouraging
an acquisition of Doral Financial deemed undesirable by the board of directors
of Doral Financial.
RANK
Unless otherwise specified in the prospectus supplement relating to the
shares of any series of preferred stock, such shares will rank on an equal basis
with each other series of preferred stock and prior to the common stock as to
dividends and distributions of assets.
DIVIDENDS
Holders of each series of preferred stock will be entitled to receive cash
dividends, when, as and if declared by the board of directors of Doral Financial
out of funds legally available for dividends. The rates and dates of payment of
dividends will be set forth in the prospectus supplement relating to each series
of preferred stock. Dividends will be payable to holders of record of preferred
stock as
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they appear on the books of Doral Financial on the record dates fixed by the
board of directors. Dividends on any series of preferred stock may be cumulative
or noncumulative.
Doral Financial is a party to contracts that prevent it from paying
dividends if it does not comply with some terms of those contracts. The
agreement pursuant to which Doral Financial issued its 7.84% Senior Notes due
2006, prohibits Doral Financial from paying dividends if the aggregate amount of
dividends paid on its capital stock, including all series of preferred stock,
would exceed the sum of the following:
- 50% of consolidated net income earned since October 1, 1996, and prior
to the end of the fiscal quarter ending not less than 45 days prior to
the proposed dividend payment date;
- $15 million; and
- the net proceeds of any sale of capital stock after October 1, 1996.
A warehousing loan agreement entered into with Citibank, N.A. limits the
aggregate amount of cash dividends that Doral Financial may pay on its capital
stock during a fiscal year to 50% of consolidated net income for the immediately
preceding fiscal year.
Doral Financial may not declare, pay or set apart for payment dividends on
the preferred stock unless full dividends on any other series of preferred stock
that ranks on an equal or senior basis have been paid or sufficient funds have
been set apart for payment for
- all prior dividend periods of the other series of preferred stock that
pay dividends on a cumulative basis; or
- the immediately preceding dividend period of the other series of
preferred stock that pay dividends on a noncumulative basis.
Partial dividends declared on shares of preferred stock and any other
series of preferred stock ranking on an equal basis as to dividends will be
declared pro rata. A pro rata declaration means that the ratio of dividends
declared per share to accrued dividends per share will be the same for both
series of preferred stock.
Similarly, Doral Financial may not declare, pay or set apart for payment
non-stock dividends or make other payments on the common stock or any other
stock of Doral Financial ranking junior to the preferred stock until full
dividends on the preferred stock have been paid or set apart for payment for
- all prior dividend periods if the preferred stock pays dividends on a
cumulative basis; or
- the dividend period established in the certificate of designation for
each series of preferred stock if the preferred stock pays dividends
on a noncumulative basis.
CONVERSION OR EXCHANGE
The prospectus supplement for any series of preferred stock will state the
terms, if any, on which shares of that series are convertible into shares of
another series of preferred stock of Doral Financial. The preferred stock will
not be convertible into or exchangeable for shares of Doral Financial's common
stock.
If so determined by the board of directors of Doral Financial, the holders
of shares of preferred stock of any series may be obligated at any time or at
maturity to exchange such shares for preferred stock or debt securities of Doral
Financial. The terms of any such exchange and any such preferred
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stock or debt securities will be described in the prospectus supplement relating
to such series of preferred stock.
REDEMPTION
If so specified in the applicable prospectus supplement, a series of
preferred stock may be redeemable at any time, in whole or in part, at the
option of Doral Financial or the holder thereof and may be mandatorily redeemed.
Any partial redemptions of preferred stock will be made in a way that the
board of directors decides is equitable.
Unless Doral Financial defaults in the payment of the redemption price,
dividends will cease to accrue after the redemption date on shares of preferred
stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
Doral Financial, holders of each series of preferred stock will be entitled to
receive distributions upon liquidation in the amount set forth in the prospectus
supplement relating to such series of preferred stock. Such distributions will
be made before any distribution is made on any securities ranking junior
relating to liquidation, including common stock.
If the liquidation amounts payable relating to the preferred stock of any
series and any other securities ranking on a parity regarding liquidation rights
are not paid in full, the holders of the preferred stock of such series and such
other securities will share in any such distribution of available assets of
Doral Financial on a ratable basis in proportion to the full liquidation
preferences. Holders of such series of preferred stock will not be entitled to
any other amounts from Doral Financial after they have received their full
liquidation preference.
VOTING RIGHTS
The holders of shares of preferred stock will have no voting rights,
except:
- as otherwise stated in the prospectus supplement;
- as otherwise stated in the certificate of designation establishing
such series; or
- as required by applicable law.
Under regulations adopted by the Federal Reserve Board, if the holders of
the preferred stock of any series become entitled to vote for the election of
directors because dividends on the preferred stock of such series are in
arrears, preferred stock of such series could be deemed a "class of voting
securities." In this instance, a holder of 25% or more of the preferred stock of
such series could then be subject to regulation as a bank holding company in
accordance with the Bank Holding Company Act. A holder of 5% or more of such
series that otherwise exercises a "controlling influence" over Doral Financial
could also be subject to regulation under the Bank Holding Company Act. In
addition, at any time a series of the preferred stock is deemed a class of
voting securities, (1) any other bank holding company may be required to obtain
the approval of the Federal Reserve Board to acquire or retain 5% or more of the
outstanding shares of such series of preferred stock, and (2) any person other
than a bank holding company may be required to file with the Federal Reserve
Board under the Change in Bank Control Act to acquire or retain 10% or more of
such series.
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Section 12 of the Puerto Rico Banking Law requires that the Office of the
Commissioner of Financial Institutions of Puerto Rico approve any change of
control involving a bank organized under the Banking Law. The Banking Law
requires that the Office of the Commissioner be informed not less than 60 days
prior to any transfer of voting stock of a Puerto Rico bank that results in any
person owning, directly or indirectly, more than 5% of the outstanding voting
stock of the bank. For the purposes of Section 12 of the Banking Law, the term
"control" means the power to, directly or indirectly, direct or influence
decisively the administration or the norms of the bank. The Office of the
Commissioner has made an administrative determination that these provisions of
the Banking Law are applicable to a change in control of Doral Financial.
Pursuant to the Banking Law, if the Office of the Commissioner receives
notice of a proposed transaction that may result in a change of control of Doral
Financial, the Office of the Commissioner is required to investigate and
determine whether a change of control has occurred. The Office of the
Commissioner will issue an authorization for the transfer of control of Doral
Financial if the results of its investigations are in its judgment satisfactory.
The decision of the Office of the Commissioner is final and unreviewable.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL
As of the date of this prospectus, Doral Financial is authorized to issue
50,000,000 shares of common stock, $1.00 par value, and 2,000,000 shares of
serial preferred stock, $1.00 par value. The following is a summary of certain
rights and privileges of the common stock and outstanding serial preferred
stock. You should read the more detailed provisions of Doral Financial's
restated certificate of incorporation, as amended, and the certificate of
designation relating to any series of preferred stock for provisions that may be
important to you.
OUTSTANDING SERIAL PREFERRED STOCK
The general terms of Doral Financial's preferred stock are described above
under "DESCRIPTION OF PREFERRED STOCK." As of the date of this prospectus, the
8% Convertible Cumulative Preferred Stock (the "8% Preferred Stock") and the 7%
Noncumulative Monthly Income Preferred Stock, Series A (the "7% Preferred
Stock") described below are only two series of outstanding serial preferred
stock designated by Doral Financial.
8% PREFERRED STOCK
Doral Financial has outstanding 8,460 shares of 8% Preferred Stock. All
shares of 8% Preferred Stock are held by Popular, Inc. Popular acquired the 8%
Preferred Stock in a private transaction with Doral Financial, in which Popular
exchanged convertible debentures of Doral Financial in the principal amount of
$8.46 million it had previously acquired. Doral Financial entered into the
exchange because the 8% Preferred Stock qualified as Tier I capital for purposes
of compliance with the regulatory requirements applicable to bank holding
companies while the convertible debentures did not qualify for this treatment.
Dividend Rights and Limitations. The holders of the shares of 8% Preferred
Stock are entitled to receive cumulative cash dividends when, as and if declared
by the board of directors, at the annual rate of 8% of the $1,000 liquidation
preference thereof payable monthly. The holders of the 8% Preferred Stock are
entitled to receive such dividends prior to any payment of dividends or
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distribution of assets to holders of the common stock and to any other class of
capital stock ranking junior to the 8% Preferred Stock with respect to the
payment of dividends.
Liquidation Rights. Upon the liquidation, dissolution or winding up of
Doral Financial, whether voluntary or involuntary, the holders of the 8%
Preferred Stock are entitled to receive out of the assets of Doral Financial an
amount in cash equal to $1,000 per share plus accrued and unpaid dividends
thereon to the date of the distribution. This distribution must be made before
any payment may be made to the holders of common stock or any other securities
of Doral Financial ranking junior to the 8% Preferred Stock as to the
distribution of assets upon liquidation. No distribution of this type or payment
on account of liquidation, dissolution or winding up of Doral Financial may be
made to the holders of the shares of any class or series of stock ranking on a
parity with the 8% Preferred Stock as to the distribution of assets upon
liquidation, unless the holders of the 8% Preferred Stock receive like amounts
ratably in accordance with the full distributive amounts which they and the
holders of parity stock are respectively entitled to receive upon this
preferential distribution.
After the payment to the holders of the 8% Preferred Stock of the full
preferential amounts provided for above, the holders of the 8% Preferred Stock
will have no right or claim to any of the remaining assets of Doral Financial.
Conversion Rights. The holders of shares of 8% Preferred Stock have the
right, at their option, to convert such shares for shares of common stock of
Doral Financial at any time on or before December 1, 2005, at a conversion price
of $4.375 per share, subject to adjustment from time to time upon the occurrence
of certain events. As of April 1, 1999, the 8,460 shares of 8% Preferred Stock
held by Popular were convertible into 1,933,714 shares of common stock, or
approximately 4.6% of the outstanding common stock.
Redemption. The 8% Preferred Stock is subject to redemption in whole or in
part, at the option of Doral Financial with the consent of the Federal Reserve
on or after January 1, 2001, and on or prior to December 31, 2002, at a price of
$1,020 per share and after this period at redemption prices declining to a price
of $1,000 per share on or after January 1, 2005. There is no mandatory
redemption or sinking fund obligation with respect to the 8% Preferred Stock.
Voting Rights. The holders of shares of 8% Preferred Stock are not
entitled to any voting rights except as required by law or in connection with
any changes of the terms or rights of the 8% Preferred Stock.
Rank vis-a-vis 7% Preferred Stock. The 8% Preferred Stock will have the
same rank as the 7% Preferred Stock as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up of Doral
Financial.
7% PREFERRED STOCK
Doral Financial has outstanding 1,495,000 shares of 7% Preferred Stock.
Dividend Rights and Limitations. The holders of the shares of 7% Preferred
Stock are entitled to receive noncumulative cash dividends when, as and if
declared by the Board of Directors, at the annual rate of 7% of the $50
liquidation preference thereof payable monthly. The holders of the 7% Preferred
Stock are entitled to receive such dividends prior to any payment of dividends
or distribution of assets to holders of the common stock and to any other class
of capital stock ranking junior to the 7% Preferred Stock with respect to the
payment of dividends.
21
<PAGE> 23
Liquidation Rights. Upon the liquidation, dissolution or winding up of
Doral Financial, whether voluntary or involuntary, the holders of the 7%
Preferred Stock are entitled to receive out of the assets of Doral Financial an
amount in cash equal to $50 per share plus accrued and unpaid dividends thereon
for the current monthly dividend period to the date of the distribution. This
distribution must be made before any payment may be made to the holders of
common stock or any other securities of Doral Financial ranking junior to the 7%
Preferred Stock as to the distribution of assets upon liquidation. No
distribution of this type or payment on account of liquidation, dissolution or
winding up of Doral Financial may be made to the holders of the shares of any
class or series of stock ranking on a parity with the 7% Preferred Stock as to
the distribution of assets upon liquidation, unless the holders of the 7%
Preferred Stock receive like amounts ratably in accordance with the full
distributive amounts which they and the holders of parity stock are respectively
entitled to receive upon this preferential distribution.
After the payment to the holders of the 7% Preferred Stock of the full
preferential amounts provided for above, the holders of the 7% Preferred Stock
will have no right or claim to any of the remaining assets of Doral Financial.
Conversion Rights. The shares of 7% Preferred Stock are not convertible
into or exchangeable for any other securities of Doral Financial.
Redemption. The 7% Preferred Stock is subject to redemption in whole or in
part, at the option of Doral Financial with the consent of the Federal Reserve
on or after February 28, 2004 and on or prior to February 27, 2005, at a price
of $51 per share and after this period at redemption prices declining to a price
of $50 per share on or after February 28, 2006. There is no mandatory redemption
or sinking fund obligation with respect to the 7% Preferred Stock.
Voting Rights. The holders of shares of 7% Preferred Stock are not
entitled to any voting rights except (1) if Doral Financial does not pay
dividends in full on the 7% Preferred Stock for 18 consecutive monthly dividend
periods, (2) as required by law or (3) in connection with any changes of the
terms or rights of the 7% Preferred Stock.
Rank vis-a-vis Series A Preferred Stock. The 7% Preferred Stock will have
the same rank as the 8% Preferred Stock as to the payment of dividends and as to
the distribution of assets upon liquidation, dissolution or winding up of Doral
Financial.
PLAN OF DISTRIBUTION
Doral Financial may sell the offered securities (1) through agents; (2) to
or through underwriters or dealers; (3) directly to one or more purchasers; or
(4) through a combination of any of these methods of sale.
The prospectus supplement relating to an offering of offered securities
will set forth the terms of such offering, including:
- the name or names of any underwriters, dealers or agents;
- the purchase price of the offered securities and the proceeds to Doral
Financial from such sale;
- any underwriting discounts and commissions or agency fees and other
items constituting underwriters' or agents' compensation;
- the initial public offering price;
22
<PAGE> 24
- any discounts or concessions to be allowed or reallowed or paid to
dealers; and
- any securities exchanges on which such offered securities may be listed.
Any initial public offering prices, discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
BY AGENTS
Offered securities may be sold through agents designated by Doral
Financial. Any agent involved in the offer or sale of the offered securities in
respect of which this prospectus is delivered will be named, and any commissions
payable by Doral Financial to such agent will be set forth, in the prospectus
supplement relating to that offering. Unless otherwise indicated in such
prospectus supplement, the agents will agree to use their reasonable best
efforts to solicit purchases for the period of their appointment.
BY UNDERWRITERS
If underwriters are used in the offering, the offered securities will be
acquired by the underwriters for their own account. The underwriters may resell
the securities from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The securities may be either offered to the
public through underwriting syndicates represented by one or more managing
underwriters or by one or more underwriters without a syndicate. The obligations
of the underwriters to purchase the securities will be subject to certain
conditions. The underwriters will be obligated to purchase all the securities of
the series offered if any of the securities are purchased. Any initial public
offering price and any discounts or concessions allowed or re-allowed or paid to
dealers may be changed from time to time.
In connection with underwritten offerings of the offered securities and in
accordance with applicable law and industry practice, underwriters may
over-allot or effect transactions that stabilize, maintain or otherwise affect
the market price of the offered securities at levels above those that might
otherwise prevail in the open market, including by entering stabilizing bids,
effecting syndicate covering transactions or imposing penalty bids, each of
which is described below.
- A stabilizing bid means the placing of any bid, or the effecting of any
purchase, for the purpose of pegging, fixing or maintaining the price of
a security.
- A syndicate covering transaction means the placing of any bid on behalf
of the underwriting syndicate or the effecting of any purchase to reduce
a short position created in connection with the offering.
- A penalty bid means an arrangement that permits the managing underwriter
to reclaim a selling concession from a syndicate member in connection
with the offering when offered securities originally sold by the
syndicate member are purchased in syndicate covering transactions.
These transactions may be effected in the over-the-counter market, or
otherwise. Underwriters are not required to engage in any of these activities,
or to continue such activities if commenced.
DIRECT SALES
Offered securities may also be sold directly by Doral Financial. In this
case, no underwriters or agents would be involved.
23
<PAGE> 25
GENERAL INFORMATION
Doral Financial may have agreements with the underwriters, dealers and
agents to indemnify them against certain civil liabilities, including
liabilities under the Securities Act of 1933, or to contribute with respect to
payments which the underwriters, dealers or agents may be required to make.
Each series of offered securities will be a new issue of securities and
will have no established trading market. Any underwriters to whom offered
securities are sold for public offering and sale may make a market in such
offered securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given that there will be a market for the offered securities.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, Doral Financial or its subsidiaries in the ordinary course
of their businesses.
WHERE YOU CAN FIND MORE INFORMATION
Doral Financial files annual, quarterly and current reports, proxy
statements and other information with the SEC. Doral Financial has also filed
with the SEC a registration statement on Form S-3, to register the securities
being offered by this prospectus. This prospectus, which forms part of the
registration statement, does not contain all of the information included in the
registration statement. For further information about Doral Financial and the
securities offered in this prospectus, you should refer to the registration
statement and its exhibits.
You may read and copy any document filed by Doral Financial with the SEC at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the Public Reference Room. Doral Financial files its SEC materials
electronically with the SEC, so you can also review Doral Financial's filings by
accessing the web site maintained by the SEC at http://www.sec.gov. This site
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC.
The SEC allows Doral Financial to "incorporate by reference" the
information it files with them, which means that it can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus.
Information that Doral Financial files later with the SEC will automatically
update and supersede information in this prospectus. In all cases, you should
rely on the later information over different information included in this
prospectus or the prospectus supplement. Doral Financial has previously filed
the following documents with the SEC and is incorporating them by reference into
this prospectus:
- Annual Report on Form 10-K for the year ended December 31, 1998;
and
- Current Reports on Form 8-K, dated January 12, 1999, February 22,
1999 and April 13, 1999.
Doral Financial also incorporates by reference, from the date of the
initial filing of the registration statement, all documents filed by it with the
SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of
1934 after the date of this prospectus and until Doral Financial sells all of
the securities being offered by this prospectus.
24
<PAGE> 26
You may request a copy of these filings at no cost, by writing or
telephoning Doral Financial at the following address:
Doral Financial Corporation
Attn.: Mario S. Levis, Executive
Vice President & Treasurer
1159 Franklin D. Roosevelt Ave.
San Juan, Puerto Rico 00920
(787) 749-7108
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. Doral Financial has
not authorized anyone else to provide you with different information. Doral
Financial is not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents.
LEGAL OPINIONS
Unless otherwise specified in the applicable prospectus supplement,
Pietrantoni Mendez & Alvarez LLP, will issue an opinion about the legality of
the offered securities for Doral Financial. Unless otherwise specified in the
applicable prospectus supplement, any underwriters will be advised about certain
issues relating to any offering by Brown & Wood LLP.
EXPERTS
PricewaterhouseCoopers LLP, independent accountants, audited Doral
Financial's financial statements incorporated by reference in this prospectus
and elsewhere in the registration statement. These financial statements are
incorporated by reference herein in reliance on the report of
PricewaterhouseCoopers LLP given on the authority as experts in auditing and
accounting in giving the report.
25
<PAGE> 27
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1999)
$200,000,000
DORAL FINANCIAL CORPORATION
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
------------------------
THE NOTES:
- - Doral Financial will offer notes from time to time and specify the terms and
conditions of each issue of notes in a pricing supplement.
- - The notes will be either senior or subordinated unsecured debt securities of
Doral Financial.
- - The notes will have stated maturities of nine months or more from the date
they are originally issued.
- - Doral Financial will pay amounts due on the notes in U.S. dollars or any other
consideration described in the applicable pricing supplement.
- - The notes may bear interest at fixed or floating rates or may not bear any
interest. If the notes bear interest at a floating rate, the floating rate may
be based on one or more indices or formulas plus or minus a fixed amount or
multiplied by a factor.
- - Doral Financial will specify whether the notes can be redeemed or repaid
before their maturity and whether they are subject to mandatory redemption,
redemption at the option of Doral Financial or repayment at the option of the
holder of the notes.
- - Holders of the subordinated notes may not accelerate the maturity of the
subordinated notes except upon Doral Financial's bankruptcy or insolvency.
INVESTING IN THE NOTES INVOLVES CERTAIN RISKS.
SEE "RISK FACTORS" ON PAGE S-3 OF THIS PROSPECTUS SUPPLEMENT AND
"RISK FACTORS" ON PAGE 6 OF THE ACCOMPANYING PROSPECTUS.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement, the accompanying prospectus or any pricing supplement is
truthful or complete. Any representation to the contrary is a criminal offense.
The notes are not deposits or savings accounts and are not insured by the
Federal Deposit Insurance Corporation or any other governmental agency or
instrumentality.
<TABLE>
<CAPTION>
AGENT'S DISCOUNTS PROCEEDS, BEFORE EXPENSES, TO
PUBLIC OFFERING PRICE AND COMMISSIONS DORAL FINANCIAL
--------------------- ------------------- -----------------------------
<S> <C> <C> <C>
Per note......................... 100% .125%-.750% 99.875%-99.250%
Total(1)......................... $200,000,000 $250,000-$1,500,000 $199,750,000-$198,500,000
</TABLE>
- -------------------------
(1) Or the equivalent in one or more foreign or composite currencies.
Doral Financial may sell notes to the agents referred to below as principal
for resale at varying or fixed offering prices or through the agents as agents
using their reasonable efforts on behalf of Doral Financial. Doral Financial may
also sell notes without the assistance of the agents, whether acting as
principal or as agent.
If Doral Financial sells other securities referred to in the accompanying
prospectus, the amount of notes that Doral Financial may offer and sell under
this prospectus supplement may be reduced.
------------------------
MERRILL LYNCH & CO. BEAR, STEARNS & CO. INC.
------------------------
The date of this prospectus supplement is , 1999.
<PAGE> 28
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Risk Factors................................................ S-3
Description of the Notes.................................... S-4
United States Federal Income Taxation....................... S-25
Certain Puerto Rico Income Tax Consequences................. S-33
Plan of Distribution........................................ S-34
PROSPECTUS
Summary..................................................... 3
Risk Factors................................................ 6
Fluctuations in Interest Rates May Hurt Doral Financial's
Business............................................... 6
Doral Financial May Suffer Losses From Mortgage Loans It
Sells But Retains the Credit Risk...................... 7
Increases in Doral Financial's Originations of Commercial
Loans Has Increased Its Credit Risks................... 7
Doral Financial Is Exposed To Greater Risk Because Its
Business Is Concentrated In Puerto Rico................ 7
Doral Financial's Business Would Be Disrupted If Its
Computer Systems Cannot Work Properly With Year 2000
Data................................................... 7
Doral Financial............................................. 7
Use of Proceeds............................................. 8
Description of Debt Securities.............................. 9
General................................................... 9
Denominations............................................. 10
Subordination............................................. 10
Limitations on Liens and Disposition of Stock of Principal
Mortgage Banking Subsidiaries.......................... 11
Consolidation, Merger or Sale............................. 13
Modification of Indentures................................ 13
Events of Default......................................... 14
Covenants................................................. 15
Payment and Transfer...................................... 15
Global Securities......................................... 15
Defeasance................................................ 16
The Trustee............................................... 16
Description of Preferred Stock.............................. 16
General................................................... 17
Rank...................................................... 17
Dividends................................................. 17
Conversion or Exchange.................................... 18
Redemption................................................ 18
Liquidation Preference.................................... 19
Voting Rights............................................. 19
Description of Capital Stock................................ 20
Authorized Capital........................................ 20
Outstanding Serial Preferred Stock........................ 20
8% Preferred Stock........................................ 20
7% Preferred Stock........................................ 21
</TABLE>
S-1
<PAGE> 29
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Plan of Distribution........................................ 22
By Agents................................................. 23
By Underwriters........................................... 23
Direct Sales.............................................. 23
General Information....................................... 24
Where You Can Find More Information......................... 24
Legal Opinions.............................................. 25
Experts..................................................... 25
</TABLE>
References in this prospectus supplement to "Doral Financial" are to Doral
Financial Corporation.
S-2
<PAGE> 30
RISK FACTORS
Your investment in the notes involves certain risks. In consultation with
your own financial and legal advisers, you should carefully consider, among
other matters, the following discussion of risks before deciding whether an
investment in the notes is suitable for you. The notes are not an appropriate
investment for you if you are unsophisticated with respect to the significant
components of the notes.
YOU MAY SUFFER LOSSES ON INDEXED NOTES RESULTING FROM FLUCTUATIONS IN THE
INDICES
If you invest in notes indexed to one or more interest rate, currency or
other indices or formulas, there will be significant risks not associated with a
conventional fixed rate or floating rate debt security. These risks include
fluctuation of the indices or formulas and the possibility that you will receive
a lower, or no, amount of principal, premium or interest and at different times
than you expected. Doral Financial has no control over a number of matters,
including economic, financial and political events, that are important in
determining the existence, magnitude and longevity of these risks and their
results. In addition, if an index or formula used to determine any amounts
payable in respect of the notes contains a multiplier or leverage factor, the
effect of any change in that index or formula will be magnified. In recent
years, values of certain indices and formulas have been volatile and volatility
in those and other indices and formulas may be expected in the future. However,
past experience is not necessarily indicative of what may occur in the future.
REDEMPTION MAY ADVERSELY AFFECT YOUR RETURN ON THE NOTES
If your notes are redeemable at the option of Doral Financial or are
otherwise subject to mandatory redemption, Doral Financial may, in the case of
optional redemption, or must, in the case of mandatory redemption, choose to
redeem your notes at times when prevailing interest rates may be relatively low.
Accordingly, you generally will not be able to reinvest the redemption proceeds
in a comparable security at an effective interest rate as high as that of the
notes.
THERE MAY BE AN UNCERTAIN TRADING MARKET FOR YOUR NOTES; MANY FACTORS AFFECT THE
TRADING VALUE OF YOUR NOTES
Doral Financial cannot assure you a trading market for your notes will ever
develop or be maintained. Many factors independent of Doral Financial's
creditworthiness may affect the trading market of your notes. These factors
include:
- the complexity and volatility of the index or formula applicable to the
notes,
- the method of calculating the principal, premium and interest in respect
of the notes,
- the time remaining to the maturity of the notes,
- the outstanding amount of the notes,
- the redemption features of the notes,
- the level, direction and volatility of market interest rates generally.
In addition, because some notes were designed for specific investment
objectives or strategies, these notes will have a more limited trading market
and experience more price volatility. There may be a limited number of buyers
for these notes. This may affect the price you receive for these notes
S-3
<PAGE> 31
or your ability to sell these notes at all. You should not purchase notes unless
you understand and know you can bear the related investment risks.
DORAL FINANCIAL'S CREDIT RATINGS MAY NOT REFLECT ALL RISKS OF AN INVESTMENT IN
THE NOTES
Doral Financial's credit ratings are an assessment of its ability to pay
its obligations. Consequently, real or anticipated changes in Doral Financial's
credit ratings will generally affect the market value of your notes. Doral
Financial's credit ratings, however, may not reflect the potential impact of
risks related to structure, market or other factors discussed above on the value
of your notes.
DESCRIPTION OF THE NOTES
Senior notes will be issued as a series of senior debt securities under a
senior indenture, dated as of , 1998 (the "Senior Indenture"),
between Doral Financial and Bankers Trust Company ("Bankers Trust"), as the
senior trustee. Subordinated notes will be issued as a series of subordinated
debt securities under a subordinated indenture, dated as of , 1999
(the "Subordinated Indenture" and, together with the Senior Indenture, the
"Indentures"), between Doral Financial and Bankers Trust, as the subordinated
trustee. The terms "senior debt securities" and "subordinated debt securities,"
as used in this prospectus supplement, refer to all securities issued and
issuable from time to time under the Senior Indenture and Subordinated
Indenture, respectively, and include the notes. The term "debt securities"
refers to both senior debt securities and subordinated debt securities.
The debt securities and the Indentures are more fully described in the
accompanying prospectus. The following summary of the material provisions of the
notes and the Indentures is not complete and is qualified in its entirety by
reference to the Indentures, a copy of which has been filed as an exhibit to the
registration statement of which this prospectus supplement and the accompanying
prospectus are a part.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement, the accompanying prospectus and any
pricing supplement. Doral Financial has not authorized any other person to
provide you with different or additional information. If anyone provides you
with different or additional information, you should not rely on it. Doral
Financial is not making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted. You should assume that the information
contained or incorporated by reference in this prospectus supplement, the
accompanying prospectus and any pricing supplement is accurate only as of the
date on the front cover of the applicable pricing supplement.
THE FOLLOWING DESCRIPTION OF NOTES WILL APPLY UNLESS OTHERWISE SPECIFIED IN
AN APPLICABLE PRICING SUPPLEMENT.
TERMS OF THE NOTES
Senior debt securities, including the senior notes, issued and to be issued
under Doral Financial's Senior Indenture will be unsecured general obligations
of Doral Financial and will rank equally with all other unsecured and
unsubordinated indebtedness of Doral Financial from time to time outstanding.
Subordinated debt securities, including the subordinated notes, issued and to be
issued under Doral Financial's Subordinated Indenture will be subordinated in
right of payment, to the extent described in the accompanying prospectus, to all
Senior Indebtedness and Other Financial Obligations (as these terms are defined
in the accompanying prospectus), including the senior debt
S-4
<PAGE> 32
securities. Holders of the subordinated notes may not accelerate the maturity of
the subordinated notes except upon Doral Financial's bankruptcy or insolvency.
See "Description of Debt Securities -- Subordination" in the accompanying
prospectus. As of , 1999, Doral Financial had $ aggregate principal
amount of Senior Indebtedness outstanding.
Because Doral Financial is a holding company that conducts some of its
operations through subsidiaries, holders of notes will generally have a junior
position to claims of creditors of Doral Financial's subsidiaries, including
trade creditors, debtholders, secured creditors, taxing authorities, guarantee
holders and any preferred stockholders.
The Indentures do not limit the aggregate principal amount of debt
securities which Doral Financial may issue. Doral Financial may issue its debt
securities from time to time as a single series or in two or more separate
series up to the aggregate principal amount from time to time authorized by
Doral Financial for each series. The aggregate principal amount of notes which
may be offered and sold by this prospectus supplement may be reduced by the sale
by Doral Financial of other securities under the registration statement of which
this prospectus supplement and the accompanying prospectus are a part.
The notes will be offered on a continuing basis and will mature on a day
nine months or more from the date of issue, as selected by the purchaser and
agreed to by Doral Financial. Interest-bearing notes will bear interest at
either fixed or floating rates as specified in the applicable pricing
supplement. Notes may be issued at significant discounts from their principal
amount payable at stated maturity, or on any date before the stated maturity
date on which the principal or an installment of principal of a note becomes due
and payable, whether by the declaration of acceleration, call for redemption at
the option of Doral Financial, repayment at the option of the holder or
otherwise (the stated maturity date or such prior date, as the case may be, is
referred to as, a "Maturity"). Some notes may not bear interest.
Unless otherwise indicated in a note and in the applicable pricing
supplement, the notes will be denominated in United States dollars and Doral
Financial will make payments of principal of, and premium, if any, and interest
on, the notes in United States dollars.
Interest rates, interest rate formulae and other variable terms of the
notes are subject to change by Doral Financial from time to time, but no change
will affect any note already issued or as to which Doral Financial has accepted
an offer to purchase.
Each note will be issued in fully registered book-entry form or
certificated form, in denominations of $1,000 and integral multiples of $1,000,
unless otherwise specified in the applicable pricing supplement. Notes in
book-entry form may be transferred or exchanged only through a participating
member of The Depository Trust Company, also known as DTC, or any other
depository as is identified in an applicable pricing supplement. See
"-- Book-Entry Notes". Registration of transfer of notes in certificated form
will be made at the corporate trust office of the applicable trustee. There will
be no service charge for any registration of transfer or exchange of notes, but
Doral Financial may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection with any transfer or exchange,
other than exchanges pursuant to the Indentures not involving any transfer.
Doral Financial will make payments of principal of, and premium and
interest, if any, on notes in book-entry form through the applicable trustee to
the depository or its nominee. See "-- Book-Entry Notes". Unless otherwise
specified in the applicable pricing supplement, a beneficial owner of notes in
book-entry form that are denominated in a currency other than United States
dollars (a "Specified Currency") electing to receive payments of principal or
any premium or interest in that Specified Currency must notify the participant
of DTC through which its interest is held on or before the
S-5
<PAGE> 33
applicable regular record date, in the case of a payment of interest, and on or
before the sixteenth day, whether or not a Business Day, as defined below,
before its stated maturity, in the case of principal or premium, of the
beneficial owner's election to receive all or a portion of any payment in a
Specified Currency. The participant must notify the depository of any election
on or before the third Business Day after the regular record date. The
depository will notify the paying agent of the election on or before the fifth
Business Day after the regular record date. If complete instructions are
received by the participant and forwarded to the depository, and forwarded by
the depository to the paying agent, on or before the relevant dates, the
beneficial owner of the notes in book-entry form will receive payments in the
Specified Currency.
In the case of notes in certificated form, Doral Financial will make
payment of principal or premium, if any, at the Maturity of each note in
immediately available funds upon presentation of the note and, in the case of
any repayment on an optional repayment date, upon submission of a duly completed
election form if and as required by the provisions described below, at the
corporate trust office of the applicable trustee in the Borough of Manhattan,
The City of New York, or at any other place as Doral Financial may designate.
Payment of interest due at Maturity will be made to the person to whom payment
of the principal of the note in certificated form will be made. Payment of
interest due on notes in certificated form other than at Maturity will be made
at the corporate trust office of the trustee or, at the option of Doral
Financial, may be made by check mailed to the address of the person entitled to
receive payment as the address shall appear in the security register.
Notwithstanding the immediately preceding sentence, a holder of $1,000,000 or
more in aggregate principal amount of notes in certificated form, whether having
identical or different terms and provisions, having the same interest payment
dates will, at the option of Doral Financial, be entitled to receive interest
payments, other than at Maturity, by wire transfer of immediately available
funds if appropriate wire transfer instructions have been received in writing by
the trustee not less than 15 days prior to the applicable interest payment date.
Any wire instructions received by the trustee shall remain in effect until
revoked by the holder.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York;
provided, however, that, with respect to non-United States dollar-denominated
notes, the day is also not a day on which commercial banks are authorized or
required by law, regulation or executive order to close in the Principal
Financial Center, as defined below, of the country issuing the Specified
Currency or, if the Specified Currency is Euro, the day is also a day on which
the Trans-European Automated Real-time Gross Settlement Express Transfer
(TARGET) System is open; provided, further, that, with respect to notes as to
which LIBOR is an applicable Interest Rate Basis, the day is also a London
Business Day. "London Business Day" means a day on which commercial banks are
open for business, including dealings in the Index Currency, as defined below,
in London.
"Principal Financial Center" means, unless otherwise specified in the
applicable pricing supplement,
(1) the capital city of the country issuing the Specified Currency, except
that with respect to United States dollars, Australian dollars,
Canadian dollars, Deutsche marks, Dutch guilders, South African rand
and Swiss francs, the "Principal Financial Center" will be The City of
New York, Sydney and Melbourne, Toronto, Frankfurt, Amsterdam,
Johannesburg and Zurich, respectively, or
(2) the capital city of the country to which the LIBOR Currency relates,
except that with respect to United States dollars, Canadian dollars,
Deutsche marks, Dutch guilders, Portuguese escudos, South African rand
and Swiss francs, the "Principal Financial Center"
S-6
<PAGE> 34
will be The City of New York, Toronto, Frankfurt, Amsterdam, London,
Johannesburg and Zurich, respectively.
TRANSACTION AMOUNT
Interest rates offered by Doral Financial with respect to the notes may
differ depending upon, among other things, the aggregate principal amount of
notes purchased in any transaction. Doral Financial may offer notes with similar
variable terms but different interest rates concurrently at any time. Doral
Financial may also concurrently offer notes having different variable terms to
different investors.
REDEMPTION AT THE OPTION OF DORAL FINANCIAL
The notes will not be subject to any sinking fund. Doral Financial may
redeem the notes at its option prior to their stated maturity only if an initial
redemption date is specified in the applicable notes and in the applicable
pricing supplement. If so indicated in the applicable pricing supplement, Doral
Financial may redeem the notes at its option on any date on and after the
applicable initial redemption date specified in the applicable pricing
supplement. On and after the initial redemption date, if any, Doral Financial
may redeem the related note at any time in whole or from time to time in part at
its option at the applicable redemption price referred to below together with
interest on the principal of the applicable note payable to the redemption date,
on notice given, unless otherwise specified in the applicable pricing
supplement, not more than 60 nor less than 30 days before the redemption date.
Doral Financial will redeem the notes in increments of $1,000, provided that any
remaining principal amount will be an authorized denomination of the applicable
note. Unless otherwise specified in the applicable pricing supplement, the
redemption price with respect to a note will initially mean a percentage, the
initial redemption percentage, of the principal amount of the note to be
redeemed specified in the applicable pricing supplement and shall decline at
each anniversary of the initial redemption date by a percentage specified in the
applicable pricing supplement, of the principal amount to be redeemed until the
redemption price is 100% of the principal amount.
REPAYMENT AT THE OPTION OF THE HOLDER
If so indicated in an applicable pricing supplement, Doral Financial will
repay the notes in whole or in part at the option of the holders of the notes on
any optional repayment date specified in the applicable pricing supplement. If
no optional repayment date is indicated with respect to a note, it will not be
repayable at the option of the holder before its stated maturity. Any repayment
in part will be in an amount equal to $1,000 or integral multiples of $1,000,
provided that any remaining principal amount will be an authorized denomination
of the applicable note. The repurchase price for any note so repurchased will be
100% of the principal amount to be repaid, together with interest on the
principal of the applicable note payable to the date of repayment. For any note
to be repaid, the applicable trustee must receive, at its office maintained for
such purpose in the Borough of Manhattan, The City of New York, currently the
corporate trust office of the applicable trustee, not more than 60 nor less than
30 days before the optional repayment date:
- in the case of a note in certificated form, the note and the form
entitled "Option to Elect Repayment" duly completed, or
- in the case of a note in book-entry form, instructions to that effect
from the applicable beneficial owner of the notes to the depository and
forwarded by the depository.
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Notices of elections from a holder to exercise the repayment option must be
received by the applicable trustee by 5:00 p.m., New York City time, on the last
day for giving such notice. Exercise of the repayment option by the holder of a
note will be irrevocable.
Only the depository may exercise the repayment option in respect of global
securities representing notes in book-entry form. Accordingly, beneficial owners
of global securities that desire to have all or any portion of the notes in
book-entry form represented by global securities repaid must instruct the
participant through which they own their interest to direct the depository to
exercise the repayment option on their behalf by forwarding the repayment
instructions to the applicable trustee as discussed above. In order to ensure
that the instructions are received by the applicable trustee on a particular
day, the applicable beneficial owner must so instruct the participant through
which it owns its interest before that participant's deadline for accepting
instructions for that day. Different firms may have different deadlines for
accepting instructions from their customers. Accordingly, beneficial owners of
notes in book-entry form should consult the participants through which they own
their interest for the respective deadlines. All instructions given to
participants from beneficial owners of notes in book-entry form relating to the
option to elect repayment will be irrevocable. In addition, at the time
instructions are given, each beneficial owner will cause the participant through
which it owns its interest to transfer its interest in the global security or
securities representing the related notes in book-entry form, on the
depository's records, to the trustee. See "-- Book-Entry Notes."
If applicable, Doral Financial will comply with the requirements of Section
14(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules promulgated thereunder and any other securities laws or
regulations in connection with any repayment at the option of the holder.
Doral Financial may at any time purchase notes at any price or prices in
the open market or otherwise. Notes so purchased by Doral Financial may, at the
discretion of Doral Financial, be held, resold or surrendered to the trustee for
cancellation.
INTEREST
Each note will bear interest from the date of issue at the rate per annum
or, in the case of a floating rate note, pursuant to the interest rate formula
stated in the applicable note and in the applicable pricing supplement until the
principal of the note is paid or made available for payment. Interest will be
payable in arrears on each interest payment date specified in the applicable
pricing supplement on which an installment of interest is due and payable and at
Maturity. The first payment of interest on any note originally issued between a
regular record date and the related interest payment date will be made on the
interest payment date immediately following the next succeeding regular record
date to the registered holder on the next succeeding regular record date. The
regular record date will be the fifteenth calendar day, whether or not a
Business Day, immediately preceding the related interest payment date.
FIXED RATE NOTES
Unless otherwise specified in an applicable pricing supplement, each fixed
rate note will bear interest from, and including, the date of issue, at the rate
per annum stated on the face of the note until the principal amount of the note
is paid or made available for payment. Interest payments on fixed rate notes
will equal the amount of interest accrued from and including the immediately
preceding interest payment date in respect of which interest has been paid or
from and including the date of issue, if no interest has been paid with respect
to the applicable fixed rate notes, to, but excluding, the related interest
payment date or Maturity, as the case may be. Unless otherwise
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specified in the applicable pricing supplement, interest on fixed rate notes
will be computed on the basis of a 360-day year of twelve 30-day months.
Unless otherwise specified in the applicable pricing supplement, interest
on fixed rate notes will be payable semiannually on and
of each year and at Maturity. If any interest payment date
or the Maturity of a fixed rate note falls on a day that is not a Business Day,
the related payment of principal, premium, if any, or interest will be made on
the next succeeding Business Day as if made on the date the applicable payment
was due, and no interest will accrue on the amount payable for the period from
and after the interest payment date or Maturity, as the case may be.
FLOATING RATE NOTES
Interest on floating rate notes will be determined by reference to the
applicable Interest Rate Basis or Interest Rate Bases, which may be one or more
of:
- the CD Rate,
- the CMT Rate,
- the Commercial Paper Rate,
- the Eleventh District Cost of Funds Rate,
- the Federal Funds Rate,
- LIBOR,
- the Prime Rate,
- the Treasury Rate, or
- any other Interest Rate Basis or interest rate formula that is specified
in the applicable pricing supplement.
A floating rate note may bear interest with respect to two or more Interest
Rate Bases.
TERMS. Each applicable pricing supplement will specify the terms of the
floating rate note being delivered, including:
- whether the floating rate note is
- a "Regular Floating Rate Note,"
- a "Inverse Floating Rate Note" or
- a "Floating Rate/Fixed Rate Note,"
- the Interest Rate Basis or Bases,
- the Initial Interest Rate,
- the Interest Reset Dates,
- the interest payment dates,
- the period to maturity of the instrument or obligation with respect to
which the Interest Rate Basis or Bases will be calculated (the "Index
Maturity"),
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- the Maximum Interest Rate and Minimum Interest Rate, if any,
- the number of basis points to be added to or subtracted from the related
Interest Rate Basis or Bases (the "Spread"),
- the percentage of the related Interest Rate Basis or Bases by which the
Interest Rate Basis or Bases will be multiplied to determine the
applicable interest rate (the "Spread Multiplier"),
- if one or more of the specified Interest Rate Bases is LIBOR, the LIBOR
Currency, the Index Maturity and the Designated LIBOR Page, and
- if one or more of the specified Interest Rate Bases is the CMT Rate, the
Designated CMT Telerate Page and Designated CMT Maturity Index.
The interest rate borne by the floating rate Notes will be determined as
follows:
Regular Floating Rate Notes. Unless a floating rate note is designated as
a Floating Rate/Fixed Rate Note, an Inverse Floating Rate Note or as having an
Addendum attached or as having "Other Provisions" apply relating to a different
interest rate formula, it will be a "Regular Floating Rate Note" and, except as
described below or in an applicable pricing supplement, will bear interest at
the rate determined by reference to the applicable Interest Rate Basis or Bases:
- plus or minus the applicable Spread, if any, and/or
- multiplied by the applicable Spread Multiplier, if any.
Commencing on the first Interest Reset Date, the rate at which interest on
the Regular Floating Rate Note will be payable will be reset as of each Interest
Reset Date; provided, however, that the interest rate in effect for the period
from the date of issue to the first Interest Reset Date will be the Initial
Interest Rate.
Floating Rate/Fixed Rate Notes. If a floating rate note is designated as a
"Floating Rate/Fixed Rate Note," it will bear interest at the rate determined by
reference to the applicable Interest Rate Basis or Bases:
- plus or minus the applicable Spread, if any, and/or
- multiplied by the applicable Spread Multiplier, if any. Commencing on the
first Interest Reset Date, the rate at which interest on the applicable
Floating Rate/Fixed Rate Note will be payable will be reset as of each
Interest Reset Date; provided, however, that:
- the interest rate in effect for the period from the date of issue to the
first Interest Reset Date will be the Initial Interest Rate, and
- the interest rate in effect commencing on, and including, the date on
which interest begins to accrue on a fixed rate basis to Maturity will be
the Fixed Interest Rate, if the rate is specified in the applicable
pricing supplement, or if no Fixed Interest Rate is specified, the
interest rate in effect on the Floating Rate/Fixed Rate Note on the day
immediately preceding the date on which interest begins to accrue on a
fixed rate basis.
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Inverse Floating Rate Notes. If a floating rate note is designated as an
"Inverse Floating Rate Note," except as described below, it will bear interest
equal to the Fixed Interest Rate specified in the related pricing supplement
minus the rate determined by reference to the applicable Interest Rate Basis or
Bases:
- plus or minus the applicable Spread, if any, and/or
- multiplied by the applicable Spread Multiplier, if any; provided,
however, that unless otherwise specified in the applicable pricing
supplement, the interest rate on the applicable Inverse Floating Rate
Note will not be less than zero percent. Commencing on the first Interest
Reset Date, the rate at which interest on the applicable Inverse Floating
Rate Note is payable will be reset as of each Interest Reset Date;
provided, however, that the interest rate in effect for the period from
the date of issue to the first Interest Reset Date will be the Initial
Interest Rate.
Each Interest Rate Basis shall be the rate determined in accordance with
the applicable provisions below. Except as set forth above, the interest rate in
effect on each day will be:
- if the day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date (as defined below) immediately preceding
the applicable Interest Reset Date or
- if the day is not an Interest Reset Date, the interest rate determined as
of the Interest Determination Date immediately preceding the applicable
Interest Reset Date.
Interest Reset Dates. The applicable pricing supplement will specify the
dates on which the interest rate on the related floating rate note will be reset
(each, an "Interest Reset Date"). Unless otherwise specified in the applicable
pricing supplement, the Interest Reset Date will be, in the case of floating
rate notes which reset:
- daily -- each Business Day;
- weekly -- the Wednesday of each week, with the exception of weekly reset
Floating Rate Notes as to which the Treasury Rate is an applicable
Interest Rate Basis, which will reset the Tuesday of each week, except as
described below;
- monthly -- the third Wednesday of each month, with the exception of
monthly reset Floating Rate Notes as to which the Eleventh District Cost
of Funds Rate is an applicable Interest Rate Basis, which will reset on
the first calendar day of the month;
- quarterly -- the third Wednesday of March, June, September and December
of each year;
- semiannually -- the third Wednesday of the two months specified in the
applicable pricing supplement; and
- annually -- the third Wednesday of the month specified in the applicable
pricing supplement;
provided, however, that with respect to Floating Rate/Fixed Rate Notes, the rate
of interest will not reset after the applicable date on which interest on a
fixed rate basis begins to accrue.
If any Interest Reset Date for any floating rate note would otherwise be a
day that is not a Business Day, the applicable Interest Reset Date will be
postponed to the next succeeding day that is a Business Day, except that in the
case of a floating rate note as to which LIBOR is an applicable Interest Rate
Basis, if the Business Day falls in the next succeeding calendar month, then the
Interest Reset Date will be the immediately preceding Business Day. In addition,
in the case of a floating rate
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note for which the Treasury Rate is an applicable Interest Rate Basis if the
Interest Determination Date would otherwise fall on an Interest Reset Date, then
the applicable Interest Reset Date will be postponed to the next succeeding
Business Day.
Maximum and Minimum Interest Rates. A floating rate note may also have
either or both of the following:
- a maximum numerical limitation, or ceiling, on the rate at which interest
may accrue during any interest period (a "Maximum Interest Rate"), and
- a minimum numerical limitation, or floor, on the rate at which interest
may accrue during any period (a "Minimum Interest Rate").
Notwithstanding the above provisions, the interest rate on floating rate
notes will in no event be higher than the maximum rate permitted by New York law
as the same may be modified by United States law of general application. Under
present New York law, the maximum rate of interest, subject to certain
exceptions, for any loan in an amount less than $250,000, is 16%, and for any
loan in the amount of $250,000 or more but less than $2,500,000, is 25%, per
annum on a simple interest basis. These limits do not apply to loans of
$2,500,000 or more.
Interest Payments. Each applicable pricing supplement will specify the
dates on which interest will be payable. Each floating rate note will bear
interest from the date of issue at the rates specified in the applicable
floating rate note until the principal of the applicable note is paid or
otherwise made available for payment. Except as provided below or in the
applicable pricing supplement, the interest payment dates with respect to
floating rate notes will be, in the case of floating rate notes which reset:
- daily, weekly or monthly -- the third Wednesday of each month or on the
third Wednesday of March, June, September and December of each year, as
specified in the applicable pricing supplement;
- quarterly -- the third Wednesday of March, June, September and December
of each year;
- semiannually -- the third Wednesday of the two months of each year
specified in the applicable pricing supplement;
- annually -- the third Wednesday of the month of each year specified in
the applicable pricing supplement; and
- at Maturity.
If any interest payment date for any floating rate note, other than an
interest payment date at Maturity, would otherwise be a day that is not a
Business Day, the interest payment date will be postponed to the next succeeding
day that is a Business Day except that in the case of a floating rate note as to
which LIBOR is an applicable Interest Rate Basis, if the Business Day falls in
the next succeeding calendar month, the applicable interest payment date will be
the immediately preceding Business Day. If the Maturity of a floating rate note
falls on a day that is not a Business Day, the payment of principal, premium, if
any, and interest will be made on the next succeeding Business Day, and no
interest on such payment will accrue for the period from and after the Maturity.
All percentages resulting from any calculation on floating rate notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upwards. For example,
9.876545%, or .09876545, would be rounded to 9.87655%, or .0987655. All dollar
amounts used in or resulting from any calculation on floating rate notes will be
rounded to the nearest cent with one-half cent being rounded upward.
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<PAGE> 40
Interest payments on floating rate notes will equal the amount of interest
accrued from and including the immediately preceding interest payment date in
respect of which interest has been paid or from and including the date of issue,
if no interest has been paid, to but excluding the related interest payment date
or Maturity.
With respect to each floating rate note, accrued interest is calculated by
multiplying its face amount by an accrued interest factor. The accrued interest
factor is computed by adding the interest factor calculated for each day in the
period for which accrued interest is being calculated.
- In the case of notes for which the Interest Rate Basis is the CD Rate,
the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate, the interest factor for each
day will be computed by dividing the interest rate applicable to each day
by 360.
- In the case of notes for which the Interest Rate Basis is the CMT Rate or
the Treasury Rate, the interest factor for each day will be computed by
dividing the interest rate applicable to each day by the actual number of
days in the year.
- The interest factor for notes for which the interest rate is calculated
with reference to two or more Interest Rate Bases will be calculated in
each period in the same manner as if only one of the applicable Interest
Rate Bases applied.
Interest Determination Dates. The interest rate applicable to each
interest reset period commencing on the Interest Reset Date with respect to that
interest reset period will be the rate determined as of the applicable "Interest
Determination Date."
- The Interest Determination Date with respect to the CD Rate, the CMT Rate
and the Commercial Paper Rate will be the second Business Day preceding
each Interest Reset Date for the related note.
- The Interest Determination Date with respect to the Federal Funds Rate
and the Prime Rate will be the Business Day immediately preceding each
Interest Reset Date.
- The Interest Determination Date with respect to the Eleventh District
Cost of Funds Rate will be the last working day of the month immediately
preceding each Interest Reset Date on which the Federal Home Loan Bank of
San Francisco publishes the Index, as defined below.
- The Interest Determination Date with respect to LIBOR will be the second
London Business Day preceding each Interest Reset Date.
- The Interest Determination Date with respect to the Treasury Rate will be
the day in the week in which the related Interest Reset Date falls on
which day Treasury Bills, as defined below, are normally auctioned.
Treasury Bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is normally
held on the following Tuesday, except that the auction may be held on the
preceding Friday; provided, however, that if an auction is held on the
Friday of the week preceding the related Interest Reset Date, the related
Interest Determination Date will be the preceding Friday; and provided,
further, that if an auction falls on any Interest Reset Date, then the
related Interest Reset Date will instead be the first Business Day
following the auction.
- The Interest Determination Date pertaining to a floating rate note the
interest rate of which is determined with reference to two or more
Interest Rate Bases will be the latest Business Day which is at least two
Business Days before the applicable Interest Reset Date for the
applicable floating rate note on which each Interest Reset Basis is
determinable. Each Interest
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<PAGE> 41
Rate Basis will be determined on the Interest Determination Date, and the
applicable interest rate will take effect on the related Interest Reset
Date.
Calculation Date. Unless otherwise provided in the applicable pricing
supplement, the trustee under the applicable indenture will be the calculation
agent. Upon the request of the holder of any floating rate note, the calculation
agent will provide the interest rate then in effect and, if determined, the
interest rate that will become effective as a result of a determination made for
the next Interest Reset Date with respect to that floating rate note. Unless
otherwise specified in the applicable pricing supplement, the calculation date,
if applicable, pertaining to any Interest Determination Date will be the earlier
of:
- the tenth calendar day after the applicable Interest Determination Date,
or, if the tenth calendar day is not a Business Day, the next succeeding
Business Day or
- the Business Day preceding the applicable Interest Payment Date or
Maturity, as the case may be.
CD RATE. CD Rate Notes will bear interest at the rates, calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable CD Rate Notes and in any applicable pricing
supplement.
"CD Rate" means:
(1) the rate on the applicable Interest Determination Date for negotiable
United States dollar certificates of deposit having the Index Maturity
specified in the applicable pricing supplement published in H.15(519)
under the heading "CDs (secondary market)," or
(2) if the rate referred to in clause (1) above is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the applicable Interest Determination Date for negotiable United States
dollar certificates of deposit of the Index Maturity specified in the
applicable pricing supplement as published in H.15 Daily Update, or
other recognized electronic source used for the purpose of displaying
the applicable rate, under the caption "CDs (secondary market)," or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date calculated by the calculation
agent as the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on the applicable Interest
Determination Date, of three leading non-bank dealers in negotiable
United States dollar certificates of deposit in The City of New York
selected by the calculation agent for negotiable United States dollar
certificates of deposit of major United States money center banks for
negotiable certificates of deposit with a remaining maturity closest to
the Index Maturity specified in the applicable pricing supplement in an
amount that is representative for a single transaction in that market
at that time, or
(4) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (3) above, the CD rate in effect on the applicable
Interest Determination Date.
"H.15(519)" means the weekly statistical release designated as H.15(519),
or any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world-wide-web site of the Board of Governors of the Federal Reserve System
at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or
publication.
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CMT RATE. CMT Rate Notes will bear interest at the rates, calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable CMT Rate Notes and in any applicable pricing
supplement.
"CMT Rate" means:
(1) the rate displayed on the Designated CMT Telerate Page under the
caption "...Treasury Constant Maturities... Federal Reserve Board
Release H.15... Mondays Approximately 3:45 P.M.," under the column for
the Designated CMT Maturity Index for:
(a) if the Designated CMT Telerate Page is 7051, the rate on the
applicable Interest Determination Date, and
(b) if the Designated CMT Telerate Page is 7052, the weekly or the
monthly average, as specified in the applicable pricing supplement,
for the week or the month, as applicable, ended immediately
preceding the week or the month, as applicable, in which the related
Interest Determination Date falls, or
(2) if the rate referred to in clause (1) is no longer displayed on the
relevant page or is not so displayed by 3:00 P.M., New York City time,
on the related calculation date, the treasury constant maturity rate
for the Designated CMT Maturity Index published in H.15(519), or
(3) if the rate referred to in clause (2) is no longer published or is not
published by 3:00 P.M., New York City time, on the related calculation
date, the treasury constant maturity rate for the Designated CMT
Maturity Index, or other United States Treasury rate for the Designated
CMT Maturity Index, for the applicable Interest Determination Date with
respect to the applicable Interest Reset Date as may then be published
by either the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the calculation agent
determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519), or
(4) if the rate referred to in clause (3) is not so published by 3:00 P.M.,
New York City time, on the applicable calculation date, the rate on the
applicable Interest Determination Date calculated by the calculation
agent as a yield to maturity, based on the arithmetic mean of the
secondary market offered rates as of approximately 3:30 P.M., New York
City time, on the applicable Interest Determination Date reported,
according to their written records, by three leading primary United
States government securities dealers in The City of New York, which may
include the agent or its affiliates (each, a "Reference Dealer"),
selected by the calculation agent from five Reference Dealers selected
by the calculation agent after eliminating the highest quotation, or,
in the event of equality, one of the highest, and the lowest quotation
or, in the event of equality, one of the lowest, for the most recently
issued direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to maturity of not
less than such Designated CMT Maturity Index minus one year, or
(5) if the calculation agent is unable to obtain three applicable Treasury
Note quotations as referred to in clause (4), the rate on the
applicable Interest Determination Date calculated by the calculation
agent as a yield to maturity based on the arithmetic mean of the
secondary market offered rates as of approximately 3:30 P.M., New York
City time, on the applicable Interest Determination Date of three
Reference Dealers in The City of New York selected by the calculation
agent from five Reference Dealers selected by the calculation agent
after eliminating the highest quotation or, in the event of equality,
one of the highest and the lowest quotation or, in the event of
equality, one of the lowest, for
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Treasury Notes with an original maturity of the number of years that is
the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an
amount of at least $100 million, or
(6) if three or four and not five of Reference Dealers are quoting as
referred to in clause (5) above, the rate will be calculated by the
calculation agent as the arithmetic mean of the offered rates obtained
and neither the highest nor the lowest of quotes will be eliminated, or
(7) if fewer than three Reference Dealers selected by the calculation agent
are quoting as mentioned in clause (6), the rate in effect on the
applicable Interest Determination Date.
If two Treasury Notes with an original maturity as described in clause
(5) have remaining terms to maturity equally close to the Designated CMT
Maturity Index, the calculation agent will obtain from five Reference
Dealers quotations for the Treasury Notes with the shorter remaining term
to maturity.
"Designated CMT Telerate Page" means the display on Bridge Telerate, Inc.
or any successor service on the page specified in the applicable pricing
supplement or any other page as may replace the specified page on that service
for the purpose of displaying Treasury Constant Maturities as reported in
H.15(519), or, if no page is specified in the applicable pricing supplement,
page 7052.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities, either 1, 2, 3, 5, 7, 10, 20 or 30 years,
specified in the applicable pricing supplement with respect to which the CMT
Rate will be calculated or, if no maturity is specified in the applicable
pricing supplement, 2 years.
COMMERCIAL PAPER RATE. Commercial Paper Rate Notes will bear interest at
the rates, calculated with reference to the Commercial Paper Rate and the Spread
and/or Spread Multiplier, if any, specified in the applicable Commercial Paper
Rate Notes and in any applicable pricing supplement.
"Commercial Paper Rate" means:
(1) the Money Market Yield on the applicable Interest Determination Date of
the rate for commercial paper having the Index Maturity specified in
the applicable pricing supplement published in H.15(519) under the
caption "Commercial Paper-Nonfinancial," or
(2) if the rate described in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date for commercial paper having the
Index Maturity specified in the applicable pricing supplement published
in H.15 Daily Update, or other recognized electronic source used for
the purpose of displaying the applicable rate, under the caption
"Commercial Paper-Nonfinancial," or
(3) if the rate is referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the applicable Interest Determination Date calculated by the
calculation agent as the Money Market Yield of the arithmetic mean of
the offered rates at approximately 11:00 A.M., New York City time, on
the applicable Interest Determination Date of three leading dealers of
United States dollar commercial paper in The City of New York, which
may include the agent and its affiliates, selected by the calculation
agent for commercial paper having the Index Maturity specified in the
applicable pricing supplement placed for industrial issuers whose bond
rating is "Aa," or the equivalent, from a nationally recognized
statistical rating organization, or
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(4) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (3), the rate in effect on the applicable Interest
Determination Date.
"Money Market Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
<TABLE>
<C> <C> <C> <C> <S>
Money Market Yield = D X 360 X 100
--------------
360 - (D X M)
</TABLE>
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
ELEVENTH DISTRICT COST OF FUNDS RATE. Eleventh District Cost of Funds Rate
Notes will bear interest at the rates, calculated with reference to the Eleventh
District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable Eleventh District Cost of Funds Rate Notes and in
any applicable pricing supplement.
"Eleventh District Cost of Funds Rate" means:
(1) the rate equal to the monthly weighted average cost of funds for the
calendar month immediately preceding the month in which the applicable
Interest Determination Date falls as set forth under the caption "11th
District" on the display on Bridge Telerate, Inc. or any successor
service on page 7058 or any other page as may replace the specified
page on that service ("Telerate Page 7058") as of 11:00 A.M., San
Francisco time, on the applicable Interest Determination Date, or
(2) if the rate referred to in clause (1) does not appear on Telerate Page
7058 on the related Interest Determination Date, the monthly weighted
average cost of funds paid by member institutions of the Eleventh
Federal Home Loan Bank District that was most recently announced (the
"Index") by the Federal Home Loan Bank of San Francisco as the cost of
funds for the calendar month immediately preceding the applicable
Interest Determination Date, or
(3) if the Federal Home Loan Bank of San Francisco fails to announce the
Index on or before the applicable Interest Determination Date for the
calendar month immediately preceding the applicable Interest
Determination Date, the rate in effect on the applicable Interest
Determination Date.
FEDERAL FUNDS RATE. Federal Funds Rate Notes will bear interest at the
rates, calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any, specified in the applicable Federal Funds Rate Notes
and in any applicable pricing supplement.
"Federal Funds Rate" means:
(1) the rate on the applicable Interest Determination Date for United
States dollar federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)," as displayed on Bridge Telerate, Inc. or
any successor service on page 120 or any other page as may replace the
applicable page on that service ("Telerate Page 120"), or
(2) if the rate referred to in clause (1) does not appear on Telerate Page
120 or is not so published by 3:00 P.M., New York City time, on the
related calculation date, the rate on the applicable Interest
Determination Date for United States dollar federal funds published
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in H.15 Daily Update, or other recognized electronic source used for
the purpose of displaying the applicable rate, under the caption
"Federal Funds/Effective Rate," or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date calculated by the calculation
agent as the arithmetic mean of the rates for the last transaction in
overnight United States dollar federal funds arranged by three leading
brokers of United States dollar federal funds transactions in The City
of New York, which may include the agent or its affiliates, selected by
the calculation agent before 9:00 A.M., New York City time, on the
applicable Interest Determination Date, or
(4) if the brokers selected by the calculation agent are not quoting as
mentioned in clause (3), the rate in effect on the applicable Interest
Determination Date.
LIBOR. LIBOR Notes will bear interest at the rates, calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any, specified in
the applicable LIBOR Notes and in any applicable pricing supplement.
"LIBOR" means:
(1) if "LIBOR Telerate" is specified in the applicable pricing supplement
or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable pricing supplement as the method for calculating LIBOR,
LIBOR will be the rate for deposits in the LIBOR Currency, as defined
below, having the Index Maturity specified in the applicable pricing
supplement, commencing on the second London Business Day immediately
following that Interest Determination Date that appears on the
Designated LIBOR Page as of 11:00 A.M., London time, on the applicable
Interest Determination Date, or
(2) if "LIBOR Reuters" is specified in the applicable pricing supplement,
LIBOR will be the arithmetic mean of the offered rates for deposits in
the LIBOR Currency having the Index Maturity specified in the
applicable pricing supplement, commencing on the second London Business
Day immediately following that Interest Determination Date, that
appear, on the Designated LIBOR Page specified in the applicable
pricing supplement as of 11:00 A.M., London time, on the applicable
Interest Determination Date; provided that if the Designated LIBOR Page
by its terms provides only for a single rate, then the single rate will
be used, or
(3) with respect to a LIBOR Interest Determination Date on which fewer than
two offered rates appear, in the case of clause (1), or no rate
appears, in the case of clause (2), on the designated LIBOR Page, the
rate calculated by the calculation agent as the arithmetic mean of at
least two quotations obtained by the calculation agent after requesting
the principal London offices of each of four major reference banks,
which may include affiliates of an agent, in the London interbank
market to provide the calculation agent with its offered quotation for
deposits in the LIBOR Currency for the period of the Index Maturity
specified in the applicable pricing supplement, commencing on the
second London Business Day immediately following the applicable
Interest Determination Date, to prime banks in the London interbank
market at approximately 11:00 A.M., London time, on the applicable
Interest Determination Date and in a principal amount that is
representative for a single transaction in the applicable LIBOR
Currency in that market at that time, or
(4) if fewer than two quotations referred to in clause (3) are so provided,
the rate on the applicable Interest Determination Date calculated by
the calculation agent as the arithmetic mean of the rates quoted at
approximately 11:00 A.M., in the applicable Principal Financial
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Center(s), on the applicable Interest Determination Date by three major
banks, which may include affiliates of the agent, in the applicable
Principal Financial Center selected by the calculation agent for loans
in the LIBOR Currency to leading European banks, having the Index
Maturity specified designated in the applicable pricing supplement and
in a principal amount that is representative for a single transaction
in the applicable LIBOR Currency in that market at that time, or
(5) if the banks so selected by the calculation agent are not quoting as
mentioned in clause (4), the rate in effect on the applicable Interest
Determination Date.
"LIBOR Currency" means the currency specified in the applicable pricing
supplement as to which LIBOR will be calculated or, if no currency is
specified in the applicable pricing supplement, United States dollars.
"Designated LIBOR Page" means either:
- if "LIBOR Telerate" is designated in the applicable pricing supplement or
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable pricing supplement as the method for calculating LIBOR, the
display on Bridge Telerate, Inc. or any successor service on the page
specified in such pricing supplement or any page as may replace the
specified page on that service for the purpose of displaying the London
interbank rates of major banks for the applicable LIBOR Currency, or
- if "LIBOR Reuters" is specified in the applicable pricing supplement, the
display on the Reuter Monitor Money Rates Service or any successor
service on the page specified in the applicable pricing supplement or any
other page as may replace the specified page on that service for the
purpose of displaying the London interbank rates of major banks for the
applicable LIBOR Currency.
PRIME RATE. Prime Rate Notes will bear interest at the rates, calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any, specified in the applicable Prime Rate Notes and any applicable pricing
supplement.
"Prime Rate" means:
(1) the rate on the applicable Interest Determination Date as published in
H.15(519) under the heading "Bank Prime Loan," or
(2) if the rate referred to in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date published in H.15 Daily Update,
or such other recognized electronic source used for the purpose of
displaying the applicable rate under the caption "Bank Prime Loan," or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate
calculated by the calculation agent as the arithmetic mean of the rates
of interest publicly announced by at least four banks that appear on
the Reuters Screen US PRIME 1 Page as the particular bank's prime rate
or base lending rate as of 11:00 A.M., New York City time, on the
applicable Interest Determination Date, or
(4) if fewer than four rates described in clause (3) are shown on Reuters
Screen US PRIME 1 Page by 3:00 P.M., New York City time, on the related
calculation date, the rate on the applicable Interest Determination
Date calculated by the calculation agent as the arithmetic mean of the
prime rates or base lending rates quoted on the basis of the actual
number of days in the year divided by a 360-day year as of the close of
business on the applicable
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Interest Determination Date by three major banks, which may include
affiliates of the agent, in The City of New York selected by the
calculation agent, or
(5) if the banks selected by the calculation agent are not quoting as
mentioned in clause (4), the rate in effect on the applicable Interest
Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter Monitor
Money Rates Service or any successor service on the "US PRIME 1" Page or other
page as may replace the US PRIME 1 Page on such service for the purpose of
displaying prime rates or base lending rates of major United States banks.
TREASURY RATE. Treasury Rate Notes will bear interest at the rates,
calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any, specified in the applicable Treasury Rate Notes and in any
applicable pricing supplement.
"Treasury Rate" means:
(1) the rate from the auction held on the applicable Interest Determination
Date (the "Auction") of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified in the
applicable pricing supplement under the caption "INVESTMENT RATE" on
the display on Bridge Telerate, Inc. or any successor service on page
56 or any other page as may replace page 56 on that service ("Telerate
Page 56") or page 57 or any other page as may replace page 57 on that
service ("Telerate Page 57"), or
(2) if the rate described in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the Bond
Equivalent Yield of the rate for the applicable Treasury Bills as
published in H.15 Daily Update, or other recognized electronic source
used for the purpose of displaying the applicable rate, under the
caption "U.S. Government Securities/Treasury Bills/Auction High," or
(3) if the rate described in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the Bond
Equivalent Yield of the auction rate of the applicable Treasury Bills
announced by the United States Department of the Treasury, or
(4) in the event that the rate referred to in clause (3) is not announced
by the United States Department of the Treasury, or if the Auction is
not held, the Bond Equivalent Yield of the rate on the applicable
Interest Determination Date of Treasury Bills having the Index Maturity
specified in the applicable Pricing Supplement published in H.15(519)
under the caption "U.S. Government Securities/Treasury Bills/Secondary
Market," or
(5) if the rate referred to in clause (4) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date of the applicable Treasury Bills
as published in H.15 Daily Update, or other recognized electronic
source used for the purpose of displaying the applicable rate, under
the caption "U.S. Government Securities/Treasury Bills/Secondary
Market," or
(6) if the rate referred to in clause (5) is not so published by 3:00 P.M.,
New York City time, on the related Calculation Date, the rate on the
applicable Interest Determination Date calculated by the calculation
agent as the Bond Equivalent Yield of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York
City time, on the applicable Interest Determination Date, of three
primary United States government securities dealers, which may include
the agent or its affiliates, selected by the calculation agent, for the
issue of Treasury Bills with a remaining maturity closest to the Index
Maturity specified in the applicable pricing supplement, or
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(7) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (6), the rate in effect on the applicable Interest
Determination Date.
"Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
D x N
Bond Equivalent Yield = ------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest is
being calculated.
OTHER PROVISIONS; ADDENDA
Any provisions with respect to an issue of notes, including the
determination of one or more Interest Rate Bases, the specification of one or
more Interest Rate Bases, the calculation of the interest rate applicable to a
floating rate note, the applicable interest payment dates, the stated maturity
date, any redemption or repayment provisions or any other matter relating to the
applicable notes may be modified by the terms as specified under "Other
Provisions" on the face of the applicable notes or in an Addendum relating to
the applicable notes, if so specified on the face of the applicable notes and in
the applicable pricing supplement.
ORIGINAL ISSUE DISCOUNT NOTES
Doral Financial may from time to time offer notes at a price less than
their stated redemption price at Maturity. If the difference between the issue
price of the notes and their stated redemption price at maturity exceeds a de
minimus amount, the notes will be treated as if they were issued with original
issue discount for federal income tax purposes ("Original Issue Discount
Notes"). Original Issue Discount Notes may currently pay no interest or interest
at a rate which at the time of issuance is below market rates. Additional
considerations relating to any Original Issue Discount Notes will be described
in the applicable pricing supplement.
AMORTIZING NOTES
Doral Financial may from time to time offer notes ("Amortizing Notes"),
with amounts of principal and interest payable in installments over the term of
the notes. Unless otherwise specified in the applicable pricing supplement,
interest on each Amortizing Note will be computed on the basis of a 360-day year
of twelve 30-day months. Payments with respect to Amortizing Notes will be
applied first to interest due and payable on the Amortizing Notes and then to
the reduction of the unpaid principal amount of the Amortizing Notes. Further
information concerning additional terms and conditions of any issue of
Amortizing Notes will be provided in the applicable pricing supplement. A table
setting forth repayment information in respect of each Amortizing Note will be
included in the applicable note and the applicable pricing supplement.
BOOK-ENTRY NOTES
DESCRIPTION OF THE GLOBAL SECURITIES
Upon issuance, all notes in book-entry form having the same date of issue,
Maturity and otherwise having identical terms and provisions will be represented
by one or more fully registered global notes (the "Global Notes"). Each Global
Note will be deposited with, or on behalf of, The
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Depository Trust Company as depository registered in the name of the depository
or a nominee of the depository. Unless and until it is exchanged in whole or in
part for notes in certificated form, no Global Note may be transferred except as
a whole by the depository to a nominee of the depository or by a nominee of the
depository to the depository or another nominee of the depository or by the
depository or any such nominee to a successor of the depository or a nominee of
the successor.
DTC PROCEDURES
The following is based on information furnished by the depository:
The depository will act as securities depository for the notes in
book-entry form. The notes in book-entry form will be issued as fully registered
securities registered in the name of Cede & Co., the depository's partnership
nominee. One fully registered Global Note will be issued for each issue of notes
in book-entry form, each in the aggregate principal amount of the issue, and
will be deposited with the depository. If, however, the aggregate principal
amount of any issue exceeds $200,000,000, one Global Note will be issued with
respect to each $200,000,000 of principal amount and an additional Global Note
will be issued with respect to any remaining principal amount of the issue.
The depository is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The depository holds securities that its participants deposit with the
depository. The depository also facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct participants of the depository include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
The depository is owned by a number of its direct participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the depository's system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a direct
participant, either directly or indirectly. The rules applicable to the
depository and its participants are on file with the SEC.
Purchasers of notes in book-entry form under the depository's system must
be made by or through direct participants, which will receive a credit for those
notes in book-entry form on the depository's records. The ownership interest of
each actual purchaser of each note in book-entry form represented by a Global
Note is, in turn, to be recorded on the records of direct participants and
indirect participants. Beneficial owners in book-entry form will not receive
written confirmation from the depository of their purchase, but beneficial
owners are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the direct
participants or indirect participants through which the beneficial owner entered
into the transaction. Transfers of ownership interests in a Global Note
representing notes in book-entry form are to be accomplished by entries made on
the books of participants acting on behalf of beneficial owners. Beneficial
owners of a Global Note representing notes in book-entry form will not receive
notes in certificated form representing their ownership interests therein,
except in the event that use of the book-entry system for such notes in
book-entry form is discontinued.
To facilitate subsequent transfers, all Global Notes representing notes in
book-entry form which are deposited with, or on behalf of, the depository are
registered in the name of the depository's nominee, Cede & Co. The deposit of
Global Notes with, or on behalf of, the depository and their registration in the
name of Cede & Co. effect no change in beneficial ownership. The depository has
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no knowledge of the actual beneficial owners of the Global Notes representing
the notes in book-entry form; the depository's records reflect only the identity
of the direct participants to whose accounts such notes in book-entry form are
credited, which may or may not be the beneficial owners. The participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the depository to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners, will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither the depository nor Cede & Co. will consent or vote with respect to
the Global Notes representing the notes in book-entry form. Under its usual
procedures, the depository mails an omnibus proxy to Doral Financial as soon as
possible after the applicable record date. The omnibus proxy assigns Cede &
Co.'s consenting or voting rights to those direct participants, identified in a
listing attached to the omnibus proxy, to whose accounts the notes in book-entry
form are credited on the applicable record date.
Doral Financial will make principal, premium, if any, and/or interest, if
any, payments on the Global Notes representing the notes in book-entry form in
immediately available funds to the depository. The depository's practice is to
credit direct participants' accounts on the applicable payment date in
accordance with their respective holdings shown on the depository's records
unless the depository has reason to believe that it will not receive payment on
the applicable payment date. Payments by participants to beneficial owners will
be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of the applicable participant
and not of the depository, the trustee or Doral Financial, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal, premium, if any, and/or interest, if any, to the
depository is the responsibility of Doral Financial and the trustee,
disbursement of payments to direct participants will be the responsibility of
the depository, and disbursement of payments to the beneficial owners will be
the responsibility of direct participants and indirect participants.
If applicable, redemption notices shall be sent to Cede & Co. If less than
all of the notes in book-entry form of like tenor and terms are being redeemed,
the depository's practice is to determine by lot the amount of the interest of
each direct participant in the issue to be redeemed.
A beneficial owner will give notice of any option to elect to have its
notes in book-entry form repaid by Doral Financial, through its participant, to
the applicable trustee, and will effect delivery of the applicable notes in
book-entry form by causing the direct participant to transfer the participant's
interest in the Global Note notes in book-entry form, on the depository's
records, to the trustee.
The depository may discontinue providing its services as securities
depository with respect to the notes in book-entry form at any time by giving
reasonable notice to Doral Financial or the applicable trustee. In the event
that a successor securities depository is not obtained, notes in certificated
form are required to be printed and delivered.
Doral Financial may decide to discontinue use of the system of book-entry
transfers through the depository or a successor securities depository. In that
event, notes in certificated form will be printed and delivered.
The laws of some states may require that certain purchasers of securities
take physical delivery of securities in definitive form. Such limits and such
laws may impair the ability to own, transfer or pledge beneficial interests in
Global Notes.
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So long as the depository, or its nominee, is the registered owner of a
Global Note, the depository or its nominee, as the case may be, will be
considered the sole owner or holder of the notes represented by such Global Note
for all purposes under the Indentures. Except as provided below, beneficial
owners of a Global Note will not be entitled to have the notes represented by a
Global Note registered in their names, will not receive or be entitled to
receive physical delivery of the notes in definitive form and will not be
considered the owners or holders thereof under the applicable indenture.
Accordingly, each person owning a beneficial interest in a Global Note must rely
on the procedures of the depository and, if that person is not a participant, on
the procedures of the participant through which that person owns its interest,
to exercise any rights of a holder under the applicable indenture. Doral
Financial understands that under existing industry practices, in the event that
Doral Financial requests any action of holders or that an owner of a beneficial
interest in a Global Note desires to give or take any action which a holder is
entitled to give or take under the applicable indenture, the depository would
authorize the participants holding the relevant beneficial interests to give or
take the desired action, and the participants would authorize beneficial owners
owning through the participants to give or take the desired action or would
otherwise act upon the instructions of beneficial owners.
The depository's management is aware that some computer applications,
systems, and the like for processing data ("Systems") that are dependent upon
calendar dates, including dates before, on, and after January 1, 2000, may
encounter "Year 2000 problems." The depository has informed its participants and
other members of the financial community (the "Industry") that it has developed
and is implementing a program so that its Systems, as the same relate to the
timely payment of distributions (including principal and interest payments) to
securityholders, book-entry deliveries, and settlement of trades within the
depository continue to function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally, the
depository's plan includes a testing phase, which is expected to be completed
within appropriate time frames.
However, the depository's ability to perform properly its services is also
dependent upon other parties, including but not limited to issuers and their
agents, as well as the depository's direct and indirect participants, third
party vendors from whom the depository licenses software and hardware, and third
party vendors on whom the depository relies for information or the provision of
services, including telecommunication and electrical utility service providers,
among others. The depository has informed the Industry that it is contacting
(and will continue to contact) third party vendors from whom the depository
acquires services to: (i) impress upon them the importance of such services
being Year 2000 compliant; and (ii) determine the extent of their efforts for
Year 2000 remediation (and, as appropriate, testing) of their services. In
addition, the depository is in the process of developing such contingency plans
as it deems appropriate.
EXCHANGE FOR NOTES IN CERTIFICATED FORM
If:
(a) the depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by Doral
Financial within 90 days,
(b) Doral Financial executes and delivers to the trustee a company order to
the effect that the Global Notes shall be exchangeable, or
(c) an Event of Default has occurred and is continuing with respect to the
notes,
the Global Note or Global Notes will be exchangeable for notes in certificated
form of like tenor and of an equal aggregate principal amount, in denominations
of $1,000 and integral multiples of $1,000. The certificated notes will be
registered in the name or names as the depository instructs the
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applicable trustee. It is expected that instructions may be based upon
directions received by the depository from participants with respect to
ownership of beneficial interests in Global Notes.
The information in this section concerning the depository and the
depository's system has been obtained from sources that Doral Financial believes
to be reliable, but Doral Financial takes no responsibility for the accuracy of
the information.
UNITED STATES FEDERAL INCOME TAXATION
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change, including changes in effective dates, or possible differing
interpretations. It deals only with notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the United States dollar. It also does not deal with
holders other than original purchasers, except where otherwise specifically
noted. Persons considering the purchase of the notes should consult their own
tax advisors concerning the application of United States Federal income tax laws
to their particular situations as well as any consequences of the purchase,
ownership and disposition of the notes arising under the laws of any other
taxing jurisdiction.
As used in this prospectus, the term "U.S. Holder" means a beneficial owner
of a note that is for United States Federal income tax purposes:
(1) a citizen or resident of the United States,
(2) a corporation or a partnership (including an entity treated as a
corporation or a partnership for United States Federal income tax
purposes) created or organized in or under the laws of the United
States, any state thereof or the District of Columbia (unless, in the
case of a partnership, Treasury regulations are adopted that provide
otherwise),
(3) an estate whose income is subject to United States Federal income tax
regardless of its source,
(4) a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions
of the trust, or
(5) any other person whose income or gain in respect of a note is
effectively connected with the conduct of a United States trade or
business.
Certain trusts not described in clause (4) above in existence on August 20, 1996
that elect to be treated as a United States person will also be a U.S. Holder
for purposes of the following discussion. As used herein, the term "non-U.S.
Holder" means a beneficial owner of a note that is not a U.S. Holder.
U.S. HOLDERS
PAYMENTS OF INTEREST. Payments of interest on a note generally will be
taxable to a U.S. Holder as ordinary interest income at the time such payments
are accrued or are received (in accordance with the U.S. Holder's regular method
of tax accounting).
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ORIGINAL ISSUE DISCOUNT. The following summary is a general discussion of
the United States Federal income tax consequences to U.S. Holders of the
purchase, ownership and disposition of notes issued with original issue discount
("Discount Notes"). The following summary is based upon final Treasury
regulations (the "OID Regulations") released by the Internal Revenue Service on
January 27, 1994, as amended on June 11, 1996, under the original issue discount
provisions of the Code.
For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a note over its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of 1%
of the note's stated redemption price at maturity multiplied by the number of
complete years to its maturity from its issue date or, in the case of a note
providing for the payment of any amount other than qualified stated interest (as
defined below) prior to maturity, multiplied by the weighted average maturity of
the note). The issue price of each note of an issue of notes equals the first
price at which a substantial amount of the notes has been sold (ignoring sales
to bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents, or wholesalers). The stated
redemption price at maturity of a note is the sum of all payments provided by
the note other than "qualified stated interest" payments. The term "qualified
stated interest" generally means stated interest that is unconditionally payable
in cash or property (other than debt instruments of the issuer) at least
annually at a single fixed rate. In addition, under the OID Regulations, if a
note bears interest for one or more accrual periods at a rate below the rate
applicable for the remaining term of the note (e.g., notes with teaser rates or
interest holidays), and if the greater of either the resulting foregone interest
on the note or any "true" discount on the note (i.e., the excess of the note's
stated principal amount over its issue price) equals or exceeds a specified de
minimis amount, then the stated interest on the note would be treated as
original issue discount rather than qualified stated interest.
Payments of qualified stated interest on a note are taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Note must include original issue
discount in income as ordinary interest for United States Federal income tax
purposes as it accrues under a constant yield method in advance of receipt of
the cash payments attributable to such income, regardless of the U.S. Holder's
regular method of tax accounting. In general, the amount of original issue
discount included in income by the initial U.S. Holder of a Discount Note is the
sum of the daily portions of original issue discount with respect to the
Discount Note for each day during the taxable year (or portion of the taxable
year) on which the U.S. Holder held the Discount Note. The "daily portion" of
original issue discount on any Discount Note is determined by allocating to each
day in any accrual period a ratable portion of the original issue discount
allocable to that accrual period. An "accrual period" may be of any length and
the accrual periods may vary in length over the term of the Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the final day of an accrual
period or on the first day of an accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the difference
between
- the product of the Discount Note's adjusted issue price at the beginning
of such accrual period and its yield to maturity (determined on the basis
of compounding at the close of each accrual period and appropriately
adjusted to take into account the length of the particular accrual
period) and
- the amount of any qualified stated interest payments allocable to such
accrual period.
The "adjusted issue price" of a Discount Note at the beginning of any accrual
period is the sum of the issue price of the Discount Note plus the amount of
original issue discount allocable to all prior
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accrual periods minus the amount of any prior payments on the Discount Note that
were not qualified stated interest payments. Under these rules, U.S. Holders
generally will have to include in income increasingly greater amounts of
original issue discount in successive accrual periods.
A U.S. Holder who purchases a Discount Note for an amount that is greater
than its adjusted issue price as of the purchase date and less than or equal to
the sum of all amounts payable on the Discount Note after the purchase date
other than payments of qualified stated interest, will be considered to have
purchased the Discount Note at an "acquisition premium". Under the acquisition
premium rules, the amount of original issue discount which such U.S. Holder must
include in its gross income with respect to such Discount Note for any taxable
year (or portion thereof in which the U.S. Holder holds the Discount Note) will
be reduced (but not below zero) by the portion of the acquisition premium
properly allocable to the period.
Under the OID Regulations, Floating Rate Notes and Indexed Notes
(hereinafter "Variable Notes") are subject to special rules whereby a Variable
Note will qualify as a "variable rate debt instrument" if
- its issue price does not exceed the total noncontingent principal
payments due under the Variable Note by more than a specified de minimis
amount and
- it provides for stated interest, paid or compounded at least annually, at
current values of:
- one or more qualified floating rates,
- a single fixed rate and one or more qualified floating rates,
- a single objective rate, or
- a single fixed rate and a single objective rate that is a qualified
inverse floating rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Note is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualified floating rate, a variable rate
equal to the product of a qualified floating rate and a fixed multiple that is
greater than .65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than .65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, under the OID Regulations, two or more qualified floating rates that
can reasonably be expected to have approximately the same values throughout the
term of the Variable Note (e.g., two or more qualified floating rates with
values within 25 basis points of each other as determined on the Variable Note's
issue date) will be treated as a single qualified floating rate. Notwithstanding
the foregoing, a variable rate that would otherwise constitute a qualified
floating rate but which is subject to one or more restrictions such as a maximum
numerical limitation (i.e., a cap) or a minimum numerical limitation (i.e., a
floor) may, under certain circumstances, fail to be treated as a qualified
floating rate under the OID Regulations unless such cap or floor is fixed
throughout the term of the note. An "objective rate" is a rate that is not
itself a qualified floating rate but which is determined using a single fixed
formula that is based on objective financial or economic information. A rate
will not qualify as an objective rate if it is based on information that is
within the control of the issuer (or a related party) or that is unique to the
circumstances of the issuer (or a related party), such as dividends, profits, or
the value of the issuer's stock (although a rate does not fail to be an
objective rate merely because it is based on the credit quality of the issuer).
A "qualified inverse floating rate" is any objective rate where such rate is
equal to a fixed rate minus a qualified floating rate, as long as variations in
the rate can reasonably be expected to inversely reflect contemporaneous
variations in the qualified floating rate. The OID
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Regulations also provide that if a Variable Note provides for stated interest at
a fixed rate for an initial period of one year or less followed by a variable
rate that is either a qualified floating rate or an objective rate and if the
variable rate on the Variable Note's issue date is intended to approximate the
fixed rate (e.g., the value of the variable rate on the issue date does not
differ from the value of the fixed rate by more than 25 basis points), then the
fixed rate and the variable rate together will constitute either a single
qualified floating rate or objective rate, as the case may be.
If a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument" under the OID Regulations, and if
the interest on a Variable Note is unconditionally payable in cash or property
(other than debt instruments of the issuer) at least annually, then all stated
interest on the Variable Note will constitute qualified stated interest and will
be taxed accordingly. Thus, a Variable Note that provides for stated interest at
either a single qualified floating rate or a single objective rate throughout
the term thereof and that qualifies as a "variable rate debt instrument" under
the OID Regulations will generally not be treated as having been issued with
original issue discount unless the Variable Note is issued at a "true" discount
(i.e., at a price below the Variable Note's stated principal amount) in excess
of a specified de minimis amount. The amount of qualified stated interest and
the amount of original issue discount, if any, that accrues during an accrual
period on such a Variable Note is determined under the rules applicable to fixed
rate debt instruments by assuming that the variable rate is a fixed rate equal
to
(1) in the case of a qualified floating rate or qualified inverse floating
rate, the value as of the issue date, of the qualified floating rate or
qualified inverse floating rate, or
(2) in the case of an objective rate (other than a qualified inverse
floating rate), a fixed rate that reflects the yield that is reasonably
expected for the Variable Note.
The qualified stated interest allocable to an accrual period is increased (or
decreased) if the interest actually paid during an accrual period exceeds (or is
less than) the interest assumed to be paid during the accrual period pursuant to
the foregoing rules.
In general, any other Variable Note that qualifies as a "variable rate debt
instrument" will be converted into an "equivalent" fixed rate debt instrument
for purposes of determining the amount and accrual of original issue discount
and qualified stated interest on the Variable Note. The OID Regulations
generally require that such a Variable Note be converted into an "equivalent"
fixed rate debt instrument by substituting any qualified floating rate or
qualified inverse floating rate provided for under the terms of the Variable
Note with a fixed rate equal to the value of the qualified floating rate or
qualified inverse floating rate, as the case may be, as of the Variable Note's
issue date. Any objective rate (other than a qualified inverse floating rate)
provided for under the terms of the Variable Note is converted into a fixed rate
that reflects the yield that is reasonably expected for the Variable Note. In
the case of a Variable Note that qualifies as a "variable rate debt instrument"
and provides for stated interest at a fixed rate in addition to either one or
more qualified floating rates or a qualified inverse floating rate, the fixed
rate is initially converted into a qualified floating rate (or a qualified
inverse floating rate, if the Variable Note provides for a qualified inverse
floating rate). Under such circumstances, the qualified floating rate or
qualified inverse floating rate that replaces the fixed rate must be such that
the fair market value of the Variable Note as of the Variable Note's issue date
is approximately the same as the fair market value of an otherwise identical
debt instrument that provides for either the qualified floating rate or
qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the Variable Note is then converted into an "equivalent"
fixed rate debt instrument in the manner described above.
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Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S. Holder
of the Variable Note will account for such original issue discount and qualified
stated interest as if the U.S. Holder held the "equivalent" fixed rate debt
instrument. Each accrual period appropriate adjustments will be made to the
amount of qualified stated interest or original issue discount assumed to have
been accrued or paid with respect to the "equivalent" fixed rate debt instrument
in the event that such amounts differ from the actual amount of interest accrued
or paid on the Variable Note during the accrual period.
If a Variable Note does not qualify as a "variable rate debt instrument"
under the OID Regulations, then the Variable Note would be treated as a
contingent payment debt obligation. On June 11, 1996, the Treasury Department
issued final regulations (the "CPDI Regulations") concerning the proper United
States Federal income tax treatment of contingent payment debt instruments. In
general, the CPDI Regulations would cause the timing and character of income,
gain or loss reported on a contingent payment debt instrument to substantially
differ from the timing and character of income, gain or loss reported on a
contingent payment debt instrument under general principles of current United
States Federal income tax law. Specifically, the CPDI Regulations generally
require a U.S. Holder of such an instrument to include future contingent and
noncontingent interest payments in income as such interest accrues based upon a
projected payment schedule. Moreover, in general, under the CPDI Regulations,
any gain recognized by a U.S. Holder on the sale, exchange, or retirement of a
contingent payment debt instrument will be treated as ordinary income and all or
a portion of any loss realized could be treated as ordinary loss as opposed to
capital loss (depending upon the circumstances). The CPDI Regulations apply to
debt instruments issued on or after August 13, 1996. The proper United States
Federal income tax treatment of Variable Notes that are treated as contingent
payment debt obligations will be more fully described in the applicable pricing
supplement. Furthermore, any other special United States Federal income tax
considerations, not otherwise discussed herein, which are applicable to any
particular issue of notes will be discussed in the applicable pricing
supplement.
Doral Financial may issue notes which:
- may be redeemable at the option of Doral Financial prior to their stated
maturity (a "call option") and/or
- may be repayable at the option of the holder prior to their stated
maturity (a "put option").
Notes containing such features may be subject to rules that differ from the
general rules discussed above. Investors intending to purchase notes with such
features should consult their own tax advisors, since the original issue
discount consequences will depend, in part, on the particular terms and features
of the purchased notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
FOREIGN-CURRENCY NOTES. The United States Federal income tax consequences
of the purchase, ownership and disposition of notes providing for payments
denominated in a currency other than U.S. dollars will be more fully described
in the applicable pricing supplement.
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SHORT-TERM NOTES. Notes that have a fixed maturity of one year or less
("Short-Term Notes") will be treated as having been issued with original issue
discount. In general, an individual or other cash method U.S. Holder is not
required to accrue such original issue discount unless the U.S. Holder elects to
do so. If such an election is not made, any gain recognized by the U.S. Holder
on the sale, exchange or maturity of the Short-Term Note will be ordinary income
to the extent of the original issue discount accrued on a straight-line basis,
or upon election under the constant yield method (based on daily compounding),
through the date of sale or maturity, and a portion of the deductions otherwise
allowable to the U.S. Holder for interest on borrowings allocable to the Short-
Term Note will be deferred until a corresponding amount of income is realized.
U.S. Holders who report income for United States Federal income tax purposes
under the accrual method, and certain other holders including banks and dealers
in securities, are required to accrue original issue discount on a Short-Term
Note on a straight-line basis unless an election is made to accrue the original
issue discount under a constant yield method (based on daily compounding).
MARKET DISCOUNT. If a U.S. Holder purchases a note, other than a Discount
Note, for an amount that is less than its issue price (or, in the case of a
subsequent purchaser, its stated redemption price at maturity) or, in the case
of a Discount Note, for an amount that is less than its adjusted issue price as
of the purchase date, such U.S. Holder will be treated as having purchased the
note at a "market discount," unless such market discount is less than a
specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of a Discount Note, any payment
that does not constitute qualified stated interest) on, or any gain realized on
the sale, exchange, retirement or other disposition of, a note as ordinary
income to the extent of the lesser of:
- the amount of such payment or realized gain or
- the market discount which has not previously been included in income and
is treated as having accrued on the note at the time of such payment or
disposition.
Market discount will be considered to accrue ratably during the period from the
date of acquisition to the maturity date of the note, unless the U.S. Holder
elects to accrue market discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a note with market discount until the maturity of the Note or
certain earlier dispositions, because a current deduction is only allowed to the
extent the interest expense exceeds an allocable portion of market discount. A
U.S. Holder may elect to include market discount in income currently as it
accrues (on either a ratable or semiannual compounding basis), in which case the
rules described above regarding the treatment as ordinary income of gain upon
the disposition of the note and upon the receipt of certain cash payments and
regarding the deferral of interest deductions will not apply. Generally, such
currently included market discount is treated as ordinary interest for United
States Federal income tax purposes. Such an election will apply to all debt
instruments acquired by the U.S. Holder on or after the first day of the taxable
year to which such election applies and may be revoked only with the consent of
the IRS.
PREMIUM. If a U.S. Holder purchases a note for an amount that is greater
than the sum of all amounts payable on the note after the purchase date other
than payments of qualified stated interest, the U.S. Holder will be considered
to have purchased the note with "amortizable bond premium" equal in amount to
such excess. A U.S. Holder may elect to amortize such premium using a constant
yield method over the remaining term of the note and may offset interest
otherwise required to be included in respect of the note during any taxable year
by the amortized amount of such excess for
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the taxable year. However, if the note may be optionally redeemed after the U.S.
Holder acquires it at a price in excess of its stated redemption price at
maturity, special rules would apply which could result in a deferral of the
amortization of some bond premium until later in the term of the note. Any
election to amortize bond premium applies to all taxable debt obligations then
owned and thereafter acquired by the U.S. Holder and may be revoked only with
the consent of the IRS.
DISPOSITION OF A NOTE. Except as discussed above, upon the sale, exchange
or retirement of a note, a U.S. Holder generally will recognize taxable gain or
loss equal to the difference between the amount realized on the sale, exchange
or retirement (other than amounts representing accrued and unpaid interest) and
the U.S. Holder's adjusted tax basis in the note. A U.S. Holder's adjusted tax
basis in a note generally will equal the U.S. Holder's initial investment in the
note increased by any original issue discount included in income (and accrued
market discount, if any, if the U.S. Holder has included such market discount in
income) and decreased by the amount of any payments, other than qualified stated
interest payments, received and amortizable bond premium taken with respect to
the note. Such gain or loss generally will be long-term capital gain or loss if
the note were held for more than one year. Long-term capital gains of
individuals are subject to reduced capital gain rates while short-term capital
gains are subject to ordinary income rates. The deductibility of capital losses
is subject to certain limitations. Prospective investors should consult their
own tax advisors concerning these tax law provisions.
NON-U.S. HOLDERS
Subject to the discussion of "back-up" withholding below, interest on the
notes is currently exempt from United States Federal income taxes, including
withholding taxes, if paid to a "non-U.S. Holder", whether or not such non-U.S.
Holder is engaged in a trade or business in the United States, unless:
(i) the corporation is an insurance company carrying on a United States
insurance business to which the interest is attributable, within
the meaning of the Code, or
(ii) the individual or corporation has an office or other fixed place of
business in the United States to which the interest is attributable
and the interest is derived in the active conduct of a banking,
financing or similar business within the United States.
Subject to the discussion of back-up withholding below, a non-U.S. Holder
will not be subject to United States Federal income tax on any gain realized on
the sale or exchange of a Note, provided that such gain is not effectively
connected with the conduct by the holder of a United States trade or business
and, in the case of a non-U.S. Holder who is an individual, such holder is not
present in the United States for a total of 183 days or more during the taxable
year in which such gain is realized and certain other conditions are met. The
notes are deemed to be situated outside the United States for purposes of the
United States federal estate tax and are not includible in the gross estate for
purposes of such tax in the case of a nonresident in the United States who was
not a citizen of the United States at the time of death.
BACKUP WITHHOLDING. A 31% "back-up" withholding tax and certain
information reporting requirements may apply to payments of principal and
interest on the notes made to certain non-corporate holders if such payments are
made or are considered made in the United States (including payments on notes
made by wire transfer from outside the United States to an account maintained by
the holder with the paying agent in the United States). If such payments are
considered to have been made in the United States, non-U.S Holders are generally
exempt from these withholding and reporting requirements (assuming that the gain
or income is otherwise exempt from United States Federal income tax) but may be
required to comply with certification and identification procedures in
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order to prove their exemption from the requirements. Similar rules requiring
reporting and withholding with respect to gross sale proceeds will apply to a
non-U.S. Holder who sells a Note through a United States branch of a broker and
information reporting (but not back-up withholding) will apply to a non-U.S.
Holder who sells a Note through (a) a non-United States branch of a United
States broker, or (b) a non-United States office of a broker that is a
controlled foreign corporation for United States tax purposes or that is a
person 50% or more of whose income is effectively connected with a United States
trade or business for a specified period ("US Connected Broker"), in either case
unless the holder proves an exemption from the requirement.
On October 6, 1997, the Treasury Department released new Treasury
Regulations governing these backup withholding and information reporting
requirements. The new regulations would not generally alter the treatment of
non-U.S. Holders described above. The new regulations are generally effective
for payments made after December 31, 2000.
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information,
such as the registered owner's taxpayer identification number, in the required
manner.
Generally, individuals are not exempt recipients, whereas corporations and
certain other entities generally are exempt recipients. Payments made in respect
of the notes to a U.S. Holder must be reported to the IRS, unless the U.S.
Holder is an exempt recipient or establishes an exemption. Compliance with the
identification procedures described in the preceding section would establish an
exemption from backup withholding for those non-U.S. Holders who are not exempt
recipients.
In addition, upon the sale of a note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either:
- the broker determines that the seller is a corporation or other exempt
recipient or
- the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Holder, certifies that such
seller is a non-U.S. Holder (and certain other conditions are met).
Such a sale must also be reported by the broker to the IRS, unless either:
- the broker determines that the seller is an exempt recipient or
- the seller certifies its non-U.S. status (and certain other conditions
are met).
Certification of the registered owner's non-U.S. status would be made normally
on an IRS Form W-8 under penalties of perjury, although in certain cases it may
be possible to submit other documentary evidence. In addition, prospective U.S.
Holders are strongly urged to consult their own tax advisors with respect to the
New Withholding Regulations. See " United States Federal Income Taxation --
Non-U.S. Holders".
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
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CERTAIN PUERTO RICO INCOME TAX CONSEQUENCES
The following discussion of certain Puerto Rico income tax consequences to
holders of notes with respect to the acquisition, ownership and disposition of
the notes is based upon laws, regulations, rulings and decisions now in effect,
all of which are subject to change. The discussion below does not purport to
deal with all aspects of Puerto Rico income taxation that may be relevant to
particular investors. Prospective investors are advised to consult their own tax
advisors regarding the Puerto Rico income tax consequences of the acquisition,
ownership and disposition of the notes and the applicability of the income and
withholding tax provisions described below.
INTEREST ON THE NOTES
Foreign Corporations, Foreign Partnerships and Nonresident Aliens. Under
the Puerto Rico Internal Revenue Code of 1994, as amended (the "PR Code"),
interest on the notes received by a holder of the notes who is (i) not a citizen
of the United States and not a resident of Puerto Rico, or (ii) a foreign
corporation or partnership (i.e., not organized under the laws of Puerto Rico)
not engaged in a trade or business in Puerto Rico (each, a "Non-Resident Foreign
Holder") will be exempt from Puerto Rico income and withholding tax, provided
that (a) such Non-Resident Holder is not a "related person" with respect to
Doral Financial and (b) the interest on the note is not treated as income
effectively connected with a trade or business in Puerto Rico of the
Non-Resident Foreign Holder. For this purpose, a "related person" generally will
be one that directly or indirectly owns 50% or more in value of the stock of
Doral Financial.
United States Citizens not Residents of Puerto Rico. Interest on the notes
received by United States citizens non-residents of Puerto Rico ("Non-Resident
U.S. Citizen") is exempt from Puerto Rico income and withholding taxes.
Treatment of Original Issue Discount under the PR Code. The PR Code does
not provide any rules with respect to the treatment to be accorded to the
excess, if any, of the amount due at maturity of a note over the initial
offering price to the public of such note (the "Excess"). The administrative
practice of the Department of the Treasury of Puerto Rico has been to treat the
Excess as interest.
SALE, EXCHANGE OR RETIREMENT OF NOTES
A gain realized by a Non-Resident Foreign Holder from the sale, exchange or
retirement of the notes (excluding any part of such gain attributable to an
Excess) will not be subject to Puerto Rico income tax if such gain constitutes
income from sources outside Puerto Rico and it does not constitute income
effectively connected with the conduct of a trade or business in Puerto Rico.
A gain realized by a Non-Resident U.S. Citizen from the sale, exchange or
retirement of the notes (excluding any part of such gain attributable to an
Excess) will not be subject to Puerto Rico income tax under the PR Code if such
gain constitutes income from sources outside Puerto Rico.
A gain derived by a holder of the notes from the sale, exchange or
retirement of the notes (excluding any part of such gain attributable to an
Excess) will constitute income from sources outside Puerto Rico if all rights,
title and interest in the notes are transferred outside Puerto Rico and the
delivery or surrender of the notes are made to an office of a paying or exchange
agent located outside Puerto Rico.
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PLAN OF DISTRIBUTION
Doral Financial is offering the notes for sale on a continuing basis
through the agents, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Bear, Stearns & Co. Inc., who will purchase the notes, as
principal, from Doral Financial, for resale to investors and other purchasers at
varying prices relating to prevailing market prices at the time of resale as
determined by the applicable agent, or, if so specified in an applicable pricing
supplement, for resale at a fixed public offering price. Unless otherwise
specified in an applicable pricing supplement, any note sold to an agent as
principal will be purchased by that agent at a price equal to 100% of the
principal amount of the note less a percentage of the principal amount equal to
the commission applicable to an agency sale as described below of a note of
identical maturity. If agreed to by Doral Financial and an agent, that agents
may utilize its reasonable efforts on an agency basis to solicit offers to
purchase the notes at 100% of the principal amount of the notes, unless
otherwise specified in an applicable pricing supplement. Doral Financial will
pay a commission to the each agent, ranging from .125% to .750% of the principal
amount of a note, depending upon its stated maturity or, with respect to a note
for which the stated maturity is in excess of 30 years, a commission as agreed
upon by Doral Financial and each agent at the time of sale, sold through that
agent.
The agents may sell notes they have purchased from Doral Financial as
principal to other dealers for resale to investors, and may allow any portion of
the discount received in connection with such purchases from Doral Financial to
such dealers. After the initial public offering of notes, the public offering
price, in the case of notes to be resold at a fixed public offering price, the
concession and the discount allowed to dealers may be changed.
Doral Financial reserves the right to withdraw, cancel or modify the offer
made by this prospectus supplement without notice and may reject orders, in
whole or in part, whether placed directly with Doral Financial or through an
agent. Each agent will have the right, in its discretion reasonably exercised,
to reject in whole or in part any offer to purchase notes received by the agent.
Unless otherwise specified in an applicable pricing supplement, payment of
the purchase price of the notes will be required to be made in immediately
available funds in U.S. dollars or the Specified Currency, as the case may be,
in New York City on the date of settlement.
No Note will have an established trading market when issued. Unless
specified in the applicable pricing supplement, Doral Financial will not list
the notes on any securities exchange. The agents may from time to time purchase
and sell notes in the secondary market, but the agents are not obligated to do
so, and there can be no assurance that there will be a secondary market for the
notes or liquidity in the secondary market if one develops. From time to time,
the agents may make a market in the notes.
The agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. Doral Financial has agreed to indemnify the
agents against or to make contributions relating to certain civil liabilities,
including liabilities under the Securities Act, or to contribute to payments the
agents may be required to make in respect thereof. Doral Financial has agreed to
reimburse the agents for certain expenses.
From time to time, Doral Financial may issue and sell other securities
described in the accompanying prospectus, and the amount of notes that Doral
Financial may offer and sell under this prospectus supplement may be reduced as
a result of such sales.
In connection with the offering of notes purchased by the agents as
principal on a fixed price basis, the agents are permitted to engage in certain
transactions that stabilize the price of the notes. These transactions may
consist of bids or purchases for the purpose of pegging, fixing or maintaining
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the price of the notes. If the agents create a short position in the notes in
connection with the offering, i.e., if they sell notes in an aggregate principal
amount exceeding that set forth in the applicable pricing supplement, then the
agents may reduce that short position by purchasing notes in the open market. In
general, purchases of notes for the purpose of stabilization or to reduce a
short position could cause the price of the notes to be higher than in the
absence of these purchases.
Neither Doral Financial nor the agents make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the notes. In addition, neither Doral
Financial nor the agents make any representation that the agent will engage in
any such transactions or that such transactions, once commenced, will not be
discontinued without notice.
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(DORAL FINANCIAL LOGO)
$200,000,000
DORAL FINANCIAL CORPORATION
MEDIUM-TERM NOTES
----------------------------------
PROSPECTUS SUPPLEMENT
----------------------------------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 64
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the offering all of which will be
borne by the Registrant are as follows (all amounts are estimates except for
the SEC Registration fee):
<TABLE>
<S> <C>
SEC registration fee ..................... $ 69,500
NASD fee ................................. 20,500
Printing expenses ........................ 75,000
Legal fees and expenses .................. 225,000
Accounting fees and expenses ............. 70,000
Trustees and registrar's fees and expenses 30,000
Rating Agency fees ....................... 320,000
Listing fees ............................. 30,000
Miscellaneous ............................ 20,000
--------
Total ........................... $860,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) Article 1.02(B)(6) of the Puerto Rico General Corporation Act
(the "PR GCA") provides that a corporation may include in its certificate of
incorporation a provision eliminating or limiting the personal liability of
members of its board of directors or governing body for breach of a director's
fiduciary duty of care. However, no such provision may eliminate or limit the
liability of a director for breaching his duty of loyalty, failing to act in
good faith, engaging in intentional misconduct or knowingly violating a law,
paying a dividend or approving a stock repurchase which was illegal, or
obtaining an improper personal benefit. A provision of this type has no effect
on the availability or equitable remedies, such as injunction or rescission,
for breach of fiduciary duty. Article Seventh of Doral Financial's Restated
Certificate of Incorporation contains such a provision.
(b) Article 4.09 of the PR GCA authorizes Puerto Rico corporations
to indemnify their officers and directors against liabilities arising out of
pending or threatened actions, suits or proceedings to which they are or may be
made parties by reason of being directors or officers. Such rights of
indemnification are not exclusive of any other rights to which such officers or
directors may be entitled under any by-law, agreement, vote of stockholders or
otherwise. The Restated Certificate of Incorporation of Doral Financial
provides that Doral Financial shall indemnify its directors, officers and
employees to the fullest extent permitted by law. Doral Financial also
maintains directors' and officers' liability insurance on behalf of its
directors and officers.
(c) Section 1 of Article IX of Doral Financial's By-laws (the
"By-laws") provides that Doral Financial shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of Doral Financial)
by reason of the fact that he is or was a director, officer, employee or agent
of Doral Financial or is or was serving at the request of Doral Financial as a
director, officer, employer or agent of another corporation or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed
II-1
<PAGE> 65
to the best interests of Doral Financial, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.
Section 2 of Article IX of the By-laws provides that Doral Financial
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of Doral Financial to procure a judgment in its favor by reason of the fact
that such person acted in any of the capacities set forth above, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted under similar
standards set forth in the preceding paragraph, except that no indemnification
may be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to Doral Financial unless and only to the
extent that the court in which such action or suit was brought shall determine
that despite the adjudication of liability, such person is fairly and
reasonably entitled to be indemnified for such expenses which the court shall
deem proper.
Section 3 of Article IX of the By-laws provides that to the extent a
director or officer of Doral Financial has been successful on the merits or
otherwise in the defense of any action, suit or proceeding referred to in
Sections 1 and 2 of Article IX of the By-laws or in the defense of any claim,
issue, or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
Section 5 of Article IX of the By-laws provides that Doral Financial
shall pay expenses incurred in defending a civil or criminal action, suit or
proceeding in advance of the final disposition of such action, suit or
proceeding. Doral Financial must make such advanced payments if it receives an
undertaking by or on behalf of any person covered by Section 1 of Article IX of
the By-laws to repay such amounts, if it is ultimately determined that he is
not entitled to be indemnified by Doral Financial as authorized in Article IX
of the By-laws.
Sections 6 and 7 of Article IX of the By-laws provide that
indemnification provided for by Sections 1 and 2 of Article IX of the By-laws
shall not be deemed exclusive of any other rights to which the indemnified
party may be entitled; and that Doral Financial may purchase and maintain
insurance on behalf of a director or officer of Doral Financial against any
liability asserted against him or incurred by him in any such capacity or
arising out of his status as such whether or not Doral Financial would have the
power to indemnify him against such liabilities under such Sections 1 and 2 of
Article IX of the By-laws.
ITEM 16. LIST OF EXHIBITS
<TABLE>
<S> <C>
1.1* Form of Distribution Agreement for Medium Term Notes.
1.2*** Form of Universal Shelf Underwriting Agreement.
4.1* Senior Indenture.
4.2* Forms of Senior Fixed Rate Medium Term Note and Senior Floating Rate Medium Term Note.
4.3* Subordinated Indenture.
4.4* Form of Subordinated Fixed Rate Medium Term Note and Subordinated Floating Rate
Medium Term Note.
4.5*** Form of Certificate of Designations, Preferences and Rights of Preferred Stock.
</TABLE>
II-2
<PAGE> 66
<TABLE>
<S> <C>
4.6*** Specimen Preferred Stock Certificate.
4.7 Certificate of Incorporation of Doral Financial as currently
in effect (incorporated by reference to exhibit number 3.1(e)
of Doral Financial's Annual Report on Form 10-K for the year
ended December 31, 1998).
4.8 By-laws of Doral Financial, as amended as of October 19, 1998
(incorporated by reference to exhibit number 3.2 of Doral
Financial's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998).
5.1* Opinion of Pietrantoni Mendez & Alvarez LLP regarding
legality of the Preferred Stock and the Debt Securities.
10.1* Form of Administrative Procedures for Fixed and Floating Rate
Medium Term Notes.
12.1** Statement of Computation of Ratios of Earnings to Fixed
Charges and Earnings to Fixed Changes and Preferred Stock
Dividends.
23.1* Consent of Pietrantoni Mendez & Alvarez LLP (included in Exhibit
5.1).
23.2** Consent of PricewaterhouseCoopers LLP.
24.1** Powers of Attorney (included at page II-5).
25.1* Statement of Eligibility of Senior Trustee on Form T-1.
25.2* Statement of Eligibility of Subordinated Trustee on Form T-1.
</TABLE>
- --------------------------
* Filed herewith.
** Filed previously as an exhibit to this Registration Statement.
*** To be incorporated by reference from a Current Report on Form 8-K.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)
(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
II-3
<PAGE> 67
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions in Item 15, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
II-4
<PAGE> 68
(2) For the purpose of determining any liability under the Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering hereof.
The undersigned Registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act of 1939, as amended
(the "Act"), in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Act.
II-5
<PAGE> 69
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly cause this
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in San Juan, Puerto Rico, on the 4th
day of May, 1999.
DORAL FINANCIAL CORPORATION
By: /s/ Richard F. Bonini
------------------------------------------------------------
Richard F. Bonini
Senior Executive Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
* Chairman of the Board and May 4, 1999
- ------------------------------------------------------ Chief Executive Officer
Salomon Levis
/s/Richard F. Bonini Senior Executive Vice May 4, 1999
- ------------------------------------------------------ President, Chief Financial Officer
Richard F. Bonini and Director
* Vice President and May 4, 1999
- ------------------------------------------------------ Chief Accounting Officer
Ricardo Melendez
* Director May 4, 1999
- ------------------------------------------------------
A. Brean Murray
* Director May 4, 1999
- ------------------------------------------------------
Edgar M. Cullman, Jr.
* Director May 4, 1999
- ------------------------------------------------------
John L. Ernst
* Director May 4, 1999
- ------------------------------------------------------
Efraim M. Kier
* Director May 4, 1999
- ------------------------------------------------------
Zoila Levis
* Director May 4, 1999
- ------------------------------------------------------
Victor M. Pons, Jr.
* /s/Richard F. Bonini
- ------------------------------------------------------
Richard F. Bonini
as attorney-in-fact for
each of the persons indicated
</TABLE>
II-6
<PAGE> 70
INDEX TO EXHIBITS
DESCRIPTION OF DOCUMENTS
<TABLE>
<S> <C>
1.1* Form of Distribution Agreement for Medium Term Notes.
1.2*** Form of Universal Shelf Underwriting Agreement.
4.1* Senior Indenture.
4.2* Forms of Senior Fixed Rate Medium Term Note and Senior
Floating Rate Medium Term Note.
4.3* Subordinated Indenture.
4.4* Form of Subordinated Fixed Rate Medium Term Note and
Subordinated Floating Rate Medium Term Note.
4.5*** Form of Certificate of Designations, Preferences and Rights of
Preferred Stock.
4.6*** Specimen Preferred Stock Certificate.
4.7 Certificate of Incorporation of Doral Financial as currently
in effect (incorporated by reference to exhibit number 3.1(e)
of Doral Financial's Annual Report on Form 10-K for the year
ended December 31, 1998).
4.8 By-laws of Doral Financial, as amended as of October 19, 1998
(incorporated by reference to exhibit number-3.2 of Doral
Financial's Quarterly Report on Form-10-Q for the quarter
ended September 30, 1998).
5.1* Opinion of Pietrantoni Mendez & Alvarez LLP regarding
legality of the Preferred Stock and the Debt Securities.
10.1* Form of Administrative Procedures for Fixed and Floating Rate
Medium Term Notes.
12.1** Statement of Computation of Ratios of Earnings to Fixed
Charges and Earnings to Fixed Changes and Preferred Stock
Dividends.
23.1* Consent of Pietrantoni Mendez & Alvarez LLP (included in
Exhibit 5.1).
23.2** Consent of PricewaterhouseCoopers LLP.
24.1** Powers of Attorney (included at page II-5).
25.1* Statement of Eligibility of Senior Trustee on Form T-1.
25.2* Statement of Eligibility of Subordinated Trustee on Form T-1.
</TABLE>
- --------------------------
* Filed herewith.
** Filed previously as an exhibit to this Registration Statement.
*** To be incorporated by reference from a Current Report on Form 8-K.
II-7
<PAGE> 1
EXHIBIT 1.1
DORAL FINANCIAL CORPORATION
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
May [ ], 1999
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, NY 10167
Dear Sirs:
DORAL FINANCIAL CORPORATION, a bank holding company organized under the
laws of the Commonwealth of Puerto Rico (the "Company"), confirms its agreement
with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Bear, Stearns & Co. Inc. (each, an "Agent," and collectively, the "Agents") with
respect to the issue and sale by the Company of its Senior Medium-Term Notes Due
Nine Months or More From Date of Issue (the "Senior Notes") and its Subordinated
Medium-Term Notes Due Nine Months or More From Date of Issue (the "Subordinated
Notes," and together with the Senior Notes, the "Notes"). The Senior Notes are
to be issued pursuant to a Senior Indenture, dated as of ___________, 1999, as
amended or modified from time to time (the "Senior Indenture"), between the
Company and Bankers Trust Company, as trustee (the "Senior Trustee"); the
Subordinated Notes are to be issued pursuant to a Subordinated Indenture, dated
as of ___________, 1999, as amended or modified from time to time (the
"Subordinated Indenture," and together with the Senior Indenture, the
"Indentures"), between the Company and Bankers Trust Company, as trustee (the
"Subordinated Trustee," and together with the Senior Trustee, the "Trustees").
As of the date hereof, the Company has authorized the issuance and sale of up to
U.S. $250,000,000 aggregate initial offering price of Notes (or its equivalent,
based upon the exchange rate on the applicable trade date in such foreign or
composite currencies as the Company shall designate at the time of issuance) to
or through the Agents pursuant to the terms of this Agreement. It is understood,
however, that the Company may from time to time authorize the issuance of
additional Notes and that such additional Notes may be sold to or through the
Agents pursuant to the terms of this Agreement, all as though the issuance of
such Notes were authorized as of the date hereof.
<PAGE> 2
This Agreement provides both for the sale of Notes by the Company to
one or more Agents as principal for resale to investors and other purchasers and
for the sale of Notes by the Company directly to investors (as may from time to
time be agreed to by the Company and the applicable Agent), in which case the
applicable Agent will act as an agent of the Company in soliciting offers for
the purchase of Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-76259) [and
pre-effective amendment[s] no[s]. ___ thereto] for the registration of preferred
stock and debt securities, including the Notes, under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"). Such registration statement has been
declared effective by the Commission and the Indentures each have been duly
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"),
and the Company has filed such post-effective amendments thereto as may be
required prior to its acceptance of any offer for the purchase of Notes and each
such post-effective amendment has been declared effective by the Commission.
Such registration statement (as so amended, if applicable) is referred to herein
as the "Registration Statement"; and the final prospectus and all applicable
amendments or supplements thereto (including the final prospectus supplement and
pricing supplement relating to the offering of Notes), in the form first
furnished to the applicable Agent(s) for use in confirming sales of Notes, are
collectively referred to herein as the "Prospectus"; provided, however, that all
references to the "Registration Statement" and the "Prospectus" shall also be
deemed to include all documents incorporated therein by reference pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to any
acceptance by the Company of an offer for the purchase of Notes; provided,
further, that if the Company files a registration statement with the Commission
pursuant to Rule 462(b) of the 1933 Act Regulations (the "Rule 462(b)
Registration Statement"), then, after such filing, all references to the
"Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement. A "preliminary prospectus" shall be deemed to refer to
any prospectus used before the Registration Statement became effective and any
prospectus furnished by the Company after the Registration Statement became
effective and before any acceptance by the Company of an offer for the purchase
of Notes which omitted information to be included upon pricing in a form of
prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations. For purposes of this Agreement, all references to the Registration
Statement, Prospectus or preliminary prospectus or to any amendment or
supplement thereto shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "disclosed," "contained," "included" or "stated"
(or other references of like import) in the Registration Statement, Prospectus
or preliminary prospectus shall be deemed to include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, Prospectus or preliminary prospectus
shall be deemed to include the filing of any document under the 1934 Act which
is incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be.
2
<PAGE> 3
SECTION 1. Appointment as Agent.
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly on
its own behalf, the Company hereby appoints each Agent as its agent for purposes
of soliciting purchases of Notes from the Company by others. The Company agrees
that, during the period that the Agents are acting as agents hereunder, it will
not appoint any other agents to act on its behalf, or to assist it, in the
placement of the Notes.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of offers for the purchase of Notes in excess of the amount which
shall be authorized by the Company from time to time or in excess of the
aggregate initial offering price of Notes registered pursuant to the
Registration Statement. The Agents shall have no responsibility for maintaining
records with respect to the aggregate initial offering price of Notes sold, or
of otherwise monitoring the availability of Notes for sale, under the
Registration Statement.
(c) Purchases as Principal. The Agents shall not have any obligation to
purchase Notes from the Company as principal. However, absent an agreement
between an Agent and the Company that such Agent shall be acting solely as an
agent for the Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such Agent.
Accordingly, the Agents, individually or in a syndicate, may agree from time to
time to purchase Notes from the Company as principal for resale to investors and
other purchasers determined by such Agents. Any purchase of Notes from the
Company by an Agent as principal shall be made in accordance with Section 3(a)
hereof.
(d) Solicitations as Agent. If agreed upon between an Agent and the
Company, such Agent, acting solely as an agent for the Company and not as
principal, will solicit offers for the purchase of Notes. Such Agent will
communicate to the Company, orally, each offer for the purchase of Notes
solicited by it on an agency basis other than those offers rejected by such
Agent. Such Agent shall have the right, in its discretion reasonably exercised,
to reject any offer for the purchase of Notes, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained herein. The
Company may accept or reject any offer for the purchase of Notes, in whole or in
part and any such rejection shall not be deemed a rejection of its agreement
contained herein. Such Agent shall make reasonable efforts to assist the Company
in obtaining performance by each purchaser whose offer for the purchase of Notes
has been solicited by it on an agency basis and accepted by the Company. Such
Agent shall not have any liability to the Company in the event that any such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Notes to a purchaser whose offer has been solicited by
such Agent on an agency basis and accepted by the Company, the Company shall (i)
hold such Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) pay to such Agent any commission
to which it would otherwise be entitled absent such default.
(e) Reliance. The Company and the Agents agree that any Notes purchased
from the Company by one or more Agents as principal shall be purchased, and any
Notes the placement of which an Agent arranges as an agent of the Company shall
be placed by such Agent, in reliance
3
<PAGE> 4
on the representations, warranties, covenants and agreements of the Company
contained herein and on the terms and conditions and in the manner provided
herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to such Agent as principal or through such Agent as
agent), as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to
such Agent as principal is referred to herein as a "Settlement Date"), and as of
any time that the Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein as a
"Representation Date"), as follows:
(i) Due Incorporation, Good Standing and Due Qualification of
the Company. The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Puerto Rico with corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into this Agreement and
consummate the transactions contemplated in the Prospectus; the Company
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or be
in good standing would not result in a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise (a "Material Adverse Effect"); the Company is duly
registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended (the "Bank Holding Company Act"); all of the issued
and outstanding shares of capital stock of the Company have been duly
authorized and are validly issued, fully paid and non-assessable; and
none of the outstanding shares of capital stock of the Company were
issued in violation of preemptive or other similar rights of any
securityholder of the Company.
(ii) Due Incorporation, Good Standing and Due Qualification of
Subsidiaries. Each subsidiary of the Company (each, a "Subsidiary") has
been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in
good standing would not result in a Material Adverse Effect; except as
stated in the Prospectus, all of the issued and outstanding shares of
capital stock of each Subsidiary has been duly authorized and is
validly issued, fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of preemptive or other similar
rights of any securityholder of such Subsidiary.
4
<PAGE> 5
(iii) Registration Statement and Prospectus. The Company meets
the requirements for use of Form S-3 under the 1933 Act; the
Registration Statement (or any Rule 462(b) Registration Statement) has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement (or any Rule 462(b)
Registration Statement) has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with; the Indentures have each been duly qualified
under the 1939 Act; at the respective times that the Registration
Statement (including any Rule 462(b) Registration Statement) and any
post-effective amendment thereto (including the filing of the Company's
most recent Annual Report on Form 10-K with the Commission (the "Annual
Report on Form 10-K")) became effective and at each Representation
Date, the Registration Statement (including any Rule 462(b)
Registration Statement) and any amendments thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied
when so filed in all material respects with the 1933 Act Regulations;
each preliminary prospectus and the Prospectus delivered to the
applicable Agent(s) for use in connection with the offering of Notes
are identical to any electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T; and at the date hereof, at the date of the
Prospectus and each amendment or supplement thereto and at each
Representation Date, neither the Prospectus nor any amendment or
supplement thereto included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by the Agents
expressly for use in the Registration Statement or the Prospectus.
(iv) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission under the 1934 Act (the
"1934 Act Regulations") and, when read together with the other
information in the Prospectus, at the date hereof, at the date of the
Prospectus and at each Representation Date, did not and will not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(v) Independent Accountants. The accountants who certified
the financial statements and any supporting schedules thereto included
in the Registration Statement
5
<PAGE> 6
and the Prospectus are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The consolidated financial
statements of the Company included in the Registration Statement and
the Prospectus, together with the related schedules and notes, as well
as those financial statements, schedules and notes of any other entity
included in the Registration Statement and the Prospectus, present
fairly the consolidated financial position of the Company and its
subsidiaries, or such other entity, as the case may be, at the dates
indicated and the consolidated statement of operations, stockholders'
equity and cash flows of the Company and its subsidiaries, or such
other entity, as the case may be, for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved; the supporting schedules, if any,
included in the Registration Statement and the Prospectus present
fairly in accordance with GAAP the information required to be stated
therein; the selected financial data and the summary financial
information included in the Registration Statement and the Prospectus
present fairly the information shown therein and have been compiled on
a basis consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus; and any pro
forma consolidated financial statements of the Company and its
subsidiaries and the related notes thereto included in the Registration
Statement and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have
been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(vii) No Material Changes. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (1) there has been no
event or occurrence that would result in a Material Adverse Effect and
(2) there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise.
(viii) Authorization, etc., of this Agreement, the Indentures
and the Notes. This Agreement has been duly authorized, executed and
delivered by the Company; each Indenture has been duly authorized,
executed and delivered by the Company and will be a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), and except further as
enforcement thereof may be limited by requirements that a claim with
respect to any debt securities issued under the applicable Indenture
that are payable in a foreign or composite currency (or a foreign or
composite currency judgment in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date
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determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United
States; the Notes have been duly authorized by the Company for offer,
sale, issuance and delivery pursuant to this Agreement and, when
issued, authenticated and delivered in the manner provided for in the
applicable Indenture and delivered against payment of the consideration
therefor, will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law), and except further as enforcement
thereof may be limited by requirements that a claim with respect to any
Notes payable in a foreign or composite currency (or a foreign or
composite currency judgment in respect of such claim) be converted into
U.S. dollars at a rate or exchange prevailing on a date determined
pursuant to applicable law or by governmental authority to limit, delay
or prohibit the making of payments outside the United States; the Notes
will be substantially in a form previously certified to the Agents and
contemplated by the applicable Indenture; and each holder of Notes will
be entitled to the benefits of the applicable Indenture.
(ix) Descriptions of the Indentures and the Notes. Each of the
Indentures and the Notes conform and will conform in all material
respects to the statements relating thereto contained in the Prospectus
and are substantially in the form filed or incorporated by reference,
as the case may be, as an exhibit to the Registration Statement.
(x) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of the provisions of its
charter or by-laws or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be
bound or to which any of the property or assets of the Company or any
of its subsidiaries is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement, the Indentures, the Notes and any other agreement or
instrument entered into or issued or to be entered into or issued by
the Company in connection with the transactions contemplated by the
Prospectus, the consummation of the transactions contemplated in the
Prospectus (including the issuance and sale of the Notes and the use of
proceeds therefrom as described in the Prospectus) and the compliance
by the Company with its obligations hereunder and under each of the
Indentures, the Notes and such other agreements or instruments have
been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or the passage
of time or both, conflict with or constitute a breach of, or default or
event or condition which gives the
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holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries (a "Repayment
Event") under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets, properties or operations of the
Company or any of its subsidiaries pursuant to, any Agreements and
Instruments, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its
subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or any of their assets,
properties or operations.
(xii) Absence of Labor Disputes. No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or any subsidiary's principal suppliers, manufacturers, customers
or contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or to
the knowledge of the Company threatened, against or affecting the
Company or any of its subsidiaries which is required to be disclosed in
the Registration Statement and the Prospectus (other than as stated
therein), or which may reasonably be expected to result in a Material
Adverse Effect, or which may reasonably be expected to materially and
adversely affect the assets, properties or operations thereof, the
performance by the Company of its obligations under this Agreement, the
Indentures and the Notes or the consummation of the transactions
contemplated in the Prospectus; and the aggregate of all pending legal
or governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of their respective assets,
properties or operations is the subject which are not described in the
Registration Statement and the Prospectus, including ordinary routine
litigation incidental to the business, may not reasonably be expected
to result in a Material Adverse Effect.
(xiv) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, result in a
Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not result in a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the
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subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect.
(xv) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind, except (A) as otherwise stated in the Registration Statement and
the Prospectus or (B) those which do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company or
any of its subsidiaries; and all of the leases and subleases material
to the business of the Company and its subsidiaries considered as one
enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Prospectus, are in full force and
effect, and neither the Company nor any of its subsidiaries has
received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any of its
subsidiaries under any of such leases or subleases, or affecting or
questioning the rights of the Company or such subsidiary of the
continued possession of the leased or subleased premises under any such
lease or sublease.
(xvi) No Filings, Regulatory Approvals, etc. No filing with,
or approval, authorization, consent, license, registration,
qualification, order or decree of, any court or governmental authority
or agency, domestic or foreign, is necessary or required for the due
authorization, execution and delivery by the Company of this Agreement,
the Indentures and the Notes or for the performance by the Company of
the transactions contemplated in this Agreement, the Indentures or the
Prospectus, except such as have been previously made, obtained or
rendered, as applicable.
(xvii) Investment Company Act. The Company is not, and upon
the issuance and sale of the Notes as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(xviii) Commodity Exchange Act. The Notes, upon issuance, will
be excluded or exempted under, or beyond the purview of, the Commodity
Exchange Act, as amended (the "Commodity Exchange Act"), and the rules
and regulations of the Commodity Futures Trading Commission under the
Commodity Exchange Act (the "Commodity Exchange Act Regulations").
(xix) Ratings. The Medium-Term Note Program under which the
Notes are issued (the "Program"), as well as the Notes, are rated Baa3
by Moody's Investors Service, Inc., BBB- by Standard & Poor's Ratings
Services and BBB by Duff & Phelps Credit Rating Co., or such other
rating as to which the Company shall have most recently notified the
Agents pursuant to Section 4(a) hereof.
(xx) Taxes. No taxes, withholdings or other charges are
required to be withheld or deducted under the laws of the Commonwealth
of Puerto Rico or any
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political subdivision thereof from any payment made by the Company on
the Notes and the Notes are not subject to any registration tax, stamp
duty or similar tax or duty imposed by the Commonwealth of Puerto Rico
or any political subdivision thereof.
(b) Additional Certifications. Any certificate signed by any officer of
the Company or any of its subsidiaries and delivered to one or more Agents or to
counsel for the Agents in connection with an offering of Notes to one or more
Agents as principal or through an Agent as agent shall be deemed a
representation and warranty by the Company to such Agent or Agents as to the
matters covered thereby on the date of such certificate and, unless subsequently
amended or supplemented, at each Representation Date subsequent thereto.
SECTION 3. Purchases as Principal; Solicitations as Agent.
(a) Purchases as Principal. Notes purchased from the Company by the
Agents, individually or in a syndicate, as principal shall be made in accordance
with terms agreed upon between such Agent or Agents and the Company (which
terms, unless otherwise agreed, shall, to the extent applicable, include those
terms specified in Exhibit A hereto and shall be agreed upon orally, with
written confirmation prepared by such Agent or Agents and mailed to the
Company). An Agent's commitment to purchase Notes as principal shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions herein
set forth. Unless the context otherwise requires, references herein to "this
Agreement" shall include the applicable agreement of one or more Agents to
purchase Notes from the Company as principal. Each purchase of Notes, unless
otherwise agreed, shall be at a discount from the principal amount of each such
Note equivalent to the applicable commission set forth in Schedule A hereto. The
Agents may engage the services of any broker or dealer in connection with the
resale of the Notes purchased by them as principal and may allow all or any
portion of the discount received from the Company in connection with such
purchases to such brokers or dealers. At the time of each purchase of Notes from
the Company by one or more Agents as principal, such Agent or Agents shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof.
If the Company and two or more Agents enter into an agreement pursuant
to which such Agents agree to purchase Notes from the Company as principal and
one or more of such Agents shall fail at the Settlement Date to purchase the
Notes which it or they are obligated to purchase (the "Defaulted Notes"), then
the nondefaulting Agents shall have the right, within 24 hours thereafter, to
make arrangements for one of them or one or more other Agents or underwriters to
purchase all, but not less than all, of the Defaulted Notes in such amounts as
may be agreed upon and upon the terms herein set forth; provided, however, that
if such arrangements shall not have been completed within such 24-hour period,
then:
(i) if the aggregate principal amount of Defaulted Notes
does not exceed 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement Date, the
nondefaulting Agents shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their
respective initial underwriting obligations bear to the underwriting
obligations of all nondefaulting Agents; or
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(ii) if the aggregate principal amount of Defaulted Notes
exceeds 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement Date, such agreement
shall terminate without liability on the part of any nondefaulting
Agent.
No action taken pursuant to this paragraph shall relieve any defaulting Agent
from liability in respect of its default. In the event of any such default which
does not result in a termination of such agreement, either the nondefaulting
Agents or the Company shall have the right to postpone the Settlement Date for a
period not exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus or in any other documents or
arrangements.
(b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers for the purchase of
Notes upon the terms set forth in the Prospectus. The Agents are not authorized
to appoint sub-agents with respect to Notes sold through them as agent. All
Notes sold through an Agent as agent will be sold at 100% of their principal
amount unless otherwise agreed upon between the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of Notes through an Agent, as an agent
of the Company, commencing at any time for any period of time or permanently. As
soon as practicable after receipt of instructions from the Company, such Agent
will suspend solicitation of offers for the purchase of Notes from the Company
until such time as the Company has advised such Agent that such solicitation may
be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent, as an
agent of the Company, as set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes specified in Exhibit A
hereto (as applicable) shall be agreed upon between the Company and the
applicable Agent(s) and specified in a pricing supplement to the Prospectus
(each, a "Pricing Supplement") to be prepared by the Company in connection with
each sale of Notes. Except as otherwise specified in the applicable Pricing
Supplement, the Notes will be issued in denominations of U.S. $1,000 or any
larger amount that is an integral multiple of U.S. $1,000. Administrative
procedures with respect to the issuance and sale of the Notes (the "Procedures")
shall be agreed upon from time to time among the Company, the Agents and each of
the Trustees. The Agents and the Company agree to perform, and the Company
agrees to cause each of the Trustees to agree to perform, their respective
duties and obligations specifically provided to be performed by them in the
Procedures.
SECTION 4. Covenants of the Company.
The Company covenants and agrees with each Agent as follows:
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(a) Notice of Certain Events. The Company will notify the Agents
immediately, and confirm such notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement or the filing of any
amendment or supplement to the Prospectus (other than any amendment or
supplement thereto providing solely for the determination of the variable terms
of the Notes or relating solely to the offering of securities other than the
Notes), (ii) the receipt of any comments from the Commission, (iii) any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv)
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement, or of any order preventing or suspending the use of
any preliminary prospectus, or of the initiation of any proceedings for that
purpose or (v) any change in the rating assigned by any nationally recognized
statistical rating organization to the Program or any debt securities (including
the Notes) of the Company, or the public announcement by any nationally
recognized statistical rating organization that it has under surveillance or
review, with possible negative implications, its rating of the Program or any
such debt securities, or the withdrawal by any nationally recognized statistical
rating organization of its rating of the Program or any such debt securities.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) Filing or Use of Amendments. The Company will give the Agents
advance notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment to
the Registration Statement (including any filing under Rule 462(b) of the 1933
Act Regulations) or any amendment or supplement to the prospectus included in
the Registration Statement at the time it became effective or to the Prospectus
(other than an amendment or supplement thereto providing solely for the
determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish to the Agents copies of any such
document a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such document to which the Agents or
counsel for the Agents shall object.
(c) Delivery of the Registration Statement. The Company has furnished
to each Agent and to counsel for the Agents, without charge, signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed and conformed copies of all consents and
certificates of experts. The Registration Statement and each amendment thereto
furnished to the Agents will be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) Delivery of the Prospectus. The Company will deliver to each Agent,
without charge, as many copies of each preliminary prospectus as such Agent may
reasonably request, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to each Agent,
without charge, such number of copies of the Prospectus (as amended or
supplemented) as such Agent may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Agents will be identical
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to any electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold to or through one or more Agents pursuant to
this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents. The Company will deliver such Pricing
Supplement no later than 11:00 a.m., New York City time, on the business day
following the date of the Company's acceptance of the offer for the purchase of
such Notes and will file such Pricing Supplement pursuant to Rule 424(b)(3)
under the 1933 Act not later than the close of business of the Commission on the
fifth business day after the date on which such Pricing Supplement is first
used.
(f) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (m) of this Section 4, if at any time during the term of
this Agreement any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Agents or counsel for
the Company, to amend the Registration Statement in order that the Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or to amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company shall give immediate notice,
confirmed in writing, to the Agents to cease the solicitation of offers for the
purchase of Notes in their capacity as agents and to cease sales of any Notes
they may then own as principal, and the Company will promptly prepare and file
with the Commission, subject to Section 4(b) hereof, such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration Statement and Prospectus comply with such requirements, and the
Company will furnish to the Agents, without charge, such number of copies of
such amendment or supplement as the Agents may reasonably request. In addition,
the Company will comply with the 1933 Act, the 1933 Act Regulations, the 1934
Act and the 1934 Act Regulations so as to permit the completion of the
distribution of each offering of Notes.
(g) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to each of the first
three quarters of any fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish such information to
the Agents, confirmed in writing, and shall cause the Prospectus to be amended
or supplemented to include financial information with respect thereto and
corresponding information for the comparable period of the preceding fiscal
year, as well as such other information and explanations as shall be necessary
for an understanding thereof or as shall be required by the 1933 Act or the 1933
Act Regulations.
(h) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be
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released to the general public financial information included in or derived from
the audited consolidated financial statements of the Company for the preceding
fiscal year, the Company shall furnish such information to the Agents, confirmed
in writing, and shall cause the Prospectus to be amended or supplemented to
include such audited consolidated financial statements and the report or
reports, and consent or consents to such inclusion, of the independent
accountants with respect thereto, as well as such other information and
explanations as shall be necessary for an understanding of such consolidated
financial statements or as shall be required by the 1933 Act or the 1933 Act
Regulations.
(i) Earnings Statements. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods prescribed by the 1934 Act and the 1934 Act
Regulations.
(k) Restriction on Offers and Sales of Securities. Unless otherwise
agreed upon between one or more Agents acting as principal and the Company,
between the date of the agreement by such Agent(s) to purchase the related Notes
from the Company and the Settlement Date with respect thereto, the Company will
not, without the prior written consent of such Agent(s), issue, sell, offer or
contract to sell, grant any option for the sale of, or otherwise dispose of, any
debt securities of the Company (other than the Notes that are to be sold
pursuant to such agreement, deposits or commercial paper in the ordinary course
of business).
(l) Use of Proceeds. The Company will use the net proceeds received by
it from the issuance and sale of the Notes in the manner specified in the
Prospectus.
(m) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (f), (g) or (h) of this
Section 4 during any period from the time (i) the Agents shall have suspended
solicitation of offers for the purchase of Notes in their capacity as agents
pursuant to a request from the Company and (ii) no Agent shall then hold any
Notes purchased from the Company as principal, as the case may be, until the
time the Company shall determine that solicitation of offers for the purchase of
Notes should be resumed or an Agent shall subsequently purchase Notes from the
Company as principal.
SECTION 5. Conditions of Agents' Obligations.
The obligations of one or more Agents to purchase Notes from the
Company as principal and to solicit offers for the purchase of Notes as an agent
of the Company, and the obligations of any purchasers of Notes sold through an
Agent as an agent of the Company, will be subject to the accuracy of the
representations and warranties on the part of the Company herein contained or
contained in any certificate of an officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance and
observance by the Company of its covenants and other obligations hereunder, and
to the following additional conditions precedent:
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(a) Effectiveness of Registration Statement. The Registration Statement
(including any Rule 462(b) Registration Statement) has become effective under
the 1933 Act and no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or shall be pending or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Agents.
(b) Legal Opinions. On the date hereof, the Agents shall have received
the following legal opinions, dated as of the date hereof and in form and
substance satisfactory to the Agents:
(i) Opinion of Counsel for the Company. The favorable opinion
of Pietrantoni Mendez & Alvarez LLP, counsel for the Company, to the
effect set forth in Exhibit B hereto and to such further effect as the
Agents may reasonably request.
(ii) Opinion of Counsel for the Agents. The favorable opinion
of Brown & Wood LLP, counsel for the Agents, with respect to the
matters set forth in paragraphs 1, 2, 7, 8, 9, 16, 17, and 19 and the
penultimate paragraph of Exhibit B hereto.
(c) Officer's Certificate. On the date hereof, there shall not have
been, since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Agents shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial officer or chief accounting officer of the Company, dated as of the
date hereof, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties of the Company herein contained
are true and correct with the same force and effect as though expressly made at
and as of the date of such certificate, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the date of such certificate, and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to the best
of such officer's knowledge, are threatened by the Commission.
(d) Comfort Letter of PricewaterhouseCoopers LLP. On the date hereof,
the Agents shall have received a letter from PricewaterhouseCoopers LLP, dated
as of the date hereof and in form and substance satisfactory to the Agents, to
the effect set forth in Exhibit C hereto.
(e) Additional Documents. On the date hereof, counsel to the Agents
shall have been furnished with such documents and opinions as such counsel may
require for the purpose of enabling such counsel to pass upon the issuance and
sale of Notes as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of Notes as herein
contemplated shall be satisfactory in form and substance to the Agents and to
counsel to the Agents.
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If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the applicable Agent or Agents by notice to the Company at any time and any
such termination shall be without liability of any party to any other party
except as provided in Section 10 hereof and except that Sections 8, 9, 11, 14
and 15 hereof shall survive any such termination and remain in full force and
effect.
SECTION 6. Delivery of and Payment for Notes Sold through an Agent as
Agent.
Delivery of Notes sold through an Agent as an agent of the Company
shall be made by the Company to such Agent for the account of any purchaser only
against payment therefor in immediately available funds. In the event that a
purchaser shall fail either to accept delivery of or to make payment for a Note
on the date fixed for settlement, such Agent shall promptly notify the Company
and deliver such Note to the Company and, if such Agent has theretofore paid the
Company for such Note, the Company will promptly return such funds to such
Agent. If such failure has occurred for any reason other than default by such
Agent in the performance of its obligations hereunder, the Company will
reimburse such Agent on an equitable basis for its loss of the use of the funds
for the period such funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company further covenants and agrees with each Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
the Company of an offer for the purchase of Notes (whether to one or more Agents
as principal or through an Agent as agent), and each delivery of Notes (whether
to one or more Agents as principal or through an Agent as agent), shall be
deemed to be an affirmation that the representations and warranties of the
Company herein contained and contained in any certificate theretofore delivered
to the Agents pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of delivery
to such Agent(s) or to the purchaser or its agent, as the case may be, of the
Notes relating to such acceptance or sale, as the case may be, as though made at
and as of each such time (it being understood that such representations and
warranties shall relate to the Registration Statement and Prospectus as amended
and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished to the Agent(s), forthwith a certificate dated
the date of filing with the Commission or the date of effectiveness of such
amendment or supplement, as applicable, or the date of such sale, as the case
may be, in form satisfactory to the Agent(s) to the effect that the statements
contained in the certificate referred to in Section 5(c) hereof which were last
furnished to the Agents are true and correct at the time of the filing or
effectiveness of such amendment or supplement, as applicable, or the
16
<PAGE> 17
time of such sale, as the case may be, as though made at and as of such time
(except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such time) or, in
lieu of such certificate, a certificate of the same tenor as the certificate
referred to in Section 5(c) hereof, modified as necessary to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such certificate (it being understood that, in the case of
clause (ii) above, any such certificate shall also include a certification that
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise since the date of the
agreement by such Agent(s) to purchase Notes from the Company as principal).
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished forthwith to the Agent(s) and to counsel to the
Agents the written opinion of Pietrantoni Mendez & Alvarez LLP, counsel to the
Company, or other counsel satisfactory to the Agent(s), dated the date of filing
with the Commission or the date of effectiveness of such amendment or
supplement, as applicable, or the date of such sale, as the case may be, in form
and substance satisfactory to the Agent(s), of the same tenor as the opinion
referred to in Section 5(b)(1) hereof, but modified, as necessary, to relate to
the Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion or, in lieu of such opinion, counsel last
furnishing such opinion to the Agents shall furnish the Agent(s) with a letter
substantially to the effect that the Agent(s) may rely on such last opinion to
the same extent as though it was dated the date of such letter authorizing
reliance (except that statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes) or (ii) (if required in connection with the purchase of Notes
from the Company by one or more Agents as principal) the Company sells Notes to
one or more Agents as principal, the Company shall cause PricewaterhouseCoopers
LLP forthwith to furnish to the Agent(s) a letter, dated the date of filing with
the Commission or the date of effectiveness of such amendment or supplement, as
applicable, or the date of such sale, as the case may be, in form satisfactory
to the Agent(s), of the same tenor as the letter referred to in Section 5(d)
hereof but modified to relate to the Registration Statement and Prospectus as
amended and supplemented to the date of such letter.
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<PAGE> 18
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to
indemnify and hold harmless each Agent and each person, if any, who controls
such Agent within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of an untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
arising out of an untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, provided
that (subject to Section 8(d) hereof) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
such Agent), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the Agents
expressly for use in the Registration Statement (or any amendment thereto) or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided further, that as to any preliminary prospectus, this
indemnity agreement shall not inure to the benefit of any Agent or any person
controlling that Agent on account of any loss, claim, damage, liability or
action arising from the sale of Notes to any person by that Agent if (i) that
Agent failed to send or give a copy of the Prospectus (excluding the documents
incorporated by reference therein), as the same may be amended or supplemented,
to that person within the time required by the 1933 Act and (ii) the Company
delivered to that Agent a sufficient number of copies of the Prospectus pursuant
to Section 3(d) hereof, and the untrue statement or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact in such
preliminary prospectus was corrected in the Prospectus.
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<PAGE> 19
(b) Indemnification of Company, Directors and Officers. Each Agent
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 8(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Agents expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 8(a) hereof,
counsel to the indemnified parties shall be selected by the applicable Agent(s)
and, in the case of parties indemnified pursuant to Section 8(b) hereof, counsel
to the indemnified shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 8 or 9 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 8(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into
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<PAGE> 20
and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
SECTION 9. Contribution.
If the indemnification provided for in Section 8 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
applicable Agent(s), on the other hand, from the offering of the Notes that were
the subject of the claim for indemnification or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the
applicable Agent(s), on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
applicable Agent(s), on the other hand, in connection with the offering of the
Notes that were the subject of the claim for indemnification shall be deemed to
be in the same respective proportions as the total net proceeds from the
offering of such Notes (before deducting expenses) received by the Company and
the total discount or commission received by each applicable Agent, as the case
may be, bears to the aggregate initial offering price of such Notes.
The relative fault of the Company, on the one hand, and the applicable
Agent(s), on the other hand, shall be determined by reference to, among other
things, whether any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the applicable Agent(s) and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the applicable Agent(s) were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 9 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any applicable untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, (i) no Agent shall be
required to contribute any amount in excess of the amount by which the total
discount or commission received by such Agent in connection with the offering of
the Notes that were the subject of the claim for indemnification exceeds the
amount of any damages which such Agent has otherwise
20
<PAGE> 21
been required to pay by reason of any applicable untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. In addition, in connection with an offering
of Notes purchased from the Company by two or more Agents as principal, the
respective obligations of such Agents to contribute pursuant to this Section 9
are several, and not joint, in proportion to the aggregate principal amount of
Notes that each such Agent has agreed to purchase from the Company.
For purposes of this Section 9, each person, if any, who controls an
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as such Agent, and each director
of the Company, each officer of the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation, filing, printing and delivery of the Registration
Statement as originally filed and all amendments thereto and any preliminary
prospectus, the Prospectus and any amendments or supplements thereto;
(b) The preparation, printing and delivery of this Agreement and the
Indentures;
(c) The preparation, issuance and delivery of the Notes, including any
fees and expenses relating to the eligibility and issuance of Notes in
book-entry form and the cost of obtaining CUSIP or other identification numbers
for the Notes;
(d) The fees and disbursements of the Company's accountants, counsel
and other advisors or agents (including any calculation agent or exchange rate
agent) and of each of the Trustees and their respective counsel;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the Program and incurred from
time to time in connection with the transactions contemplated hereby;
(f) The fees charged by nationally recognized statistical rating
organizations for the rating of the Program and the Notes;
(g) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;
(h) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agents in connection with, the review, if any,
by the National Association of Securities Dealers, Inc. (the "NASD"); and
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<PAGE> 22
(i) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company.
SECTION 11. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Agents or any controlling person of an Agent, or by or on behalf of the
Company, and shall survive each delivery of and payment for the Notes.
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
agreement by one or more Agents to purchase Notes from the Company as principal)
may be terminated for any reason, at any time by either the Company or an Agent,
as to itself, upon the giving of 15 days' prior written notice of such
termination to the other party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. The
applicable Agent(s) may terminate any agreement by such Agent(s) to purchase
Notes from the Company as principal, immediately upon notice to the Company, at
any time prior to the Settlement Date relating thereto, if (i) there has been,
since the date of such agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or, if such Notes are denominated and/or payable in, or indexed
to, one or more foreign or composite currencies, in the international financial
markets, or any outbreak of hostilities or escalation thereof or other calamity
or crisis or any change or development or event involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of such
Agent(s), impracticable to market such Notes or enforce contracts for the sale
of such Notes, or (iii) trading in any securities of the Company has been
suspended or materially limited by the Commission or a national securities
exchange, or if trading generally on the New York Stock Exchange or the American
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by either of said exchanges or by such
system or by order of the Commission, the NASD or any other governmental
authority, or (iv) a banking moratorium has been declared by either Federal,
Puerto Rico or New York authorities or by the relevant authorities in the
country or countries of origin of any foreign or composite currency in which
such Notes are denominated and/or payable, or (v) the rating assigned by any
nationally recognized statistical rating organization to the Program or any debt
securities (including the Notes) of the Company as of the date of such agreement
shall have been lowered or withdrawn since that date or if any such rating
organization shall have publicly announced that it has under surveillance or
review its rating of the Program or any such debt securities, or (vi) there
shall have come to the attention of such Agent(s) any facts that would cause
such Agent(s) to believe that the Prospectus, at the time it was required to be
delivered to a purchaser of such Notes,
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<PAGE> 23
included an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time of such delivery, not misleading.
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commissions earned in accordance with the third paragraph of
Section 3(b) hereof, (ii) if at the time of termination (a) any Agent shall own
any Notes purchased by it from the Company as principal or (b) an offer to
purchase any of the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of such Notes relating thereto has not
occurred, the covenants set forth in Sections 4 and 7 hereof shall remain in
effect until such Notes are so resold or delivered, as the case may be, and
(iii) the covenant set forth in Section 4(i) hereof, the provisions of Section
10 hereof, the indemnity and contribution agreements set forth in Sections 8 and
9 hereof, and the provisions of Sections 11, 14 and 15 hereof shall remain in
effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
Doral Financial Corporation
1159 Franklin D. Roosevelt Avenue
San Juan, Puerto Rico 00920
Attention: Mario S. Levis,
Executive Vice President & Treasurer
Telecopy No.: (787) 749-7____
If to the Agents:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telecopy No.: (212) 449-2234
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY 10167
Attention: Medium-Term Note Desk
Telecopy No.: (212) 272-6227
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<PAGE> 24
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons, officers and directors referred to in
Sections 8 and 9 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons, officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be deemed to
be a successor by reason merely of such purchase.
SECTION 15. GOVERNING LAW; FORUM.
THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. ANY SUIT, ACTION OR
PROCEEDING BROUGHT BY THE COMPANY AGAINST ANY AGENT IN CONNECTION WITH OR
ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT SOLELY IN THE STATE OR FEDERAL
COURT OF APPROPRIATE JURISDICTION LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY
OF NEW YORK.
SECTION 16. Effect of Headings.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
SECTION 17. Counterparts.
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.
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<PAGE> 25
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Distribution Agreement, along with all counterparts, will become a binding
agreement among the Agents and the Company in accordance with its terms.
Very truly yours,
DORAL FINANCIAL CORPORATION
By:
--------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-----------------------------------------
Authorized Signatory
BEAR, STEARNS & CO. INC.
[By: ]
----------------------------
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<PAGE> 26
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay the applicable Agent, on a discount basis, a commission for the sale
of each Note equal to the principal amount of such Note multiplied by the
appropriate percentage set forth below:
<TABLE>
<CAPTION>
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
- --------------- ----------------
<S> <C>
From 9 months to less than 1 year...................................... .125%
From 1 year to less than 18 months..................................... .150
From 18 months to less than 2 years.................................... .200
From 2 years to less than 3 years...................................... .250
From 3 years to less than 4 years...................................... .350
From 4 years to less than 5 years...................................... .450
From 5 years to less than 6 years...................................... .500
From 6 years to less than 7 years...................................... .550
From 7 years to less than 10 years..................................... .600
From 10 years to less than 15 years.................................... .625
From 15 years to less than 20 years.................................... .700
From 20 years to 30 years.............................................. .750
Greater than 30 years.................................................. *
</TABLE>
- -------------
* As agreed to by the Company and the applicable Agent at the time of sale.
26
<PAGE> 27
EXHIBIT A
PRICING TERMS
Principal Amount:
(or principal amount of foreign or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
LIBOR Reuters Page:
LIBOR Telerate Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052:
Weekly Average
Monthly Average
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: ___%, plus accrued interest, if any, from ___________
27
<PAGE> 28
Price to Public: ___%, plus accrued interest, if any, from __________
Issue Price:
Settlement Date and Time:
Additional/Other Terms:
Also, in connection with the purchase of Notes from the Company by one or more
Agents as principal, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 7(b) of the Distribution
Agreement.
Legal Opinion pursuant to Section 7(c) of the Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the Distribution Agreement.
28
<PAGE> 29
EXHIBIT B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)(1)
(1) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the Commonwealth of Puerto
Rico.
(2) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into the Distribution Agreement and consummate the
transactions contemplated in the Prospectus.
(3) The Company is duly registered as a bank holding company under the
Bank Holding Company Act and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not result in a Material Adverse Effect.
(4) All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company were issued in violation of preemptive or other similar rights of any
securityholder of the Company.
(5) Each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing would not result
in a Material Adverse Effect; except as stated in the Prospectus, all of the
issued and outstanding shares of capital stock of each Subsidiary has been duly
authorized and are validly issued, fully paid and non-assessable and are owned
by the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; and none of the
outstanding shares of capital stock of any Subsidiary were issued in violation
of preemptive or other similar rights of any securityholder of such Subsidiary.
(6) The Distribution Agreement has been duly authorized, executed and
delivered by the Company.
(7) Each Indenture has been duly authorized, executed and delivered by
the Company and (assuming due authorization, execution and delivery thereof by
the applicable Trustee) constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally or by general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at law), and
except further as enforcement thereof may be limited by requirements that a
claim with respect to any debt
29
<PAGE> 30
securities issued under the applicable Indenture that are payable in a foreign
or composite currency (or a foreign or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of exchange prevailing on a
date determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United States.
(8) The Notes have been duly authorized by the Company for offer,
sale, issuance and delivery pursuant to the Distribution Agreement and, when
issued, authenticated and delivered in the manner provided for in the applicable
Indenture and delivered against payment of the consideration therefor, will
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally or
by general equitable principles (regardless of whether enforcement is considered
in a proceeding in equity or at law), and except further as enforcement thereof
may be limited by requirements that a claim with respect to any Notes payable in
a foreign or composite currency (or a foreign or composite currency judgment in
respect of such claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or by governmental
authority to limit, delay or prohibit the making of payments outside the United
States; and the Notes, in the forms certified on the date hereof, are in the
form contemplated by, and each registered holder thereof is entitled to the
benefits of, the applicable Indenture.
(9) The Indentures and the Notes, in the forms certified on the date
hereof, conform in all material respects to the statements relating thereto
contained in the Prospectus and are in substantially the form filed or
incorporated by reference, as the case may be, as an exhibit to the Registration
Statement.
(10) The information in the Prospectus under "Description of Debt
Securities," "Description of Notes," "Special Provisions Relating to Foreign
Currency Notes" and "Certain Federal Income Tax Considerations," or any caption
purporting to cover such matters, the information in the Annual Report on Form
10-K under ["Business-Mortgage Banking Business," "Business-Commercial Banking
Activities," and "Business-Regulation-Puerto Rico Regulation"] and the
information in the Registration Statement under Item 15, to the extent that such
information constitutes matters of law, summaries of legal matters, the
Company's charter and bylaws or legal proceedings, or legal conclusions, has
been reviewed by us and is correct in all material respects.
(11) To the best of such counsel's knowledge, neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws and no default
by the Company or any of its subsidiaries exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any Agreement and Instrument that is described or referred to in
the Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement.
(12) The execution, delivery and performance of the Distribution
Agreement, the Indentures and the Notes and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company in
connection with the transactions contemplated in the Prospectus, the
consummation of the transactions contemplated in the Prospectus (including the
issuance and sale of the Notes and the use of the proceeds therefrom as
described in the
30
<PAGE> 31
Prospectus) and the compliance by the Company with its obligations thereunder
have been duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
assets, properties or operations of the Company or any of its subsidiaries
pursuant to, any Agreement and Instrument known to us, nor will such action
result in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of their assets, properties
or operations.
(13) To the best of such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation to which the
Company or any of its subsidiaries thereof is a party or to which the assets,
properties or operations of the Company or any of its subsidiaries thereof is
subject, before or brought by any court or governmental agency or body, domestic
or foreign, which might reasonably be expected to result in a Material Adverse
Effect or which might reasonably be expected to materially and adversely affect
the assets, properties or operations of the Company or any of its subsidiaries,
the performance by the Company of its obligations under the Distribution
Agreement, the Indentures or the Notes or the consummation of the transactions
contemplated in the Prospectus.
(14) All descriptions in the Prospectus of contracts and other
documents to which the Company or any of its subsidiaries are a party are
accurate in all material respects; to the best of such counsel's knowledge,
there are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(15) There are no statutes or regulations that are required to be
described in the Prospectus that are not described as required.
(16) The Registration Statement has been declared effective under the
1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b); to the
best of such counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the 1933 Act and no proceedings
for that purpose have been initiated or are pending or threatened by the
Commission.
(17) The Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement to
the Registration Statement and Prospectus, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates (other
than the financial statements and supporting schedules included therein or
omitted therefrom and the applicable Trustee's Statement of Eligibility on Form
T-1 (the "Form T-1"), as to which we express no opinion), complied as to form in
all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(18) The documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules included therein or
omitted therefrom, as to which
31
<PAGE> 32
we express no opinion), when they were filed with the Commission, complied as to
form in all material respects with the requirements of the 1934 Act and the 1934
Act Regulations.
(19) Each of the Indentures has been duly qualified under the 1939 Act.
(20) The Company is not, and upon the issuance and sale of the Notes
and the application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" within the meaning of the 1940 Act.
(21) The Notes, in the forms certified on the date hereof, will be
excluded or exempted under, or beyond the purview of, the Commodity Exchange Act
and the Commodity Exchange Act Regulations.
(22) No filing with, or approval, authorization, consent, license,
registration, qualification, order or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required for the due
authorization, execution and delivery by the Company of the Distribution
Agreement, the Indentures and the Notes or for the performance by the Company of
the transactions contemplated in the Distribution Agreement, the Indentures or
the Prospectus, except such as have been previously made, obtained or rendered,
as applicable.
(23) To the extent the holders of the Notes are not affiliates of the
Company, no taxes, withholdings or other charges are required to be withheld or
deducted under the laws of the Commonwealth of Puerto Rico or any political
subdivision thereof from any payment made by the Company on the Notes and the
Notes are not subject to any registration tax, stamp duty or similar tax or duty
imposed by the Commonwealth of Puerto Rico or any political subdivision thereof.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any post-effective amendment thereto (except for
financial statements, supporting schedules and other financial data included
therein or omitted therefrom and for the Form T-1, as to which we make no
statement), at the time the Registration Statement or any post-effective
amendment thereto (including the filing of the Company's Annual Report on Form
10-K with the Commission) became effective [or at the date of any agreement of
the applicable Agent(s) to purchase Notes from the Company as principal],
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or supplement thereto
(except for financial statements, supporting schedules and other financial data
included therein or omitted therefrom, as to which we make no statement), at the
time the Prospectus was issued, at the time any such amended or supplemented
prospectus was issued or at the date hereof, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering our opinion, we may rely as to matters of fact (but not as
to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
32
<PAGE> 33
EXHIBIT C
FORM OF ACCOUNTANT'S COMFORT LETTER
PURSUANT TO SECTION 5(d)
We are independent public accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations
and:
(i) in our opinion, the audited consolidated financial
statements and the related financial statement schedules
included or incorporated by reference in the Registration
Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards)
consisting of a reading of the unaudited interim consolidated
financial statements of the Company for the [three- month
periods ended _________, 19__ and _________, 19__, the three-
and six-month periods ended _________, 19__ and _________,
19__ and the three- and nine-month periods ended _________,
19__ and _________, 19__, included or incorporated by
reference in the Registration Statement and the Prospectus
(collectively, the "10-Q Financials")](1) [, a reading of the
unaudited interim consolidated financial statements of the
Company for the _____-month periods ended _________, 19___ and
_________, 19___, included or incorporated by reference in the
Registration Statement and the Prospectus (the "_____-month
financials")](2) [, a reading of the latest available
unaudited interim consolidated financial statements of the
Company],(3) a reading of the minutes of all meetings of the
stockholders and directors of the Company and its subsidiaries
and committees thereof since [day after end of last audited
period], inquiries of certain officials of the Company and its
subsidiaries responsible for financial and accounting matters,
a review of interim financial information in accordance with
standards established by the American Institute of Certified
Public Accountants in Statement on Auditing Standards No. 71,
Interim Financial Information ("SAS 71"),(4) with respect to
the [description of relevant periods](5) and such other
- ----------------------
(1) Include the appropriate dates of the 10-Q Financials.
(2) Include if non-10-Q Financials are included or incorporated by
reference in the Registration Statement and the Prospectus.
(3) Include if the latest available unaudited financial statements are more
recent than the unaudited financial statements included or incorporated
by reference in the Registration Statement and the Prospectus.
(4) Note that a review in accordance with SAS 71 is required for an
accountant to give negative assurance on interim financial information.
A review in accordance with SAS 71 will only be performed at the
request of the Company and the accountant's report, if any, related to
that review will be addressed only to the Company. Many companies have
a SAS 71 review performed in connection with the preparation of their
10-Q Financials. See Codification of Statements on Auditing Standards,
AUss.722 for a description of the procedures that constitute such a
review. The comfort letter itself should recite that the review was
...(continued)
33
<PAGE> 34
inquiries and procedures as may be specified in such letter,
nothing came to our attention that caused us to believe that:
(A) the 10-Q Financials included or incorporated by
reference in the Registration Statement and the Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the 1934
Act Regulations applicable to unaudited financial statements
included in Form 10-Q or any material modifications should be
made to the 10-Q Financials included or incorporated by
reference in the Registration Statement and the Prospectus for
them to be in conformity with generally accepted accounting
principles;
[(B) the _____-month financials included or
incorporated by reference in the Registration Statement and the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and
the 1933 Act Regulations applicable to unaudited interim
financial statements included in registration statements or any
material modifications should be made to the _____-month
financials included in the Registration Statement and the
Prospectus for them to be in conformity with generally accepted
accounting principles;](6)
(C) at [_________, 19___ and at](7) a specified date
not more than five days(8) prior to the date hereof, there was
any change in the ___________ of the Company and its
subsidiaries, any decrease in the __________ of the Company and
its subsidiaries or any increase in the __________ of the
Company and its subsidiaries(9), in each case as
- ----------------------
...(continued)
performed and a copy of the report, if any, should be attached to the
comfort letter. Any report issued pursuant to SAS 71 that is mentioned
in the Registration Statement should also be included in the
Registration Statement as an exhibit. If a review in accordance with
SAS 71 has not and will not be performed by the accountants, they
should be prepared to perform certain agreed-upon procedures on the
interim financial information and to report their findings thereon in
the comfort letter. See Codification of Statements on Auditing
Standards, AUss.622 for a discussion of reports related to the
accountant's performance of agreed-upon procedures. Any question as to
whether a review in accordance with SAS 71 will be performed by the
accountants should be resolved early.
(5) The relevant periods include all interim unaudited consolidated
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus.
(6) Include if unaudited financial statements, not just selected unaudited
data, are included or incorporated by reference in the Registration
Statement and the Prospectus.
(7) If the latest available unaudited financial statements are more recent
than the unaudited financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, include and
insert the date of the latest available financial statements of the
Company.
(8) According to Example A of SAS No. 72, the specified date should be five
calendar days prior to the date of the comfort letter. However, in
unusual circumstances, five business days may be used.
(9) The blanks should be filled in with significant balance sheet items,
selected by the banker and tailored to the issuer's industry in general
and operations in particular. While the ultimate decision of which
items should be included rests with the banker, comfort is routinely
requested for certain balance sheet items,
...(continued)
34
<PAGE> 35
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Registration
Statement and the Prospectus, except in each case for any
changes, decreases or increases that the Registration
Statement and the Prospectus disclose have occurred or may
occur; or
(D) for the period from [_________, 19__ to
_________, 19__ and for the period from]10 _________, 19__ to
a specified date not more than five days prior to the date
hereof, there was any decrease in _________, __________ or
___________,(11) in each case as compared with the comparable
period in the preceding year, except in each case for any
decreases that the Registration Statement and the Prospectus
discloses have occurred or may occur;
[(iii) based upon the procedures set forth in clause (ii) above and
a reading of the Selected Financial Data included or incorporated by
reference in the Registration Statement and the Prospectus [and a
reading of the financial statements from which such data were
derived],(12) nothing came to our attention that caused us to
believe that the Selected Financial Data included or incorporated by
reference in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the disclosure
requirements of Item 301 of Regulation S-K of the 1933 Act [, that
the amounts included in the Selected Financial Data are not in
agreement with the corresponding amounts in the audited consolidated
financial statements for the respective periods or that the
financial statements not included or incorporated by reference in
the Registration Statement and the Prospectus from which certain of
such data were derived are not in conformity with generally accepted
accounting principles;](13)
- ------------------
...(continued)
including long-term debt, stockholders' equity, capital stock and net
current assets.
10 If the latest available unaudited financial statements are more recent
than the unaudited financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, include and
insert the period from the end of the period of the unaudited financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus to the date of the latest available
financial statements of the Company. Even if this first period is
applicable, the second period should run from the date of the most
recent financial statements included or incorporated by reference in
the Registration Statement and the Prospectus, not from the latest
available financial statements of the Company.
11 The blanks should be filled in with significant income statement items,
selected by the banker and tailored to the issuer's industry in general
and operations in particular. While the ultimate decision of which
items should be included rests with the banker, comfort is routinely
requested for certain income statement items, including net sales,
total and per share amounts of income before extraordinary items and of
net income.
12 Include only if there are selected financial data that have been
derived from financial statements not included or incorporated by
reference in the Registration Statement and the Prospectus.
13 In unusual circumstances, the accountants may report on "Selected
Financial Data" as described in SAS No. 42, Reporting on Condensed
Financial Statements and Selected Financial Data, and include in their
report in the Registration Statement and the Prospectus the paragraph
contemplated by SAS No. 42.9. This situation may arise only if the
Selected Financial Data do not include interim period data and the
five-year
...(continued)
35
<PAGE> 36
(iv) we have compared the information included or incorporated by
reference in the Registration Statement and the Prospectus under
selected captions with the disclosure requirements of Regulation S-K of
the 1933 Act and on the basis of limited procedures specified herein,
nothing came to our attention that caused us to believe that such
information does not comply as to form in all material respects with
the disclosure requirements of Items 302, 402 and 503(d), respectively,
of Regulation S-K;
[(v) based upon the procedures set forth in clause (ii) above, a
reading of the latest available unaudited financial statements of the
Company that have not been included or incorporated by reference in the
Registration Statement and the Prospectus and a review of such
financial statements in accordance with SAS 71, nothing came to our
attention that caused us to believe that the unaudited amounts for
________ for the [most recent period] do not agree with the amounts set
forth in the unaudited consolidated financial statements for those
periods or that such unaudited amounts were not determined on a basis
substantially consistent with that of the corresponding amounts in the
audited consolidated financial statements;](14)
[(vi) we are unable to and do not express any opinion on the [Pro Forma
Combined Balance Sheet and Statement of Operations] (collectively, the
"Pro Forma Statements") included or incorporated by reference in the
Registration Statement and the Prospectus or on the pro forma
adjustments applied to the historical amounts included in the Pro Forma
Statements; however, for purposes of this letter we have:
(A) read the Pro Forma Statements;
(B) performed [an audit] [a review in accordance with
SAS 71] of the financial statements to which the pro forma
adjustments were applied;
(C) made inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters about the basis for their determination of the pro
forma adjustments and whether the Pro Forma Statements comply
as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X; and
- -------------
...(continued)
selected data are derived entirely from financial statements audited by
the auditors whose report is included in the Registration Statement and
the Prospectus. If the guidelines set forth in SAS No. 42 are followed
and the accountant's report as included in the Registration Statement
and the Prospectus includes the additional language prescribed by SAS
No. 42.9, the bracketed language may be eliminated.
14 This language should be included when the Registration Statement and
the Prospectus include earnings or other data for a period after the
date of the most recent financial statements included or incorporated
by reference in the Registration Statement and the Prospectus. The
blank should be filled in with a description of the financial statement
item(s) included.
36
<PAGE> 37
(D) proved the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts in the
Pro Forma Statements; and
on the basis of such procedures and such other inquiries and procedures
as specified herein, nothing came to our attention that caused us to
believe that the Pro Forma Statements included or incorporated by
reference in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the applicable
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of those statements;](15)
(vii) in addition to the procedures referred to in clause (ii)
above, we have performed other procedures, not constituting an
audit, with respect to certain amounts, percentages, numerical
data and financial information included or incorporated by
reference in the Registration Statement and the Prospectus,
which are specified herein, and have compared certain of such
items with, and have found such items to be in agreement with,
the accounting and financial records of the Company;(16) and
[(viii) in addition, we [add comfort on a financial forecast
that is included or incorporated by reference in the
Registration Statement and the Prospectus](17).
- --------------------
15 If an audit or a review in accordance with SAS 71 has not been
performed by the accountants with respect to the underlying historical
financial statements, or if negative assurance on the Company's pro
forma financial statements is not otherwise available, the accountants
should be requested to perform certain other procedures with respect to
such pro forma financial statements. See Example O of SAS No. 72.
16 This language is intended to encompass all other financial/numerical
information included or incorporated by reference in the Registration
Statement and the Prospectus for which comfort may be given, including
(but not limited to) narrative and other summary financial data
appearing in tabular form (e.g. the capitalization table).
17 Accountants' services with respect to a financial forecast may take one
of three forms: an examination of the forecast, a compilation of the
forecast or the application of agreed-upon procedures to the forecast.
If the accountant is to perform an examination of the forecast included
or incorporated by reference in the Registration Statement and the
Prospectus, text should state that, in their opinion, the forecasted
financial statements for the [relevant period or periods] included or
incorporated by reference in the Registration Statement and the
Prospectus are presented in conformity with guidelines for presentation
of a forecast established by the AICPA, and that the underlying
assumptions provide a reasonable basis for management's forecast. If
the accountant is to perform a compilation of the forecasted financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus, text should state that they have compiled
the forecasted financial statements for the [relevant period or
periods] included or incorporated by reference in the Registration
Statement and the Prospectus in accordance with the guidelines
established by the AICPA. Finally, if the accountant is to perform
agreed-upon procedures on a forecast included or incorporated by
reference in the Registration Statement and the Prospectus, SAS No. 72
requires that the accountant first prepare a compilation report with
respect to the forecast and attach such report to the comfort letter,
after which the accountant may report on specific procedures performed
and findings obtained.
37
<PAGE> 1
EXHIBIT 4.1
DORAL FINANCIAL CORPORATION
To
BANKERS TRUST COMPANY,
Trustee
----------
Indenture
Dated as of
----------
----------
SENIOR DEBT SECURITIES
<PAGE> 2
DORAL FINANCIAL CORPORATION
RECONCILIATION AND TIE BETWEEN
TRUST INDENTURE ACT OF 1939 AND
INDENTURE DATED AS OF ______________
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C> <C>
ss.310 (a)(1) ................................................. 6.09
(a)(2) ................................................. 6.09
(a)(3) ................................................. Not Applicable
(a)(4) ................................................. Not Applicable
(b) ................................................. 6.08
6.10
ss.311 (a) ................................................. 6.13
(b) ................................................. 6.13
ss.312 (a) ................................................. 7.01
7.02(a)
(b) ................................................. 7.02(b)
(c) ................................................. 7.02(c)
ss.313 (a) ................................................. 7.03(a)
(b) ................................................. 7.03(b)
(c) ................................................. 7.03(c)
(d) ................................................. 7.03(d)
ss.314 (a) ................................................. 7.04
(a)(4) ................................................. 12.02
(b) ................................................. Not Applicable
(c)(1) ................................................. 1.02
(c)(2) ................................................. 1.02
(c)(3) ................................................. Not Applicable
(d) ................................................. Not Applicable
(e) ................................................. 1.02
ss.315 (a) ................................................. 6.01
(b) ................................................. 6.02
(c) ................................................. 6.01
(d) ................................................. 6.01
(e) ................................................. 5.14
ss.316 (a) ................................................. 1.01
(a)(1)(A) ................................................. 5.02
5.12
(a)(1)(B) ................................................. 5.13
(a)(2) ................................................. Not Applicable
(b) ................................................. 5.08
ss.317 (a)(1) ................................................. 5.03
(a)(2) ................................................. 5.04
(b) ................................................. 12.04
ss.318 (a) ................................................. 1.06
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
</TABLE>
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
<S> <C> <C>
Section 1.01. Definitions..............................................................................-1-
Section 1.02. Compliance Certificates and Opinions....................................................-13-
Section 1.03. Form of Documents Delivered to Trustee..................................................-13-
Section 1.04. Notices, etc., to Trustee and Company...................................................-14-
Section 1.05. Notice to Holders; Waiver...............................................................-14-
Section 1.06. Conflict with Trust Indenture Act.......................................................-15-
Section 1.07. Effect of Headings and Table of Contents................................................-15-
Section 1.08. Successors and Assigns..................................................................-16-
Section 1.09. Separability Clause.....................................................................-16-
Section 1.10. Benefits of Indenture...................................................................-16-
Section 1.11. Governing Law...........................................................................-16-
Section 1.12. Legal Holidays..........................................................................-16-
Section 1.13. No Security Interest Created............................................................-17-
Section 1.14. Liability Solely Corporate..............................................................-17-
ARTICLE TWO
DEBT SECURITY FORMS
Section 2.01. Forms Generally........................................................................-17-
Section 2.02. Form of Trustee's Certificate of Authentication........................................-18-
Section 2.03. Securities in Global Form..............................................................-18-
ARTICLE THREE
THE DEBT SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series...................................................-19-
Section 3.02. Denominations..........................................................................-23-
Section 3.03. Execution, Authentication, Delivery and Dating.........................................-23-
Section 3.04. Temporary Debt Securities; Exchange of Temporary Global Notes for
Definitive Bearer Securities; Global Notes Representing
Registered Securities......................................................-26-
Section 3.05. Registration, Transfer and Exchange....................................................-32-
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt Securities..................................-34-
Section 3.07. Payment of Interest; Interest Rights Preserved.........................................-35-
</TABLE>
-i-
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 3.08. Cancellation...........................................................................-37-
Section 3.09. Computation of Interest................................................................-38-
Section 3.10. Currency of Payments in Respect of Debt Securities.....................................-38-
Section 3.11. Judgments..............................................................................-41-
Section 3.12. Exchange Upon Default..................................................................-42-
Section 3.13. CUSIP Numbers..........................................................................-42-
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture................................................-43-
Section 4.02. Application of Trust Money.............................................................-44-
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default......................................................................-45-
Section 5.02. Acceleration of Maturity; Rescission and Annulment.....................................-47-
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee........................-48-
Section 5.04. Trustee May File Proofs of Claim.......................................................-49-
Section 5.05. Trustee May Enforce Claims Without Possession of Debt Securities.......................-50-
Section 5.06. Application of Money Collected.........................................................-50-
Section 5.07. Limitation on Suits....................................................................-50-
Section 5.08. Unconditional Right of Holders to Receive Principal, Premium
and Interest...............................................................-51-
Section 5.09. Restoration of Rights and Remedies.....................................................-51-
Section 5.10. Rights and Remedies Cumulative.........................................................-52-
Section 5.11. Delay or Omission Not Waiver...........................................................-52-
Section 5.12. Control by Holders.....................................................................-52-
Section 5.13. Waiver of Past Defaults................................................................-53-
Section 5.14. Undertaking for Costs..................................................................-53-
Section 5.15. Waiver of Stay or Extension Laws.......................................................-53-
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities....................................................-54-
Section 6.02. Notice of Defaults.....................................................................-55-
Section 6.03. Certain Rights of Trustee..............................................................-56-
Section 6.04. Not Responsible for Recitals or Issuance of Debt Securities............................-57-
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C> <C>
Section 6.05. May Hold Debt Securities...............................................................-57-
Section 6.06. Money Held in Trust....................................................................-57-
Section 6.07. Compensation and Reimbursement.........................................................-57-
Section 6.08. Disqualification; Conflicting Interests................................................-58-
Section 6.09. Corporate Trustee Required; Eligibility................................................-64-
Section 6.10. Resignation and Removal; Appointment of Successor......................................-65-
Section 6.11. Acceptance of Appointment by Successor.................................................-66-
Section 6.12. Merger, Conversion, Consolidation or Succession to Business............................-67-
Section 6.13. Preferential Collection of Claims Against Company......................................-68-
Section 6.14. Appointment of Authenticating Agent....................................................-72-
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Company to Furnish Trustee Names and Addresses of Holders..............................-73-
Section 7.02. Preservation of Information; Communication to Holders..................................-74-
Section 7.03. Reports by Trustee.....................................................................-75-
Section 7.04. Reports by Company.....................................................................-77-
ARTICLE EIGHT
CONCERNING THE HOLDERS
Section 8.01. Acts of Holders........................................................................-78-
Section 8.02. Proof of Ownership; Proof of Execution of Instruments by Holder........................-78-
Section 8.03. Persons Deemed Owners..................................................................-79-
Section 8.04. Revocation of Consents; Future Holders Bound...........................................-80-
ARTICLE NINE
HOLDERS' MEETINGS
Section 9.01. Purposes of Meetings...................................................................-80-
Section 9.02. Call of Meetings by Trustee............................................................-81-
Section 9.03. Call of Meetings by Company or Holders.................................................-81-
Section 9.04. Qualifications for Voting..............................................................-81-
Section 9.05. Regulations............................................................................-81-
Section 9.06. Voting.................................................................................-82-
Section 9.07. No Delay of Rights by Meeting..........................................................-82-
</TABLE>
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<PAGE> 6
<TABLE>
ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
<S> <C> <C>
Section 10.01. Company May Consolidate, Etc., Only on Certain Terms..................................-83-
Section 10.02. Successor Substituted.................................................................-84-
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of Holders....................................-84-
Section 11.02. Supplemental Indentures With Consent of Holders.......................................-85-
Section 11.03. Execution of Supplemental Indentures..................................................-87-
Section 11.04. Effect of Supplemental Indentures.....................................................-87-
Section 11.05. Conformity with Trust Indenture Act...................................................-87-
Section 11.06. Reference in Debt Securities to Supplemental Indentures...............................-87-
Section 11.07. Notice of Supplemental Indenture......................................................-87-
ARTICLE TWELVE
COVENANTS
Section 12.01. Payment of Principal, Premium and Interest............................................-88-
Section 12.02. Officer's Certificate as to Default...................................................-88-
Section 12.03. Maintenance of Office or Agency.......................................................-88-
Section 12.04. Money for Debt Securities; Payments to Be Held in Trust...............................-90-
Section 12.05. Corporate Existence...................................................................-91-
Section 12.06. Limitation Upon Creation of Liens on Voting Stock of Significant
Subsidiaries...............................................................-91-
Section 12.07. Limitation upon Disposition of Voting Stock of Principal Mortgage
Banking Subsidiaries.......................................................-92-
Section 12.08. Waiver of Certain Covenants...........................................................-93-
ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES
Section 13.01. Applicability of Article..............................................................-93-
Section 13.02. Election to Redeem; Notice to Trustee.................................................-93-
Section 13.03. Selection by Trustee of Debt Securities to Be Redeemed................................-94-
Section 13.04. Notice of Redemption..................................................................-94-
Section 13.05. Deposit of Redemption Price...........................................................-95-
</TABLE>
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<TABLE>
<S> <C> <C>
Section 13.06. Debt Securities Payable on Redemption Date............................................-96-
Section 13.07. Debt Securities Redeemed in Part......................................................-96-
ARTICLE FOURTEEN
SINKING FUNDS
Section 14.01. Applicability of Article..............................................................-97-
Section 14.02. Satisfaction of Mandatory Sinking Fund Payments with
Debt Securities............................................................-97-
Section 14.03. Redemption of Debt Securities for Sinking Fund........................................-98-
ARTICLE FIFTEEN
DEFEASANCE
Section 15.01. Applicability of Article..............................................................-99-
Section 15.02. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations....................................................-100-
Section 15.03. Deposited Moneys and U.S. Government Obligations to Be
Held in Trust.............................................................-101-
Section 15.04. Repayment to Company.................................................................-102-
</TABLE>
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<PAGE> 8
INDENTURE dated as of ____________, between DORAL FINANCIAL
CORPORATION, a Puerto Rico corporation (hereinafter called the "Company"),
having its principal executive office at 1159 Franklin D. Roosevelt Avenue, San
Juan, Puerto Rico 00920, and BANKERS TRUST COMPANY, a New York banking
corporation, as trustee (hereinafter called the "Trustee"), having its Corporate
Trust Office at Four Albany Street, New York, New York.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debentures, notes, bonds or other evidences of indebtedness (herein generally
called the "Debt Securities"), to be issued in one or more series, as provided
in this Indenture.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, WITNESSETH:
For and in consideration of the premises and the purchase of
Debt Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of Debt Securities or of
Debt Securities of any series, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01 Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting
<PAGE> 9
principles as are generally accepted in the United States of America at
the date of such computation; 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 Three or Article Six, are
defined in those respective Articles.
"Act" when used with respect to any Holder, has the meaning
specified in Section 8.01.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Affiliated Corporation" means any corporation which is
controlled by the Company but which is not a Subsidiary of the Company
pursuant to the definition of the term "Subsidiary".
"Authenticating Agent" has the meaning specified in Section
6.14.
"Authorized Newspaper" means a newspaper or financial journal
in an official language of the country of publication customarily
published at least once a day, and customarily published for at least
five days in each calendar week, and of general circulation in the
place in connection with which the term is used or in the financial
community of such place. Where successive publications are required to
be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting
the foregoing requirements and in each case on any Business Day in such
city.
"Bearer Security" means any Debt Security (with or without
Coupons), in the form established pursuant to Section 2.01, which is
payable to bearer (including any Global Note payable to bearer) and
title to which passes by delivery only, but does not include any
Coupons.
"Board of Directors" means either the board of directors of
the Company, or any committee of that board duly authorized to act
hereunder or any director or
-2-
<PAGE> 10
directors and/or officer or officers of the Company to whom that board
or committee shall have delegated its authority.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment
or any other particular location referred to in this Indenture or in
the Debt Securities means any day which is not a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust
companies in that Place of Payment or other location are authorized or
obligated by law to close, except as otherwise specified pursuant to
Section 3.01.
"Code" means the Internal Revenue Code of 1986, as amended and
as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange
Act of 1934, as amended, or if at any time after the execution of this
instrument such Commission is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body
performing such duties on such date.
"Common Depositary" has the meaning specified in Section
3.04(b).
"Commonwealth" means the Commonwealth of Puerto Rico.
"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" and "Company Order" mean, respectively, a
written request or order signed in the name of the Company by its
Chairman, its President, its Chief Financial Officer or an Executive
Vice President, and by its Treasurer, its Chief Accounting Officer, its
Controller, an Assistant Treasurer, its Secretary or an Assistant
Secretary of the Company and delivered to the Trustee.
"Component Currency" has the meaning specified in Section
3.10(i).
"Conversion Date" has the meaning specified in Section
3.10(e).
-3-
<PAGE> 11
"Conversion Event" means the cessation of use of (i) a Foreign
Currency both by the government of the country which issued such
Currency and for the settlement of transactions by public institutions
of or within the international banking community, (ii) the ECU both
within the European Monetary System and for the settlement of
transactions by public institutions of or within the European
Communities or (iii) any Currency Unit other than the ECU for the
purposes for which it was established.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which at any particular time its corporate
trust business shall be administered, which office at the date of
execution of this instrument is located at Four Albany Street, New
York, New York 10006.
"Corporation" and "corporation" includes corporations,
associations, companies (including joint stock companies and limited
liability companies) and business trusts.
"Coupon" means any interest coupon appertaining to any Debt
Security.
"Coupon Security" means any Bearer Security authenticated and
delivered with one or more Coupons appertaining thereto.
"Currency" means Dollars or Foreign Currency or Currency Unit.
"Currency Determination Agent" means the New York Clearing
House bank, if any, from time to time selected by the Company pursuant
to Section 3.01; provided that such agent shall accept such appointment
in writing and the terms of such appointment shall be acceptable to the
Company and shall, in the opinion of the Company and the Trustee at the
time of such appointment, require such agent to make the determinations
required by this Indenture by a method consistent with the method
provided in this Indenture for the making of such decision or
determination.
"Currency Unit" means a composite currency or currency unit
the value of which is determined by reference to the value of the
currencies of any group of countries.
"Debt Securities" has the meaning stated in the first recital
of this Indenture and more particularly means any Debt Securities
(including any Global Notes) authenticated and delivered under this
Indenture.
"Defaulted Interest" has the meaning specified in Section
3.07.
"Discharged" has the meaning specified in Section 15.02.
-4-
<PAGE> 12
"Discount Security" means any Debt Security which is issued
with "original issue discount" within the meaning of Section 1273(a) of
the Code and the regulations thereunder.
"Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time of payment is
legal tender for the payment of public and private debts.
"Dollar Equivalent of the Currency Unit" has the meaning
specified in Section 3.10(h).
"Dollar Equivalent of the Foreign Currency" has the meaning
specified in Section 3.10(g).
"ECU" means the European Currency Unit as defined and revised
from time to time by the Council of the European Communities.
"Election Date" has the meaning specified in Section 3.10(i).
"Euroclear Operator" means the operator of the Euroclear
System.
"European Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy
Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the
European Communities.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Date" has the meaning specified in Section 3.04(b).
"Exchange Rate Officer's Certificate" means a telex or a
certificate setting forth (i) the applicable Market Exchange Rate and
(ii) the Dollar, Foreign Currency or Currency Unit amounts of
principal, premium, if any, and any interest respectively (on an
aggregate basis and on the basis of a Debt Security having the lowest
denomination principal amount determined in accordance with Section
3.02 in the relevant Currency or Currency Unit), payable on the basis
of such Market Exchange Rate sent (in the case of a telex) or signed
(in the case of a certificate) by the Treasurer or any Assistant
Treasurer of the Company.
"Fixed Rate Security" means a Debt Security which provides for
the payment of interest at a fixed rate.
-5-
<PAGE> 13
"Floating Rate Security" means a Debt Security which provides
for the payment of interest at a variable rate determined periodically
by reference to an interest rate index or any other index specified
pursuant to Section 3.01.
"Foreign Currency" means a currency issued by the government
of any country other than the United States or a composite currency or
currency unit the value of which is determined by reference to the
values of the currencies of any group of countries.
"Global Note" means a Registered or Bearer Security evidencing
all or part of a series of Debt Securities, including, without
limitation, any temporary or permanent Global Note.
"Holder" means, with respect to a Registered Security, the
Registered Holder, and with respect to a Bearer Security or a Coupon,
the bearer thereof.
"Indebtedness" means (1) any obligation of a Person for (a)
the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments or for the payment of
the deferred purchase price of property or assets (other than Trade
Payables), or (b) for the payment of money relating to a lease that is
required to be classified as a capitalized lease obligation in
accordance with generally accepted accounting principles; (2) any
liability of others described in the preceding clause (1) that the
Person has guaranteed, that is recourse to such Person or that is
otherwise its legal liability; and (3) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (1) and (2) above.
"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 and, unless the context otherwise requires, shall
include the terms of a particular series of Debt Securities as
established pursuant to Section 3.01.
"Interest," when used with respect to a Discount Security
which by its terms bears interest only after Maturity, means interest
payable after Maturity, and, when used with respect to a Bearer
Security, includes any additional amounts payable on such Bearer
Security, if so provided pursuant to Section 3.01.
"Interest Payment Date" with respect to any Debt Security
means the Stated Maturity of an installment of interest on such Debt
Security.
"Market Exchange Rate" means (i) for any conversion involving
a Currency Unit on the one hand and Dollars or any Foreign Currency on
the other, the exchange
-6-
<PAGE> 14
rate between the relevant Currency Unit and Dollars or such Foreign
Currency calculated at noon New York time, on the Valuation Date by the
method specified pursuant to Section 3.01 for the securities of the
relevant series, (ii) for any conversion of Dollars into any Foreign
Currency, the noon (New York time) buying rate for such Foreign
Currency for cable transfers quoted in New York City as certified for
customs purposes by the Federal Reserve Bank of New York and (iii) for
any conversion of one Foreign Currency into Dollars or another Foreign
Currency, the spot rate at noon local time in the relevant market at
which, in accordance with normal banking procedures, the Dollars or
Foreign Currency into which conversion is being made could be purchased
with the Foreign Currency from which conversion is being made from
major banks located in either New York City, London or any other
principal market for Dollars or such purchased Foreign Currency. In the
event of the unavailability of any of the exchange rates provided for
in the foregoing clauses (i), (ii) and (iii) the Company shall use, in
its sole discretion and without liability on its part, such quotation
of the Federal Reserve Bank of New York as of the most recent available
date, or quotations from one or more major banks in New York City,
London or other principal market for such Currency or Currency Unit in
question, or such other quotations as the Company shall deem
appropriate, in its sole discretion and without liability on its part.
Unless otherwise specified by the Currency Determination Agent, if
there is more than one market for dealing in any Currency or Currency
Unit by reason of foreign exchange regulations or otherwise, the market
to be used in respect of such Currency or Currency Unit shall be that
as determined by the Currency Determination Agent, in its sole
discretion and without liability on its part, upon which a nonresident
issuer of securities designated in such Currency or Currency Unit would
purchase such Currency or Currency Unit in order to make payments in
respect of such securities.
"Maturity" when used with respect to any Debt Security means
the date on which the principal of such Debt Security or an installment
of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call
for redemption, repayment at the option of the Holder thereof or
otherwise.
"Officers' Certificate" means a certificate signed by the
Chairman, the President, the Chief Financial Officer or an Executive
Vice President, and by the Treasurer, the Chief Accounting Officer, the
Controller or the Secretary of the Company and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel to the Company (including an employee of the Company)
and who shall be satisfactory to the Trustee, which is delivered to the
Trustee.
-7-
<PAGE> 15
"Outstanding" when used with respect to Debt Securities,
means, as of the date of determination, all Debt Securities theretofore
authenticated and delivered under this Indenture, except:
(i) Debt Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Debt Securities with respect to which 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 Debt Securities and any Coupons thereto
pertaining; provided, however, that if such Debt Securities
are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Debt Securities which have been paid pursuant to Section
3.06 or in exchange for or in lieu of which other Debt
Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Debt Securities in respect
of which there shall have been presented to the Trustee proof
reasonably satisfactory to it that such Debt Securities are
held by a bona fide purchaser in whose hands such Debt
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of Debt Securities Outstanding have
performed any Act hereunder, Debt Securities owned by the Company or
any other obligor upon the Debt 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 Act, only Debt Securities which
the Trustee knows to be so owned shall be so disregarded. Debt
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 to act with respect to such Debt
Securities and that the pledgee is not the Company or any other obligor
upon the Debt Securities or any Affiliate of the Company or of such
other obligor. In determining whether the Holders of the requisite
principal amount of Outstanding Debt Securities have performed any Act
hereunder, the principal amount of a Discount Security that shall be
deemed to be Outstanding for such purpose shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.02 and the principal amount of a Debt
Security denominated in a Foreign Currency that shall be deemed to be
Outstanding for such purpose shall be the amount calculated pursuant to
Section 3.10(k).
-8-
<PAGE> 16
"Overdue Rate", when used with respect to any series of the
Debt Securities, means the rate designated as such in or pursuant to
the Board Resolution or the supplemental indenture, as the case may be,
relating to such series as contemplated by Section 3.01.
"Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Debt
Securities on behalf of the Company.
"permanent Global Note" shall have the meaning given such term
in Section 3.04(b).
"Person" means any individual, Corporation, partnership, joint
venture, association, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" when used with respect to the Debt
Securities of any series means the place or places where the principal
of (and premium, if any) and interest on the Debt Securities of that
series are payable as specified pursuant to Section 3.01.
"Predecessor Security" of any particular Debt Security means
every previous Debt Security evidencing all or a portion of the same
debt as that evidenced by such particular Debt Security; and, for the
purposes of this definition, any Debt Security authenticated and
delivered under Section 3.06 in lieu of a mutilated, lost, destroyed or
stolen Debt Security or a Debt Security to which a mutilated, lost,
destroyed or stolen Coupon appertains shall be deemed to evidence the
same debt as the mutilated, lost, destroyed or stolen Debt Security or
the Debt Security to which the mutilated, lost, destroyed or stolen
Coupon appertains, as the case may be.
"Principal Mortgage Banking Subsidiary" means any Subsidiary,
including its Subsidiaries, which (1) is principally engaged in the
mortgage banking business, and (2) meets any of the following
conditions: (i) the Company's and its other Subsidiaries' investments
in and advances to the Subsidiary exceed 30 percent of the total assets
of the Company and its Subsidiaries consolidated as of the end of the
most recently completed fiscal year; (ii) the Company's and its other
Subsidiaries' proportionate share of the total assets (after
intercompany eliminations) of the Subsidiary exceeds 30 percent of the
total assets of the Company and its Subsidiaries consolidated as of the
end of the most recently completed fiscal year; or (iii) the Company's
and its other Subsidiaries' equity in the income from continuing
operations before income taxes, extraordinary items and cumulative
effect of a change in accounting principles of the Subsidiary exceeds
30 percent of such income of the Company and its Subsidiaries
consolidated for the most recently completed
-9-
<PAGE> 17
fiscal year; provided, however, that any Subsidiary chartered as a
banking corporation or as a savings association under the laws of the
United States, any State or the Commonwealth shall not be considered a
Principal Mortgage Banking Subsidiary unless the Company shall, after
the date of this Indenture, transfer the mortgage banking business
currently conducted by Doral Mortgage Corporation or the Company's HF
Mortgage Bankers Division to such banking corporation or savings
association.
"Redemption Date" means the date fixed for redemption of any
Debt Security pursuant to this Indenture.
"Redemption Price" means, in the case of a Discount Security,
the amount of the principal thereof that would be due and payable as of
the Redemption Date upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.02 or any other redemption specified
pursuant to Section 3.01, and in the case of any other Debt Security,
the principal amount thereof, plus, in each case, premium, if any, and
accrued and unpaid interest, if any, to the Redemption Date.
"Registered Holder" means the Person in whose name a
Registered Security is registered in the Security Register.
"Registered Security" means any Debt Security in the form
established pursuant to Section 2.01 which is registered as to
principal and interest in the Security Register.
"Regular Record Date" for the interest payable on the
Registered Securities of any series on any Interest Payment Date means
the date specified for the purpose pursuant to Section 3.01 for such
Interest Payment Date.
"Responsible Officer" means when used with respect to the
Trustee any officer within the Corporate Trust Office including any
Vice President, Managing Director, Assistant Vice President, Secretary,
Assistant Secretary, Treasurer or Assistant Treasurer or any other
officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also, with
respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge and familiarity with
the particular subject.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.05(a).
"Significant Subsidiary" means a Subsidiary, including its
Subsidiaries, which meets any of the following conditions: (i) the
Company's and its other Subsidiaries' investments in and advances to
the Subsidiary exceed 10 percent of the total assets of the Company and
its Subsidiaries consolidated as of the end of the
-10-
<PAGE> 18
most recently completed fiscal year; (ii) the Company's and its other
Subsidiaries' proportionate share of the total assets (after
intercompany eliminations) of the Subsidiary exceeds 10 percent of the
total assets of the Company and its Subsidiaries consolidated as of the
end of the most recently completed fiscal year; or (iii) the Company's
and its other Subsidiaries' equity in the income from continuing
operations before income taxes, extraordinary items and cumulative
effect of a change in accounting principles of the Subsidiary exceeds
10 percent of such income of the Company and its Subsidiaries
consolidated for the most recently completed fiscal year.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.07.
"Specified Amount" has the meaning specified in Section
3.10(i).
"State" means any of the various States of the United States
of America.
"Stated Maturity" when used with respect to any Debt Security
or any installment of principal thereof or premium thereon or interest
thereon means the date specified in such Debt Security or the Coupon,
if any, representing such installment of interest, as the date on which
the principal of such Debt Security or such installment of principal,
premium or interest is due and payable.
"Subsidiary" means any Corporation of which at least a
majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation,
irrespective of whether or not, at the time, stock of any other class
or classes of such Corporation shall have or might have voting power by
reason of the happening of any contingency, is at the time, directly or
indirectly, owned or controlled by the Company or by one or more
Subsidiaries thereof, or by the Company and one or more Subsidiaries
thereof.
"temporary Global Note" shall have the meaning given such term
in Section 3.04(b).
"Trade Payables" means accounts payable or any other
indebtedness or monetary obligations to trade creditors created or
assumed in the ordinary course of business in connection with the
obtaining of materials or services.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture,
and thereafter "Trustee" shall mean or include each Person who is then
a Trustee hereunder, and if at any time there is more than
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one such Person, "Trustee" as used with respect to the Debt Securities
of any series shall mean the Trustee with respect to Debt Securities of
such series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
amended and as in force at the date as of which this instrument was
executed, except as provided in Section 11.05.
"United States" means the United States of America (including
the States and the District of Columbia), and its possessions, which
include the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam,
American Samoa, Wake Island and the Northern Mariana Islands.
"U.S. Depositary" means a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or any successor thereto,
which shall in either case be designated by the Company pursuant to
Section 3.01 until a successor U.S. Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"U.S. Depositary" shall mean or include each Person who is then a U.S.
Depositary hereunder, and if at any time there is more than one such
Person, "U.S. Depositary" as used with respect to the Debt Securities
of any series shall mean the U.S. Depositary with respect to the Debt
Securities of that series.
"U.S. Government Obligations" has the meaning specified in
Section 15.02.
"U.S. Person" means a citizen or resident of the United
States, a Corporation, partnership or other entity created or organized
in or under the laws of the United States, or an estate or trust the
income of which is subject to United States Federal income taxation
regardless of its source.
"Valuation Date" has the meaning specified in Section 3.10(d).
"Vice President" includes with respect to the Company and the
Trustee, any Vice President of the Company or the Trustee, as the case
may be, whether or not designated by a number or word or words added
before or after the title "Vice President."
"Voting Stock" means capital stock the holders of which have
general voting power under ordinary circumstances to elect at least a
majority of the board of directors of a corporation, provided that, for
the purposes of such definition, capital stock which carries only the
right to vote conditioned on the happening of an event shall not be
considered voting stock whether or not such event shall have happened.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of
the outstanding voting stock (other than directors' qualifying shares)
is at the time,
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directly or indirectly, owned by the Company, or by one or more
Wholly-Owned Subsidiaries of the Company or by the Company and one or
more Wholly-Owned Subsidiaries of the Company.
Section 1.02 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every Officers' Certificate or Opinion of Counsel with respect
to compliance with a condition or covenant provided for in this Indenture (other
than certificates provided pursuant to Section 12.02) shall include:
(1) a statement that each individual signing such Officers'
Certificate or Opinion of Counsel 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 Officers' Certificate or Opinion of Counsel are
based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 1.04 Notices, etc., to Trustee and Company.
Any 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 (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust and Agency Services.
(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 or airmail postage prepaid if sent from outside the United
States, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this Indenture, to the
attention of its Treasurer, or at any other address previously
furnished in writing to the Trustee by the Company.
Any such Act or other document shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Section 1.05 Notice to Holders; Waiver.
When this Indenture provides for notice to Holders of any
event, (1) such notice shall be sufficiently given to Registered Holders (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to such Registered Holders as their names and addresses appear
in the Security Register, within the time prescribed, and (2) such notice shall
be sufficiently given to Holders of Bearer Securities or Coupons (unless
otherwise herein expressly provided) if published at least twice in an
Authorized Newspaper or Newspapers in The City of New York and, if Debt
Securities of such series are then listed on any stock exchange located outside
the United
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States and such stock exchange shall so require, in a daily newspaper or
financial journal or in such city or cities specified pursuant to Section 3.01
or in any Debt Security on Business Days, the first such publication to be not
earlier than the earliest date and not later than two Business Days prior to the
latest date prescribed for the giving of such notice; provided, however, that,
in any case, any notice to Holders of Floating Rate Securities regarding the
determination of a periodic rate of interest, if such notice is required
pursuant to Section 3.01, shall be sufficiently given if given in the manner
specified pursuant to Section 3.01.
In the event of suspension of regular mail service or by
reason of any other cause it shall be impracticable to give notice by mail, such
notification as shall be given with the approval of the Trustee shall constitute
sufficient notice for every purpose hereunder.
In the event of suspension of publication of any Authorized
Newspapers or by reason of any other cause it shall be impracticable to give
notice by publication, such notification as shall be given with the approval of
the Trustee shall constitute sufficient notice for every purpose hereunder.
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 on such waiver. 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, and any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given. In any case
where notice to Holders is given by publication, any defect in any notice so
published as to any particular Holder shall not affect the sufficiency of such
notice with respect to other Holders, and any notice which is published in the
manner herein provided shall be conclusively presumed to have been duly given.
Section 1.06 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
the duties imposed on any person by the provisions of Sections 310 to 317,
inclusive, of the Trust Indenture Act, such duties imposed by the Trust
Indenture Act shall control.
Section 1.07 Effect of Headings and Table of Contents.
The Article and Section headings herein and in the Table of
Contents are for convenience only and shall not affect the construction hereof.
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Section 1.08. Successors and Assigns.
All covenants and agreements in this Indenture by the parties
hereto shall bind their respective successors and assigns and inure to the
benefit of their permitted successors and assigns, whether so expressed or not.
Section 1.09. Separability Clause.
In case any provision in this Indenture or in the Debt
Securities shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 1.10. Benefits of Indenture.
Nothing in this Indenture or in the Debt Securities, express
or implied, shall give to any Person, other than the parties hereto, any
Security Registrar, any Paying Agent and their successors hereunder, and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 1.11. Governing Law.
This Indenture, the Debt Securities and the Coupons shall be
deemed to be contracts made and to be performed entirely in the State of New
York, and for all purposes shall be governed by and construed in accordance with
the laws of said State without regard to the conflicts of law rules of said
State.
Section 1.12. Legal Holidays.
Unless otherwise specified pursuant to Section 3.01 or in any
Debt Security, in any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Debt Security of any series shall not be a Business Day
at any Place of Payment for the Debt Securities of that series, then
(notwithstanding any other provision of this Indenture or of the Debt Securities
or Coupons) payment of principal (and premium, if any) or interest need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, Redemption Date or at the Stated
Maturity, and no interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, to such Business Day if such payment is made or duly
provided for on such Business Day.
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Section 1.13. No Security Interest Created.
Nothing in this Indenture or in the Debt Securities or
Coupons, express or implied, shall be construed to constitute a security
interest or mortgage or other pledge of collateral under the Uniform Commercial
Code or similar legislation or real property laws, as now or hereafter enacted
and in effect in any jurisdiction where property of the Company or its
Subsidiaries is or may be located.
Section 1.14. Liability Solely Corporate.
No recourse shall be had for the payment of the principal of
(or premium, if any) or the interest on any Debt Securities or Coupons, or any
part thereof, or of the indebtedness represented thereby, or upon any
obligation, covenant or agreement of this Indenture, against any incorporator,
or against any stockholder, officer or director, as such, past, present or
future, of the Company (or any incorporator, stockholder, officer or director of
any predecessor or successor corporation), either directly or through the
Company (or any such predecessor or successor corporation), whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly agreed and understood
that this Indenture and all the Debt Securities and Coupons are solely corporate
obligations, and that no personal liability whatsoever shall attach to, or be
incurred by, any such incorporator, stockholder, officer or director, past,
present or future, of the Company (or any incorporator, stockholder, officer or
director of any such predecessor or successor corporation), either directly or
indirectly through the Company or any such predecessor or successor corporation,
because of the indebtedness hereby authorized or under or by reason of any of
the obligations, covenants, promises or agreements contained in this Indenture
or in any of the Debt Securities or Coupons or to be implied herefrom or
therefrom; and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of this Indenture and the issue of Debt Securities; provided, however, that
nothing herein or in the Debt Securities or Coupons contained shall be taken to
prevent recourse to and the enforcement of the liability, if any, of any
stockholder or subscriber to capital stock upon or in respect of the shares of
capital stock not fully paid.
ARTICLE TWO
DEBT SECURITY FORMS
Section 2.01. Forms Generally.
The Debt Securities and the Coupons, if any, of each series
shall be substantially in one of the forms (including global form) established
in or pursuant to a Board Resolution or one or more indentures supplemental
hereto, and shall have 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 or designation and such
legends or endorsements placed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions
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of this Indenture, or as may be required to comply with any law or with any rule
or regulation made pursuant thereto or with any rule or regulation of any
securities exchange on which any series of the Debt Securities may be listed, or
to conform to usage, all as determined by the officers executing such Debt
Securities and Coupons as conclusively evidenced by their execution of such Debt
Securities and Coupons. If the form of a series of Debt Securities or Coupons
(or any Global Note) is established in or pursuant to a Board Resolution, a copy
of such Board Resolution shall be delivered to the Trustee, together with an
Officers' Certificate setting forth the form of such series, at or prior to the
delivery of the Company Order contemplated by Section 3.03 for the
authentication and delivery of such Debt Securities (or any such Global Note) or
Coupons.
Unless otherwise specified as contemplated by Section 3.01,
Debt Securities in bearer form (other than in global form) shall have Coupons
attached.
The definitive Debt Securities and Coupons, if any, of each
series shall be printed, lithographed or engraved or produced by any combination
of these methods on steel engraved borders or may be produced in any other
manner, all as determined by the officers executing such Debt Securities and
Coupons, as conclusively evidenced by their execution of such Debt Securities
and Coupons.
Section 2.02. Form of Trustee's Certificate of Authentication.
The form of the Trustee's certificate of authentication to be
borne by the Debt Securities shall be substantially as follows:
This is one of the Debt Securities of the series designated
therein issued under the within - mentioned Indenture.
Dated: Bankers Trust Company,
as Trustee
By
----------------------
Authorized Signatory
Section 2.03. Securities in Global Form.
If any Debt Security of a series is issuable in global form,
the Global Note so issued may provide that it shall represent the aggregate
amount of Outstanding Debt Securities from time to time endorsed thereon and may
also provide that the aggregate amount of Outstanding Debt Securities
represented thereby may from time to time be reduced or increased to reflect
exchanges. Any endorsement of a Global Note to reflect the amount, or any
increase or decrease in the amount, of Outstanding Debt Securities represented
thereby shall be made by the Trustee and in such manner as shall be specified in
such Global Note. Any instructions by the Company with respect to a Global Note,
after its initial issuance, shall be in writing but need not comply with Section
1.02.
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Global Notes may be issued in either registered or bearer form
and in either temporary or permanent form. Permanent Global Notes will be issued
in definitive form.
ARTICLE THREE
THE DEBT SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Debt Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Debt Securities may be issued from time to time in one or
more series. There shall be established in or pursuant to a Board Resolution and
(subject to Section 3.03) set forth in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of Debt
Securities of any series:
(1) the title of the Debt Securities of the series (which
shall distinguish the Debt Securities of such series from all other
series of Debt Securities);
(2) the limit, if any, upon the aggregate principal amount of
the Debt Securities of the series which may be authenticated and
delivered under this Indenture (except for Debt Securities
authenticated and delivered upon transfer of, or in exchange for, or in
lieu of, other Debt Securities of such series pursuant to Sections
3.04, 3.05, 3.06, 11.06 or 13.07);
(3) the percentage of the principal amount at which the Debt
Securities will be issued and, if other than the principal amount
thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the Maturity thereof or the method by
which such portion shall be determined;
(4) the date or dates on which or periods during which the
Debt Securities of the series may be issued, and the date or dates (or
the method of determination thereof) on which the principal of (and
premium, if any, on) the Debt Securities of such series are or may be
payable (which, if so provided in such Board Resolution or supplemental
indenture, may be determined by the Company from time to time and set
forth in the Debt Securities of the series issued from time to time);
(5) the rate or rates (or the method of determination thereof)
at which the Debt Securities of the series shall bear interest, if any,
and the dates from which such interest shall accrue (which, in either
case or both, if so provided in such Board Resolution or supplemental
indenture, may be determined by the Company from time to time and set
forth in the Debt Securities of the series issued from time to time);
and the Interest Payment Dates
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on which such interest shall be payable (or the method of determination
thereof), and, in the case of Registered Securities, the Regular Record
Dates for the interest payable on such Interest Payment Dates and, in
the case of Floating Rate Securities, the notice, if any, to Holders
regarding the determination of interest and the manner of giving such
notice;
(6) the place or places where the principal of (and premium,
if any) and interest on Debt Securities of the series shall be payable;
the extent to which, or the manner in which, any interest payable on
any Global Note on an Interest Payment Date will be paid, if other than
in the manner provided in Section 3.07; the extent, if any, to which
the provisions of the last sentence of Section 12.01 shall apply to the
Debt Securities of the series; and the manner in which any principal
of, or premium, if any, on, any Global Note will be paid, if other than
as set forth elsewhere herein;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Debt Securities of the series pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option of
the Holder and the period or periods within which or the dates on
which, the prices at which and the terms and conditions upon which Debt
Securities of the series shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligation;
(8) the right, if any, of the Company to redeem the Debt
Securities of such series, in whole or in part, at its option and the
period or periods within which, or the date or dates on which, the
price or prices at which, and the terms and conditions upon which Debt
Securities of the series may be redeemed, if any, in whole or in part,
at the option of the Company or otherwise;
(9) if the coin or Currency in which the Debt Securities shall
be issuable is in Dollars, the denominations of such Debt Securities if
other than denominations of $1,000 and any integral multiple thereof
(except as provided in Section 3.04);
(10) whether the Debt Securities of the series are to be
issued as Discount Securities and the amount of discount with which
such Debt Securities may be issued and, if other than the principal
amount thereof, the portion of the principal amount of Debt Securities
of the series which shall be payable upon declaration of acceleration
of the Maturity thereof pursuant to Section 5.02;
(11) provisions, if any, for the defeasance of the Debt
Securities of such series or certain of the Company's obligations with
respect to the Debt Securities;
(12) whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer
Securities are issued, whether Coupons will be attached thereto,
whether Bearer Securities of the series may be exchanged for Registered
Securities of the series, as provided in Section 3.05(b) or otherwise
and the circumstances
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under which and the place or places at which any such exchanges, if
permitted, may be made;
(13) whether provisions for payment of additional amounts or
tax redemptions shall apply and, if such provisions shall apply, such
provisions; and, if Bearer Securities of the series are to be issued,
whether a procedure other than that set forth in Section 3.04(b) shall
apply and, if so, such other procedure, and if the procedure set forth
in Section 3.04(b) shall apply, the forms of certifications to be
delivered under such procedure;
(14) if other than Dollars, the Foreign Currency or Currencies
or Currency Unit in which Debt Securities of the series shall be
denominated or in which payment of the principal of (and/or premium, if
any) and/or interest on the Debt Securities of the series may be made,
and the particular provisions applicable thereto and, if applicable,
the amount of Debt Securities of the series which entitles the Holder
of a Debt Security of the series or its proxy to one vote for purposes
of Section 9.06;
(15) if the principal of (and premium, if any) or interest on
Debt Securities of the series are to be payable, at the election of the
Company or a Holder thereof, in a Currency other than that in which the
Debt Securities are denominated or payable without such election, in
addition to or in lieu of the provisions of Section 3.10, the period or
periods within which and the terms and conditions upon which, such
election may be made and the time and the manner of determining the
exchange rate or rates between the Currency or Currencies in which the
Debt Securities are denominated or payable without such election and
the Currency or Currencies in which the Debt Securities are to be paid
if such election is made;
(16) the date as of which any Debt Securities of the series
shall be dated, if other than as set forth in Section 3.03;
(17) if the amount of payments of principal of (and premium,
if any) or interest on the Debt Securities of the series may be
determined with reference to an index, including, but not limited to,
an index based on a Currency or Currencies other than that in which the
Debt Securities are denominated or payable, or any other type of index,
the manner in which such amounts shall be determined;
(18) if the Debt Securities of the series are denominated or
payable in a Foreign Currency, any other terms concerning the payment
of principal of (and premium, if any) or any interest on such Debt
Securities (including the Currency or Currencies of payment thereof);
(19) the designation of the original Currency Determination
Agent, if any;
(20) the applicable Overdue Rate, if any;
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(21) if the Debt Securities of the series do not bear
interest, the applicable dates for purposes of Section 7.01;
(22) any addition to, or modification or deletion of, any
Events of Default or covenants provided for with respect to Debt
Securities of the series;
(23) if Bearer Securities of the series are to be issued, (x)
whether interest in respect of any portion of a temporary Debt Security
in global form (representing all of the Outstanding Bearer Securities
of the series) payable in respect of any Interest Payment Date prior to
the exchange of such temporary Debt Security for definitive Debt
Securities of the series shall be paid to any clearing organization
with respect to the portion of such temporary Debt Security held for
its account and, in such event, the terms and conditions (including any
certification requirements) upon which any such interest payment
received by a clearing organization will be credited to the Persons
entitled to interest payable on such Interest Payment Date, (y) the
terms upon which interests in such temporary Debt Security in global
form may be exchanged for interests in a permanent Global Note or for
definitive Debt Securities of the series and the terms upon which
interests in a permanent Global Note, if any, may be exchanged for
definitive Debt Securities of the series and (z) the cities in which
the Authorized Newspapers designated for the purposes of giving notices
to Holders are published;
(24) whether the Debt Securities of the series shall be issued
in whole or in part in the form of one or more Global Notes and, in
such case, the U.S. Depositary or any Common Depositary for such Global
Note or Notes; and if the Debt Securities of the series are issuable
only as Registered Securities, the manner in which and the
circumstances under which Global Notes representing Debt Securities of
the series may be exchanged for Registered Securities in definitive
form, if other than, or in addition to, the manner and circumstances
specified in Section 3.04(c);
(25) the designation, if any, of the U.S. Depositary; and the
designation of any trustees (other than the Trustee), depositaries,
Authenticating Agents, Paying Agents, Security Registrars, or any other
agents with respect to the Debt Securities of such series;
(26) if the Debt Securities of such series are to be issuable
in definitive form (whether upon original issuance or upon exchange of
a temporary Debt Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions; and
(27) any other terms of the series (which other terms shall
not be inconsistent with the provisions of this Indenture).
All Debt Securities of any one series and Coupons, if any,
shall be substantially identical to all other debt securities of such series
except as to denomination, rate of interest, Stated
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Maturity and the date from which interest, if any, shall accrue, which, as set
forth above, may be determined by the Company from time to time as to Debt
Securities of a series if so provided in or established pursuant to the
authority granted in a Board Resolution or in any such indenture supplemental
hereto, and except as may otherwise be provided in or pursuant to such Board
Resolution and (subject to Section 3.03) set forth in such Officers'
Certificate, or in any such indenture supplemental hereto. All Debt Securities
of any one series need not be issued at the same time, and unless otherwise
provided, a series may be reopened for issuance of additional Debt Securities of
such series.
If any of the terms of a series of Debt Securities is
established in or pursuant to a Board Resolution, a copy of such Board
Resolution shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
Section 3.02. Denominations.
In the absence of any specification pursuant to Section 3.01
with respect to the Debt Securities of any series, the Debt Securities of such
series shall be issuable only as Registered Securities in denominations of
$1,000 and any integral multiple thereof and shall be payable only in Dollars.
Section 3.03. Execution, Authentication, Delivery and Dating.
The Debt Securities and the Coupons, if any, of any series
shall be executed on behalf of the Company by its Chairman, its President, one
of its Executive Vice Presidents, its Chief Accounting Officer or its Treasurer,
under its corporate seal reproduced thereon and attested by its Secretary or one
of its Assistant Secretaries. The signature of any of these officers may be
manual or facsimile.
Debt Securities and Coupons 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 Debt Securities and Coupons or did not hold such offices at the date of
such Debt Securities and Coupons.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debt Securities, with
appropriate Coupons, if any, of any series, executed by the Company, to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Debt Securities and Coupons and the Trustee in accordance
with the Company Order shall authenticate and deliver such Debt Securities and
Coupons, subject, in the case of Bearer Securities, to Section 3.04(b);
provided, however, that, in connection with its sale during the "restricted
period" (as defined in Section 1.163-5(c)(2)(i)(D)(7) of the United States
Treasury Regulations), no Bearer Security shall be mailed or otherwise delivered
to any location in
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the United States; and provided, further, that a Bearer Security (other than a
temporary Global Note in bearer form) may be delivered outside the United States
in connection with its original issuance only if the Person entitled to receive
such Bearer Security shall have furnished to the Euroclear Operator or to
Cedelbank a certificate substantially in the form set forth in Exhibit A to this
Indenture and if the Euroclear Operator or Cedelbank has furnished the Trustee a
certificate substantially in the form set forth in Exhibit B. If all the Debt
Securities of any one series are not to be issued at one time and if a Board
Resolution or supplemental indenture relating to such series shall so permit,
such Company Order may set forth procedures acceptable to the Trustee for the
issuance of such Debt Securities and other matters which are subject to
variation, such as interest rate, Stated Maturity, date of issuance and date
from which interest, if any, shall accrue. If any Debt Security shall be
represented by a permanent Global Note, then, for purposes of this Section and
Section 3.04, the notation by the Common Depositary of a beneficial owner's
interest therein upon original issuance of such Debt Security or upon exchange
of a portion of a temporary Global Note shall be deemed to be delivery in
connection with the original issuance of such beneficial owner's interest in
such permanent Global Note. Except as permitted by Section 3.06 or 3.07, the
Trustee shall not authenticate and deliver any Bearer Security unless all
Coupons for interest then matured have been detached and canceled.
The Trustee shall be entitled to receive, and (subject to
Section 6.01) shall be fully protected in relying upon, prior to the
authentication and delivery of the Debt Securities and Coupons of such series,
(i) the supplemental indenture or the Board Resolution by or pursuant to which
the form and terms of such Debt Securities and Coupons have been approved, (ii)
the certificates and opinions required pursuant to Section 1.02 and (iii) one or
more Opinions of Counsel substantially to the effect that:
(1) all instruments furnished by the Company to the Trustee in
connection with the authentication and delivery of such Debt Securities
and Coupons conform to the requirements of this Indenture and
constitute sufficient authority hereunder for the Trustee to
authenticate and deliver such Debt Securities and Coupons;
(2) the forms and terms of such Debt Securities and Coupons
have been established in conformity with the provisions of this
Indenture;
(3) in the event that the forms or terms of such Debt
Securities and Coupons have been established in a supplemental
indenture, the execution and delivery of such supplemental indenture
has been duly authorized by all necessary corporate action of the
Company, such supplemental indenture has been duly executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Trustee, is a valid and binding obligation enforceable
against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law);
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(4) the execution and delivery of such Debt Securities and
Coupons have been duly authorized by all necessary corporate action of
the Company and such Debt Securities and Coupons have been duly
executed by the Company and, assuming due authentication by the Trustee
and delivery by the Company, are valid and binding obligations of the
Company enforceable against the Company in accordance with their terms,
entitled to the benefit of the Indenture, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and subject to such other exceptions as counsel shall
reasonably request and as to which the Trustee shall not reasonably
object; and
(5) to the best of such counsel's knowledge, all governmental
consents, authorizations and approvals which are required for the
execution and delivery of the Indenture and the Debt Securities under
all applicable Federal, Commonwealth and State of New York laws, and
any other applicable law, if any, have been received other than such as
may be required by the securities or blue sky laws of the various
states in connection with the offer and sale of the Debt Securities.
Notwithstanding the provisions of Section 3.01 and of the
preceding two paragraphs, if not all of the Debt Securities of any series are to
be issued at one time, it shall not be necessary to deliver the Officers'
Certificate required by Section 3.01 or the Opinion of Counsel otherwise
required by clause (iii) of the preceding paragraph prior to or at the time of
issuance of each Debt Security of such series, but such documents shall be
delivered prior to or at the time of delivery of the first Debt Security of such
series.
For purposes of this opinion, such counsel may rely as to
factual matters upon certificates or written statements from officers or other
appropriate representatives of the Company or upon certificates of public
officials and such opinion may contain assumptions, limitations, exceptions and
restrictions which are reasonably satisfactory to the Trustee and its counsel.
The Trustee shall not be required to authenticate such Debt
Securities and Coupons if the issuance of such Debt Securities and Coupons
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Debt Securities and this Indenture in a manner which is not
reasonably acceptable to the Trustee.
Each Registered Security shall be dated the date of its
authentication. Each Bearer Security (including any temporary or permanent or
other definitive Bearer Security in global form) shall be dated as of the date
of original issuance of the first Debt Security of such series to be issued,
except as otherwise provided pursuant to Section 3.01 with respect to the Bearer
Securities of any series.
No Debt Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Debt Security a certificate of authentication
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substantially in one of the forms provided for herein duly executed by the
Trustee or by an Authenticating Agent, and such certificate upon any Debt
Security shall be conclusive evidence, and the only evidence, that such Debt
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Debt
Security shall have been duly authenticated and delivered hereunder but never
issued and sold by the Company, and the Company shall deliver such Debt Security
to the Trustee for cancellation as provided in Section 3.08 together with a
written statement (which need not comply with Section 1.02) stating that such
Debt Security has never been issued and sold by the Company, for all purposes of
this Indenture such Debt Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
Section 3.04. Temporary Debt Securities; Exchange of Temporary
Global Notes for Definitive Bearer Securities; Global Notes Representing
Registered Securities.
(a) Pending the preparation of definitive Registered
Securities of any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Registered Securities which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination for Registered Securities of such series,
substantially of the tenor of the definitive Registered Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Registered
Securities may determine, as conclusively evidenced by their execution of such
Registered Securities. Every such temporary Registered Security shall be
executed by the Company and shall be authenticated and delivered by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect, as the definitive Registered Securities in lieu of which they are
issued. In the case of any series issuable as Bearer Securities, such temporary
Debt Securities may be in global form, representing such of the Outstanding Debt
Securities of such series as shall be specified therein.
Except in the case of temporary Debt Securities in global form
(which shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Debt Securities of any series are issued, the Company
will cause definitive Debt Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Debt Securities of such
series, the temporary Debt Securities of such series shall be exchangeable for
definitive Debt Securities of such series, of a like Stated Maturity and with
like terms and provisions, upon surrender of the temporary Debt Securities of
such series at the office or agency of the Company in a Place of Payment for
such series, without charge to the Holder, except as provided in Section 3.05 in
connection with a transfer. Upon surrender for cancellation of any one or more
temporary Debt Securities of any series (accompanied by any unmatured Coupons),
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Debt Securities of the
same series of authorized denominations and of a like Stated Maturity and like
terms and provisions; provided, however, that no definitive Bearer Security
shall be delivered in exchange for a temporary Registered Security; and
provided, further, that a definitive Bearer Security (including a permanent
Bearer Security in global form) shall be delivered in exchange for
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a temporary Bearer Security only in compliance with the conditions set forth in
Section 3.03. Until so exchanged, the temporary Registered Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Registered Securities of such series.
(b) Unless otherwise specified pursuant to Section 3.01, all
Bearer Securities of a series shall be initially issued in the form of a single
temporary Bearer Security in global form (a "temporary Global Note"). The
Company shall execute, and upon Company Order the Trustee (or other agent
specified under Section 3.01) shall authenticate, any temporary Global Note and
any permanent Bearer Security in global form (as described below, a "permanent
Global Note") upon the same conditions and in substantially the same manner, and
with the same effect, as definitive Bearer Securities, and the temporary or
permanent Global Note, as the case may be, shall, unless otherwise specified
therein, be delivered by the Trustee (or such other agent) to the London office
of a depositary or common depositary (the "Common Depositary"), for the benefit
of the Euroclear Operator or Cedelbank, as the case may be, for credit to the
account of the Company (in the case of sales of Bearer Securities by the Company
directly to investors) or the managing underwriter (in the case of sales of
Bearer Securities by the Company to underwriters) or such other accounts as the
Company or the managing underwriter, respectively, may direct in writing.
On or after the date specified in or determined pursuant to
the terms of any temporary Global Note which (subject to any applicable laws and
regulations) shall be at least 40 days after the issue date of a temporary
Global Note (the "Exchange Date"), the Debt Securities represented by such
temporary Global Note may be exchanged for definitive Debt Securities (subject
to the second succeeding paragraph) or Debt Securities to be represented
thereafter by one or more permanent Global Notes in definitive form without
Coupons. On or after the Exchange Date such temporary Global Note shall be
surrendered by the Common Depositary to the Trustee (or such other agent as is
specified for the purpose pursuant to Section 3.01), as the Company's agent for
such purpose at such place specified outside the United States pursuant to
Section 3.01 and following such surrender, the Trustee (or such other agent)
shall (1) endorse the temporary Global Note to reflect the reduction of its
principal amount by an equal aggregate principal amount of such Debt Security,
(2) endorse the applicable permanent Global Note, if any, to reflect the initial
amount, or an increase in the amount of Debt Securities represented thereby, (3)
manually authenticate such definitive Debt Securities (including any permanent
Global Note), (4) deliver such definitive Debt Securities to the Holder thereof
or, if such definitive Debt Security is a permanent Global Note, deliver such
permanent Global Note to the Common Depositary to be held outside the United
States for the accounts of the Euroclear Operator or Cedelbank, as the case may
be, for credit to the respective accounts at Euroclear Operator or Cedelbank, as
the case may be, designated by or on behalf of the beneficial owners of such
Debt Securities (or to such other accounts as they may direct) and (5) redeliver
such temporary Global Note to the Common Depositary, unless such temporary
Global Note shall have been canceled in accordance with Section 3.08 hereof;
provided, however, that, unless otherwise specified in such temporary Global
Note, upon such presentation by the Common Depositary, such temporary Global
Note shall be accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by the Euroclear Operator, as to the portion of such
temporary Global Note held for its account then to be exchanged for definitive
Debt Securities (including any
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permanent Global Note), and a certificate dated the Exchange Date or a
subsequent date and signed by Cedelbank, as to the portion of such temporary
Global Note held for its account then to be exchanged for definitive Debt
Securities (including any permanent Global Note), each substantially in the form
set forth in Exhibit B to this Indenture. Each certificate substantially in the
form of Exhibit B hereto of the Euroclear Operator or Cedelbank, as the case may
be, shall be based on certificates of the account holders listed in the records
of the Euroclear Operator or Cedelbank, as the case may be, as being entitled to
all or any portion of the applicable temporary Global Note. An account holder of
the Euroclear Operator or Cedelbank, as the case may be, desiring to effect the
exchange of an interest in a temporary Global Note for an interest in definitive
Debt Securities (including any permanent Global Note) shall instruct the
Euroclear Operator or Cedelbank, as the case may be, to request such exchange on
its behalf and shall deliver to the Euroclear Operator or Cedelbank, as the case
may be, a certificate substantially in the form of Exhibit A hereto and dated no
earlier than 10 days prior to the Exchange Date. Until so exchanged, temporary
Global Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Debt Securities (including any permanent Global Note) of
the same series authenticated and delivered hereunder, except as to payment of
interest, if any.
The delivery to the Company, its agent or the Trustee by the
Euroclear Operator or Cedelbank of any certificate substantially in the form of
Exhibit B hereto may be relied upon by the Company, its agent and the Trustee as
conclusive evidence that a corresponding certificate or certificates has or have
been delivered to the Euroclear Operator or Cedelbank, as the case may be,
pursuant to the terms of this Indenture.
On or prior to the Exchange Date, the Company shall deliver to
the Trustee (or such other agent as may be specified as the Company's agent for
such purpose pursuant to Section 3.01) definitive Debt Securities in an
aggregate principal amount equal to the principal amount of such temporary
Global Note, executed by the Company. At any time, on or after the Exchange
Date, upon 30 days' notice to the Trustee (or such other agent as may be
specified as the Company's agent for such purpose pursuant to Section 3.01) by
the Euroclear Operator or Cedelbank, as the case may be, acting at the request
of or on behalf of the beneficial owner, a Debt Security represented by a
temporary Global Note or a permanent Global Note, as the case may be, may be
exchanged, in whole or from time to time in part, for definitive Debt Securities
without charge and the Trustee (or such agent) shall authenticate and deliver,
in exchange for each portion of such temporary Global Note or such permanent
Global Note, an equal aggregate principal amount of definitive Debt Securities
of the same series of authorized denominations and of a like Stated Maturity and
with like terms and conditions, as the portion of such temporary Global Note or
such permanent Global Note to be exchanged, which, unless the Debt Securities of
the series are not issuable both as Bearer Securities and as Registered
Securities, as contemplated by Section 3.01, shall be in the form of Bearer
Securities or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof; provided, however, that definitive
Bearer Securities shall be delivered in exchange for a portion of the temporary
Global Note or the permanent Global Note only in compliance with the
requirements of the second preceding paragraph. On or prior to the forty-fifth
day following receipt by the Trustee (and such agent as may be specified as the
Company's agent for such purpose
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pursuant to Section 3.01) of such notice with respect to a Debt Security, or, if
such day is not a Business Day, the next succeeding Business Day, the temporary
Global Note or the permanent Global Note, as the case may be, shall be
surrendered by the Common Depositary to the Trustee (or such other agent as may
be specified as the Company's agent for such purpose pursuant to Section 3.01),
as the Company's agent for such purpose, to be exchanged, in whole or from time
to time in part, for definitive Debt Securities without charge following such
surrender, upon the request of the Euroclear Operator or Cedelbank, as the case
may be, and the Trustee (or such agent) shall (1) endorse the applicable
temporary Global Note or the permanent Global Note to reflect the reduction of
its principal amount by the aggregate principal amount of such Debt Security,
(2) cause the terms of such Debt Security and Coupons, if any, to be entered on
a definitive Debt Security, (3) manually authenticate such definitive Debt
Security, and (4) if a Bearer Security is to be delivered, deliver such
definitive Debt Security outside the United States to the Euroclear Operator or
Cedelbank, as the case may be, for or on behalf of the beneficial owner thereof,
in exchange for a portion of such temporary Global Note or the permanent Global
Note.
Unless otherwise specified in such temporary Global Note or
the permanent Global Note, any such exchange shall be made free of charge to the
beneficial owners of such temporary Global Note or the permanent Global Note,
except that a Person receiving definitive Debt Securities must bear the cost of
insurance, postage, transportation and the like in the event that such Person
does not take delivery of such definitive Debt Securities in person at the
offices of the Euroclear Operator or Cedelbank. Definitive Debt Securities in
bearer form to be delivered in exchange for any portion of a temporary Global
Note or the permanent Global Note shall be delivered only outside the United
States. Notwithstanding the foregoing, in the event of redemption or
acceleration of all or any part of a temporary Global Note prior to the Exchange
Date, a permanent Global Note or definitive Bearer Securities, as the case may
be, will not be issuable in respect of such temporary Global Note or such
portion thereof, and payment thereon will instead be made as provided in such
temporary Global Note.
Until exchanged in full as hereinabove provided, any temporary
Global Note or the permanent Global Note shall in all respects be entitled to
the same benefits under this Indenture as definitive Debt Securities of the same
series and tenor authenticated and delivered hereunder, except that, unless
otherwise specified as contemplated by Section 3.01, interest payable on such
temporary Global Note on an Interest Payment Date for Debt Securities of such
series occurring prior to the applicable Exchange Date shall be payable to the
Euroclear Operator or Cedelbank on such Interest Payment Date upon delivery by
the Euroclear Operator or Cedelbank to the Trustee (or such agent as may be
specified pursuant to Section 3.01) of a certificate or certificates
substantially in the form set forth in Exhibit B to this Indenture, for credit
without further interest on or after such Interest Payment Date to the
respective accounts of the Persons who are the beneficial owners of such
temporary Global Note on such Interest Payment Date and who have each delivered
to the Euroclear Operator or Cedelbank, as the case may be, a certificate
substantially in the form set forth in Exhibit A to this Indenture.
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Any definitive Bearer Security authenticated and delivered by
the Trustee (or such agent) in exchange for a portion of a temporary Global Note
or the permanent Global Note shall not bear a coupon for any interest which
shall theretofore have been duly paid by the Trustee to the Euroclear Operator
or Cedelbank, or by the Company to the Trustee (or such agent) in accordance
with the provisions of this Section 3.04.
With respect to Exhibits A and B to this Indenture, the
Company may, in its discretion and if required or desirable under applicable
law, substitute one or more other forms of such Exhibits for such Exhibits,
eliminate the requirement that any or all certificates be provided, or change
the time that any certificate may be required, provided that such substitute
form or forms or notice of elimination or change of such certification
requirement have theretofore been delivered to the Trustee (and any agent of the
Company appointed pursuant to Section 3.01 and referred to above) with a Company
Request and such form or forms, elimination or change is reasonably acceptable
to the Trustee (and any such agent).
(c) If the Company shall establish pursuant to Section 3.01
that the Registered Securities of a series are to be issued in whole or in part
in the form of one or more Global Notes, then the Company shall execute and the
Trustee shall, in accordance with Section 3.03 and the Company Order with
respect to such series, authenticate and deliver one or more Global Notes in
temporary or permanent form that (i) shall represent and shall be denominated in
an amount equal to the aggregate principal amount of the Outstanding Debt
Securities of such series to be represented by one or more Global Notes, (ii)
shall be registered in the name of the U.S. Depositary for such Global Note or
Notes or the nominee of such depositary, and (iii) shall bear a legend
substantially to the following effect:
"This Debt Security may not be 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, unless and until this Debt Security is exchanged
in whole or in part for Debt Securities in definitive form."
Notwithstanding any other provision of this Section or Section
3.05, unless and until it is exchanged in whole or in part for Registered
Securities in definitive form, a Global Note representing all or a portion of
the Registered Securities of a series may not be transferred except as a whole
by the U.S. Depositary for such series to a nominee of such depositary or by a
nominee of such depositary to such depositary or another nominee of such
depositary or by such depositary or any such nominee to a successor U.S.
Depositary for such series or a nominee of such successor depositary.
If at any time the U.S. Depositary for the Debt Securities of
a series notifies the Company that it is unwilling or unable to continue as U.S.
Depositary for the Debt Securities of such series or if at any time the U.S.
Depositary for Debt Securities of a series shall no longer be a
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clearing agency registered and in good standing under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation, the Company
shall appoint a successor U.S. Depositary with respect to the Debt Securities of
such series. If a successor U.S. Depositary for the Debt Securities of such
series is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such condition, the Company will execute, and
the Trustee, upon receipt of a Company Order for the authentication and delivery
of definitive Debt Securities of such series, will authenticate and deliver,
Registered Securities of such series in definitive form in an aggregate
principal amount equal to the principal amount of the Global Note or Notes
representing such series in exchange for such Global Note or Notes.
The Company may at any time and in its sole discretion
determine that the Registered Securities of any series issued in the form of one
or more Global Notes shall no longer be represented by such Global Note or
Notes. In such event, the Company will execute, and the Trustee, upon receipt of
a Company Order for the authentication and delivery of definitive Debt
Securities of such series, will authenticate and deliver, Registered Securities
of such series in definitive form and in an aggregate principal amount equal to
the principal amount of the Global Note or Notes representing such series in
exchange for such Global Note or Notes.
If the Registered Securities of any series shall have been
issued in the form of one or more Global Notes and if an Event of Default with
respect to the Debt Securities of such series shall have occurred and be
continuing, the Company will promptly execute, and the Trustee, upon receipt of
a Company Order for the authentication and delivery of definitive Debt
Securities of such series, will authenticate and deliver, Registered Securities
of such series in definitive form and in an aggregate principal amount equal to
the principal amount of the Global Note or Notes representing such series in
exchange for such Global Note or Notes.
If specified by the Company pursuant to Section 3.01 with
respect to Registered Securities of a series, the U.S. Depositary for such
series of Registered Securities may surrender a Global Note for such series of
Debt Securities in exchange in whole or in part for Registered Securities of
such series in definitive form on such terms as are acceptable to the Company
and such depositary. Thereupon, the Company shall execute and the Trustee shall
authenticate and deliver, without charge:
(i) to each Person specified by the U.S. Depositary a new
Registered Security or Securities of the same series, of any authorized
denomination as requested by such Person in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Note; and
(ii) to the U.S. Depositary a new Global Note in a denomination
equal to the difference, if any, between the principal amount of the
surrendered Global Note and the aggregate principal amount of
Registered Securities delivered to Holders thereof.
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Upon the exchange of a Global Note for Registered Securities
in definitive form, such Global Note shall be canceled by the Trustee. Debt
Securities issued in exchange for a Global Note pursuant to this subsection (c)
shall be registered in such names and in such authorized denominations as the
U.S. Depositary for such Global Note, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debt Securities to the Persons in whose names such Debt
Securities are so registered.
Section 3.05. Registration, Transfer and Exchange.
(a) The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the registers maintained in such office and in
any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Registered Securities and of transfers and exchanges of
Registered Securities. The Trustee is hereby appointed "Security Registrar" for
the purpose of registering Registered Securities and registering transfers and
exchanges of Registered Securities as herein provided; provided, however, that
the Company may appoint co-Security Registrars.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency of the Company maintained for
such purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee, one or more new Registered
Securities of the same series of like aggregate principal amount of such
denominations as are authorized for Registered Securities of such series and of
a like Stated Maturity and with like terms and conditions.
Except as otherwise provided in Section 3.04 and this Section
3.05, at the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of like aggregate
principal amount and of a like Stated Maturity and with like terms and
conditions, upon surrender of the Registered Securities to be exchanged at such
office or agency. Whenever any Registered Securities are surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Securities which the Holder making the exchange is
entitled to receive.
(b) If and to the extent specified pursuant to Section 3.01,
the provisions of this Section 3.05(b) shall be applicable to Debt Securities of
any series which are Bearer Securities. At the option of the Holder thereof, to
the extent permitted by law, any Bearer Security of any series which by its
terms is registrable as to principal and interest may be exchanged for a
Registered Security of such series of like aggregate principal amount and of a
like Stated Maturity and with like terms and conditions upon surrender of such
Bearer Security at the Corporate Trust Office or at any other office or agency
of the Company designated pursuant to Section 3.01 for the purpose of making any
such exchanges. Any Coupon Security surrendered for exchange shall be
surrendered with all unmatured Coupons and any matured Coupons in default
attached thereto. If the Holder of a Bearer Security is unable to produce any
such unmatured Coupon or Coupons or matured Coupon
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or Coupons in default, such exchange may be effected if the Bearer Securities
are accompanied by payment in funds acceptable to the Company in an amount equal
to the face amount of such missing Coupon or Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company and the Trustee if there
is furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to any Paying Agent any such missing Coupon in respect
of which such a payment shall have been made, such Holder shall be entitled to
receive the amount of such payment; provided, however, that except as otherwise
provided in Section 12.03, interest represented by Coupons shall be payable only
upon presentation and surrender of those Coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in exchange
for a Registered Security of the same series and of a like Stated Maturity and
with like terms and conditions after the close of business at such office or
agency 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 Defaulted Interest, such Bearer Security
shall be surrendered without the Coupon relating to such Interest Payment Date
or proposed date for payment, as the case may be (or, if such Coupon is so
surrendered with such Bearer Security, such Coupon shall be returned to the
Person so surrendering the Bearer Security), and interest or Defaulted Interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture. The Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Security or Securities which the Holder making the
exchange is entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer
Securities for Registered Securities will be subject to the provisions of United
States income tax laws and regulations applicable to Debt Securities in effect
at the time of such exchange.
(c) Except as otherwise specified pursuant to Section 3.01, in
no event may Registered Securities, including Registered Securities received in
exchange for Bearer Securities, be exchanged for Bearer Securities.
(d) All Debt Securities issued upon any transfer or exchange
of Debt Securities shall be valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Debt
Securities surrendered for such transfer or exchange.
Every Registered Security presented or surrendered for
transfer or exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed, by the
Holder thereof or his attorney duly authorized in writing.
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No service charge will be made for any transfer or exchange of
Debt Securities except as provided in Section 3.04(b) or 3.06. 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, transfer or
exchange of Debt Securities, other than those expressly provided in this
Indenture to be made at the Company's own expense or without expense or without
charge to the Holders.
The Company shall not be required (i) to register, transfer or
exchange Debt Securities of any series during a period beginning at the opening
of business 15 days before the day of the transmission of a notice of redemption
of Debt Securities of such series selected for redemption under Section 13.03
and ending at the close of business on the day of such transmission, or (ii) to
register, transfer or exchange any Debt Security so selected for redemption in
whole or in part, except the unredeemed portion of any Debt Security being
redeemed in part.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt
Securities.
If (i) any mutilated Debt Security or any mutilated Coupon
with the Coupon Security to which it appertains (and all unmatured Coupons
attached thereto) is surrendered to the Trustee, or (ii) the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Debt Security or any Coupon, and there is delivered to the Company and
the Trustee such security or indemnity as may be required by them to save each
of them and any Paying Agent harmless, and neither the Company nor the Trustee
receives notice that such Debt Security or Coupon has been acquired by a bona
fide purchaser, then the Company shall execute and upon Company Request the
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Debt Security or in exchange for the Coupon
Security to which such mutilated, destroyed, lost or stolen Coupon appertained,
a new Debt Security of the same series of like Stated Maturity and with like
terms and conditions and like principal amount, bearing a number not
contemporaneously Outstanding, and, in the case of a Coupon Security, with such
Coupons attached thereto that neither gain nor loss in interest shall result
from such exchange or substitution.
In case any such mutilated, destroyed, lost or stolen Debt
Security or Coupon has become or is about to become due and payable, the Company
in its discretion may, instead of issuing a new Debt Security, pay the amount
due on such Debt Security or Coupon in accordance with its terms; provided,
however, that principal of (and premium, if any) and any interest on Bearer
Securities shall, except as otherwise provided in Section 12.03, be payable only
at an office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 3.01 or except as otherwise provided in
this Section 3.06, any interest on Bearer Securities shall be payable only upon
presentation and surrender of the Coupons appertaining thereto.
Upon the issuance of any new Debt 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 respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
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Every new Debt Security or Coupon of any series issued
pursuant to this Section shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Debt
Security or Coupon 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 Debt Securities or Coupons of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Debt
Securities or Coupons.
Section 3.07. Payment of Interest; Interest Rights Preserved.
(a) Interest on any Registered 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 such Registered Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest notwithstanding the cancellation of such
Registered Security upon any transfer or exchange subsequent to the Regular
Record Date. Unless otherwise specified as contemplated by Section 3.01 with
respect to the Debt Securities of any series, payment of interest on Registered
Securities shall be made at the place or places specified pursuant to Section
3.01 or, at the option of the Company, by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register
or, if provided pursuant to Section 3.01, by wire transfer to an account
designated by the Registered Holder.
(b) Interest on any Coupon Security which is payable and is
punctually paid or duly provided for on any Interest Payment Date shall, except
as otherwise provided in Section 12.03, be paid to the Holder of the Coupon
which has matured on such Interest Payment Date upon surrender of such Coupon on
such Interest Payment Date at an office or agency of the Company in a Place of
Payment located outside the United States specified pursuant to Section 3.01.
Interest on any Bearer Security (other than a Coupon Security)
which is payable and is punctually paid or duly provided for on any Interest
Payment Date shall be paid to the Holder of the Bearer Security upon
presentation of such Bearer Security and notation thereon on such Interest
Payment Date at an office or agency of the Company in a Place of Payment located
outside the United States specified pursuant to Section 3.01.
Unless otherwise specified pursuant to Section 3.01, at the
direction of the Holder of any Bearer Security or Coupon payable in Dollars,
payment on such Bearer Security or Coupon will be made by check or, if agreeable
to the Trustee (or the Paying Agent specified pursuant to Section 3.01), by wire
transfer to a Dollar account maintained by such Holder outside the United
States. If such payment at the offices of all Paying Agents outside the United
States becomes illegal or is effectively precluded because of the imposition of
exchange controls or similar restrictions on the full payment or receipt of such
amounts in Dollars, the Company will appoint an office or agent in the United
States at which such payment may be made. Unless otherwise specified pursuant to
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Section 3.01, at the direction of the Holder of any Bearer Security or Coupon
payable in a Foreign Currency, payment on such Bearer Security or Coupon will be
made by a check drawn on a bank outside the United States or, if acceptable to
the Trustee or such Paying Agent, by wire transfer to an appropriate account
maintained by such Holder outside the United States. Except as provided in this
paragraph, no payment on any Bearer Security or Coupon will be made by mail to
an address in the United States or by wire transfer to an account in the United
States.
(c) Any interest on any Debt Security which is payable but is
not punctually paid or duly provided for on any Interest Payment Date (herein
called "Defaulted Interest") shall, if such Debt Security is a Registered
Security, forthwith cease to be payable to the Registered Holder on the relevant
Regular Record Date by virtue of his having been such Registered Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names such Registered 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, at least 25 days prior to the date of the proposed payment,
notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Registered Security and the date of
the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money in the Currency or Currency Unit in
which the Debt Securities of such series are payable (except as
otherwise specified pursuant to Section 3.01 or 3.10) 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 is to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which date shall be not more than 20 days
and not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to the Holders of such Registered Securities at their
addresses as they appear 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 mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names such Registered 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 clause (2).
(2) The Company may make payment of any Defaulted Interest on
Registered Securities in any other lawful manner not inconsistent with
the requirements of any securities
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exchange on which such Registered Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
(d) Any Defaulted Interest payable in respect of Bearer
Securities of any series shall be payable pursuant to such procedures as may be
satisfactory to the Trustee in such manner that there is no discrimination
between the Holders of Registered Securities (if any) and Bearer Securities of
such series, and notice of the payment date therefor shall be given by the
Trustee, in the name and at the expense of the Company, in the manner provided
in Section 1.05 not more than 20 days and not less than 10 days prior to the
date of the proposed payment.
(e) Subject to the foregoing provisions of this Section, each
Debt Security delivered under this Indenture upon transfer of or in exchange for
or in lieu of any other Debt Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Debt Security.
Section 3.08. Cancellation.
Unless otherwise specified pursuant to Section 3.01 for Debt
Securities of any series, all Debt Securities surrendered for payment,
redemption, transfer, exchange or credit against any sinking fund and all
Coupons surrendered for payment or exchange shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee. All Registered Securities
and matured Coupons so delivered shall be promptly canceled by the Trustee. All
Bearer Securities and unmatured Coupons so delivered shall be held by the
Trustee and, upon instruction by the Company Order, shall be canceled or held
for reissuance. Bearer Securities and unmatured Coupons held for reissuance may
be reissued only in exchange for Bearer Securities of the same series and of
like Stated Maturity and with like terms and conditions pursuant to Section 3.05
or in replacement of mutilated, lost, stolen or destroyed Bearer Securities of
the same series and of like Stated Maturity and with like terms and conditions
or the related Coupons pursuant to Section 3.06. All Bearer Securities and
unmatured Coupons held by the Trustee pending such cancellation or reissuance
shall be deemed to be delivered for cancellation for all purposes of this
Indenture and the Debt Securities. The Company may at any time deliver to the
Trustee for cancellation any Debt Securities or Coupons previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and the Company may deliver to the Trustee (or to any other Person
for delivery to the Trustee) for cancellation any Debt Securities previously
authenticated hereunder which the Company has not issued, and all Debt
Securities or Coupons so delivered shall be promptly canceled by the Trustee. No
Debt Securities or Coupons shall be authenticated in lieu of or in exchange for
any Debt Securities or Coupons canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Debt Securities and Coupons
held by the Trustee shall be destroyed by the Trustee in accordance with its
customary procedures and a certificate of destruction shall be delivered to the
Company upon Company Request. The acquisition of any Debt Securities or Coupons
by the Company shall not operate as a redemption or satisfaction of the
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indebtedness represented thereby unless and until such Debt Securities or
Coupons are surrendered to the Trustee for cancellation. In the case of any
temporary Global Note which shall be destroyed if the entire aggregate principal
amount of the Debt Securities represented thereby has been exchanged, the
certificate of destruction shall state that all certificates required pursuant
to Section 3.04 hereof and substantially in the form of Exhibit B hereto, to be
given by the Euroclear Operator or Cedelbank, have been duly presented to the
Trustee by the Euroclear Operator or Cedelbank, as the case may be. Permanent
Global Notes shall not be destroyed until exchanged in full for definitive Debt
Securities or until payment thereon is made in full.
Section 3.09. Computation of Interest.
Except as otherwise specified pursuant to Section 3.01 for
Debt Securities of any series, interest on the Debt Securities of each series
shall be computed on the basis of a 360-day year of twelve 30-day months.
Section 3.10. Currency of Payments in Respect of Debt
Securities.
(a) Except as otherwise specified pursuant to Section 3.01 for
Bearer Securities of any series, payment of the principal of (and premium, if
any) and interest on Bearer Securities of such series denominated in any
Currency will be made in such Currency.
(b) With respect to Registered Securities of any series not
permitting the election provided for in paragraph (c) below or the Holders of
which have not made the election provided for in paragraph (c) below, except as
provided in paragraph (e) below, payment of the principal of (and premium, if
any) and any interest on any Registered Security of such series will be made in
the Currency in which such Registered Security is payable.
(c) It may be provided pursuant to Section 3.01 with respect
to the Registered Securities of any series that Holders shall have the option,
subject to paragraphs (e) and (f) below, to receive payments of principal of
(and premium, if any) and any interest on such Registered Securities in any of
the Currencies which may be designated for such election by delivering to the
Trustee a written election, to be in form and substance reasonably satisfactory
to the Trustee, not later than the close of business on the Election Date
immediately preceding the applicable payment date. If a Holder so elects to
receive such payments in any such Currency, such election will remain in effect
for such Holder or any transferee of such Holder until changed by such Holder or
such transferee by written notice to the Trustee (but any such change must be
made not later than the close of business on the Election Date immediately
preceding the next payment date to be effective for the payment to be made on
such payment date and no such change or election may be made with respect to
payments to be made on any Registered Security of such series with respect to
which an Event of Default has occurred or notice of redemption has been given by
the Company pursuant to Article Thirteen). Any Holder of any such Registered
Security who shall not have delivered any such election to the Trustee by the
close of business on the applicable Election Date will be paid the
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amount due on the applicable payment date in the relevant Currency as provided
in paragraph (b) of this Section 3.10.
(d) If the election referred to in paragraph (c) above has
been provided for pursuant to Section 3.01, then not later than the fourth
Business Day after the Election Date for each payment date, the Trustee will
deliver to the Company a written notice specifying, in the Currency in which
each series of the Registered Securities is payable, the respective aggregate
amounts of principal of (and premium, if any) and any interest on the Registered
Securities to be paid on such payment date, specifying the amounts so payable in
respect of the Registered Securities as to which the Holders of Registered
Securities denominated in any Currency shall have elected to be paid in another
Currency as provided in paragraph (c) above. If the election referred to in
paragraph (c) above has been provided for pursuant to Section 3.01 and if at
least one Holder has made such election, then, on the second Business Day
preceding each payment date, the Company will deliver to the Trustee an Exchange
Rate Officer's Certificate in respect of the Currency payments to be made on
such payment date. The Currency amount receivable by Holders of Registered
Securities who have elected payment in a Currency as provided in paragraph (c)
above shall be determined by the Company on the basis of the applicable Market
Exchange Rate in effect on the third Business Day (the "Valuation Date")
immediately preceding each payment date.
(e) If a Conversion Event occurs with respect to a Foreign
Currency, the ECU or any other Currency Unit in which any of the Debt Securities
are denominated or payable other than pursuant to an election provided for
pursuant to paragraph (c) above, then with respect to each date for the payment
of principal of (and premium, if any) and any interest on the applicable Debt
Securities denominated or payable in such Foreign Currency, the ECU or such
other Currency Unit occurring after the last date on which such Foreign
Currency, the ECU or such other Currency Unit was used (the "Conversion Date"),
the Dollar shall be the Currency of payment for use on each such payment date.
The Dollar amount to be paid by the Company to the Trustee and by the Trustee or
any Paying Agent to the Holders of such Debt Securities with respect to such
payment date shall be the Dollar Equivalent of the Foreign Currency or, in the
case of a Currency Unit, the Dollar Equivalent of the Currency Unit, in each
case as determined by the Currency Determination Agent, in the manner provided
in paragraph (g) or (h) below.
(f) If the Holder of a Registered Security denominated in any
Currency shall have elected to be paid in another Currency as provided in
paragraph (c) above, and a Conversion Event occurs with respect to such elected
Currency, such Holder shall receive payment in the Currency in which payment
would have been made in the absence of such election. If a Conversion Event
occurs with respect to the Currency in which payment would have been made in the
absence of such election, such Holder shall receive payment in Dollars as
provided in paragraph (e) of this Section 3.10.
(g) The "Dollar Equivalent of the Foreign Currency" shall be
determined by the Currency Determination Agent, and shall be obtained for each
subsequent payment date by
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converting the specified Foreign Currency into Dollars at the Market Exchange
Rate on the Conversion Date.
(h) The "Dollar Equivalent of the Currency Unit" shall be
determined by the Currency Determination Agent, and subject to the provisions of
paragraph (i) below, shall be the sum of each amount obtained by converting the
Specified Amount of each Component Currency into Dollars at the Market Exchange
Rate for such Component Currency on the Valuation Date with respect to each
payment.
(i) For purposes of this Section 3.10 the following terms
shall have the following meanings:
A "Component Currency" shall mean any Currency which, on the
Conversion Date, was a component Currency of the relevant Currency
Unit, including, but not limited to, the ECU.
A "Specified Amount" of a Component Currency shall mean the
number of units of such Component Currency or fractions thereof which
were represented in the relevant Currency Unit, including, but not
limited to, the ECU, on the Conversion Date. If after the Conversion
Date the official unit of any Component Currency is altered by way of
combination or subdivision, the Specified Amount of such Component
Currency shall be divided or multiplied in the same proportion. If
after the Conversion Date two or more Component Currencies are
consolidated into a single Currency, the respective Specified Amounts
of such Component Currencies shall be replaced by an amount in such
single Currency equal to the sum of the respective Specified Amounts of
such consolidated Component Currencies expressed in such single
Currency, and such amount shall thereafter be a Specified Amount and
such single Currency shall thereafter be a Component Currency. If after
the Conversion Date any Component Currency shall be divided into two or
more Currencies, the Specified Amount of such Component Currency shall
be replaced by amounts of such two or more Currencies with appropriate
Dollar equivalents at the Market Exchange Rate on the date of such
replacement equal to the Dollar equivalent of the Specified Amount of
such former Component Currency at the Market Exchange Rate on such
date, and such amounts shall thereafter be Specified Amounts and such
Currencies shall thereafter be Component Currencies. If after the
Conversion Date of the relevant Currency Unit, including but not
limited to, the ECU, a Conversion Event (other than any event referred
to above in this definition of "Specified Amount") occurs with respect
to any Component Currency of such Currency Unit, the Specified Amount
of such Component Currency shall, for purposes of calculating the
Dollar Equivalent of the Currency Unit, be converted into Dollars at
the Market Exchange Rate in effect on the Conversion Date of such
Component Currency.
"Election Date" shall mean the record date with respect to any
payment date, and with respect to the Maturity shall mean the record
date (if within 16 or fewer days prior to the
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Maturity) immediately preceding the Maturity, and with respect to any
series of Debt Securities whose record date immediately preceding the
Maturity is more than 16 days prior to the Maturity or any series of
Debt Securities for which no record dates are provided with respect to
interest payments, shall mean the date which is 16 days prior to the
Maturity.
(j) All decisions and determinations of the Currency
Determination Agent, if any, regarding the Dollar Equivalent of the Foreign
Currency, the Dollar Equivalent of the Currency Unit and the Market Exchange
Rate shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive for all purposes and irrevocably binding upon the Company
and all Holders of the Debt Securities denominated or payable in the relevant
Currency. In the event of a Conversion Event with respect to a Foreign Currency,
the Company, after learning thereof, will immediately give written notice
thereof to the Trustee (and the Trustee will promptly thereafter give notice in
the manner provided in Section 1.05 to the Holders) specifying the Conversion
Date. In the event of a Conversion Event with respect to the ECU or any other
Currency Unit in which Debt Securities are denominated or payable, the Company,
after learning thereof, will immediately give written notice thereof to the
Trustee (and the Trustee will promptly thereafter give written notice in the
manner provided in Section 1.05 to the Holders) specifying the Conversion Date
and the Specified Amount of each Component Currency on the Conversion Date. In
the event of any subsequent change in any Component Currency as set forth in the
definition of Specified Amount above, the Company, after learning thereof, will
similarly give written notice to the Trustee. The Trustee shall be fully
justified and protected in relying and acting upon information received by it
from the Company and the Currency Determination Agent, if any, and may,
notwithstanding any other provision of this Indenture, conclusively assume that
no Conversion Event or other event of which it is entitled to notice hereunder
has occurred unless it receives written notice thereof as provided herein, and
shall not otherwise have any duty or obligation to determine such information
independently.
(k) For purposes of any provision of this Indenture where the
Holders of Outstanding Debt Securities may perform an Act which requires that a
specified percentage of the Outstanding Debt Securities of all series perform
such Act and for purposes of any decision or determination by the Trustee of
amounts due and unpaid for the principal (and premium, if any) and interest on
the Debt Securities of all series in respect of which moneys are to be disbursed
ratably, the principal of (and premium, if any) and interest on the Outstanding
Debt Securities denominated in a Foreign Currency will be the amount in Dollars
based upon the Market Exchange Rate for Debt Securities of such series, as of
the date for determining whether the Holders entitled to perform such Act have
performed it, or as of the Business Day immediately prior to the date of such
decision or determination by the Trustee, as the case may be.
Section 3.11. Judgments.
If for the purpose of obtaining a judgment in any court with
respect to any obligation of the Company hereunder or under any Debt Security,
it shall become necessary to convert into any other Currency any amount in the
Currency due hereunder or under such Debt Security, then such conversion shall
be made at the Market Exchange Rate as in effect on the date the Company shall
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make payment to any Person in satisfaction of such judgment. If pursuant to any
such judgment, conversion shall be made on a date other than the date payment is
made and there shall occur a change between such Market Exchange Rate and the
Market Exchange Rate as in effect on the date of payment, the Company agrees to
pay such additional amounts (if any) as may be necessary to ensure that the
amount paid is equal to the amount in such other Currency which, when converted
at the Market Exchange Rate as in effect on the date of payment or distribution,
is the amount then due hereunder or under such Debt Security. Any amount due
from the Company under this Section 3.11 shall be due as a separate debt and is
not to be affected by or merged into any judgment being obtained for any other
sums due hereunder or in respect of any Debt Security. In no event, however,
shall the Company be required to pay more in the Currency or Currency Unit due
hereunder or under such Debt Security at the Market Exchange Rate as in effect
when payment is made than the amount of Currency stated to be due hereunder or
under such Debt Security so that in any event the Company's obligations
hereunder or under such Debt Security will be effectively maintained as
obligations in such Currency, and the Company shall be entitled to withhold (or
be reimbursed for, as the case may be) any excess of the amount actually
realized upon any such conversion over the amount due and payable on the date of
payment or distribution.
Section 3.12. Exchange Upon Default.
If default is made in the payments referred to in Section
12.01, the Company hereby undertakes that upon presentation and surrender of a
permanent Global Note to the Trustee (or to any other Person or at any other
address as the Company may designate in writing), on any Business Day on or
after the maturity date thereof the Company will issue and, upon receipt of a
Company Order, the Trustee will authenticate and deliver to the bearer of such
permanent Global Note duly executed and authenticated definitive Debt Securities
with the same issue date and maturity date as set out in such permanent Global
Note.
Section 3.13. CUSIP Numbers.
The Company in issuing the Debt Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Debt Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Debt Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
This Indenture, with respect to the Debt Securities of any
series (if all series issued under this Indenture are not to be affected), shall
upon Company Request, cease to be of further effect (except as to any surviving
rights of registration of transfer or exchange or conversion of such Debt
Securities herein expressly provided for or expressly provided in the terms of
the Debt Securities of such series pursuant to Section 3.01, and rights to
receive payments of principal (and premium, if any) and interest on such Debt
Securities) and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Debt Securities and the Coupons, if any, of such
series theretofore authenticated and delivered (other than (i) Debt
Securities and Coupons of such series which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
3.06, (ii) Coupons appertaining to Bearer Securities surrendered for
exchange for Registered Securities and maturing after such exchange,
whose surrender is not required or has been waived under Section 3.05,
(iii) Coupons appertaining to Bearer Securities called for redemption
and maturing after the relevant Redemption Date, whose surrender has
been waived as provided in Section 13.06, and (iv) Debt Securities and
Coupons of such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 12.04) have been delivered to the Trustee for
cancellation; or
(B) all Debt Securities and the Coupons, if any, of such
series 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 by the Trustee in the name,
and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) of this subclause
(B), has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for such purpose an amount in the
Currency in which such Debt Securities are denominated (except as
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otherwise provided pursuant to Section 3.01 or 3.10) sufficient to pay
and discharge the entire indebtedness on such Debt Securities for
principal (and premium, if any) and interest to the date of such
deposit (in the case of Debt Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may
be; provided, however, in the event a petition for relief under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, State or Commonwealth bankruptcy, insolvency or
other similar law, is filed with respect to the Company within 91 days
after the deposit and the Trustee is required to return the deposited
money to the Company, the obligations of the Company under this
Indenture with respect to such Debt Securities shall not be deemed
terminated or discharged;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company;
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture with respect to such series have been
complied with; and
(4) the Company has delivered to the Trustee an Opinion of
Counsel or a ruling by the Internal Revenue Service to the effect that
such deposit and discharge will not cause Holders of the Debt
Securities of the series to recognize income, gain or loss for Federal
income tax purposes.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07, the obligations of
the Trustee to any Authenticating Agent under Section 6.14, the obligations of
the Company under Section 12.01, and, if money shall have been deposited with
the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 4.02 and the last paragraph of Section
12.04, shall survive. If, after the deposit referred to in subclause (B) of
clause 1 of this Section has been made, (x) the Holder of a Debt Security is
entitled to, and does, elect pursuant to Section 3.10(c), to receive payment in
a Currency other than that in which deposit was made, or (y) if a Conversion
Event occurs with respect to the Currency in which deposit was made or elected
to be received by the Holder pursuant to Section 3.10(c), then the indebtedness
represented by such Debt Security shall be fully discharged to the extent that
deposit made with respect to such Debt Security shall be converted into the
Currency in which such payment is made.
Section 4.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
12.04, all money deposited with the Trustee pursuant to Section 4.01 shall be
held in trust and applied by it, in accordance with the provisions of the Debt
Securities and Coupons, if any, and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as
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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.
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default.
"Event of Default" wherever used herein with respect to Debt
Securities of any series means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law, 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 Debt
Security or any payment with respect to the Coupons, if any, of such
series when it becomes due and payable, and continuance of such default
for a period of 30 days; or
(2) default in the payment of the principal of (and premium,
if any, on) any Debt Security of such series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Debt Security of such series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or any covenant or warranty which
expressly has been included in this Indenture solely for the benefit of
Debt Securities of a series other than such series), and continuance of
such default or breach for a period of 90 days after there has been
given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Debt Securities of such series, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed (including a default with
respect to Debt Securities of any series other than that series) or
under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness
for money borrowed by the Company or any Significant Subsidiary in
excess of $5,000,000 (including this Indenture), whether such
indebtedness now exists or shall hereafter be created, which default
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shall have resulted in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have become
due and payable, without such acceleration having been rescinded or
annulled within a period of 30 days after there shall have been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of not less than 25% in
principal amount of the Outstanding Debt Securities of that series a
written notice specifying such default and requiring the Company or the
Significant Subsidiary, as the case may be, to cause such acceleration
to be rescinded or annulled and stating that such notice is a "Notice
of Default" hereunder; provided, however, that if such default shall be
remedied or cured by the Company or the Significant Subsidiary or
waived by the holders of such indebtedness, then the Event of Default
hereunder by reason thereof shall be deemed likewise to have been
thereupon remedied, cured or waived without any action on the part of
the Trustee or any of the Holders; or
(6) the entry of a decree or order for relief in respect of
the Company or any Significant Subsidiary by a court having
jurisdiction in the premises in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, State of Commonwealth bankruptcy, insolvency or
other similar law, or a decree or order adjudging the Company or any
Significant Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable Federal, State or
Commonwealth law, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the
Company or any Significant Subsidiary or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 consecutive days; or
(7) the commencement by the Company or any Significant
Subsidiary of a voluntary case under the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable Federal, State or
Commonwealth bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary
case under any such law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Company or any Significant Subsidiary or of
any substantial part of its property, or the making by it of an
assignment for the benefit of its creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company or any Significant
Subsidiary in furtherance of any such action; or
(8) any other Event of Default provided with respect to Debt
Securities of that series pursuant to Section 3.01.
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Section 5.02. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default with respect to Debt Securities of any
series at that time Outstanding occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of such series may declare the principal amount (or,
if any Debt Securities of such series are Discount Securities, such portion of
the principal amount of such Discount Securities as may be specified in the
terms of such Discount Securities) of all the Debt Securities of such series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon, any such declaration such principal
amount (or specified amount) plus accrued and unpaid interest (and premium, if
any), shall become immediately due and payable. Upon payment of such amount in
the Currency in which such Debt Securities are denominated (except as otherwise
provided pursuant to Section 3.01 or 3.10), all obligations of the Company in
respect of the payment of principal of the Debt Securities of such series shall
terminate.
At any time after such a declaration of acceleration with
respect to Debt Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Debt Securities of such series, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
in the Currency in which such Debt Securities are denominated (except
as otherwise provided pursuant to Section 3.01 or 3.10) sufficient to
pay
(A) all overdue installments of interest on all Debt
Securities or all overdue payments with respect to
any Coupons of such series,
(B) the principal of (and premium, if any, on) any Debt
Securities of such series which have become due
otherwise than by such declaration of acceleration
and interest thereon at the rate or rates prescribed
therefor in such Debt Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of
interest on each Debt Security of such series or upon
overdue payments on any Coupons of such series at the
Overdue Rate, 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; provided, however, that all sums payable
under this clause (D) shall be paid in Dollars; and
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(2) All Events of Default with respect to Debt Securities of
such series, other than the nonpayment of the principal of Debt
Securities of such series which has become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 5.13.
No such rescission and annulment shall affect any subsequent default or impair
any right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of
interest on any Debt Security or any payment with respect to any
Coupons when such interest or payment becomes due and payable and such
default continues for a period of 30 days,
(2) default is made in the payment of principal of (or
premium, if any, on) any Debt Security at the Maturity thereof, or
(3) default is made in the making or satisfaction of any
sinking fund payment or analogous obligation when the same becomes due
pursuant to the terms of the Debt Securities of any series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debt Securities or of such Coupons, (i) the amount then due and
payable on such Debt Securities or matured Coupons for the principal (and
premium, if any) and interest, if any, (ii) to the extent that payment of such
interest shall be legally enforceable, interest upon the overdue principal (and
premium, if any) and upon overdue installments of interest, at the Overdue Rate,
and (iii) 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 amount 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, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Debt
Securities and Coupons, 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 such Debt Securities and Coupons wherever situated.
If an Event of Default with respect to Debt Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Debt Securities
and Coupons of such series by such appropriate judicial
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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 5.04. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceedings, or any voluntary or involuntary case under the
applicable Federal, State or Commonwealth bankruptcy, insolvency or similar law,
as now or hereafter constituted, relative to the Company or any other obligor
upon the Debt Securities and Coupons, if any, of a particular series or the
property of the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of such Debt Securities shall then be due
and payable as therein expressed or by declaration of acceleration 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,
(i) to file and prove a claim for the whole amount of principal
(or, if the Debt Securities of such series are Discount Securities,
such portion of the principal amount as may be due and payable with
respect to such series pursuant to a declaration in accordance with
Section 5.02) (and premium, if any) and interest owing and unpaid in
respect of the Debt Securities and Coupons of such series and to file
such other papers or documents and take such other actions, including
participating as a member, voting or otherwise, of any committee of
creditors appointed in the matter, 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 of such Debt
Securities and Coupons allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
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 such 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 6.07.
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
Debt Securities and any Coupons of such series 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.
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Section 5.05. Trustee May Enforce Claims Without Possession of
Debt Securities.
All rights of action and claims under this Indenture or the
Debt Securities and the Coupons, if any, of any series may be prosecuted and
enforced by the Trustee without the possession of any of such Debt Securities or
Coupons 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 Debt Securities or Coupons in respect of which such judgment
has been recovered.
Section 5.06. 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
(and premium, if any) or interest, upon presentation of the Debt Securities or
Coupons of any series in respect of which money has been collected 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 6.07.
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Debt Securities
or Coupons of such series, 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
Debt Securities or Coupons for principal (and premium, if any) and
interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
Section 5.07. Limitation on Suits.
No Holder of any Debt Security or Coupon of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to such series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Debt Securities of such series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Debt Securities of such
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders or of the Holders of Outstanding Debt Securities or Coupons of any other
series, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders. For the protection and enforcement of the provisions of this Section
5.07, each and every Holder of Debt Securities or Coupons of any series and the
Trustee for such series shall be entitled to such relief as can be given at law
or in equity.
Section 5.08. Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Debt Security or of any Coupon shall have the right, which is
absolute and unconditional, to receive payment of the principal of (and premium,
if any) and (subject to Section 3.07) interest on such Debt Security or Coupon
on the respective Stated Maturity or Maturities expressed in such Debt Security
or Coupon (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment and interest thereon, and
such right shall not be impaired without the consent of such Holder.
Section 5.09. 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 the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
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Section 5.10. Rights and Remedies Cumulative.
Except as otherwise expressly provided elsewhere in this
Indenture, 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 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder 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 any
acquiescence therein. Every right and remedy given by this Indenture 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 5.12. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Debt Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Debt Securities of such series, provided, that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
(2) subject to the provisions of Section 6.01, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceeding so directed
would be unjustly prejudicial to the Holders of Debt Securities of such
series not joining in any such direction;
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(4) this provision shall not affect the rights of the Trustee
set forth in Section 6.01(c)(4).
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Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of any series may on behalf of the Holders of
all the Debt Securities of any such series waive, by notice to the Trustee and
the Company, any past default or Event of Default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series, or in the payment of any
sinking fund installment or analogous obligation with respect to the
Debt Securities of such series, or
(2) in respect of a covenant or provision hereof which
pursuant to Article Eleven cannot be modified or amended without the
consent of the Holder of each Outstanding Debt Security of such series
affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of the Debt Securities of such series under this Indenture, but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Debt Security or any Coupon 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 other than the Trustee of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder or group of Holders holding in the
aggregate more than 10% in principal amount of the Outstanding Debt Securities
of any series, or to any suit instituted by any Holder of a Debt Security or
Coupon for the enforcement of the payment of the principal of (or premium, if
any) or interest on such Debt Security or the payment of any Coupon on or after
the respective Stated Maturity or Maturities expressed in such Debt Security or
Coupon (or, in the case of redemption, on or after the Redemption Date).
Section 5.15. 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
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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 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default with
respect to the Debt Securities of any series,
(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 provisions 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.
(b) In case an Event of Default with respect to Debt
Securities of any series has occurred and is continuing, the Trustee shall, with
respect to the Debt Securities of such series, 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) Subject to Section 6.04, 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 shall not be construed to limit the effect
of subsection (a) of this Section;
(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;
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(3) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it with respect to Debt
Securities of any series in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Debt Securities of such series 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;
(4) the Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights
or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it; and
(5) the Trustee shall not be charged with knowledge of any
default or Event of Default or any other act or circumstance upon the
occurrence of which the Trustee may be required to take action unless a
Responsible Officer of the Trustee obtains actual knowledge of such
default, Event of Default, act or circumstance or unless written notice
referencing this Indenture or the Debt Securities is received by the
Trustee at the Corporate Trust Office.
(d) 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 6.02. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder
with respect to Debt Securities or Coupons, if any, of any series, the Trustee
shall give notice to all Holders of Debt Securities and Coupons of such series
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 Debt
Security or Coupon of such series or in the payment of any sinking fund
installment with respect to Debt Securities of such series, 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 and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Debt Securities and of Coupons of
such series; and provided, further, that in the case of any default of the
character specified in Section 5.01(4) with respect to Debt Securities of such
series no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Debt Securities of such series.
Notice given pursuant to this Section 6.02 with respect to
Registered Securities shall be transmitted by mail:
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(1) to all Registered Holders, as the names and addresses of
the Registered Holders appear in the Security Register;
(2) to such Holders of Bearer Securities of any series as have
within two years preceding such transmission, filed their names and
addresses with the Trustee for such series for that purpose; and
(3) to each Holder of a Debt Security of any series whose name
and address appear in the information preserved at the time by the
Trustee in accordance with Section 7.02(a) of this Indenture; and
(4) to the Company.
Notice given pursuant to this Section 6.02 with respect to
Bearer Securities shall be transmitted in the manner set forth in Section 1.05.
Section 6.03. Certain Rights of Trustee.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, 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 shall 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 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 of Debt Securities of any series pursuant to
this Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
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(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent (including any agent appointed pursuant
to Section 3.10(j)) or attorney appointed with due care by it hereunder.
Section 6.04. Not Responsible for Recitals or Issuance of Debt
Securities.
The recitals contained herein and in the Debt 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 Debt Securities or Coupons, if any, of
any series. The Trustee shall not be accountable for the use or application by
the Company of any Debt Securities or the proceeds thereof. The Trustee assumes
no responsibility for the accuracy of any statements in any registration
statement relating to the Debt Securities.
Section 6.05. May Hold Debt Securities.
The Trustee, any Paying Agent, the Security Registrar or any
other agent of the Company, in its individual or any other capacity, may become
the owner or pledgee of Debt Securities or Coupons, and, subject to Sections
6.08 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Paying Agent, Security Registrar or such other
agent.
Section 6.06. Money Held in Trust.
Money in any Currency held by the Trustee or any Paying Agent
in trust hereunder need not be segregated from other funds except to the extent
required by law. Neither the Trustee nor any Paying Agent shall be under any
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
Section 6.07. Compensation and Reimbursement.
The Company agrees:
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(1) to pay to the Trustee from time to time such compensation
in Dollars as the Company and the Trustee shall from time to time agree
in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee in Dollars upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
connection with the administration of the trusts herein set forth
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify in Dollars the Trustee for, and to hold it
harmless against, any loss, liability, damage, claims or expense,
including taxes (other than taxes based upon, measured by or determined
by income of the Trustee), incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust or performance of its duties hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the
Company under this Section and in addition to its rights under Section 5.06, the
Trustee shall have a claim prior to the Debt Securities and Coupons, if any,
upon all property and funds held or collected by the Trustee as such, except
funds held in trust pursuant to Section 15.03 hereof or for the payment of
amounts due on particular Debt Securities and Coupons. The fees and expenses
incurred by the Trustee in connection with any bankruptcy of the Company shall
constitute fees and expenses of administration; provided, however, that this
shall not affect the Trustee's rights as set forth in the preceding sentence or
Section 5.06.
Section 6.08. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting
interest, as defined in this Section with respect to the Debt Securities of any
series, then, within 90 days after ascertaining that it has such conflicting
interest, and if the default (as hereinafter defined) to which such conflicting
interest relates has not been cured or duly waived or otherwise eliminated
before the end of such 90- day period, the Trustee shall either eliminate such
conflicting interest or, except as otherwise provided below, resign with respect
to the Debt Securities of such series, and the Company shall take prompt steps
to have a successor appointed, 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 (a) of this Section with respect to the Debt
Securities of any series, the Trustee shall,
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within 10 days after the expiration of such 90-day period, transmit to all
Holders of Debt Securities of such series notice of such failure.
Notice given pursuant to this Section 6.08(b) with respect to
Registered Securities shall be transmitted by mail:
(1) to all Registered Holders, as the names and addresses of
the Registered Holders appear in the Security Register;
(2) to such Holders of Bearer Securities of any series as
have, within two years preceding such transmission, filed their names
and addresses with the Trustee for such series for that purpose;
(3) to each Holder of a Debt Security of any series whose name
and address appear in the information preserved at the time by the
Trustee in accordance with Section 7.02(a) of this Indenture; and
(4) to the Company.
Notice given pursuant to this Section 6.08(b) with respect to
Bearer Securities shall be transmitted in the manner set forth in Section 1.05.
(c) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest with respect to the Debt Securities of any
series, if there shall exist an Event of Default (as such term is defined
herein, but exclusive of any period of grace or requirement of notice) with
respect to such Debt Securities and
(1) the Trustee is trustee under this Indenture with respect
to the Outstanding Debt Securities of any series other than that series
or 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
Debt Securities issued under this Indenture, provided that there shall
be excluded from the operation of this paragraph this Indenture with
respect to the Debt Securities of any series other than that series and
any other indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the
Company are outstanding, if
(i) this Indenture and such other indenture or
indentures (and all series of securities issuable thereunder)
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 with respect to the Debt
Securities of such series and one
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or more other series or the provisions of such other indenture
or indentures which are 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 this Indenture with respect
to the Debt Securities of such series and such other series or
under 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 with respect to the Debt Securities of such series
and such other series or 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 this Indenture with respect to the Debt Securities of
such series and such other series or under such other
indenture or 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 Trustee and 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, 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% 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;
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(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 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 Debt 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, 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, 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 such Event of Default or
any anniversary of such Event of Default while such Event of Default
remains outstanding, 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. As to any such securities of which the
Trustee acquired ownership through becoming 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 dates of any such Event of Default and annually in each succeeding
year that such 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 dates. If the Company fails to make payment in
full of the principal of (or premium, if any) or interest on any of the
Debt 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 be considered as though beneficially owned by the Trustee for the
purposes of paragraphs (6), (7) and (8) of this subsection; or
(10) except under the circumstances described in paragraph
(1), (3), (4), (5) or (6) of Section 6.13(b) of this Indenture, the
Trustee shall be or shall become a creditor of the Company.
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For the purposes of paragraph (1) of this subsection, the term
"series of securities" or "series" means a series, class or group of securities
issuable under an indenture pursuant to whose terms holders of one such series
may vote to direct the Trustee, or otherwise take action pursuant to a vote of
such holders, separately from holders of another series; provided, that "series
of securities" or "series" shall not include any series of securities issuable
under an indenture if all such series rank equally and are wholly unsecured.
The specification of percentages in paragraphs (5) to (9),
inclusive, of this subsection 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.
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection 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 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 one year 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 estate,
an unincorporated organization, or a
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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 arrangements whereby a trustee or
trustees or agent or agents for the owner or holder of such security
are presently entitled to vote in the direction or management of the
affairs of a person.
(5) The term "Company" means any obligor upon the Debt
Securities of any series.
(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 with 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 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.
(f) Except in the case of a default in the payment of the
principal of or interest on any Debt Security of any series, or in the payment
of any sinking or purchase fund installment, the Trustee shall not be required
to resign as provided by this Section if the Trustee shall have sustained the
burden of proving, on application to the Commission and after opportunity for
hearing thereon, that:
(1) the Event of Default may be cured or waived during a
reasonable period and under the procedures described in such
application; and
(2) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of the Debt Securities.
The filing of such an application shall automatically stay the performance of
the duty to resign until the Commission orders otherwise.
Section 6.09. 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, the Commonwealth of Puerto Rico or the District
of Columbia, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000, subject to
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supervision or examination by Federal, State, Commonwealth or District of
Columbia authority and eligible to act as Trustee hereunder in compliance with
Section 310(a)(1) of the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. Neither the Company nor any person directly or
indirectly controlling, controlled by, or under common control with the Company
shall serve as Trustee upon any Debt Securities.
Section 6.10. 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 6.11.
(b) The Trustee may resign at any time with respect to the
Debt Securities of one or more series by giving written notice thereof to the
Company. If an instrument of 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 with respect to the Debt
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Debt Securities of any series, and a successor Trustee appointed, by Act of the
Holders of a majority in principal amount of the Outstanding Debt Securities of
such series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08(a) with
respect to the Debt Securities of any series after written request
therefor by the Company or by any Holder who has been a bona fide
Holder of a Debt Security of such series for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09
with respect to the Debt Securities of any series and shall fail to
resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged 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 with respect to all Debt Securities, or (ii) subject to Section 5.14,
any Holder who has been a bona fide Holder
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of a Debt Security of any series 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 for the Debt Securities of such series.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Debt Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Debt Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Debt Securities of one or more or all of such series and that at any time there
shall be only one Trustee with respect to the Debt Securities of any particular
series) and shall comply with the applicable requirements of Section 6.11. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Debt
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Debt Securities of such series delivered
to the Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become the successor
Trustee with respect to the Debt Securities of such series and to that extent
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Debt Securities of any series shall have been so
appointed by the Company or the Holders of such series and accepted appointment
in the manner hereinafter provided, any Holder who has been a bona fide Holder
of a Debt Security of such series for at least six months may, subject to
Section 5.14, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Debt Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Debt Securities of any series and
each appointment of a successor Trustee with respect to the Debt Securities of
any series in the manner and to the extent provided in Section 1.05 to the
Holders of Debt Securities of such series. Each notice shall include the name of
the successor Trustee with respect to the Debt Securities of such series and the
address of its corporate trust office.
Section 6.11. Acceptance of Appointment by Successor.
(a) In the case of an appointment hereunder of a successor
Trustee with respect to all Debt Securities, each such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee,
but, on 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
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held by such retiring Trustee hereunder, subject nevertheless to its claim, if
any, provided for in Section 6.07.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Debt Securities of one or more (but not all) series,
the Company, the retiring Trustee and each successor Trustee with respect to the
Debt Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Debt Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debt Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in any such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any other trust or trusts hereunder administered by any other such Trustee; and
upon the execution and delivery of any such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Debt Securities of that
or those series to which the appointment of such successor Trustee relates, but,
on request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Debt
Securities of that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
Section 6.12. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided that
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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 Debt 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 Debt Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such Debt
Securities. In case any Debt Securities shall not have been authenticated by
such predecessor Trustee, any such successor Trustee may authenticate and
deliver such Debt Securities, in either its own name or that of its predecessor
Trustee, with the full force and effect which this Indenture provides for the
certificate of authentication of the Trustee.
Section 6.13. Preferential Collection of Claims Against
Company.
(a) Subject to subsection (b) of this Section, 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 (c) of this Section, or subsequent to such 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
Debt Securities and of the Coupons, if any, and the holders of other indenture
securities (as defined in subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in 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, or from the
exercise of any right of set-off which the Trustee could have exercised
if a voluntary or involuntary case had been commenced in respect of the
Company under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, State or Commonwealth
bankruptcy, insolvency or other similar law 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 or
reorganization pursuant to the Federal
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bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, State or Commonwealth bankruptcy, insolvency or
other similar 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 (c) of this Section, would
occur within three months, or
(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 among 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 laws, as now or hereafter constituted or any other applicable
Federal, State or Commonwealth bankruptcy, insolvency or other similar 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 and the holders of other
indenture securities dividends on claims filed against the Company in bankruptcy
or receivership or in proceedings for reorganization pursuant to the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal, State or Commonwealth bankruptcy, insolvency or other similar 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 laws, as now
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or hereafter constituted, or any other applicable Federal, State or Commonwealth
bankruptcy, insolvency or other similar 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 among 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 claim,
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 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 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
(a) of this Section 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 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;
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(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 (c) of
this Section;
(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; and
(6) The acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c) of this Section.
(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 Debt 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, 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 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; and
(5) the term "Company" means any obligor upon the Debt
Securities.
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Section 6.14. Appointment of Authenticating Agent.
As long as any Debt Securities of a series remain Outstanding,
upon a Company Request, there shall be an authenticating agent (the
"Authenticating Agent") appointed, for such period as the Company shall elect,
by the Trustee for such series of Debt Securities to act as its agent on its
behalf and subject to its direction in connection with the authentication and
delivery of each series of Debt Securities for which it is serving as Trustee.
Debt Securities of each such series authenticated by such Authenticating Agent
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by such Trustee. Wherever
reference is made in this Indenture to the authentication and delivery of Debt
Securities of any series by the Trustee for such series or to the Trustee's
Certificate of Authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee for such series by an
Authenticating Agent for such series and a Certificate of Authentication
executed on behalf of such Trustee by such Authenticating Agent. Such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any State or the
Commonwealth of Puerto Rico, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $5,000,000 and
subject to supervision or examination by Federal, State or Commonwealth
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for 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 any 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 any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business of any Authenticating Agent, shall continue to be the
Authenticating Agent with respect to all series of Debt Securities for which it
served as Authenticating Agent without the execution or filing of any paper or
any further act on the part of the Trustee for such series or such
Authenticating Agent. Any Authenticating Agent may at any time, and if it shall
cease to be eligible shall, resign by giving written notice of resignation to
the applicable Trustee and to the Company.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14 with respect to
one or more or all series of Debt Securities, the Trustee for such series shall
upon Company Request appoint a successor Authenticating Agent, and the Company
shall provide notice of such appointment to all Holders of Debt Securities of
such series in the manner and to the extent provided in Section 1.05. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
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Agent herein. The Trustee for the Debt Securities of such series agrees to pay
to the Authenticating Agent for such series from time to time reasonable
compensation for its services, and the Trustee shall be entitled to be
reimbursed for such payment, subject to the provisions of Section 6.07. The
Authenticating Agent for the Debt Securities of any series shall have no
responsibility or liability for any action taken by it as such in good faith and
without negligence at the direction of the Trustee for such series.
If an appointment with respect to one or more series is made
pursuant to this Section, the Debt Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Debt Securities of the series designated
therein referred to in the within mentioned Indenture.
,
----------------------------------
As Trustee
Dated: By:
----------------------------------
As Authenticating Agent
By:
----------------------------------
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Company to Furnish Trustee Names and Addresses
of Holders.
The Company will furnish or cause to be furnished to the
Trustee with respect to Registered Securities of each series for which it acts
as Trustee:
(a) semi-annually on a date not more than 15 days after each
Regular Record Date with respect to an Interest Payment Date, if any, for the
Registered Securities of such series (or on semi-annual dates in each year to be
determined pursuant to Section 3.01 if the Registered Securities of such series
do not bear interest), a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Registered Holders as of the date 15
days next preceding each such Regular Record Date (or such semi-annual dates, as
the case may be); and
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(b) at such other times as the Trustee may request in writing,
within 15 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar for such series, no such list need be furnished.
The Company shall also be required to furnish to the Trustee
at all such times set forth above all information in the possession or control
of the Company or any of its Paying Agents other than the Trustee as to the
names and addresses of the Holders of Bearer Securities of all series; provided,
however, that the Company shall have no obligation to investigate any matter
relating to any Holders of Bearer Securities of any series.
Section 7.02. Preservation of Information; Communication to
Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of Holders
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 received by it in the capacity of Paying Agent (if so acting)
hereunder, and filed with it within the two preceding years pursuant to Section
7.03(c)(2).
The Trustee may destroy any list furnished to it as provided
in Section 7.01 upon receipt of a new list so furnished, destroy any information
received by it as Paying Agent (if so acting) hereunder upon delivering to
itself as Trustee, not earlier than 45 days after an Interest Payment Date, a
list containing the names and addresses of the Holders obtained from such
information since the delivery of the next previous list, if any, destroy any
list delivered to itself as Trustee which was compiled from information received
by it as Paying Agent (if so acting) hereunder upon the receipt of a new list so
delivered, and destroy not earlier than two years after filing, any information
filed with it pursuant to Section 7.03(c)(2).
(b) If three or more Holders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Debt 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
of Debt Securities of a particular series (in which case the applicants must
hold Debt Securities of such series) or with all Holders of Debt Securities with
respect to their rights under this Indenture or under the Debt 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 the 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 Section 7.02(a), or
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(ii) inform such applicants as to the approximate number of
Holders of Debt Securities of such series or of all Debt Securities, as
the case may be, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section
7.02(a), and as to the approximate cost of mailing to such Holders the
form of proxy or other communication, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon written request of such
applicants, mail to the Holders of Debt Securities of such series or all
Holders, as the case may be, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 7.02(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 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 mailing would be contrary to the best interests of the Holders
of Debt Securities of such series or all Holders, as the case may be, 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 Debt Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee 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
Section 7.02(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
of any material pursuant to a request made under Section 7.02(b).
Section 7.03. Reports by Trustee.
(a) Within 60 days after May 30 of each year, commencing May
30, 2000, the Trustee shall, to the extent required by the Trust Indenture Act,
transmit to all Holders of Debt Securities of any series with respect to which
it acts as Trustee, in the manner hereinafter provided in this Section 7.03, a
brief report dated as of such date 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 6.09 and its
qualifications under Section 6.08;
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(2) the creation of or any material change to a relationship
specified in paragraph (1) through (10) of Section 6.08(c) of this
Indenture;
(3) 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 or charge, prior to that of the Debt Securities of such
series, 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 Outstanding Debt
Securities of such series on the date of such report;
(4) any change to the amount, interest rate and maturity date
of all other indebtedness owing by the Company (or any other obligor on
the Debt Securities of such series) 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 6.13(b)(2), (3), (4) or (6);
(5) any change to the property and funds, if any, physically
in the possession of the Trustee as such on the date of such report;
(6) any additional issue of Debt Securities which the Trustee
has not previously reported; and
(7) 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 Debt Securities of such series, except
action in respect of a default, notice of which has been or is to be
withheld by the Trustee in accordance with Section 6.02.
(b) The Trustee shall transmit by mail to all Holders of Debt
Securities of any series (whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 7.02 (a)) for
which it acts as the Trustee, as hereinafter provided, a brief report with
respect to 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) since the date of the last report transmitted pursuant to
subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this Indenture) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Debt Securities of such series, on property or funds held or collected by it
as Trustee, and which it has not previously reported pursuant to this
subsection, except that the Trustee for each series 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 amount of the Debt Securities of such
series Outstanding at such time, such report to be transmitted within 90 days
after such time.
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(c) Reports pursuant to this Section 7.03 with respect to
Registered Securities shall be transmitted by mail:
(1) to all Holders of Registered Securities, as the names and
addresses of such Holders of Registered Securities appear in the
Security Register;
(2) to such Holders of Bearer Securities of any series as
have, within two years preceding such transmission, filed their names
and addresses with the Trustee for such series for that purpose; and
(3) except in the cases of reports pursuant to subsection (b)
of this Section 7.03, to each Holder of a Debt Security of any series
whose name and address appear in the information preserved at the time
by the Trustee in accordance with Section 7.02(a).
Reports pursuant to this Section 7.03 with respect to Bearer
Securities shall be published in accordance with Section 1.05.
(d) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Debt Securities of such series are listed, with the Commission and
also with the Company. The Company will notify the Trustee when any series of
Debt Securities are listed on any stock exchange.
Section 7.04. Reports by Company.
The Company will:
(1) 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, as amended; or,
if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it will 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, as amended, in respect of a security listed and registered on a
national securities exchange as may be required from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and
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covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(3) transmit to all Holders of Debt Securities, in the manner
and to the extent provided in Section 7.03, 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
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONCERNING THE HOLDERS
Section 8.01. Acts of Holders.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent or
proxy 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. Whenever in this Indenture it is
provided that the Holders of a specified percentage in aggregate principal
amount of the Outstanding Debt Securities of any series may take any Act, the
fact that the Holders of such specified percentage have joined therein may be
evidenced (a) by the instrument or instruments executed by Holders in person or
by agent or proxy appointed in writing, or (b) by the record of Holders voting
in favor thereof at any meeting of such Holders duly called and held in
accordance with the provisions of Article Nine, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of Holders.
Section 8.02. Proof of Ownership; Proof of Execution of
Instruments by Holder.
The ownership of Registered Securities of any series shall be
proved by the Security Register for such series or by a certificate of the
Security Registrar for such series.
The ownership of Bearer Securities shall be proved by
production of such Bearer Securities or by a certificate executed by any bank or
trust company, which certificate shall be dated and shall state that on the date
thereof a Bearer Security bearing a specified identifying number or other mark
was deposited with or exhibited to the person executing such certificate by the
person named in such certificate, or by any other proof of possession reasonably
satisfactory to the Trustee. The holding by the person named in any such
certificate of any Bearer Security specified therein
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shall be presumed to continue for a period of one year unless at the time of
determination of such holding (1) another certificate bearing a later date
issued in respect of the same Bearer Security shall be produced, (2) such Bearer
Security shall be produced by some other person, (3) such Bearer Security shall
have been registered on the Security Register, if, pursuant to Section 3.01,
such Bearer Security can be so registered, or (4) such Bearer Security shall
have been canceled or paid.
Subject to the provisions of Sections 6.01, 6.03 and 9.05,
proof of the execution of a writing appointing an agent or proxy and of the
execution of any instrument by a Holder or his agent or proxy shall be
sufficient and conclusive in favor of the Trustee and the Company if made in the
following manner:
The fact and date of the execution by any such person of any
instrument may be proved by the certificate of any notary public, or other
officer authorized to take acknowledgments of deeds, that the person executing
such instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such execution sworn to before any such notary or other such
officer. Where such execution is by an officer of a corporation or association
or a member of a partnership on behalf of such corporation, association or
partnership, as the case may be, or by any other person acting in a
representative capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
The record of any Holders' meeting shall be proved in the
manner provided in Section 9.06.
The Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section so long as the request
is a reasonable one.
Section 8.03. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Registered Security is registered
as the owner of such Registered Security for the purpose of receiving payment of
the principal of (and premium, if any) and (subject to Section 3.07) interest,
if any, on such Registered Security and for all other purposes whatsoever,
whether or not such Registered 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. The Company, the Trustee, and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security or of any Coupon as the
absolute owner of such Bearer Security or Coupon for the purposes of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Bearer Security or Coupon 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. All payments made to any Holder, or upon his
order, shall be valid, and, to the extent of the sum or sums paid, effectual to
satisfy and discharge the liability for moneys payable upon such Debt Security
or Coupon.
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Section 8.04. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 8.01, of the taking of any Act by the Holders of
the percentage in aggregate principal amount of the Outstanding Debt Securities
specified in this Indenture in connection with such Act, any Holder of a Debt
Security the number, letter or other distinguishing symbol of which is shown by
the evidence to be included in the Debt Securities the Holders of which have
consented to such Act may, by filing written notice with the Trustee at the
Corporate Trust Office and upon proof of ownership as provided in Section 8.02,
revoke such Act so far as it concerns such Debt Security. Except as aforesaid,
any such Act taken by the Holder of any Debt Security shall be conclusive and
binding upon such Holder and, subject to the provisions of Section 5.08, upon
all future Holders of such Debt Security and all past, present and future
Holders of Coupons, if any, appertaining thereto and of any Debt Securities and
Coupons issued on transfer or in lieu thereof or in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such Debt Security or Coupons or such other Debt Securities or Coupons.
ARTICLE NINE
HOLDERS' MEETINGS
Section 9.01. Purposes of Meetings.
A meeting of Holders of any or all series may be called at any
time and from time to time pursuant to the provisions of this Article Nine for
any of the following purposes:
(1) to give any notice to the Company or to the Trustee for
such series, or to give any directions to the Trustee for such series,
or to consent to the waiving of any default hereunder and its
consequences, or to take any other action authorized to be taken by
Holders pursuant to any of the provisions of Article Five;
(2) to remove the Trustee for such series and appoint a
successor Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of
the Outstanding Debt Securities of any one or more or all series, as
the case may be, under any other provision of this Indenture or under
applicable law.
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Section 9.02. Call of Meetings by Trustee.
The Trustee for any series may at any time call a meeting of
Holders of such series to take any action specified in Section 9.01, to be held
at such time or times and at such place or places as the Trustee for such series
shall determine. Notice of every meeting of the Holders of any series, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given to Holders of such series
in the manner and to the extent provided in Section 1.05. Such notice shall be
given not less than 20 days nor more than 90 days prior to the date fixed for
the meeting.
Section 9.03. Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in aggregate principal amount of the
Outstanding Debt Securities of a series or of all series, as the case may be,
shall have requested the Trustee for such series to call a meeting of Holders of
any or all such series by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have given
the notice of such meeting within 20 days after the receipt of such request,
then the Company or such Holders may determine the time or times and the place
or places for such meetings and may call such meetings to take any action
authorized in Section 9.01, by giving notice thereof as provided in Section
9.02.
Section 9.04. Qualifications for Voting.
To be entitled to vote at any meeting of Holders a Person
shall be (a) a Holder of a Debt Security of the series with respect to which
such meeting is being held or (b) a Person appointed by an instrument in writing
as agent or proxy by such Holder. The only Persons who shall be entitled to be
present or to speak at any meeting of Holders shall be the Persons entitled to
vote at such meeting and their counsel and any representatives of the Trustee
for the series with respect to which such meeting is being held and its counsel
and any representatives of the Company and its counsel.
Section 9.05. Regulations.
Notwithstanding any other provisions of this Indenture, the
Trustee for any series may make such reasonable regulations as it may deem
advisable for any meeting of Holders of such series, in regard to proof of the
holding of Debt Securities of such series and of the appointment of proxies, and
in regard to the appointment and duties of inspectors of votes, the submission
and examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it shall
deem appropriate.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of such series as provided in Section 9.03, in which
case the Company or the Holders calling the meeting, as the case
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may be, shall in like manner appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by a majority vote of
the meeting.
Subject to the provisos in the definition of "Outstanding," at
any meeting each Holder of a Debt Security of the series with respect to which
such meeting is being held or proxy therefor shall be entitled to one vote for
each $1,000 principal amount (or such other amount as shall be specified as
contemplated by Section 3.01) of Debt Securities of such series held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Debt Security challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote other than by virtue of Outstanding Debt
Securities of such series held by him or instruments in writing duly designating
him as the person to vote on behalf of Holders of Debt Securities of such
series. Any meeting of Holders with respect to which a meeting was duly called
pursuant to the provisions of Section 9.02 or 9.03 may be adjourned from time to
time by a majority of such Holders present and the meeting may be held as so
adjourned without further notice.
Section 9.06. Voting.
The vote upon any resolution submitted to any meeting of
Holders with respect to which such meeting is being held shall be by written
ballots on which shall be subscribed the signatures of such Holders or of their
representatives by proxy and the serial number or numbers of the Debt Securities
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Holders
shall be taken and there shall be attached to said record the original reports
of the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was transmitted as provided
in Section 9.02. The record shall show the serial numbers of the Debt Securities
voting in favor of or against any resolution. The record shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
Section 9.07. No Delay of Rights by Meeting.
Nothing contained in this Article Nine shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to any Holder under any of the provisions of this Indenture or of the
Debt Securities of any series.
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ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 10.01. 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 properties
and assets 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 properties and assets 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 properties and assets 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 properties and assets 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 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 Debt Securities and the performance of every
covenant of this Indenture on the part of the Company to be performed
or observed;
(2) immediately after giving effect to such transaction, 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; and
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the Company
would become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by this Indenture, the
Company or such successor Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Debt Securities
equally and ratably with (or prior to) all Indebtedness secured
thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
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Section 10.02. 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 10.01, 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 Debt Securities.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of
Holders.
Without prior notice to or 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 Corporation to the
rights of the Company and the assumption by such successor of the
covenants and other obligations of the Company herein and in the Debt
Securities and Coupons, if any, contained; or
(2) to add to the covenants of the Company, for the benefit of
the Holders of all or any series of Debt Securities and the Coupons, if
any, appertaining thereto (and if such covenants are to be for the
benefit of less than all series, stating that such covenants are
expressly being included solely for the benefit of such series), or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default (and if such
Events of Default are to be applicable to less than all series, stating
that such Events of Default are expressly being included solely to be
applicable to such series); or
(4) to add or change any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
issuance of Debt Securities of any series in bearer form, registrable
or not registrable, and with or without Coupons, to permit Bearer
Securities to be issued in exchange for Registered Securities, to
permit Bearer Securities to be issued in exchange for Bearer Securities
of other authorized denominations or to permit the issuance of Debt
Securities of any series in uncertificated form, provided that any such
action shall
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not adversely affect the interests of the Holders of Debt Securities of
any series or any related Coupons in any material respect; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Outstanding Debt Security or Coupon of
any series created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision and as to
which such supplemental indenture would apply; or
(6) to secure the Debt Securities; or
(7) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to
Article Four or Fifteen, provided that any such action shall not
adversely affect the interests of the Holders of Debt Securities of
such series or any other series of Debt Securities or any related
Coupons in any material respect; or
(8) to establish the form or terms of Debt Securities and
Coupons, if any, of any series as permitted by Sections 2.01 and 3.01;
or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to one or more series of
Debt 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,
pursuant to the requirements of Section 6.11; or
(10) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, to eliminate any conflict between the terms of this
Indenture or the Debt Securities and the Trust Indenture Act or to make
any other provisions with respect to matters or questions arising under
this Indenture which shall not be inconsistent with any provision of
this Indenture; provided such other provisions shall not adversely
affect the interests of the Holders of Outstanding Debt Securities or
Coupons, if any, of any series created prior to the execution of such
supplemental indenture in any material respect.
Section 11.02. Supplemental Indentures With Consent of
Holders.
With the written consent of the Holders of not less than a
majority in principal amount of the Outstanding Debt Securities of each series
affected by such supplemental indenture voting separately, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the
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Holders under this Indenture of such Debt Securities or Coupons, if any;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Debt Security of each such series
affected thereby,
(1) change the Stated Maturity of the principal of, or
installment of interest, if any, on, any Debt Security, or reduce the
principal amount thereof or the interest thereon or any premium payable
upon redemption thereof, or change the Stated Maturity of or reduce the
amount of any payment to be made with respect to any Coupon, or change
the Currency or Currencies in which the principal of (and premium, if
any) or interest on such Debt Security is denominated or payable, or
reduce the amount of the principal of a Discount Security that would be
due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.02, or adversely affect the right of
repayment or repurchase, if any, at the option of the Holder, or reduce
the amount of, or postpone the date fixed for, any payment under any
sinking fund or analogous provisions for any Debt Security, or impair
the right to institute suit for the enforcement of any payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date), or limit the obligation of the Company to
maintain a paying agency outside the United States for payment on
Bearer Securities as provided in Section 12.03; or
(2) reduce the percentage in principal amount of the
Outstanding Debt Securities of any series, the consent of whose Holders
is required for any supplemental indenture, or the consent of whose
Holders is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults or Events of Default
hereunder and their consequences provided for in this Indenture; or
(3) modify any of the provisions of this Section, Section 5.13
or Section 12.08, 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 Debt
Security of each series affected thereby; provided, however, that this
clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant
changes in this Section and Section 12.08, or the deletion of this
proviso, in accordance with the requirements of Sections 6.11 and
11.01(7).
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.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture with respect to one or more
particular series of Debt Securities and Coupons, if any, or which modifies the
rights of the Holders of Debt Securities and Coupons of such series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Debt Securities and Coupons, if any, of
any other series.
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Section 11.03. 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 6.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
adversely affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise in a material way.
Section 11.04. 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 Debt Securities and Coupons theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
Section 11.05. 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 11.06. Reference in Debt Securities to Supplemental
Indentures.
Debt Securities and Coupons, if any, of any series
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Debt Securities
and Coupons of any series 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 Debt Securities and Coupons of such series.
Section 11.07. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the
appropriate Trustee of any supplemental indenture pursuant to Section 11.02, the
Company shall transmit, in the manner and to the extent provided in Section
1.05, to all Holders of any series of the Debt Securities affected thereby, a
notice setting forth in general terms the substance of such supplemental
indenture.
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ARTICLE TWELVE
COVENANTS
Section 12.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Debt Securities and Coupons, if any, that it will duly and punctually
pay the principal of (and premium, if any) and interest on the Debt Securities
in accordance with the terms of the Debt Securities, the Coupons and this
Indenture. Unless otherwise specified as contemplated by Section 3.01 with
respect to any series of Debt Securities or except as otherwise provided in
Section 3.06, any interest due on Bearer Securities on or before Maturity shall
be payable only upon presentation and surrender of the several Coupons for such
interest installments as are evidenced thereby as they severally mature. If so
provided in the terms of any series of Debt Securities established as provided
in Section 3.01, the interest, if any, due in respect of any temporary Global
Note or permanent Global Note, together with any additional amounts payable in
respect thereof, as provided in the terms and conditions of such Debt Security,
shall be payable only upon presentation of such Debt Security to the Trustee for
notation thereon of the payment of such interest.
Section 12.02. Officer's Certificate as to Default.
The Company will deliver to the Trustee, on or before a date
not more than four months after the end of each fiscal year of the Company
(which on the date hereof is the calendar year) ending after the date hereof, a
certificate of the principal executive officer, principal financial officer or
principal accounting officer of the Company stating whether or not to the best
knowledge of the signer thereof the Company is in compliance with all covenants
and conditions under this Indenture, and, if the Company shall be in default,
specifying all such defaults and the nature thereof of which such signer may
have knowledge. For purposes of this Section, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
Section 12.03. Maintenance of Office or Agency.
If Debt Securities of a series are issuable only as Registered
Securities, the Company will maintain or cause to be maintained in each Place of
Payment for such series an office or agency where Debt Securities of that series
may be presented or surrendered for payment, where Debt Securities of that
series may be surrendered for registration of transfer or exchange or
redemption, and where notices and demands to or upon the Company in respect of
the Debt Securities of that series and this Indenture may be served. If Debt
Securities of a series are issuable as Bearer Securities, the Company will
maintain (A) in the Borough of Manhattan, The City and State of New York, an
office or agency where any Registered Securities of that series may be presented
or surrendered for payment, where any Registered Securities of that series, if
any, may be surrendered for registration of transfer, where Debt Securities of
that series may be surrendered for exchange or
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redemption, where Debt Securities of that series that are convertible may be
surrendered for conversion, where notices and demands to or upon the Company in
respect of the Debt Securities of that series and this Indenture may be served
and where Bearer Securities of that series and related Coupons may be presented
or surrendered for payment in the circumstances described in the following
paragraph (and not otherwise), (B) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series which is located outside the
United States, an office or agency where Debt Securities of that series and
related Coupons may be presented and surrendered for payment (including payment
of any additional amounts payable on Bearer Securities of that series, if so
provided pursuant to Section 3.01); provided, however, that if the Debt
Securities of that series are listed on The Stock Exchange of the United Kingdom
and the Republic of Ireland, the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent for the Debt Securities of
that series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as the Debt Securities of that series
are listed on such exchange, and (C) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series located outside the
United States an office or agency where any Registered Securities of that series
may be surrendered for registration of transfer, where Debt Securities of that
series may be surrendered for exchange and redemption and where notices and
demands to or upon the Company in respect of the Debt Securities of that series
and this Indenture may be served. The Company will give prompt written notice to
the Trustee of the locations, and any change in the locations, of such offices
or agencies. 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, except that Bearer Securities of that
series and the related Coupons may be presented and surrendered for payment at
the offices specified in the applicable Debt Security, and the Company hereby
appoints the Trustee, or in the case of Bearer Securities, such other agent as
is specified pursuant to Section 3.01, as its agent to receive all
presentations, surrenders, notices and demands.
No payment of principal, premium or interest on Bearer
Securities shall be made at any office or agency of the Company in the United
States or by check mailed to any address in the United States or by transfer to
an account maintained with a bank located in the United States; provided,
however, that, if the Debt Securities of a series are denominated and payable in
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any additional amounts payable on Securities of such series,
if so provided pursuant to Section 3.01) shall be made at the office of the
Trustee or the Company's Paying Agent in the Borough of Manhattan, The City and
State of New York, if (but only if) payment in Dollars of the full amount of
such principal, premium, interest or additional amounts, as the case may be, at
all offices or agencies outside the United States maintained for the purpose by
the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or outside
of such Place of Payment), and may from time to time rescind any such
designations; provided, however, that no such designation or
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rescission shall in any manner relieve the Company of its obligations described
in the preceding paragraph. The Company will give prompt written notice to the
Trustee of any such additional designation or rescission of designation and any
change in the location of any such different or additional office or agency.
Section 12.04. Money for Debt Securities; Payments to Be
Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Debt Securities and Coupons, if any, it will, on
or before each due date of the principal of (and premium, if any) or interest on
any of the Debt Securities of such series, 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 with
respect to any series of Debt Securities and Coupons, it will, by or on each due
date of the principal (and premium, if any) or interest on any Debt Securities
of such series, deposit with any such 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 thereto, and (unless any 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 with respect to any
series of Debt Securities other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Debt Securities of such series
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 Debt Securities of such series) in the
making of any payment of principal (and premium, if any) or interest on
the Debt Securities of such series; 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
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to be held by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Subject to any applicable abandoned property law, 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 Debt Security of any series and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company upon Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Debt Security or Coupon
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may, in its sole
discretion, at the expense of the Company cause to be transmitted in the manner
and to the extent provided by Section 1.05, 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 notification, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 12.05. Corporate Existence.
Subject to the provisions of Article Ten hereof, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect the corporate existence, rights (charter and statutory) and
franchises of the Company and each Significant Subsidiary; 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 or of the applicable
Significant Subsidiary and that the loss thereof is not disadvantageous in any
material respect to the Holders.
Section 12.06. Limitation Upon Creation of Liens on Voting
Stock of Significant Subsidiaries.
The Company will not, and it will not permit any Subsidiary at
any time directly or indirectly to, incur, issue, assume or guarantee any
Indebtedness for borrowed money secured by a pledge of, lien on or security
interest in any shares of Voting Stock of any Principal Mortgage Banking
Subsidiary without making effective provision whereby the Outstanding Debt
Securities (and, if the Company so elects any other Indebtedness of the Company
ranking on a parity with the Debt Securities) shall be secured equally and
ratably with such secured Indebtedness; provided, however, that the foregoing
covenant shall not apply to any Indebtedness secured by a pledge of, lien on or
security interest in any shares of Voting Stock of any corporation at the time
it becomes a Principal Mortgage Banking Subsidiary; and provided further,
however, that the foregoing covenant shall not be applicable to liens for taxes
or assessments or governmental charges or levies not then due and delinquent or
the validity of which is being contested in good faith or which are less than
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$5,000,000 in amount, liens created by or resulting from any litigation or legal
proceeding which is currently being contested in good faith by appropriate
proceedings or which involve claims of less than $5,000,000, or deposits to
secure (or in lieu of) surety, stay, appeal or customs bonds.
If the company shall hereafter be required to secure the
Securities equally and ratably with any other Indebtedness of the Company
pursuant to this Section, (i) the Company will promptly deliver to the Trustee
an Officers' Certificate stating that the foregoing covenant has been complied
with, and an Opinion of counsel stating that in the opinion of such counsel the
foregoing covenant has been complied with and that any instruments executed by
the Company or any Subsidiary in the performance of the foregoing covenant
comply with the requirements of the foregoing covenant and (ii) the Trustee is
hereby authorized to enter into an indenture or agreement supplemental hereto
and to take such action, if any, as it may deem advisable to enable it to
enforce the rights of the holders of the Debt Securities so secured.
Section 12.07. Limitation upon Disposition of Voting Stock of
Principal Mortgage Banking Subsidiaries. Subject to Article 10, the Company will
not sell, assign, transfer or otherwise dispose of any shares of, securities
convertible into or options, warrants or rights to subscribe for or purchase
shares of, Voting Stock (other than directors' qualifying shares) of any
Principal Mortgage Banking Subsidiary and will not permit any Principal Mortgage
Banking Subsidiary to issue (except to the Company) any shares of, securities
convertible into or options, warrants or rights to subscribe for or purchase
shares of, Voting Stock of any Principal Mortgage Banking Subsidiary, except for
sales, assignments, transfers or other dispositions that:
(1) are for fair market value on the date thereof, as determined by the
Board of Directors of the Company (which determination shall be conclusive) and,
after giving effect to such disposition and to any possible dilution, the
Company will own not less than 80% of the shares of Voting Stock of such
Principal Mortgage Banking Subsidiary then issued and outstanding free and clear
of any security interest;
(2) are made in compliance with an order of a court or regulatory
authority of competent jurisdiction, as a condition imposed by any such court or
authority permitting the acquisition by the Company, directly or indirectly, of
any other mortgage banking institution or entity the activities of which are
legally permissible for a bank holding company or a subsidiary thereof to engage
in, or as an undertaking made to such authority in connection with such an
acquisition;
(3) are made where such Principal Mortgage Banking Subsidiary, having
obtained any necessary regulatory approvals, unconditionally guarantees payment
when due of the principal of and premium, if any, and interest on the Debt
Securities; or
(4) are made to the Company or any Wholly-Owned Subsidiary if such
Wholly-Owned Subsidiary agrees to be bound by this covenant and the Company
agrees to maintain such Wholly-Owned Subsidiary as a Wholly-Owned Subsidiary.
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Notwithstanding the foregoing, any Principal Mortgage Banking
Subsidiary may be merged into or consolidated with another mortgage banking
institution organized under the laws of the United States, any State thereof,
the Commonwealth or the District of Columbia if, after giving effect to such
merger or consolidation, the Company or any Wholly-Owned Subsidiary owns at
least 80% of the Voting Stock of such other mortgage banking institution then
issued and outstanding free and clear of any security interest and if,
immediately after giving effect thereto and treating any such resulting
institution thereafter as a Principal Mortgage Banking Subsidiary and as a
Subsidiary for purposes of this Indenture, no Event of Default, and no event
that, after the giving of notice or lapse of time or both, would become an Event
of Default, has occurred and is continuing.
Section 12.08. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in Sections 12.05, 12.06 and 12.07
(and, if so specified pursuant to Section 3.01, any other covenant not set forth
herein and specified pursuant to Section 3.01 to be applicable to the Debt
Securities of any series, except as otherwise provided pursuant to Section 3.01)
with respect to the Debt Securities of any series if before the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Debt Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent expressly so waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES
Section 13.01. Applicability of Article.
Debt Securities of any series which are redeemable before their
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified pursuant to Section 3.01 for Debt Securities of any series)
in accordance with this Article.
Section 13.02. Election to Redeem; Notice to Trustee.
The election of the Company to redeem (or, in the case of
Discount Securities, to permit the Holders to elect to surrender for redemption)
any Debt Securities shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company of less than all of the Debt
Securities of any series pursuant to Section 13.03, the Company shall, at least
60 days before 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 Debt Securities
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of such series to be redeemed. In the case of any redemption of Debt Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Debt Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with
such restrictions.
Section 13.03. Selection by Trustee of Debt Securities to
Be Redeemed.
Except in the case of a redemption in whole of the Bearer
Securities or the Registered Securities of such series, if less than all the
Debt Securities of any series are to be redeemed at the election of the Company,
the particular Debt Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding Debt
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Debt Securities of such series or any integral multiple
thereof) of the principal amount of Debt Securities of such series in a
denomination larger than the minimum authorized denomination for Debt Securities
of such series pursuant to Section 3.02 in the Currency in which the Debt
Securities of such series are denominated. The portions of the principal amount
of Debt Securities so selected for partial redemption shall be equal to the
minimum authorized denominations for Debt Securities of such series pursuant to
Section 3.02 in the Currency in which the Debt Securities of such series are
denominated or any integral multiple thereof, except as otherwise set forth in
the applicable form of Debt Securities. In any case when more than one
Registered Security of such series is registered in the same name, the Trustee
in its discretion may treat the aggregate principal amount so registered as if
it were represented by one Registered Security of such series.
The Trustee shall promptly notify the Company in writing of
the Debt Securities selected for redemption and, in the case of any Debt
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 Debt Securities
shall relate, in the case of any Debt Security redeemed or to be redeemed only
in part, to the portion of the principal amount of such Debt Security which has
been or is to be redeemed.
Section 13.04. Notice of Redemption.
Notice of redemption 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,
not less than 30 days and not more than 60 days prior to the Redemption Date to
the Holders of Debt Securities of any series to be redeemed in whole or in part
pursuant to this Article Thirteen, in the manner provided in Section 1.05. Any
notice so given shall be conclusively presumed to have been duly given, whether
or not the Holder receives such notice. Failure to give such notice, or any
defect in such notice to the Holder of any Debt Security of a series designated
for redemption, in whole or in part, shall not
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affect the sufficiency of any notice of redemption with respect to the Holder of
any other Debt Security of such series.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) that Debt Securities of such series are being redeemed by
the Company pursuant to provisions contained in this Indenture or the
terms of the Debt Securities of such series or a supplemental indenture
establishing such series, if such be the case, together with a brief
statement of the facts permitting such redemption;
(4) if less than all Outstanding Debt Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Debt Securities to
be redeemed;
(5) that on the Redemption Date the Redemption Price will
become due and payable upon each such Debt Security to be redeemed, and
that interest thereon, if any, shall cease to accrue on and after said
date;
(6) that, unless otherwise specified in such notice, Coupon
Securities of any series, if any, surrendered for redemption must be
accompanied by all Coupons maturing subsequent to the date fixed for
redemption, failing which the amount of any such missing Coupon or
Coupons will be deducted from the Redemption Price;
(7) the Place or Places of Payment where such Debt Securities
are to be surrendered for payment of the Redemption Price;
(8) if Bearer Securities of any series are to be redeemed and
any Registered Securities of such series are not to be redeemed, and if
such Bearer Securities may be exchanged for Registered Securities not
subject to redemption on this Redemption Date pursuant to Section
3.05(b) or otherwise, the last date on which such exchanges may be
made; and
(9) that the redemption is for a sinking fund, if such is the
case.
Section 13.05. Deposit of Redemption Price.
On or prior to the Redemption Date for any Debt Securities,
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 12.04) an amount of money in the Currency
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or Currencies in which such Debt Securities are denominated (except as provided
pursuant to Section 3.01 or 3.10) sufficient to pay the Redemption Price of such
Debt Securities or such amount or any portions thereof which are to be redeemed
on that date.
Section 13.06. Debt Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, any Debt
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price in the Currency in which the Debt Securities of
such series are payable (except as otherwise specified pursuant to Section 3.01
or 3.10), and from and after such date (unless the Company shall default in the
payment of the Redemption Price) such Debt Securities shall cease to bear
interest. Upon surrender of any such Debt Security for redemption in accordance
with said notice, such Debt Security shall be paid by the Company at the
Redemption Price; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 12.03) and, unless otherwise specified as
contemplated by Section 3.01, only upon presentation and surrender of Coupons
for such interest; and provided, further, that, unless otherwise specified as
contemplated by Section 3.01, installments of interest on Registered Securities
which have a Stated Maturity on or prior to the Redemption Date for such Debt
Securities shall be payable according to the terms of such Debt Securities and
the provisions of Section 3.07.
If any Debt 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 prescribed
therefor in the Debt Security.
If any Coupon Security surrendered for redemption shall not be
accompanied by all Coupons appertaining thereto maturing on or after the
Redemption Date, the Redemption Price for such Coupon Security may be reduced by
an amount equal to the face amount of all such missing Coupons. If thereafter
the Holder of such Coupon shall surrender to any Paying Agent outside the United
States any such missing Coupon in respect of which a deduction shall have been
made from the Redemption Price, such Holder shall be entitled to receive the
amount so deducted. The surrender of such missing Coupon or Coupons may be
waived by the Company and the Trustee, if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless.
Section 13.07. Debt Securities Redeemed in Part.
Any Debt Security which is to be redeemed only in part shall
be surrendered at the Corporate Trust Office or such other office or agency of
the Company as is specified pursuant to Section 3.01 (in the case of Registered
Securities) and at an office of the Trustee or such other office or agency of
the Company outside the United States as is specified pursuant to Section 3.01
(in the case of Bearer Securities) with, if the Company, the Security Registrar
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company, the
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Security Registrar and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing, and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Debt Security
without service charge, a new Debt Security or Debt Securities of the same
series, of like tenor and form, 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 Debt Security so surrendered, and, in
the case of a Coupon Security, with appropriate Coupons attached. In the case of
a Debt Security providing appropriate space for such notation, at the option of
the Holder thereof, the Trustee, in lieu of delivering a new Debt Security or
Debt Securities as aforesaid, may make a notation on such Debt Security of the
payment of the redeemed portion thereof.
ARTICLE FOURTEEN
SINKING FUNDS
Section 14.01. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Debt Securities of a series except as
otherwise specified pursuant to Section 3.01 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Debt Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Debt Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Debt Securities
of any series, the amount of any cash sinking fund payment may be subject to
reduction as provided in Section 14.02. Each sinking fund payment shall be
applied to the redemption of Debt Securities of any series as provided for by
the terms of Debt Securities of such series.
Section 14.02. Satisfaction of Mandatory Sinking Fund
Payments with Debt Securities.
In lieu of making all or any part of a mandatory sinking fund
payment with respect to any Debt Securities of a series in cash, the Company may
at its option, at any time no more than sixteen months and no less than 45 days
prior to the date on which such sinking fund payment is due, deliver to the
Trustee Debt Securities of such series (together with the unmatured Coupons, if
any, appertaining thereto) theretofore purchased or otherwise acquired by the
Company, except Debt Securities of such series which have been redeemed through
the application of mandatory sinking fund payments pursuant to the terms of the
Debt Securities of such series, accompanied by a Company Order instructing the
Trustee to credit such sinking fund payment and stating that the Debt Securities
of such series were originally issued by the Company by way of bona fide sale or
other
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negotiation for value, provided that such Debt Securities shall not have been
previously so credited. Such Debt Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such Debt
Securities for redemption through operation of the sinking fund and the amount
of such mandatory sinking fund payment shall be reduced accordingly.
Section 14.03. Redemption of Debt Securities for Sinking
Fund.
Not less than 60 days prior to each sinking fund payment date
for any series of Debt Securities (unless a shorter period shall be satisfactory
to the Trustee), the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash in the Currency or Currencies in
which the Debt Securities of such series are denominated (except as provided
pursuant to Section 3.01 or 3.10) and the portion thereof, if any, which is to
be satisfied by delivering and crediting Debt Securities of such series pursuant
to Section 14.02 and whether the Company intends to exercise its rights to make
a permitted optional sinking fund payment with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the next succeeding sinking fund payment date. In the case of the
failure of the Company to deliver such certificate, the sinking fund payment due
on the next succeeding sinking fund payment date for such series shall be paid
entirely in cash and shall be sufficient to redeem the principal amount of the
Debt Securities of such series subject to a mandatory sinking fund payment
without the right to deliver or credit Debt Securities as provided in Section
14.02 and without the right to make any optional sinking fund payment with
respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional)
made in cash plus any unused balance of any preceding sinking fund payments made
with respect to the Debt Securities of any particular series shall be applied by
the Trustee (or by the Company if the Company is acting as its own Paying Agent)
on the sinking fund payment date on which such payment is made (or, if such
payment is made before a sinking fund payment date, on the sinking fund payment
date immediately following the date of such payment) to the redemption of Debt
Securities of such series at the Redemption Price specified in such Debt
Securities with respect to the sinking fund. Any sinking fund moneys not so
applied or allocated by the Trustee (or by the Company if the Company is acting
as its own Paying Agent) to the redemption of Debt Securities shall be added to
the next sinking fund payment received by the Trustee (or if the Company is
acting as its own Paying Agent, segregated and held in trust as provided in
Section 12.04) for such series and, together with such payment (or such amount
so segregated), shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys with respect to the Debt Securities of
any particular series held by the Trustee (or if the Company is acting as its
own Paying Agent, segregated and held in trust as provided in Section 12.04) on
the last sinking fund payment date with respect to Debt Securities of such
series and not held for the payment or redemption of particular Debt Securities
of such series shall be applied by the Trustee (or by the Company if the Company
is acting as its own Paying Agent), together with other moneys, if necessary, to
be deposited (or segregated) sufficient for the purpose, to the payment of the
principal of the Debt Securities of such series at Maturity.
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The Trustee shall select or cause to be selected the Debt
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 13.03 and the Company shall cause notice of the redemption
thereof to be given in the manner provided in Section 13.04. Such notice having
been duly given, the redemption of such Debt Securities shall be made upon the
terms and in the manner stated in Section 13.06.
On or before each sinking fund payment date, the Company shall
pay to the Trustee (or, if the Company is acting as its own Paying Agent, the
Company shall segregate and hold in trust as provided in Section 12.04) in cash
a sum, in the Currency or Currencies in which Debt Securities of such series are
denominated (except as provided pursuant to Sections 3.01 or 3.10), equal to the
principal and any interest accrued to the Redemption Date for Debt Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section.
Neither the Trustee nor the Company shall redeem any Debt
Securities of a series with sinking fund moneys or mail any notice of redemption
of Debt Securities of such series by operation of the sinking fund for such
series during the continuance of a default in payment of interest, if any, on
any Debt Securities of such series or of any Event of Default (other than an
Event of Default occurring as a consequence of this paragraph) with respect to
the Debt Securities of such series, except that if the notice of redemption
shall have been provided in accordance with the provisions hereof, the Trustee
(or the Company, if the Company is then acting as its own Paying Agent) shall
redeem such Debt Securities if cash sufficient for that purpose shall be
deposited with the Trustee (or segregated by the Company) for that purpose in
accordance with the terms of this Article. Except as aforesaid, any moneys in
the sinking fund for such series at the time when any such default or Event of
Default shall occur and any moneys thereafter paid into such sinking fund shall,
during the continuance of such default or Event of Default, be held as security
for the payment of the Debt Securities and Coupons, if any, of such series;
provided, however, that in case such default or Event of Default shall have been
cured or waived as provided herein, such moneys shall thereafter be applied on
or prior to the next sinking fund payment date for the Debt Securities of such
series on which such moneys may be applied pursuant to the provisions of this
Section.
ARTICLE FIFTEEN
DEFEASANCE
Section 15.01. Applicability of Article.
If, pursuant to Section 3.01, provision is made for the
defeasance of Debt Securities of a series, and if the Debt Securities of such
series are Registered Securities and denominated and payable only in Dollars
(except as provided pursuant to Section 3.01) then the provisions of this
Article shall be applicable except as otherwise specified pursuant to Section
3.01 for Debt Securities of such series. Defeasance provisions, if any, for Debt
Securities denominated in a Foreign Currency or Currencies or for Bearer
Securities may be specified pursuant to Section 3.01.
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Section 15.02. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations.
At the Company's option, either (a) the Company shall be
deemed to have been Discharged (as defined below) from its obligations with
respect to Debt Securities of any series ("legal defeasance option") or (b) if
so specified pursuant to Section 3.01, the Company shall cease to be under any
obligation to comply with any obligation of the Company or restrictive covenant
added for the benefit of such series pursuant to Section 3.01) ("covenant
defeasance option"), in either case at any time after the applicable conditions
set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Debt Securities of such series (i) money in an amount,
or (ii) U.S. Government Obligations (as defined below) which through
the payment of interest and principal in respect thereof in accordance
with their terms will provide, not later than one day before the due
date of any payment, money in an amount, or (iii) a combination of (i)
and (ii), sufficient, in the opinion (with respect to (i) and (ii)) of
a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay and discharge each installment of principal (including any
mandatory sinking fund payments) of and premium, if any, and interest
on, the Outstanding Debt Securities of such series on the dates such
installments of interest or principal and premium are due;
(2) such deposit shall not cause the Trustee with respect to
the Debt Securities of that series to have a conflicting interest as
defined in Section 6.08 and for purposes of the Trust Indenture Act
with respect to the Debt Securities of any series;
(3) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) if the Debt Securities of such series are then listed on
any national securities exchange, the Company shall have delivered to
the Trustee an Opinion of Counsel or a letter or other document from
such exchange to the effect that the Company's exercise of its option
under this Section would not cause such Debt Securities to be delisted;
(5) no Event of Default or event (including such deposit)
which, with notice or lapse of time or both, would become an Event of
Default with respect to the Debt Securities of such series shall have
occurred and be continuing on the date of such deposit and, with
respect to the legal defeasance option only, no Event of Default under
Section 5.01(5) or Section 5.01(6) or event which with the giving of
notice or lapse of time, or both, would become an Event of Default
under Section 5.01(5) or Section 5.01(6) shall have occurred and be
continuing on the 91st day after such date; and
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(6) the Company shall have delivered to the Trustee an Opinion
of Counsel or a ruling from the Internal Revenue Service to the effect
that such deposit, defeasance or the Holders of the Debt Securities of
such series will not recognize income, gain or loss for Federal income
tax purposes as a result of such deposit, defeasance or Discharge.
Notwithstanding the foregoing, if the Company exercises its covenant defeasance
option and an Event of Default under Section 5.01(5) or Section 5.01(6) or event
which with the giving of notice or lapse of time, or both, would become an Event
of Default under Section 5.01(5) or Section 5.01(6) shall have occurred and be
continuing on the 91st day after the date of such deposit, the obligations of
the Company referred to under the definition of covenant defeasance option with
respect to such Debt Securities shall be reinstated. Money and securities held
in trust pursuant to a legal defeasance shall not be subject to Article Sixteen.
"Discharged" means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by, and obligations
under, the Debt Securities of such series and to have satisfied all the
obligations under this Indenture relating to the Debt Securities of such series
(and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except (A) the rights of Holders of Debt
Securities of such series to receive, from the trust fund described in clause
(1) above, payment of the principal of (and premium, if any) and interest on
such Debt Securities when such payments are due, (B) the Company's obligations
with respect to the Debt Securities of such series under Sections 3.04, 3.05,
3.06, 6.07, 12.03 and 15.03 and (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States for the timely 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
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case under clauses (i) or
(ii), are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository 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 depository 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 depository
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 depository receipt.
Section 15.03. Deposited Moneys and U.S. Government
Obligations to Be Held in Trust.
All moneys and U.S. Government Obligations deposited with the
Trustee pursuant to Section 15.02 in respect of Debt Securities of a series
shall be held in trust and applied by it, in accordance with the provisions of
such Debt Securities and this Indenture, to the payment, either
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directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Debt
Securities, of all sums due and to become due thereon for principal (and
premium, if any) and interest, if any, but such money need not be segregated
from other funds except to the extent required by law.
Section 15.04. Repayment to Company.
The Trustee and any Paying Agent shall promptly pay or return
to the Company upon Company Request any moneys or U.S. Government Obligations
held by them at any time that are not required for the payment of the principal
of (and premium, if any) and interest on the Debt Securities of any series for
which money or U.S. Government Obligations have been deposited pursuant to
Section 15.02.
The provisions of the last paragraph of Section 12.04 shall
apply to any money held by the Trustee or any Paying Agent under this Article
that remains unclaimed for two years after the Maturity of any series of Debt
Securities for which money or U.S. Government Obligations have been deposited
pursuant to Section 15.02.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
DORAL FINANCIAL CORPORATION
By:
Title:
Attest:
- ------------------------
Title:
Seal
BANKERS TRUST COMPANY,
as Trustee
By:
Title:
Attest:
- ------------------------
Title:
Seal
-103-
<PAGE> 111
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On the ____ day of ___________, 1999, before me personally
came _____________________, to me known, who, being by me duly sworn, did depose
and say that his/her office is located at 1159 Franklin D. Roosevelt Avenue, San
Juan, Puerto Rico 00920; that he/she is _____________________________ of Doral
Financial Corporation one of the corporations described in and which executed
the foregoing instrument; that he/she knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that
he/she signed his name thereto by like authority.
--------------------------
Notary Public
SEAL
-104-
<PAGE> 112
STATE OF )
) ss.:
COUNTY OF )
On the __ day of ________, 1999, before me personally came ______ ,
to me known, who, being by me duly sworn, did depose and say that his office is
located at ________; that he is, ____ of _____ one of the corporations described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
------------------------
Notary Public
SEAL
-105-
<PAGE> 113
EXHIBIT A
[FORMS OF CERTIFICATION]
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
- ------------------------
[Insert title or sufficient description
of Securities to be delivered]
This is to certify that as of the date hereof and except as
set forth below principal amount of the above captioned Debt Securities held by
you for our account (i) is owned by person(s) that are not United States
person(s) (as defined below), (ii) is owned by United States person(s) that are
(a) foreign branches of United States financial institutions (as defined in
Section 1.165-12(c)(1)(v) of the United States Treasury regulations) ("financial
institutions") purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Debt Securities through foreign branches of
United States financial institutions and who hold the Debt Securities through
such United States financial institutions on the date hereof (and in either case
(a) or (b), each such United States financial institution hereby agrees, on its
own behalf or through its agent, that you may advise the Company or the
Company's agent that it will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986, as
amended, and the Treasury regulations thereunder), or (iii) is owned by United
States or foreign financial institution(s) for the purpose of resale during the
restricted period (as defined in Section 1.163-5(c)(2)(i)(D)(7) of the United
States Treasury regulations), and in addition if the owner of the Debt
Securities is a United States or foreign financial institution described in
clause (iii) above (whether or not also described in clause (i) or (ii)) this is
to further certify that such financial institution has not acquired the Debt
Securities for the purpose of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.
We undertake to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the beneficial interest in the temporary global Security held by you for our
account in accordance with your operating procedures if any applicable statement
herein is not correct on such date, and in the absence of any such notification
it may be assumed that this certification applies as of such date.
This certificate excepts and does not relate to ________
principal amount of Debt Securities held by you for our account as to which we
are not able to provide a certificate in this form. We understand that exchange
of such portion of the temporary global Note for definitive
<PAGE> 114
Bearer Securities or interests in a permanent global Note cannot be made until
we are able to provide a certificate in this form.
We understand that this certificate is required in connection
with certain tax laws and regulations of the United States. If administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or organized
in or under the laws of the United States and any estate or trust the income of
which is subject to United States federal income taxation regardless of its
source. "United States" means the United States of America (including the States
and the District of Columbia) and its "possessions" which include the
Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
Dated: ________________________, 19__
[To be dated no earlier than the
10th day before the Exchange Date]
By:________________________
As, or as agent for, the
beneficial owner(s)of
the portion of the
temporary global Note to
which this certificate
relates.
-2-
<PAGE> 115
EXHIBIT B
[FORM OF CERTIFICATE TO BE GIVEN BY [EUROCLEAR] AND
[Cedelbank, S.A.] IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL NOTE]
CERTIFICATE
- ------------------------
[Insert title or sufficient description
of Securities to be delivered]
The undersigned certifies that, based solely on certifications
we have received in writing, by tested telex or by electronic transmission from
member organizations appearing in our records as persons being entitled to a
portion of the principal amount set forth below (our "Member Organizations")
substantially to the effect set forth in the Indenture as of the date hereof,
_________ principal amount of the above-captioned Debt Securities (i) is owned
by person(s) that are not United States person(s) (as defined below), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (as defined in Section 1.165-12(c)(1)(v) of the United
States Treasury regulations) ("financial institutions") purchasing for their own
account or for resale, or (b) United States person(s) who acquired the Debt
Securities through foreign branches of United States financial institutions and
who hold the Debt Securities through such United States financial institutions
on the date hereof (and in either case (a) or (b), each such United States
financial institution has agreed, on its own behalf or through its agent, that
we may advise the Company or the Company's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the Treasury regulations thereunder), or (iii) is owned by
United States or foreign financial institution(s) for the purpose of resale
during the restricted period (as defined in Section 1.163-5(c)(2)(i)(D)(7) of
the United States Treasury regulations), and in addition United States or
foreign financial institutions described in clause (iii) above (whether or not
also described in clause (i) or (ii)) have certified that they have not acquired
the Debt Securities for the purpose of resale directly or indirectly to a United
States person or to a person within the United States or its possessions.
We further certify (i) that we are not making available for
exchange or collection of any interest any portion of the temporary Global Note
excepted in such certifications and (ii) that as of the date hereof we have not
received any notification from any of our Member Organizations to the effect
that the statements made by such Member Organizations with respect to any
portion of the part submitted herewith for exchange or collection of any
interest are no longer true and cannot be relied upon as of the date hereof.
We understand that this certificate is required in connection
with certain tax laws and regulations of the United States. If administrative or
legal proceedings are commenced or threatened
<PAGE> 116
in connection with which this certificate is or would be relevant, we
irrevocably authorize you to produce this certificate or a copy thereof to any
interested party in such proceedings.
"United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or organized
in or under the laws of the United States and any estate or trust the income of
which is subject to United States federal income taxation regardless of its
source. "United States" means the United States of America (including the States
and the District of Columbia) and its "possessions" which include the
Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
Dated: ________________________, 19__
[To be dated no earlier than the
Exchange Date]
By:
[Operator of the Euroclear
System] [Cedelbank]
-2-
<PAGE> 1
EXHIBIT 4.2
FORM OF SENIOR FIXED RATE GLOBAL MEDIUM-TERM NOTE
THIS NOTE IS A DIRECT, UNCONDITIONAL AND UNSECURED OBLIGATION OF DORAL FINANCIAL
CORPORATION, IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER OBLIGATION OF ANY BANK
OR NONBANK SUBSIDIARY OF DORAL FINANCIAL CORPORATION AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
THIS DEBT SECURITY MAY NOT BE 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, UNLESS AND
UNTIL THIS DEBT SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR DEBT SECURITIES IN
DEFINITIVE FORM.
REGISTERED CUSIP No. ______________ PRINCIPAL AMOUNT
No. FX ______________ $_________________
DORAL FINANCIAL CORPORATION
SENIOR MEDIUM-TERM NOTE
(Fixed Rate)
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE: INTEREST RATE: STATED MATURITY:
INTEREST PAYMENT DATES: RECORD DATE:
( and , unless otherwise specified) (Fifteen days prior to the applicable
Interest Payment Date, unless
otherwise specified)
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: PERCENTAGE REDUCTION:
OPTIONAL REPAYMENT DATE(S):
DENOMINATIONS: ADDENDUM ATTACHED:
(Integral multiples of $1,000, unless otherwise specified) : Yes
: No
OTHER PROVISIONS:
</TABLE>
<PAGE> 2
DORAL FINANCIAL CORPORATION, a corporation organized under the laws of
the Commonwealth of Puerto Rico ("Issuer" or the "Company," which terms include
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of
DOLLARS on the Stated Maturity specified above (except to the extent redeemed or
repaid prior to the Stated Maturity), and to pay interest thereon at the
Interest Rate per annum specified above, until the principal hereof is paid or
duly made available for payment. Reference herein to "this Note", "hereof",
"herein" and comparable terms shall include an Addendum hereto if an Addendum is
specified above.
The Company will pay interest on each Interest Payment Date specified
above, commencing on the first Interest Payment Date next succeeding the
Original Issue Date specified above, and on the Stated Maturity or any
Redemption Date or Optional Repayment Date (as defined below) (the date of each
such Stated Maturity, Redemption Date and Optional Repayment Date and the date
on which principal or an installment of principal is due and payable by
declaration of acceleration pursuant to the Indenture being referred to
hereinafter as a "Maturity" with respect to principal payable on such date);
provided, however, that if the Original Issue Date is between a Regular Record
Date (as defined below) and the next succeeding Interest Payment Date, interest
payments will commence on the second Interest Payment Date succeeding the
Original Issue Date. Unless otherwise specified above, the "Regular Record Date"
shall be the date 15 calendar days (whether or not a Business Day) prior to the
applicable Interest Payment Date. Interest on this Note will accrue from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for or, if no interest has been paid, from the Original Issue
Date specified above, to, but excluding such Interest Payment Date. If the
Maturity or an Interest Payment Date falls on a day which is not a Business Day,
the payment due on such Maturity or Interest Payment Date will be paid on the
next succeeding Business Day with the same force and effect as if made on such
Maturity or Interest Payment Date, as the case may be, and no interest shall
accrue with respect to such payment for the period from and after such Maturity
or Interest Payment Date. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will as provided in the Indenture be
paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such Interest Payment Date. Any such interest which is payable, but not
punctually paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest"), shall forthwith cease to be payable to the registered
Holder on such Regular Record Date, and may be paid to the Person in whose name
this Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to the Holder of this
Note not less than 10 days prior to such Special Record Date, or may be paid at
any time in any other lawful manner, all as more fully provided in the
Indenture.
Payment of the principal of and interest on this Note will be made at
the Office or Agency of the Company maintained by the Company for such purpose
in the Borough of
2
<PAGE> 3
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts.
Unless the certificate of authentication hereon has been executed by or
on behalf of Bankers Trust Company, the Trustee for this Note under the
Indenture, or its successor thereunder, by the manual signature of one of its
authorized officers, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Debt Securities
(hereinafter called the "Securities") of the Company designated as its
Medium-Term Notes (the "Notes"). The Securities are issued and to be issued
under a senior indenture (the "Indenture") dated as of May [ ], 1999, between
the Company and Bankers Trust Company (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 thereunder of the Company, the Trustee and the Holders of the
Notes and the terms upon which the Notes are to be authenticated and delivered.
The terms of individual Notes may vary with respect to interest rates or
interest rate formulas, issue dates, maturity, redemption, repayment, currency
of payment and otherwise as provided in the Indenture.
The Notes are issuable only in registered form without coupons in
denominations, unless otherwise specified above, of $1,000 and integral
multiples thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes as requested by the Holder surrendering the same. If
(x) the Depository is at any time unwilling or unable to continue as depository
and a successor depository is not appointed by the Company within 90 days, (y)
the Company executes and delivers to the Trustee a Company Order to the effect
that this Note shall be exchangeable or (z) an Event of Default has occurred and
is continuing with respect to the Notes, this Note shall be exchangeable for
Notes in definitive form of like tenor and of an equal aggregate principal
amount, in authorized denominations. Such definitive Notes shall be registered
in such name or names as the Depository shall instruct the Trustee. If
definitive Notes are so delivered, the Company may make such changes to the form
of this Note as are necessary or appropriate to allow for the issuance of such
definitive Notes.
This Note is not subject to any sinking fund.
This Note may be subject to repayment at the option of the Holder prior
to its Stated Maturity on any Holder's Optional Repayment Date(s), if any,
indicated above. If no Optional Repayment Dates are set forth above, this Note
may not be so repaid at the option of the Holder hereof prior to the Stated
Maturity. On any Optional Repayment Date this Note shall be repayable in whole
or in part in an amount equal to $1,000 or any integral multiple thereof
(provided that any remaining principal amount shall be an authorized
denomination) at the option of the Holder hereof at a repayment price equal to
100% of the principal amount to be repaid, together with interest thereon
payable to the date of repayment. For this Note to be repaid in whole or in part
at the option of the Holder hereof, this Note must be received, with the form
entitled "Option to Elect Repayment" below duly completed, by the Trustee at its
office at
3
<PAGE> 4
Four Albany Street, New York, New York 10006 or such address which the
Company shall from time to time notify the Holder hereof ("Corporate Trust
Office"), not more than 60 nor less than 30 days prior to an Optional Repayment
Date. This Note must be received by the Trustee by 5:00 P.M., New York City
time, on the last day for giving such notice. Exercise of such repayment option
by the Holder hereof shall be irrevocable. In the event of payment of this Note
in part only, a new Note for the unpaid portion hereof shall be issued in the
name of the Holder hereof upon the surrender hereof.
This Note may be redeemed at the option of the Company prior to its
Stated Maturity on any date on and after the Initial Redemption Date, if any,
specified above (the "Redemption Date"). If no Initial Redemption Date is set
forth above, this Note may not be redeemed at the option of the Company prior to
the Stated Maturity. On and after the Initial Redemption Date, if any, this Note
may be redeemed at any time in whole or from time to time in part in increments
of $1,000 (provided that any remaining principal amount shall be an authorized
denomination) at the option of the Company at the applicable Redemption Price
(as defined below) together with interest thereon payable to the Redemption
Date, on notice given not more than 60 nor less than 30 days prior to the
Redemption Date. In the event of redemption of this Note in part only, a new
Note for the unredeemed portion hereof shall be issued in the name of the Holder
hereof upon the surrender hereof.
If this Note is redeemable at the option of the Company prior to its
Stated Maturity, the "Redemption Price" shall initially be the Initial
Redemption Percentage, specified above, of the principal amount of this Note to
be redeemed and shall decline at each anniversary of the Initial Redemption Date
by the Annual Redemption Percentage Reduction, if any, specified above, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
Interest payments on this Note shall include interest accrued from, and
including, the Original Issue Date indicated above, or the most recent date to
which interest has been paid or duly provided for, to, but excluding, the
related Interest Payment Date or Maturity, as the case may be, at the rate per
annum stated on the face hereof until the principal amount hereof is paid or
made available for payment. Unless otherwise specified above, interest will be
computed on the basis of a 360-day year of twelve 30-day months for the period
specified hereunder.
Any provision contained herein with respect to the calculation of the
rate of interest applicable to this Note, its payment dates or any other matter
relating hereto may be modified as specified in an Addendum relating hereto if
so specified above or as set forth under Other Provisions if so set forth above.
If an Event of Default (as defined in the Indenture) with respect to
the Notes shall occur and be continuing, the principal of all the Notes may be
declared due and payable in the manner and with the effect provided in the
Indenture.
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
4
<PAGE> 5
Holders of the Securities of each series to be affected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding, as defined in the Indenture, of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all the Securities of each
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note 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 Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the time, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein and on the face hereof, the transfer of this Note may be
registered on the Security Register of the Company, upon surrender of this Note
for registration of transfer at the office or agency of the Company in the
Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company duly
executed by, the Holder hereof or by his attorney duly authorized in writing,
and thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
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 Note 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 Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
5
<PAGE> 6
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
Dated: ____________
DORAL FINANCIAL CORPORATION
By:
-------------------------
[FACSIMILE OF SEAL]
Attest:
By:
------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the
series designated therein referred to
in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:
----------------------------------
Authorized Officer
6
<PAGE> 7
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to the principal amount hereof together with interest to
the repayment date, to the undersigned, at
- ----------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its Corporate
Trust Office, or at such other place or places of which the Company shall from
time to time notify the Holder of this Note, not more than 60 nor less than 30
days prior to an Optional Repayment Date, if any, shown on the face of this
Note, this Note with this "Option to Elect Repayment" form duly completed. This
Note notice must be received by the Trustee by 5:00 P.M., New York City time, on
the last day for giving such notice.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in an amount equal to $1,000 or an
integral multiple thereof, provided that any remaining principal amount is equal
to an authorized denomination) which the Holder elects to have repaid and
specify the denomination or denominations (which shall be in an amount equal to
an authorized denomination) of the Notes to be issued to the Holder for the
portion of this Note not being repaid (in the absence of any such specification,
one such Note will be issued for the portion not being repaid).
$
--------------------------- ---------------------------------------------
NOTICE: The signature on this Option to Elect
Repayment must correspond with the name as
Date written upon the face of this Note in every
------------------------- particular, without alteration or enlargement
or any change whatever.
7
<PAGE> 8
ASSIGNMENT/TRANSFER FORM
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto (insert Taxpayer Identification No.) ____________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ________________________________________ attorney to transfer said
Note on the books of the Company with full power of substitution in the
premises.
Date
------------------------- --------------------------------------
NOTICE: The signature of the registered
Holder to this assignment must
correspond with the name as written
upon the face of the within instrument
in every particular, without alteration
or enlargement or any change
whatsoever.
8
<PAGE> 9
FORM OF SENIOR FLOATING RATE GLOBAL MEDIUM-TERM NOTE
THIS NOTE IS A DIRECT, UNCONDITIONAL AND UNSECURED OBLIGATION OF DORAL FINANCIAL
CORPORATION, IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER OBLIGATION OF ANY BANK
OR NONBANK SUBSIDIARY OF DORAL FINANCIAL CORPORATION AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
THIS DEBT SECURITY MAY NOT BE 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, UNLESS AND
UNTIL THIS DEBT SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR DEBT SECURITIES IN
DEFINITIVE FORM.
REGISTERED PRINCIPAL AMOUNT
No. FLR ______________ CUSIP No. ________________ $_________________
DORAL FINANCIAL CORPORATION
SENIOR MEDIUM-TERM NOTE
(Floating Rate)
<TABLE>
<CAPTION>
<S> <C> <C>
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
IF LIBOR: IF CMT RATE:
[ ] LIBOR Reuters Designated CMT Telerate Page:
[ ] LIBOR Telerate If Telerate Page 7052:
INDEX CURRENCY: [ ] Weekly Average
LIBOR CURRENCY: [ ] Monthly Average
Designated CMT Maturity Index:
INDEX MATURITY: INITIAL INTEREST RATE: INTEREST PAYMENT DATES:
SPREAD (PLUS OR MINUS): INITIAL INTEREST RESET DATE: INTEREST RESET DATES:
SPREAD MULTIPLIER: INITIAL REDEMPTION DATE:
MAXIMUM INTEREST RATE: MINIMUM INTEREST RATE: OPTIONAL REPAYMENT DATE(S):
INITIAL REDEMPTION PERCENTAGE: ANNUAL REDEMPTION PERCENTAGE REDUCTION:
CALCULATION AGENT:
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate from to .
</TABLE>
<PAGE> 10
<TABLE>
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: from to .
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: from to .
<S> <C> <C>
SPECIFIED CURRENCY: DISCOUNT NOTE: AUTHORIZED DENOMINATION:
(if other than [ ] Yes |_| $1,000 and integral
U.S. dollars) [ ] No multiples thereof
Issue Price: % |_| Other
ADDENDUM ATTACHED: OTHER PROVISIONS:
[ ] Yes
[ ] No
</TABLE>
2
<PAGE> 11
DORAL FINANCIAL CORPORATION, a bank holding company organized under the
laws of the Commonwealth of Puerto Rico ("Issuer" or the "Company," which terms
include any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of
DOLLARS on the Stated Maturity specified above (except to the extent redeemed or
repaid prior to the Stated Maturity Date), and to pay interest thereon, at a
rate per annum equal to the Initial Interest Rate specified above until the
Initial Interest Reset Date specified above and thereafter at a rate per annum
determined in accordance with the provisions hereof and any Addendum relating
hereto depending upon the Interest Rate Basis or Bases, and such other terms
specified above, until the principal hereof is paid or duly made available for
payment. Reference herein to "this Note", "hereof", "herein" and comparable
terms shall include an Addendum hereto if an Addendum is specified above.
The Company will pay interest on each Interest Payment Date specified
above, commencing on the first Interest Payment Date specified above next
succeeding the Original Issue Date specified above, and on the Stated Maturity
or any Redemption Date or Optional Repayment Date (as defined below) (the date
of each such Stated Maturity, Redemption Date and Optional Repayment Date and
the date on which principal or an installment of principal is due and payable by
declaration of acceleration pursuant to the Indenture being referred to
hereinafter as a "Maturity" with respect to principal payable on such date);
provided, however, that if the Original Issue Date is between a Regular Record
Date (as defined below) and the next succeeding Interest Payment Date, interest
payments will commence on the second Interest Payment Date succeeding the
Original Issue Date; and provided, further, that if an Interest Payment Date
(other than an Interest Payment Date at Maturity) would fall on a day that is
not a Business Day (as defined below), such Interest Payment Date shall be
postponed to the next succeeding day that is a Business Day, except that in the
case the Interest Rate Basis is LIBOR, as indicated above, if such next Business
Day falls in the next calendar month, the applicable Interest Payment Date shall
be the immediately preceding Business Day. Except as provided above, interest
payments will be made on the Interest Payment Dates shown above. Unless
otherwise specified above, the "Regular Record Date" shall be the date 15
calendar days (whether or not a Business Day) prior to the applicable Interest
Payment Date. Interest on this Note will accrue from and including the Original
Issue Date specified above, at the rates determined from time to time as
specified herein, until the principal hereof has been paid or made available for
payment. If the Maturity falls on a day which is not a Business Day as defined
below, the payment due on such Maturity will be paid on the next succeeding
Business Day with the same force and effect as if made on such Maturity and no
interest shall accrue with respect to such payment for the period from and after
such Maturity. The interest so payable and punctually paid or duly provided for
on any Interest Payment Date will as provided in the Indenture be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such Interest
Payment Date. Any such interest which is payable, but not punctually paid or
duly provided for on any Interest Payment Date (herein called "Defaulted
Interest"), shall forthwith cease to be payable to the registered Holder on such
Regular Record Date, and may be paid to the Person in whose name this Note (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to the Holder of this Note not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner, all as more fully provided in the Indenture.
Payment of the principal of and interest on this Note will be made at
the Office or Agency of the Company maintained by the Company for such purpose
in the Borough of Manhattan, The City of New York, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless the certificate of authentication hereon has been executed by or
on behalf of Bankers Trust Company, the Trustee with respect to the Notes under
the Indenture, or its successor thereunder, by the manual signature of one of
its authorized officers, this Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
3
<PAGE> 12
This Note is one of a duly authorized issue of Debt Securities
(hereinafter called the "Securities") of the Company designated as its Senior
Medium-Term Notes. The Securities are issued and to be issued under a senior
indenture (the "Indenture") dated as of May [ ], 1999, between the Company and
Bankers Trust Company (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 thereunder of the Company, the Trustee and the Holders of the Notes and
the terms upon which the Notes are to be authenticated and delivered. The terms
of individual Notes may vary with respect to interest rates or interest rate
formulas, issue dates, maturity, redemption, repayment, currency of payment and
otherwise as provided in the Indenture.
The Notes are issuable only in registered form without coupons in
denominations of, unless otherwise specified above, $1,000 and integral
multiples thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes as requested by the Holder surrendering the same. If
(x) the Depository is at any time unwilling or unable to continue as depository
and a successor depository is not appointed by the Company within 90 days, (y)
the Company executes and delivers to the Trustee a Company Order to the effect
that this Note shall be exchangeable or (z) an Event of Default has occurred and
is continuing with respect to the Notes, this Note shall be exchangeable for
Notes in definitive form of like tenor and of an equal aggregate principal
amount, in authorized denominations. Such definitive Notes shall be registered
in such name or names as the Depository shall instruct the Trustee. If
definitive Notes are so delivered, the Company may make such changes to the form
of this Note as are necessary or appropriate to allow for the issuance of such
definitive Notes.
This Note is not subject to any sinking fund.
This Note may be subject to repayment at the option of the Holder prior
to its Stated Maturity on the Holder's Optional Repayment Date(s), if any,
indicated on the face hereof. If no Holder's Optional Repayment Dates are set
forth on the face hereof, this Note may not be so repaid at the option of the
Holder hereof prior to the Stated Maturity. On any Holder's Optional Repayment
Date, this Note shall be repayable in whole or in part in an amount equal to
$1,000 or integral multiples thereof (provided that any remaining principal
amount shall be an authorized denomination) at the option of the Holder hereof
at a repayment price equal to 100% of the principal amount to be repaid,
together with interest thereon payable to the date of repayment. For this Note
to be repaid in whole or in part at the option of the Holder hereof, this Note
must be received, with the form entitled "Option to Elect Repayment" below duly
completed, by the Trustee at its office at Four Albany Street, New York, New
York 10006 or such address which the Company shall from time to time notify the
Holders of the Medium-Term Notes (the "Corporate Trust Office"), not more than
60 nor less than 30 days prior to a Holder's Optional Repayment Date. This Note
must be received by the Trustee by 5:00 P.M., New York City time, on the last
day for giving such notice. Exercise of such repayment option by the Holder
hereof shall be irrevocable. In the event of payment of this Note in part only,
a new Note for the unpaid portion hereof shall be issued in the name of the
Holder hereof upon the surrender hereof.
This Note may be redeemed at the option of the Company prior to its
Stated Maturity on any date on and after the Initial Redemption Date, if any,
specified on the face hereof (the "Redemption Date"). If no Initial Redemption
Date is set forth on the face hereof, this Note may not be redeemed at the
option of the Company prior to the Stated Maturity. On and after the Initial
Redemption Date, if any, this Note may be redeemed at any time in whole or from
time to time in part in increments of $1,000 or integral multiples thereof
(provided that any remaining principal amount shall be an authorized
denomination) at the option of the Company at the applicable Redemption Price
(as defined below) together with interest thereon payable to the Redemption
Date, on notice given not more than 60 nor less than 30 days prior to the
Redemption Date. In the event of redemption of this Note in part only, a new
Note for the unredeemed portion hereof shall be issued in the name of the Holder
hereof upon the surrender hereof.
If this Note is redeemable at the option of the Company prior to its
Stated Maturity, the "Redemption Price" shall initially be the Initial
Redemption Percentage, specified on the face hereof, of the principal amount of
this Note to be redeemed and shall decline at each anniversary of the Initial
Redemption Date by the Annual
4
<PAGE> 13
Redemption Percentage Reduction, if any, specified on the face hereof, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
The interest rate borne by this Note shall be determined as follows:
1. If this Note is designated as a Regular Floating Rate Note
above, then, except as described below, this Note shall bear interest
at the rate determined by reference to the applicable Interest Rate
Basis or Bases shown above (1) plus or minus the applicable Spread, if
any, and/or (2) multiplied by the applicable Spread Multiplier, if any,
specified and applied in the manner described above. Commencing on the
first Interest Reset Date, the rate at which interest on this Note is
payable will be reset as of each Interest Reset Date specified above;
provided, however, that the interest rate in effect for the period from
the Original Issue Date to the first Interest Reset Date will be the
Initial Interest Rate.
2. If this Note is designated as a Floating Rate/Fixed Rate
Note above, then, except as described below, this Note shall bear
interest at the rate determined by reference to the applicable Interest
Rate Basis or Bases shown above (1) plus or minus the applicable
Spread, if any, and/or (2) multiplied by the applicable Spread
Multiplier, if any, specified and applied in the manner described
above. Commencing on the first Interest Reset Date, the rate at which
interest on this Note is payable will be reset as of each Interest
Reset Date specified above; provided, however, that (i) the interest
rate in effect for the period from the date of issue to the first
Interest Reset Date will be the Initial Interest Rate, and (ii) the
interest rate in effect commencing on, and including, the date on which
interest begins to accrue on a fixed rate basis to Maturity will be the
Fixed Interest Rate, if the rate is specified above, or if no Fixed
Interest Rate is specified, the interest rate in effect on the Floating
Rate/Fixed Rate Note on the day immediately preceding the date on which
interest begins to accrue on a fixed rate basis.
3. If this Note is designated as an Inverse Floating Rate Note
above, then, except as described below, this Note will bear interest
equal to the Fixed Interest Rate indicated above minus the rate
determined by reference to the applicable Interest Rate Basis or Bases
shown above (1) plus or minus the applicable Spread, if any, and/or (2)
multiplied by the applicable Spread Multiplier, if any, specified and
applied in the manner described above; provided, however, that unless
otherwise specified on the face hereof, the interest rate hereon will
not be less than zero percent. Commencing on the first Interest Reset
Date, the rate at which interest on this Note is payable shall be reset
as of each Interest Reset Date specified above; provided, however, that
the interest rate in effect for the period from the Original Issue Date
to the Initial Interest Reset Date shall be the Initial Interest Rate.
4. Notwithstanding the foregoing, if this Note is designated
above as having an Addendum attached or as having Other Provisions
apply, the Note shall bear interest in accordance with the terms
described in such Addendum or specified under Other Provisions.
Except as provided above, the interest rate in effect on each day shall
be (a) if such day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date (as defined below) immediately preceding such
Interest Reset Date or (b) if such day is not an Interest Reset Date, the
interest rate determined as of the Interest Determination Date immediately
preceding the immediately preceding Interest Reset Date. Each Interest Rate
Basis shall be the rate determined in accordance with the applicable provision
below. If any Interest Reset Date (which term includes the term first Interest
Reset Date unless the context otherwise requires) would otherwise be a day that
is not a Business Day, that Interest Reset Date shall be postponed to the next
succeeding day that is a Business Day, except that if an Interest Rate Basis
specified on the face hereof is LIBOR and the next Business Day falls in the
next succeeding calendar month, that Interest Reset Date shall be the
immediately preceding Business Day. In addition, if an Interest Rate Basis
specified on the face hereof is the Treasury Rate and the Interest Determination
Date would otherwise fall on an Interest Reset Date, then that Interest Reset
Date shall be postponed to the next succeeding Business Day.
5
<PAGE> 14
Unless otherwise specified above, interest payable on this Note on any
Interest Payment Date shall be the amount of interest accrued from and including
the immediately preceding Interest Payment Date in respect of which interest has
been paid (or from and including the Original Issue Date specified above, if no
interest has been paid), to but excluding the related Interest Payment Date or
Maturity. Unless otherwise specified above, accrued interest hereon shall be an
amount calculated by multiplying the face amount hereof by an accrued interest
factor. The accrued interest factor shall be computed by adding the interest
factor calculated for each day in the period for which accrued interest is being
calculated. Unless otherwise specified above, the interest factor for each such
day shall be computed by dividing the interest rate applicable to such day by
360, if the Day Count Convention specified above is "Actual/360" for the period
specified thereunder or by the actual number of days in the year if the Day
Count Convention specified above is "Actual/Actual" for the period specified
thereunder. In the case of notes for which the Interest Rate Basis is the CD
Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate, the interest factor for each day
will be computed by dividing the interest rate applicable to each day by 360. In
the case of notes for which the Interest Rate Basis is the CMT Rate or the
Treasury Rate, the interest factor for each day will be computed by dividing the
interest rate applicable to each day by the actual number of days in the year.
The interest factor for notes for which the interest rate is calculated with
reference to two or more Interest Rate Bases will be calculated in each period
in the same manner as if only one of the applicable Interest Rate Bases applied.
Unless otherwise specified above, the "Interest Determination Date"
with respect to the CD Rate, the CMT Rate and the Commercial Paper Rate shall be
the second Business Day preceding each Interest Reset Date; the "Interest
Determination Date" with respect to the Federal Funds Rate and the Prime Rate
shall be the Business Day immediately preceding each Interest Reset Date; the
"Interest Determination Date" with respect to LIBOR shall be the second London
Business Day (as defined below) preceding each Interest Reset Date; the
"Interest Determination Date" with respect to the Eleventh District Cost of
Funds Rate shall be the last working day of the month immediately preceding each
Interest Reset Date on which the Federal Home Loan Bank of San Francisco (the
"FHLB of San Francisco") publishes the Index (as defined below); and the
"Interest Determination Date" with respect to the Treasury Rate shall be the day
in the week in which the related Interest Reset Date falls on which day Treasury
bills (as defined below) are normally auctioned. Treasury bills are normally
sold at auction on Monday of each week, unless that day is a legal holiday, in
which case the auction is normally held on the following Tuesday, except that
the auction may be held on the preceding Friday; provided, however, that if an
auction is held on the Friday of the week preceding the related Interest Reset
Date, the related Interest Determination Date shall be such preceding Friday;
and provided, further, that if an auction shall fall on any Interest Reset Date,
then the related Interest Reset Date shall instead be the first Business Day
following such auction. If the interest rate of this Note is determined with
reference to two or more Interest Rate Bases, the Interest Determination Date
pertaining to this Note will be the latest Business Day which is at least two
Business Days prior to such Interest Reset Date on which each Interest Rate
Basis shall be determinable. Each Interest Rate Basis shall be determined and
compared on such date, and the applicable interest rate shall take effect on the
related Interest Reset Date.
Unless otherwise specified above, the "Calculation Date", if
applicable, pertaining to any Interest Determination Date will be the earlier of
(i) the tenth calendar day after such Interest Determination Date or, if the
tenth calendar day is not a Business Day, the next succeeding Business Day, or
(ii) the Business Day preceding the applicable Interest Payment Date or date of
Maturity, as the case may be. All calculations on this Note shall be made by the
Calculation Agent specified above or such successor thereto as is duly appointed
by the Company.
All percentages resulting from any calculation on this Note will be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards. For example, 9.876545% or
.09876545 would be rounded to 9.87655% or .0987655. All dollar amounts used in
or resulting from any calculation will be rounded to the nearest cent with
one-half cent being rounded upward.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close in The
City of New York; provided, however, that, with respect to non-United State
dollar denominated Notes, such day is also not a day on which commercial banks
are authorized or required by law, regulation or executive order to close in the
Principal Financial Center (as hereinafter defined) of the country issuing the
Specified Currency
6
<PAGE> 15
or, if the Specified Currency is EURO, the day is also a day on which the
Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET)
System is open; provided, further, that, with respect to Notes as to which LIBOR
is an applicable Interest Rate Basis, such day is also a London Business Day (as
hereinafter defined).
As used herein, "London Business Day" means a day on which commercial
banks are open for business, including dealings in the Index Currency in London.
As used herein, "Principal Financial Center" means,
(1) the capital city of the country issuing the Specified
Currency, except that with respect to United States dollars,
Australian dollars, Canadian dollars, Deutsche marks, Dutch
guilders, South African rand and Swiss francs, the "Principal
Financial Center" will be The City of New York, Sydney and
Melbourne, Toronto, Frankfurt, Amsterdam, Johannesburg and
Zurich, respectively, or
(2) the capital city of the country to which the LIBOR Currency
relates, except that with respect to United States dollars,
Canadian dollars, Deutsche marks, Dutch guilders, Portuguese
escudos, South African rand and Swiss francs, the "Principal
Financial Center" will be The City of New York, Toronto,
Frankfurt, Amsterdam, London, Johannesburg and Zurich,
respectively.
Determination of CD Rate. If an Interest Rate Basis for this Note is
the CD Rate, as indicated above, the CD Rate shall be determined on the
applicable Interest Determination Date (a "CD Rate Interest Determination Date")
as:
(1) the rate on the applicable CD Rate Interest Determination Date
for negotiable United States dollar certificates of deposit
having the Index Maturity specified above published in
H.15(519), as defined below, under the heading "CDs (secondary
market)", or
(2) if the rate referred to in clause (1) above is not so
published by 3:00 P.M., New York City time, on the related
Calculation Date, the rate on the applicable CD Rate Interest
Determination Date for negotiable United States dollar
certificates of deposit of the Index Maturity specified above
as published in H.15 Daily Update, as defined below, or other
recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "CDs
(secondary market)", or
(3) if the rate referred to in clause (2) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable CD Rate Interest
Determination Date calculated by the Calculation Agent as the
arithmetic mean of the secondary market offered rates as of
10:00 A.M., New York City time, on the applicable CD Rate
Interest Determination Date, of three leading non-bank dealers
in negotiable United States dollar certificates of deposit in
The City of New York selected by the Calculation Agent for
negotiable United States dollar certificates of deposit of
major United States money center banks for negotiable
certificates of deposit with a remaining maturity closest to
the Index Maturity specified above in an amount that is
representative for a single transaction in that market at that
time, or
(4) if the dealers selected by the Calculation Agent are not
quoting as mentioned in clause (3) above, the CD rate in
effect on the applicable CD Rate Interest Determination Date.
"H.15(519)" means the weekly statistical release designated as
H.15(519), or any successor publication, published by the Board of Governors of
the Federal Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available
through the world-wide-web site of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication.
7
<PAGE> 16
Determination of CMT Rate. If an Interest Rate Basis for this Note is
the CMT Rate, as indicated above, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as:
(1) the rate displayed on the Designated CMT Telerate Page, as
defined below, under the caption "...Treasury Constant
Maturities... Federal Reserve Board Release H.15... Mondays
Approximately 3:45 P.M.", under the column for the Designated
CMT Maturity Index for:
(a) if the Designated CMT Telerate Page is 7051, the rate
on the applicable CMT Rate Interest Determination Date,
and
(b) if the Designated CMT Telerate Page is 7052, the weekly
or the monthly average, as specified above, for the
week or the month, as applicable, ended immediately
preceding the week or the month, as applicable, in
which the related CMT Rate Interest Determination Date
falls, or
(2) if the rate referred to in clause (1) is no longer displayed
on the relevant page or is not so displayed by 3:00 P.M., New
York City time, on the related Calculation Date, the treasury
constant maturity rate for the Designated CMT Maturity Index,
as defined below, published in H.15(519), or
(3) if the rate referred to in clause (2) is no longer published
or is not published by 3:00 P.M., New York City time, on the
related Calculation Date, the treasury constant maturity rate
for the Designated CMT Maturity Index, or other United States
Treasury rate for the Designated CMT Maturity Index, for the
applicable CD Rate Interest Determination Date with respect to
the applicable CMT Rate Interest Reset Date as may then be
published by either the Board of Governors of the Federal
Reserve System or the United States Department of the Treasury
that the Calculation Agent determines to be comparable to the
rate formerly displayed on the Designated CMT Telerate Page
and published in H.15(519), or
(4) if the rate referred to in clause (3) is not so published by
3:00 P.M., New York City time, on the applicable Calculation
Date, the rate on the applicable CMT Rate Interest
Determination Date calculated by the Calculation Agent as a
yield to maturity, based on the arithmetic mean of the
secondary market offered rates as of approximately 3:30 P.M.,
New York City time, on the applicable CMT Rate Interest
Determination Date reported, according to their written
records, by three leading primary United States government
securities dealers in The City of New York, which may include
the agents or their affiliates (each, a "Reference Dealer"),
selected by the Calculation Agent from five Reference Dealers
selected by the Calculation Agent after eliminating the
highest quotation, or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of
equality, one of the lowest, for the most recently issued
direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately
the Designated CMT Maturity Index and a remaining term to
maturity of not less than such Designated CMT Maturity Index
minus one year, or
(5) if the Calculation Agent is unable to obtain three applicable
Treasury Note quotations as referred to in clause (4), the
rate on the applicable CMT Rate Interest Determination Date
calculated by the Calculation Agent as a yield to maturity
based on the arithmetic mean of the secondary market offered
rates as of approximately 3:30 P.M., New York City time, on
the applicable CMT Rate Interest Determination Date of three
Reference Dealers in The City of New York selected by the
Calculation Agent from five Reference Dealers selected by the
Calculation Agent after eliminating the highest quotation or,
in the event of equality, one of the highest and the lowest
quotation or, in the event of equality, one of the lowest, for
Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity
Index and a remaining
8
<PAGE> 17
term to maturity closest to the Designated CMT Maturity Index
and in an amount of at least $100 million, or
(6) if three or four and not five of Reference Dealers are quoting
as referred to in clause (5) above, the rate will be
calculated by the Calculation Agent as the arithmetic mean of
the offered rates obtained and neither the highest nor the
lowest of quotes will be eliminated, or
(7) if fewer than three Reference Dealers selected by the
Calculation Agent are quoting as mentioned in clause (6), the
rate in effect on the applicable CMT Rate Interest
Determination Date.
If two Treasury Notes with an original maturity as described
in clause (5) have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the Calculation Agent will obtain from
five Reference Dealers quotations for the Treasury Notes with the
shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on Bridge Telerate,
Inc. or any successor service on the page specified above or any other page as
may replace the specified page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519), or, if no page is
specified above, page 7052.
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities, either 1, 2, 3, 5, 7, 10, 20 or 30 years,
specified above with respect to which the CMT Rate will be calculated or, if no
maturity is specified above, 2 years.
Determination of Commercial Paper Rate. If an Interest Rate Basis for
this Note is the Commercial Paper Rate, as indicated above, the Commercial Paper
Rate shall be determined on the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date") as:
(1) the Money Market Yield, as defined below, on the applicable
Commercial Paper Rate Interest Determination Date of the rate
for commercial paper having the Index Maturity specified above
published in H.15(519) under the caption "Commercial
Paper-Nonfinancial", or
(2) if the rate described in clause (1) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Commercial Paper Rate
Interest Determination Date for commercial paper having the
Index Maturity specified above published in H.15 Daily Update,
or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "Commercial
Paper-Nonfinancial", or
(3) if the rate is referred to in clause (2) is not so published
by 3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Commercial Paper Rate
Interest Determination Date calculated by the Calculation
Agent as the Money Market Yield of the arithmetic mean of the
offered rates at approximately 11:00 A.M., New York City time,
on the applicable Commercial Paper Rate Interest Determination
Date of three leading dealers of United States dollar
commercial paper in The City of New York, which may include
the agents and their affiliates, selected by the Calculation
Agent for commercial paper having the Index Maturity specified
above placed for industrial issuers whose bond rating is "Aa",
or the equivalent, from a nationally recognized statistical
rating organization, or
(4) if the dealers selected by the Calculation Agent are not
quoting as mentioned in clause (3), the rate in effect on the
applicable Commercial Paper Rate Interest Determination Date.
"Money Market Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Money Market Yield = D x 360 x 100
----------------------
360 - ( D x M )
9
<PAGE> 18
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Eleventh District Cost of Funds Rate. If an Interest Rate Basis for
this Note is the Eleventh District Cost of Funds Rate, as indicated above, the
Eleventh District Cost of Funds Rate shall be determined on the applicable
Interest Determination Date (an "Eleventh District Cost of Funds Rate Interest
Determination Date"), and shall be:
(1) the rate equal to the monthly weighted average cost of funds
for the calendar month immediately preceding the month in
which the applicable Eleventh District Cost of Funds Rate
Interest Determination Date falls as set forth under the
caption "11th District" on the display on Bridge Telerate,
Inc. or any successor service on page 7058 or any other page
as may replace the specified page on that service ("Telerate
Page 7058") as of 11:00 A.M., San Francisco time, on the
applicable Eleventh District Cost of Funds Rate Interest
Determination Date, or
(2) if the rate referred to in clause (1) does not appear on
Telerate Page 7058 on the related Eleventh District Cost of
Funds Rate Interest Determination Date, the monthly weighted
average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most
recently announced (the "Index") by the Federal Home Loan Bank
of San Francisco as the cost of funds for the calendar month
immediately preceding the applicable Eleventh District Cost of
Funds Rate Interest Determination Date, or
(3) if the Federal Home Loan Bank of San Francisco fails to
announce the Index on or before the applicable Eleventh
District Cost of Funds Rate Interest Determination Date for
the calendar month immediately preceding the applicable
Eleventh District Cost of Funds Rate Interest Determination
Date, the rate in effect on the applicable Eleventh District
Cost of Funds Rate Interest Determination Date.
Determination of Federal Funds Rate. If an Interest Rate Basis for this
Note is the Federal Funds Rate, as indicated above, the Federal Funds Rate shall
be determined on the applicable Interest Determination Date (a "Federal Funds
Rate Interest Determination Date"), and shall be:
(1) the rate on the applicable Federal Funds Rate Interest
Determination Date for United States dollar federal funds as
published in H.15(519) under the heading "Federal Funds
(Effective)", as displayed on Bridge Telerate, Inc. or any
successor service on page 120 or any other page as may replace
the applicable page on that service ("Telerate Page 120"), or
(2) if the rate referred to in clause (1) does not appear on
Telerate Page 120 or is not so published by 3:00 P.M., New
York City time, on the related Calculation Date, the rate on
the applicable Federal Funds Rate Interest Determination Date
for United States dollar federal funds published in H.15 Daily
Update, or other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption
"Federal Funds/Effective Rate", or
(3) if the rate referred to in clause (2) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Federal Funds Rate Interest
Determination Date calculated by the Calculation Agent as the
arithmetic mean of the rates for the last transaction in
overnight United States dollar federal funds arranged by three
leading brokers of United States dollar federal funds
transactions in The City of New York, which may include the
agents or their affiliates, selected by the Calculation Agent
before 9:00 A.M., New York City time, on the applicable
Federal Funds Rate Interest Determination Date, or
10
<PAGE> 19
(4) if the brokers selected by the Calculation Agent are not
quoting as mentioned in clause (3), the rate in effect on the
applicable Federal Funds Rate Interest Determination Date.
Determination of LIBOR. "LIBOR" means the rate determined by the
Calculation Agent in accordance with the following provisions:
(1) if "LIBOR Telerate" is specified above or if neither "LIBOR
Reuters" nor "LIBOR Telerate" is specified above as the method
for calculating LIBOR, LIBOR will be the rate for deposits in
the LIBOR Currency, as defined below, having the Index
Maturity specified above, commencing on the second London
Business Day immediately following that Interest Determination
Date that appears on the Designated LIBOR Page, as defined
below, as of 11:00 A.M., London time, on the applicable
Interest Determination Date, or
(2) if "LIBOR Reuters" is specified above, LIBOR will be the
arithmetic mean of the offered rates for deposits in the LIBOR
Currency having the Index Maturity specified above, commencing
on the second London Business Day immediately following that
Interest Determination Date, that appear, on the Designated
LIBOR Page specified above as of 11:00 A.M., London time, on
the applicable Interest Determination Date. If the Designated
LIBOR Page by its terms provides only for a single rate, then
the single rate will be used, or
(3) with respect to a LIBOR Interest Determination Date on which
fewer than two offered rates appear, or no rate appears, as
the case may be, on the designated LIBOR Page as specified in
clauses (1) and (2), the rate calculated by the Calculation
Agent as the arithmetic mean of at least two quotations
obtained by the Calculation Agent after requesting the
principal London offices of each of four major reference
banks, which may include affiliates of the agents, in the
London interbank market to provide the Calculation Agent with
its offered quotation for deposits in the LIBOR Currency for
the period of the Index Maturity specified above, commencing
on the second London Business Day immediately following the
applicable Interest Determination Date, to prime banks in the
London interbank market at approximately 11:00 A.M., London
time, on the applicable Interest Determination Date and in a
principal amount that is representative for a single
transaction in the applicable LIBOR Currency in that market at
that time, or
(4) if fewer than two quotations referred to in clause (3) are so
provided, the rate on the applicable Interest Determination
Date calculated by the Calculation Agent as the arithmetic
mean of the rates quoted at approximately 11:00 A.M., in the
applicable Principal Financial Center(s), on the applicable
Interest Determination Date by three major banks, which may
include affiliates of the agents, in the applicable Principal
Financial Center selected by the Calculation Agent for loans
in the LIBOR Currency to leading European banks, having the
Index Maturity specified designated above and in a principal
amount that is representative for a single transaction in the
applicable LIBOR Currency in that market at that time, or
(5) if the banks so selected by the Calculation Agent are not
quoting as mentioned in clause (4), the rate in effect on the
applicable Interest Determination Date.
"LIBOR Currency" means the currency specified above as to which LIBOR
will be calculated or, if no currency is specified above, United States dollars.
"Designated LIBOR Page" means either:
-if "LIBOR Telerate" is designated above or neither "LIBOR Reuters"
nor "LIBOR Telerate" is specified above as the method for
calculating LIBOR, the display on Bridge Telerate, Inc. or any
successor service on the page specified in such pricing supplement
or any page as may replace the
11
<PAGE> 20
specified page on that service for the purpose of displaying
the London interbank rates of major banks for the applicable
LIBOR Currency, or
-if "LIBOR Reuters" is specified above, the display on the Reuter
Monitor Money Rates Service or any successor service on the page
specified above or any other page as may replace the specified
page on that service for the purpose of displaying the London
interbank rates of major banks for the applicable LIBOR Currency.
Determination of Prime Rate. If an Interest Rate Basis for this Note
specified above is the Prime Rate, the Prime Rate will be determined on the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date"). The "Prime Rate" means:
(1) the rate on the applicable Prime Rate Interest Determination
Date as published in H.15(519) under the heading "Bank Prime
Loan", or
(2) if the rate referred to in clause (1) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Prime Rate Interest
Determination Date published in H.15 Daily Update, or such
other recognized electronic source used for the purpose of
displaying the applicable rate under the caption "Bank Prime
Loan", or
(3) if the rate referred to in clause (2) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate calculated by the Calculation Agent as the
arithmetic mean of the rates of interest publicly announced by
at least four banks that appear on the Reuters Screen US PRIME
1 Page as the particular bank's prime rate or base lending
rate as of 11:00 A.M., New York City time, on the applicable
Prime Rate Interest Determination Date, or
(4) if fewer than four rates described in clause (3) by 3:00 P.M.,
New York City time, on the related Calculation Date as shown
on Reuters Screen US PRIME 1, the rate on the applicable Prime
Rate Interest Determination Date calculated by the Calculation
Agent as the arithmetic mean of the prime rates or base
lending rates quoted on the basis of the actual number of days
in the year divided by a 360-day year as of the close of
business on the applicable Prime Rate Interest Determination
Date by three major banks, which may include affiliates of the
agents, in The City of New York selected by the Calculation
Agent, or
(5) if the banks selected by the Calculation Agent are not quoting
as mentioned in clause (4), the rate in effect on the
applicable Prime Rate Interest Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter
Monitor Money Rates Service or any successor service on the "US PRIME 1" Page or
other page as may replace the US PRIME 1 Page on such service for the purpose of
displaying prime rates or base lending rates of major United States banks.
Determination of Treasury Rate. If an Interest Rate Basis for this Note
specified above, is the Treasury Rate, the Treasury Rate shall be determined on
the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") "Treasury Rate" means:
(1) the rate from the auction held on the applicable Treasury Rate
Interest Determination Date (the "Auction") of direct
obligations of the United States ("Treasury Bills") having the
Index Maturity specified above under the caption "INVESTMENT
RATE" on the display on Bridge Telerate, Inc. or any successor
service on page 56 or any other page as may replace page 56 on
that service ("Telerate Page 56") or page 57 or any other page
as may replace page 57 on that service ("Telerate Page 57"),
or
12
<PAGE> 21
(2) if the rate described in clause (1) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the Bond Equivalent Yield of the rate for the applicable
Treasury Bills as published in H.15 Daily Update, or other
recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "U.S.
Government Securities/Treasury Bills/Auction High", or
(3) if the rate described in clause (2) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the Bond Equivalent Yield of the auction rate of the
applicable Treasury Bills announced by the United States
Department of the Treasury, or
(4) in the event that the rate referred to in clause (3) is not
announced by the United States Department of the Treasury, or
if the Auction is not held, the Bond Equivalent Yield of the
rate on the applicable Treasury Rate Interest Determination
Date of Treasury Bills having the Index Maturity specified
above published in H.15(519) under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market", or
(5) if the rate referred to in clause (4) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Treasury Rate Interest
Determination Date of the applicable Treasury Bills as
published in H.15 Daily Update, or other recognized electronic
source used for the purpose of displaying the applicable rate,
under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market", or
(6) if the rate referred to in clause (5) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Treasury Rate Interest
Determination Date calculated by the Calculation Agent as the
Bond Equivalent Yield of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 P.M., New York City
time, on the applicable Treasury Rate Interest Determination
Date, of three primary United States government securities
dealers, which may include the agents or their affiliates,
selected by the Calculation Agent, for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity
specified above, or
(7) if the dealers selected by the Calculation Agent are not
quoting as mentioned in clause (6), the rate in effect on the
applicable Treasury Rate Interest Determination Date.
"Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Bond Equivalent Yield = D x N x 100
---------------
360 - ( D x M )
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest is
being calculated.
Any provisions contained herein with respect to the determination of
one or more Interest Rate Bases, the specification of one or more Interest Rate
Bases, calculation of the Interest Rate applicable to this Note, its payment
dates the stated maturity date, any redemption or repayment provisions, or any
other matter relating hereto may be modified by the terms as specified above
under "Other Provisions" or in an Addendum relating hereto if so specified
above.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest
13
<PAGE> 22
Rate, if any, or less than the Minimum Interest Rate, if any, specified above.
In addition to any Maximum Interest Rate applicable hereto pursuant to the above
provisions, the interest rate on this Note will in no event be higher than the
maximum rate permitted by New York law, as the same may be modified by United
States law of general application. The Calculation Agent shall calculate the
interest rate hereon in accordance with the foregoing on or before each
Calculation Date. The Company hereby covenants for the benefit of the Holder
hereof, to the extent permitted by applicable law, not to claim voluntarily the
benefits of any laws concerning usurious rates of interest against such Holder.
Unless otherwise above, the Trustee will be the "Calculation Agent". At
the request of the Holder hereof, the Calculation Agent shall provide to the
Holder hereof the interest rate hereon then in effect and, if determined, the
interest rate which shall become effective as of the next Interest Reset Date
with respect to this Note.
If an Event of Default (as defined in the Indenture) with respect to
the Notes shall occur and be continuing, the principal of all the Notes may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at any time Outstanding, as defined in the Indenture, of each series
affected thereby. The Indenture also contains provisions permitting the Holders
of specified percentages in aggregate principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all the Securities
of each series, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note 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 Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the time, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein and on the face hereof, the transfer of this Note may be
registered on the Security Register of the Company, upon surrender of this Note
for registration of transfer at the office or agency of the Company in the
Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company duly
executed by, the Holder hereof or by his attorney duly authorized in writing,
and thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
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 Note 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 Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
14
<PAGE> 23
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
Dated:
------------
DORAL FINANCIAL CORPORATION
By:
------------------------
[FACSIMILE OF SEAL]
CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the
series designated therein issued under
the within-mentioned Indenture.
Bankers Trust Company,
as Trustee
By:
----------------------------------
Authorized Officer
15
<PAGE> 24
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to the principal amount hereof together with interest to
the repayment date, to the undersigned, at _____________________________________
________________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its Corporate
Trust Office, or at such other place or places of which the Company shall from
time to time notify the Holder of this Note, not more than 60 nor less than 30
days prior to an Optional Repayment Date, if any, shown on the face of this
Note, this Note with this "Option to Elect Repayment" form duly completed. This
Note must be received by the Trustee by 5:00 P.M., New York City time, on the
last day for giving such notice.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in an amount equal to $1,000 or an
integral multiple thereof, provided that any remaining principal amount shall be
an authorized denomination) which the Holder elects to have repaid and specify
the denomination or denominations (which shall be in an amount equal to an
authorized denomination) of the Notes to be issued to the Holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).
$
-------------------------------- ----------------------------------
NOTICE: The signature on this
Option to Elect Repayment must
Date correspond with the name as
---------------------------- written upon the face of this Note
in every particular, without
alteration or enlargement or any
change whatever.
16
<PAGE> 25
ASSIGNMENT/TRANSFER FORM
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto (insert Taxpayer Identification No.) ____________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
_______________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _______________________________________ attorney to transfer said
Note on the books of the Company with full power of substitution in the
premises.
Date
------------------------ ---------------------------------------
NOTICE: The signature of the registered
Holder to this assignment must
correspond with the name as written
upon the face of the within instrument
in every particular, without alteration
or enlargement or any change
whatsoever.
17
<PAGE> 1
EXHIBIT 4.3
DORAL FINANCIAL CORPORATION
To
BANKERS TRUST COMPANY,
Trustee
----------------
Indenture
Dated as of
----------------
------------------
Subordinated Debt Securities
<PAGE> 2
DORAL FINANCIAL CORPORATION
RECONCILIATION AND TIE BETWEEN
TRUST INDENTURE ACT OF 1939 AND
INDENTURE DATED AS OF
-------------------
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C>
ss.310 (a)(1) ........................................... 6.09
(a)(2) ........................................... 6.09
(a)(3) ........................................... Not Applicable
(a)(4) ........................................... Not Applicable
(b) ........................................... 6.08
6.10
ss.311 (a) ........................................... 6.13
(b) ........................................... 6.13
ss.312 (a) ........................................... 7.01
7.02(a)
(b) ........................................... 7.02(b)
(c) ........................................... 7.02(c)
ss.313 (a) ........................................... 7.03(a)
(b) ........................................... 7.03(b)
(c) ........................................... 7.03(c)
(d) ........................................... 7.03(d)
ss.314 (a) ........................................... 7.04
(a)(4) ........................................... 12.02
(b) ........................................... Not Applicable
(c)(1) ........................................... 1.02
(c)(2) ........................................... 1.02
(c)(3) ........................................... Not Applicable
(d) ........................................... Not Applicable
(e) ........................................... 1.02
ss.315 (a) ........................................... 6.01
(b) ........................................... 6.02
(c) ........................................... 6.01
(d) ........................................... 6.01
(e) ........................................... 5.14
ss.316 (a) ........................................... 1.01
(a)(1)(A) ........................................... 5.02
5.12
(a)(1)(B) ........................................... 5.13
(a)(2) ........................................... Not Applicable
(b) ........................................... 5.08
ss.317 (a)(1) ........................................... 5.03
(a)(2) ........................................... 5.04
(b) ........................................... 12.04
ss.318 (a) ........................................... 1.06
</TABLE>
- ---------------
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION........................................................1
Section 1.01. Definitions....................................................................1
Section 1.02. Compliance Certificates and Opinions..........................................11
Section 1.03. Form of Documents Delivered to Trustee........................................12
Section 1.04. Notices, etc., to Trustee and Company.........................................12
Section 1.05. Notice to Holders; Waiver.....................................................13
Section 1.06. Conflict with Trust Indenture Act.............................................13
Section 1.07. Effect of Headings and Table of Contents......................................14
Section 1.08. Successors and Assigns........................................................14
Section 1.09. Separability Clause...........................................................14
Section 1.10. Benefits of Indenture.........................................................14
Section 1.11. Governing Law.................................................................14
Section 1.12. Legal Holidays................................................................14
Section 1.13. No Security Interest Created..................................................15
Section 1.14. Liability Solely Corporate....................................................15
ARTICLE TWO - DEBT SECURITY FORMS....................................................................15
Section 2.01. Forms Generally...............................................................15
Section 2.02. Form of Trustee's Certificate of Authentication...............................16
Section 2.03. Securities in Global Form.....................................................16
ARTICLE THREE - THE DEBT SECURITIES..................................................................17
Section 3.01. Amount Unlimited; Issuable in Series..........................................17
Section 3.02. Denominations.................................................................21
Section 3.03. Execution, Authentication, Delivery and Dating................................21
Section 3.04. Temporary Debt Securities; Exchange of Temporary Global
Notes for Definitive Bearer Securities; Global Notes
Representing Registered Securities...............................24
Section 3.05. Registration, Transfer and Exchange...........................................29
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt Securities.........................31
Section 3.07. Payment of Interest; Interest Rights Preserved................................32
Section 3.08. Cancellation..................................................................34
Section 3.09. Computation of Interest.......................................................35
Section 3.10. Currency of Payments in Respect of Debt Securities............................35
Section 3.11. Judgments.....................................................................39
Section 3.12. Exchange Upon Default.........................................................39
Section 3.13. CUSIP Numbers.................................................................39
</TABLE>
-i-
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE FOUR - SATISFACTION AND DISCHARGE............................................................40
Section 4.01. Satisfaction and Discharge of Indenture.......................................40
Section 4.02. Application of Trust Money....................................................41
ARTICLE FIVE - REMEDIES..............................................................................42
Section 5.01. Events of Default.............................................................42
Section 5.02. Acceleration of Maturity; Rescission and Annulment............................42
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee...............43
Section 5.04. Trustee May File Proofs of Claim..............................................44
Section 5.05. Trustee May Enforce Claims Without Possession of Debt Securities..............45
Section 5.06. Application of Money Collected................................................46
Section 5.07. Limitation on Suits...........................................................46
Section 5.08. Unconditional Right of Holders to Receive Principal, Premium
and Interest.....................................................47
Section 5.09. Restoration of Rights and Remedies............................................47
Section 5.10. Rights and Remedies Cumulative................................................47
Section 5.11. Delay or Omission Not Waiver..................................................47
Section 5.12. Control by Holders............................................................48
Section 5.13. Waiver of Past Defaults.......................................................48
Section 5.14. Undertaking for Costs.........................................................49
Section 5.15. Waiver of Stay or Extension Laws..............................................49
ARTICLE SIX - THE TRUSTEE............................................................................49
Section 6.01. Certain Duties and Responsibilities...........................................49
Section 6.02. Notice of Defaults............................................................51
Section 6.03. Certain Rights of Trustee.....................................................51
Section 6.04. Not Responsible for Recitals or Issuance of Debt Securities...................52
Section 6.05. May Hold Debt Securities......................................................53
Section 6.06. Money Held in Trust...........................................................53
Section 6.07. Compensation and Reimbursement................................................53
Section 6.08. Disqualification; Conflicting Interests.......................................54
Section 6.09. Corporate Trustee Required; Eligibility.......................................59
Section 6.10. Resignation and Removal; Appointment of Successor.............................60
Section 6.11. Acceptance of Appointment by Successor........................................61
Section 6.12. Merger, Conversion, Consolidation or Succession to Business...................62
Section 6.13. Preferential Collection of Claims Against Company.............................63
Section 6.14. Appointment of Authenticating Agent...........................................66
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY...............................................................68
Section 7.01. Company to Furnish Trustee Names and Addresses of Holders.....................68
Section 7.02. Preservation of Information; Communication to Holders.........................69
Section 7.03. Reports by Trustee............................................................70
Section 7.04. Reports by Company............................................................72
</TABLE>
-ii-
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE EIGHT - CONCERNING THE HOLDERS...............................................................72
Section 8.01. Acts of Holders...............................................................72
Section 8.02. Proof of Ownership; Proof of Execution of Instruments by Holder...............73
Section 8.03. Persons Deemed Owners.........................................................74
Section 8.04. Revocation of Consents; Future Holders Bound..................................74
ARTICLE NINE - HOLDERS' MEETINGS.....................................................................75
Section 9.01. Purposes of Meetings..........................................................75
Section 9.02. Call of Meetings by Trustee...................................................75
Section 9.03. Call of Meetings by Company or Holders........................................75
Section 9.04. Qualifications for Voting.....................................................76
Section 9.05. Regulations...................................................................76
Section 9.06. Voting........................................................................76
Section 9.07. No Delay of Rights by Meeting.................................................77
ARTICLE TEN - CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER
OR LEASE..................................................................77
Section 10.01. Company May Consolidate, Etc., Only on Certain Terms.........................77
Section 10.02. Successor Substituted........................................................78
ARTICLE ELEVEN - SUPPLEMENTAL INDENTURES.............................................................78
Section 11.01. Supplemental Indentures Without Consent of Holders...........................78
Section 11.02. Supplemental Indentures With Consent of Holders..............................80
Section 11.03. Execution of Supplemental Indentures.........................................81
Section 11.04. Effect of Supplemental Indentures............................................81
Section 11.05. Conformity with Trust Indenture Act..........................................81
Section 11.06. Reference in Debt Securities to Supplemental Indentures......................81
Section 11.07. Notice of Supplemental Indenture.............................................82
Section 11.08. Effect on Senior Indebtedness................................................82
ARTICLE TWELVE - COVENANTS...........................................................................82
Section 12.01. Payment of Principal, Premium and Interest...................................82
Section 12.02. Officer's Certificate as to Default..........................................83
Section 12.03. Maintenance of Office or Agency..............................................83
Section 12.04. Money for Debt Securities; Payments to Be Held in Trust......................84
Section 12.05. Corporate Existence..........................................................85
Section 12.06. Waiver of Certain Covenants..................................................86
ARTICLE THIRTEEN - REDEMPTION OF DEBT SECURITIES.....................................................86
Section 13.01. Applicability of Article.....................................................86
Section 13.02. Election to Redeem; Notice to Trustee........................................86
</TABLE>
-iii-
<PAGE> 6
<TABLE>
<S> <C>
Section 13.03. Selection by Trustee of Debt Securities to Be Redeemed.......................87
Section 13.04. Notice of Redemption.........................................................87
Section 13.05. Deposit of Redemption Price..................................................88
Section 13.06. Debt Securities Payable on Redemption Date...................................88
Section 13.07. Debt Securities Redeemed in Part.............................................89
ARTICLE FOURTEEN - SINKING FUNDS.....................................................................90
Section 14.01. Applicability of Article.....................................................90
Section 14.02. Satisfaction of Mandatory Sinking Fund Payments with
Debt Securities..................................................90
Section 14.03. Redemption of Debt Securities for Sinking Fund...............................90
ARTICLE FIFTEEN - INTENTIONALLY OMITTED..............................................................92
ARTICLE SIXTEEN - SUBORDINATION......................................................................92
Section 16.01. Agreement to Subordinate.....................................................92
Section 16.02. Distribution on Dissolution, Liquidation and Reorganization;
Subrogation of Debt Securities...................................93
Section 16.03. No Payment on Debt Securities in Event of Default on
Senior Indebtedness..............................................95
Section 16.04. Payments on Debt Securities Permitted........................................95
Section 16.05. Authorization of Holders to Trustee to Effect Subordination..................95
Section 16.06. Notices to Trustee...........................................................96
Section 16.07. Trustee as Holder of Senior Indebtedness.....................................96
Section 16.08. Modifications of Terms of Senior Indebtedness................................97
Section 16.09. Reliance on Judicial Order or Certificate of Liquidating Agent...............97
Section 16.10. Article Sixteen Not to Prevent Events of Default.............................97
Section 16.11. Payment of Proceeds in Certain Cases.........................................98
</TABLE>
-iv-
<PAGE> 7
INDENTURE dated as of _________, between DORAL FINANCIAL CORPORATION,
a Puerto Rico corporation (hereinafter called the "Company"), having its
principal executive office at 1159 Franklin D. Roosevelt Avenue, San Juan,
Puerto Rico 00920 and BANKERS TRUST COMPANY, a New York banking corporation, as
trustee (hereinafter called the "Trustee"), having its Corporate Trust Office at
Four Albany Street, New York, New York.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured and
subordinated debentures, notes, bonds or other evidences of indebtedness (herein
generally called the "Debt Securities"), to be issued in one or more series, as
provided in this Indenture.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, WITNESSETH:
For and in consideration of the premises and the purchase of Debt
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of Debt Securities or of Debt
Securities of any series, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted in the United States of America at the date of such
computation; and
<PAGE> 8
(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 Three or Article Six, are
defined in those respective Articles.
"Act" when used with respect to any Holder, has the meaning specified
in Section 8.01.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Affiliated Corporation" means any corporation which is controlled by
the Company but which is not a Subsidiary of the Company pursuant to the
definition of the term "Subsidiary."
"Authenticating Agent" has the meaning specified in Section 6.14.
"Authorized Newspaper" means a newspaper or financial journal in an
official language of the country of publication customarily published at least
once a day, and customarily published for at least five days in each calendar
week, and of general circulation in the place in connection with which the term
is used or in the financial community of such place. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same city
meeting the foregoing requirements and in each case on any Business Day in such
city.
"Bearer Security" means any Debt Security (with or without Coupons), in
the form established pursuant to Section 2.01, which is payable to bearer
(including any Global Note payable to bearer) and title to which passes by
delivery only, but does not include any Coupons.
"Board of Directors" means either the board of directors of the
Company, or any committee of that board duly authorized to act hereunder or any
director or directors and/or officer or officers of the Company to whom that
board or committee shall have delegated its authority.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Debt
Securities means any day which is not a Saturday, a Sunday or a legal holiday or
a day on which banking institutions or trust companies in that Place
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of Payment or other location are authorized or obligated by law to close, except
as otherwise specified pursuant to Section 3.01.
"Code" means the Internal Revenue Code of 1986, as amended and as in
effect on the date hereof.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties on such date.
"Common Depositary" has the meaning specified in Section 3.04(b).
"Commonwealth" means the Commonwealth of Puerto Rico.
"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" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its Chairman, its
President, its Chief Financial Officer or an Executive Vice President, and by
its Treasurer, its Chief Accounting Officer, its Controller, an Assistant
Treasurer, its Secretary or an Assistant Secretary of the Company, and delivered
to the Trustee.
"Component Currency" has the meaning specified in Section 3.10(i).
"Conversion Date" has the meaning specified in Section 3.10(e).
"Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country which issued such Currency and for the
settlement of transactions by public institutions of or within the international
banking community, (ii) the ECU both within the European Monetary System and for
the settlement of transactions by public institutions of or within the European
Communities or (iii) any Currency Unit other than the ECU for the purposes for
which it was established.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this instrument is
located at Four Albany Street, New York, New York 10006.
"Corporation" or "corporation" includes corporations, associations,
companies (including joint stock companies and limited liability companies) and
business trusts.
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"Coupon" means any interest coupon appertaining to any Debt Security.
"Coupon Security" means any Bearer Security authenticated and delivered
with one or more Coupons appertaining thereto.
"Currency" means Dollars or Foreign Currency or Currency Unit.
"Currency Determination Agent" means the New York Clearing House bank,
if any, from time to time selected by the Company pursuant to Section 3.01;
provided that such agent shall accept such appointment in writing and the terms
of such appointment shall be acceptable to the Company and shall, in the opinion
of the Company and the Trustee at the time of such appointment, require such
agent to make the determinations required by this Indenture by a method
consistent with the method provided in this Indenture for the making of such
decision or determination.
"Currency Unit" means a composite currency or currency unit the value
of which is determined by reference to the value of the currencies of any group
of countries.
"Debt Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Debt Securities (including any Global
Notes) authenticated and delivered under this Indenture.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Discount Security" means any Debt Security which is issued with
"original issue discount" within the meaning of Section 1273(a) of the Code and
the regulations thereunder.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time of payment is legal tender for the
payment of public and private debts.
"Dollar Equivalent of the Currency Unit" has the meaning specified in
Section 3.10(h).
"Dollar Equivalent of the Foreign Currency" has the meaning specified
in Section 3.10(g).
"ECU" means the European Currency Unit as defined and revised from time
to time by the Council of the European Communities.
"Election Date" has the meaning specified in Section 3.10(i).
"Entitled Persons" means any person entitled to payment pursuant to the
terms of Other Financial Obligations.
"Euroclear Operator" means the operator of the Euroclear System.
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"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Section 5.01.
"Excess Proceeds" has the meaning specified in Section 16.11(a).
"Exchange Date" has the meaning specified in Section 3.04(b).
"Exchange Rate Officer's Certificate" means a telex or a certificate
setting forth (i) the applicable Market Exchange Rate and (ii) the Dollar,
Foreign Currency or Currency Unit amounts of principal, premium, if any, and any
interest respectively (on an aggregate basis and on the basis of a Debt Security
having the lowest denomination principal amount determined in accordance with
Section 3.02 in the relevant Currency or Currency Unit), payable on the basis of
such Market Exchange Rate sent (in the case of a telex) or signed (in the case
of a certificate) by the Treasurer or any Assistant Treasurer of the Company.
"Fixed Rate Security" means a Debt Security which provides for the
payment of interest at a fixed rate.
"Floating Rate Security" means a Debt Security which provides for the
payment of interest at a variable rate determined periodically by reference to
an interest rate index or any other index specified pursuant to Section 3.01.
"Foreign Currency" means a currency issued by the government of any
country other than the United States.
"Global Note" means a Registered or Bearer Security evidencing all or
part of a series of Debt Securities, including, without limitation, any
temporary or permanent Global Note.
"Holder" means, with respect to a Registered Security, the Registered
Holder, and with respect to a Bearer Security or a Coupon, the bearer thereof.
"Indebtedness" means (1) any obligation of a Person for (a) the
repayment of borrowed money, whether or not evidenced by bonds, debentures,
notes or other written instruments or for the payment of the deferred purchase
price of property or assets (other than Trade Payables), or (b) for the payment
of money relating to a lease that is required to be classified as a capitalized
lease obligation in accordance with generally accepted accounting principles;
(2) any liability of others described in the preceding clause (1) that the
Person has guaranteed, that is recourse to such Person
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or that is otherwise its legal liability; and (3) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of the
types referred to in clauses (1) and (2) above.
"Indebtedness Ranking on a Parity with the Debt Securities" means all
Indebtedness of the Company, whether outstanding on the date of the execution of
this Indenture or thereafter created, assumed or incurred, which specifically by
its terms ranks equally with and not prior to the Debt Securities in right of
payment.
"Indebtedness Ranking Junior to the Debt Securities" means all
Indebtedness of the Company, whether outstanding on the date of the execution of
this Indenture or thereafter created, assumed or incurred, which specifically by
its terms ranks junior to and not equally with or prior to the Debt Securities
in right of payment.
"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
and, unless the context otherwise requires, shall include the terms of a
particular series of Debt Securities as established pursuant to Section 3.01.
The term "interest," when used with respect to a Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity, and, when used with respect to a Bearer Security, includes any
additional amounts payable on such Bearer Security, if so provided pursuant to
Section 3.01.
"Interest Payment Date" with respect to any Debt Security means the
Stated Maturity of an installment of interest on such Debt Security.
"Market Exchange Rate" means (i) for any conversion involving a
Currency Unit on the one hand and Dollars or any Foreign Currency on the other,
the exchange rate between the relevant Currency Unit and Dollars or such Foreign
Currency calculated for noon, New York time, on the Valuation Date by the method
specified pursuant to Section 3.01 for the securities of the relevant series,
(ii) for any conversion of Dollars into any Foreign Currency, the noon (New York
time) buying rate for such Foreign Currency for cable transfers quoted in New
York City as certified for customs purposes by the Federal Reserve Bank of New
York and (iii) for any conversion of one Foreign Currency into Dollars or
another Foreign Currency, the spot rate at noon local time in the relevant
market at which, in accordance with normal banking procedures, the Dollars or
Foreign Currency into which conversion is being made could be purchased with the
Foreign Currency from which conversion is being made from major banks located in
either New York City, London or any other principal market for Dollars or such
purchased Foreign Currency. In the event of the unavailability of any of the
exchange rates provided for in the foregoing clauses (i), (ii) and (iii) the
Company, shall use, in its sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New York as of the most recent
available date, or quotations from one or more major banks in New York City,
London or other principal market for such Currency or Currency Unit in question,
or such other quotations as the Company shall deem appropriate, in its
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sole discretion and without liability on its part. Unless otherwise specified by
the Currency Determination Agent, if there is more than one market for dealing
in any Currency or Currency Unit by reason of foreign exchange regulations or
otherwise, the market to be used in respect of such Currency or Currency Unit
shall be that, as determined by the Currency Determination Agent, in its sole
discretion and without liability on its part, upon which a nonresident issuer of
securities designated in such Currency or Currency Unit would purchase such
Currency or Currency Unit in order to make payments in respect of such
securities.
"Maturity" when used with respect to any Debt Security means the date
on which the principal of such Debt Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption, repayment at
the option of the Holder thereof or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman, the
President, the Chief Financial Officer or an Executive Vice President, and by
the Treasurer, the Chief Accounting Officer, the Controller or the Secretary of
the Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Company (including an employee of the Company) and who shall be
satisfactory to the Trustee, which is delivered to the Trustee.
"Other Financial Obligations" means, unless otherwise determined with
respect to any series of Debt Securities pursuant to Section 3.01, all
obligations to make payment pursuant to the terms of financial instruments, such
as (i) securities contracts and currency and foreign exchange rate contracts,
(ii) derivative instruments, such as swap agreements (including interest rate
and currency and foreign exchange rate swap agreements), cap agreements, floor
agreements, collar agreements, interest rate agreements, foreign exchange
agreements, options, commodity futures contracts, commodity options contracts
and (iii) similar financial instruments; provided that the term Other Financial
Obligations shall not include (A) obligations on account of Senior Indebtedness
and (B) obligations on account of Indebtedness Ranking on a Parity with the Debt
Securities and Indebtedness Ranking Junior to the Debt Securities.
"Outstanding" when used with respect to Debt Securities, means, as of
the date of determination, all Debt Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Debt Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Debt Securities with respect to which 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 Debt
Securities and any
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Coupons thereto pertaining; provided, however, that if such Debt
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and
(iii) Debt Securities which have been paid pursuant to Section
3.06 or in exchange for or in lieu of which other Debt Securities have
been authenticated and delivered pursuant to this Indenture, other than
any such Debt Securities in respect of which there shall have been
presented to the Trustee proof reasonably satisfactory to it that such
Debt Securities are held by a bona fide purchaser in whose hands such
Debt Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of Debt Securities Outstanding have
performed any Act hereunder, Debt Securities owned by the Company or
any other obligor upon the Debt 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 Act, only Debt Securities which
the Trustee knows to be so owned shall be so disregarded. Debt
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 to act with respect to such Debt
Securities and that the pledgee is not the Company or any other obligor
upon the Debt Securities or any Affiliate of the Company or of such
other obligor. In determining whether the Holders of the requisite
principal amount of Outstanding Debt Securities have performed any Act
hereunder, the principal amount of a Discount Security that shall be
deemed to be Outstanding for such purpose shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.02 and the principal amount of a Debt
Security denominated in a Foreign Currency that shall be deemed to be
Outstanding for such purpose shall be the amount calculated pursuant to
Section 3.10(k).
"Overdue Rate," when used with respect to any series of the Debt
Securities, means the rate designated as such in or pursuant to the Board
Resolution or the supplemental indenture, as the case may be, relating to such
series as contemplated by Section 3.01.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debt Securities on behalf
of the Company.
"permanent Global Note" shall have the meaning given such term in
Section 3.04(b).
"Person" means any individual, Corporation, partnership, joint venture,
association, trust, estate, unincorporated organization or government or any
agency or political subdivision thereof.
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"Place of Payment" when used with respect to the Debt Securities of any
series means the place or places where the principal of (and premium, if any)
and interest on the Debt Securities of that series are payable as specified
pursuant to Section 3.01.
"Predecessor Security" of any particular Debt Security means every
previous Debt Security evidencing all or a portion of the same debt as that
evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section 3.06 in
lieu of a mutilated, lost, destroyed or stolen Debt Security or a Debt Security
to which a mutilated, lost, destroyed or stolen Coupon appertains shall be
deemed to evidence the same debt as the mutilated, lost, destroyed or stolen
Debt Security or the Debt Security to which the mutilated, lost, destroyed or
stolen Coupon appertains, as the case may be.
"Redemption Date" means the date fixed for redemption of any Debt
Security pursuant to this Indenture.
"Redemption Price" means, in the case of a Discount Security, the
amount of the principal thereof that would be due and payable as of the
Redemption Date upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.02 or any other redemption specified pursuant to Section
3.01, and in the case of any other Debt Security, the principal amount thereof,
plus, in each case, premium, if any, and accrued and unpaid interest, if any, to
the Redemption Date.
"Registered Holder" means the Person in whose name a Registered
Security is registered in the Security Register.
"Registered Security" means any Debt Security in the form established
pursuant to Section 2.01 which is registered as to principal and interest in the
Security Register.
"Regular Record Date" for the interest payable on the Registered
Securities of any series on any Interest Payment Date means the date specified
for the purpose pursuant to Section 3.01 for such Interest Payment Date.
"Responsible Officer" means when used with respect to the Trustee any
officer within the Corporate Trust Office including any Vice President, Managing
Director, Assistant Vice President, Secretary, Assistant Secretary, Treasurer or
Assistant Treasurer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge and familiarity with the
particular subject.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05(a).
"Senior Indebtedness" means, unless otherwise determined with respect
to any series of Debt Securities pursuant to Section 3.01, all Indebtedness of
the Company, whether outstanding on the
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date of the execution of this Indenture or thereafter created, assumed or
incurred except for (i) the Debt Securities, (ii) Indebtedness Ranking on a
Parity with the Debt Securities and (iii) Indebtedness Ranking Junior to the
Debt Securities.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.07.
"Specified Amount" has the meaning specified in Section 3.10(i).
"State" means any of the various States of the United States of
America.
"Stated Maturity" when used with respect to any Debt Security or any
installment of principal thereof or premium thereon or interest thereon means
the date specified in such Debt Security or the Coupon, if any, representing
such installment of interest, as the date on which the principal of such Debt
Security or such installment of principal, premium or interest is due and
payable.
"Subsidiary" means any Corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to elect a
majority of the directors of such Corporation, irrespective of whether or not,
at the time, stock of any other class or classes of such Corporation shall have
or might have voting power by reason of the happening of any contingency, is at
the time, directly or indirectly, owned or controlled by the Company or by one
or more Subsidiaries thereof, or by the Company and one or more Subsidiaries
thereof.
"temporary Global Note" shall have the meaning given such term in
Section 3.04(b).
"Trade Payables" means accounts payable or any other indebtedness or
monetary obligations to trade creditors created or assumed in the ordinary
course of business in connection with the obtaining of materials or services.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Debt Securities of any series shall mean the Trustee with respect
to Debt Securities of such series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as amended
and as in force at the date as of which this instrument was executed, except as
provided in Section 11.05.
"United States" means the United States of America (including the
States and the District of Columbia), and its possessions, which include the
Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
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"U.S. Depositary" means a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or any successor thereto, which
shall in either case be designated by the Company pursuant to Section 3.01 until
a successor U.S. Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "U.S. Depositary" shall mean or
include each Person who is then a U.S. Depositary hereunder, and if at any time
there is more than one such Person, "U.S. Depositary" as used with respect to
the Debt Securities of any series shall mean the U.S. Depositary with respect to
the Debt Securities of that series.
"U.S. Person" means a citizen or resident of the United States, a
Corporation, partnership or other entity created or organized in or under the
laws of the United States, or an estate or trust the income of which is subject
to United States Federal income taxation regardless of its source.
"Valuation Date" has the meaning specified in Section 3.10(d).
"Vice President" includes with respect to the Company and the Trustee,
any Vice President of the Company or the Trustee, as the case may be, whether or
not designated by a number or word or words added before or after the title
"Vice President."
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the
outstanding voting stock (other than directors' qualifying shares) is at the
time, directly or indirectly, owned by the Company, or by one or more
Wholly-Owned Subsidiaries of the Company or by the Company and one or more
Wholly-Owned Subsidiaries of the Company.
Section 1.02. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture (other
than certificates provided pursuant to Section 12.02) shall include:
(1) a statement that each individual signing such Certificate or
Opinion of Counsel has read such covenant or condition and the definitions
herein relating thereto;
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(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.04. Notices, etc., to Trustee and Company.
Any 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 (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing to or with the Trustee
at its Corporate Trust Office, Attention: Corporate Trust and Agency Services.
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(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 or airmail
postage prepaid if sent from outside the United States, to the Company addressed
to it at the address of its principal office specified in the first paragraph of
this Indenture, to the attention of its Treasurer, or at any other address
previously furnished in writing to the Trustee by the Company.
Any such Act or other document shall be in the English language, except
that any published notice may be in an official language of the country of
publication.
Section 1.05. Notice to Holders; Waiver.
When this Indenture provides for notice to Holders of any event, (1)
such notice shall be sufficiently given to Registered Holders (unless otherwise
herein expressly provided) if in writing and mailed, first class postage
prepaid, to such Registered Holders as their names and addresses appear in the
Security Register, within the time prescribed, and (2) such notice shall be
sufficiently given to Holders of Bearer Securities or Coupons (unless otherwise
herein expressly provided) if published at least twice in an Authorized
Newspaper or Newspapers in The City of New York and, if Debt Securities of such
series are then listed on any stock exchange located outside the United States
and such stock exchange shall so require, in a daily newspaper or financial
journal in such other city or cities specified pursuant to Section 3.01 or in
any Debt Security on Business Days, the first such publication to be not earlier
than the earliest date and not later than two Business Days prior to the latest
date prescribed for the giving of such notice; provided, however, that, in any
case, any notice to Holders of Floating Rate Securities regarding the
determination of a periodic rate of interest, if such notice is required
pursuant to Section 3.01, shall be sufficiently given if given in the manner
specified pursuant to Section 3.01.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, such notification
as shall be given with the approval of the Trustee shall constitute sufficient
notice for every purpose hereunder.
In the event of suspension of publication of any Authorized Newspapers
or by reason of any other cause it shall be impracticable to give notice by
publication, such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice for every purpose hereunder.
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 on such waiver. 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, and any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given. In any case
where notice to
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Holders is given by publication, any defect in any notice so published as to any
particular Holder shall not affect the sufficiency of such notice with respect
to other Holders, and any notice which is published in the manner herein
provided shall be conclusively presumed to have been duly given.
Section 1.06. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the duties
imposed on any person by the provisions of Sections 310 to 317, inclusive, of
the Trust Indenture Act, such duties imposed by the Trust Indenture Act shall
control.
Section 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.08. Successors and Assigns.
All covenants and agreements in this Indenture by the parties hereto
shall bind their respective successors and assigns and inure to the benefit of
their permitted successors and assigns, whether so expressed or not.
Section 1.09. Separability Clause.
In case any provision in this Indenture or in the Debt Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 1.10. Benefits of Indenture.
Nothing in this Indenture or in the Debt Securities, express or
implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent and their successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.11. Governing Law.
This Indenture, the Debt Securities and the Coupons shall be deemed to
be contracts made and to be performed entirely in the State of New York, and for
all purposes shall be governed by and construed in accordance with the laws of
said State without regard to the conflicts of law rules of said State.
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Section 1.12. Legal Holidays.
Unless otherwise specified pursuant to Section 3.01 or in any Debt
Security, in any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debt Security of any series shall not be a Business Day at any
Place of Payment for the Debt Securities of that series, then (notwithstanding
any other provision of this Indenture or of the Debt Securities or Coupons)
payment of principal (and premium, if any) or interest need not be made at such
Place of Payment on such date, but any such payment may be made at such Place of
Payment on the next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date, Redemption Date or at the Stated Maturity,
and no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be, to such Business Day if such payment is made or duly provided for
on such Business Day.
Section 1.13. No Security Interest Created.
Nothing in this Indenture or in the Debt Securities or Coupons, express
or implied, shall be construed to constitute a security interest or mortgage or
other pledge of collateral under the Uniform Commercial Code or similar
legislation or real property laws, as now or hereafter enacted and in effect in
any jurisdiction where property of the Company or its Subsidiaries is or may be
located.
Section 1.14. Liability Solely Corporate.
No recourse shall be had for the payment of the principal of (or
premium, if any) or the interest on any Debt Securities or Coupons, or any part
thereof, or of the indebtedness represented thereby, or upon any obligation,
covenant or agreement of this Indenture, against any incorporator, or against
any stockholder, officer or director, as such, past, present or future, of the
Company (or any incorporator, stockholder, officer or director of any
predecessor or successor corporation), either directly or through the Company
(or any such predecessor or successor corporation), whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that this
Indenture and all the Debt Securities and Coupons are solely corporate
obligations, and that no personal liability whatsoever shall attach to, or be
incurred by, any such incorporator, stockholder, officer or director, past,
present or future, of the Company (or any incorporator, stockholder, officer or
director of any such predecessor or successor corporation), either directly or
indirectly through the Company or any such predecessor or successor corporation,
because of the indebtedness hereby authorized or under or by reason of any of
the obligations, covenants, promises or agreements contained in this Indenture
or in any of the Debt Securities or Coupons or to be implied herefrom or
therefrom; and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of this Indenture and the issue of Debt Securities; provided, however, that
nothing herein or in the Debt Securities or Coupons contained shall be taken to
prevent recourse to and the enforcement of the liability, if any, of any
stockholder or subscriber to capital stock upon or in respect of the shares of
capital stock not fully paid.
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ARTICLE TWO
DEBT SECURITY FORMS
Section 2.01. Forms Generally.
The Debt Securities and the Coupons, if any, of each series shall be
substantially in one of the forms (including global form) established in or
pursuant to a Board Resolution or one or more indentures supplemental hereto,
and shall have 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 or designation and such
legends or endorsements placed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which any
series of the Debt Securities may be listed, or to conform to usage, all as
determined by the officers executing such Debt Securities and Coupons as
conclusively evidenced by their execution of such Debt Securities and Coupons.
If the form of a series of Debt Securities or Coupons (or any Global Note) is
established in or pursuant to a Board Resolution, a copy of such Board
Resolution shall be delivered to the Trustee, together with an Officers'
Certificate setting forth the form of such series, at or prior to the delivery
of the Company Order contemplated by Section 3.03 for the authentication and
delivery of such Debt Securities (or any such Global Note) or Coupons.
Unless otherwise specified as contemplated by Section 3.01, Debt
Securities in bearer form (other than in global form) shall have Coupons
attached.
The definitive Debt Securities and Coupons, if any, of each series
shall be printed, lithographed or engraved or produced by any combination of
these methods on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Debt Securities and Coupons, as
conclusively evidenced by their execution of such Debt Securities and Coupons.
Section 2.02. Form of Trustee's Certificate of Authentication.
The form of the Trustee's certificate of authentication to be borne by
the Debt Securities shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
issued under the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
Dated: By
---------------------------------
Authorized Signatory
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Section 2.03. Securities in Global Form.
If any Debt Security of a series is issuable in global form, the Global
Note so issued may provide that it shall represent the aggregate amount of
Outstanding Debt Securities from time to time endorsed thereon and may also
provide that the aggregate amount of Outstanding Debt Securities represented
thereby may from time to time be reduced or increased to reflect exchanges. Any
endorsement of a Global Note to reflect the amount, or any increase or decrease
in the amount, of Outstanding Debt Securities represented thereby shall be made
by the Trustee and in such manner as shall be specified in such Global Note. Any
instructions by the Company with respect to a Global Note, after its initial
issuance, shall be in writing but need not comply with Section 1.02.
Global Notes may be issued in either registered or bearer form and in
either temporary or permanent form. Permanent Global Notes will be issued in
definitive form.
ARTICLE THREE
THE DEBT SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Debt Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Debt Securities may be issued from time to time in one or more
series. There shall be established in or pursuant to a Board Resolution and
(subject to Section 3.03) set forth in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of Debt
Securities of any series:
(1) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of such series from all other series of Debt
Securities);
(2) the limit, if any, upon the aggregate principal amount of the
Debt Securities of the series which may be authenticated and delivered under
this Indenture (except for Debt Securities authenticated and delivered upon
transfer of, or in exchange for, or in lieu of, other Debt Securities of such
series pursuant to Sections 3.04, 3.05, 3.06, 11.06 or 13.07);
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(3) the percentage of the principal amount at which the Debt
Securities will be issued and, if other than the principal amount thereof, the
portion of the principal amount thereof payable upon declaration of acceleration
of the Maturity thereof or the method by which such portion shall be determined;
(4) the date or dates on which or periods during which the Debt
Securities of the series may be issued, and the date or dates (or the method of
determination thereof) on which the principal of (and premium, if any, on) the
Debt Securities of such series are or may be payable (which, if so provided in
such Board Resolution or supplemental indenture, may be determined by the
Company from time to time and set forth in the Debt Securities of the series
issued from time to time);
(5) the rate or rates (or the method of determination thereof) at
which the Debt Securities of the series shall bear interest, if any, and the
dates from which such interest shall accrue (which, in either case or both, if
so provided in such Board Resolution or supplemental indenture, may be
determined by the Company from time to time and set forth in the Debt Securities
of the series issued from time to time); and the Interest Payment Dates on which
such interest shall be payable (or the method of determination thereof), and, in
the case of Registered Securities, the Regular Record Dates for the interest
payable on such Interest Payment Dates and, in the case of Floating Rate
Securities, the notice, if any, to Holders regarding the determination of
interest and the manner of giving such notice;
(6) the place or places where the principal of (and premium, if
any) and interest on Debt Securities of the series shall be payable; the extent
to which, or the manner in which, any interest payable on any Global Note on an
Interest Payment Date will be paid, if other than in the manner provided in
Section 3.07; the extent, if any, to which the provisions of the last sentence
of Section 12.01 shall apply to the Debt Securities of the series; and the
manner in which any principal of, or premium, if any, on, any Global Note will
be paid, if other than as set forth elsewhere herein;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Debt Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of the Holder and the
period or periods within which or the dates on which, the prices at which and
the terms and conditions upon which Debt Securities of the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such obligation;
(8) the right, if any, of the Company to redeem the Securities of
such series, in whole or in part, at its option and the period or periods within
which, or the date or dates on which, the price or prices at which, and the
terms and conditions upon which Debt Securities of the series may be redeemed,
if any, in whole or in part, at the option of the Company or otherwise;
(9) if the coin or Currency in which the Debt Securities shall be
issuable is in Dollars, the denominations of such Debt Securities if other than
denominations of $1,000 and any integral multiple thereof (except as provided in
Section 3.04);
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(10) whether the Debt Securities of the series are to be issued as
Discount Securities and the amount of discount with which such Debt Securities
may be issued and, if other than the principal amount thereof, the portion of
the principal amount of Debt Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to Section
5.02;
(11) provisions, if any, for the defeasance of the Debt Securities
of such series or certain of the Company's obligations with respect to the Debt
Securities;
(12) whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer Securities
are issued, whether Coupons will be attached thereto, whether Bearer Securities
of the series may be exchanged for Registered Securities of the series, as
provided in Section 3.05(b) or otherwise and the circumstances under which and
the place or places at which any such exchanges, if permitted, may be made;
(13) whether provisions for payment of additional amounts or tax
redemptions shall apply and, if such provisions shall apply, such provisions;
and, if Bearer Securities of the series are to be issued, whether a procedure
other than that set forth in Section 3.04(b) shall apply and, if so, such other
procedure, and if the procedure set forth in Section 3.04(b) shall apply, the
forms of certifications to be delivered under such procedure;
(14) if other than Dollars, the Foreign Currency or Currencies or
Currency Unit in which Debt Securities of the series shall be denominated or in
which payment of the principal of (and/or premium, if any) and/or interest on
the Debt Securities of the series may be made, and the particular provisions
applicable thereto and, if applicable, the amount of Debt Securities of the
series which entitles the Holder of a Debt Security of the series or its proxy
to one vote for purposes of Section 9.06;
(15) if the principal of (and premium, if any) or interest on Debt
Securities of the series are to be payable, at the election of the Company or a
Holder thereof, in a Currency other than that in which the Debt Securities are
denominated or payable without such election, in addition to or in lieu of the
provisions of Section 3.10, the period or periods within which and the terms and
conditions upon which, such election may be made and the time and the manner of
determining the exchange rate or rates between the Currency or Currencies in
which the Debt Securities are denominated or payable without such election and
the Currency or Currencies in which the Debt Securities are to be paid if such
election is made;
(16) the date as of which any Debt Securities of the series shall
be dated, if other than as set forth in Section 3.03;
(17) if the amount of payments of principal of (and premium, if
any) or interest on the Debt Securities of the series may be determined with
reference to an index, including, but not limited to, an index based on a
Currency or Currencies other than that in which the Debt Securities are
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denominated or payable, or any other type of index, the manner in which such
amounts shall be determined;
(18) if the Debt Securities of the series are denominated or
payable in a Foreign Currency, any other terms concerning the payment of
principal of (and premium, if any) or any interest on such Debt Securities
(including the Currency or Currencies of payment thereof);
(19) the designation of the original Currency Determination Agent,
if any;
(20) the applicable Overdue Rate, if any;
(21) if the Debt Securities of the series do not bear interest, the
applicable dates for purposes of Section 7.01;
(22) any addition to, or modification or deletion of, any Events of
Default or covenants provided for with respect to Debt Securities of the series;
(23) if Bearer Securities of the series are to be issued, (x)
whether interest in respect of any portion of a temporary Debt Security in
global form (representing all of the Outstanding Bearer Securities of the
series) payable in respect of any Interest Payment Date prior to the exchange of
such temporary Debt Security for definitive Debt Securities of the series shall
be paid to any clearing organization with respect to the portion of such
temporary Debt Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any such
interest payment received by a clearing organization will be credited to the
Persons entitled to interest payable on such Interest Payment Date, (y) the
terms upon which interests in such temporary Debt Security in global form may be
exchanged for interests in a permanent Global Note or for definitive Debt
Securities of the series and the terms upon which interests in a permanent
Global Note, if any, may be exchanged for definitive Debt Securities of the
series and (z) the cities in which the Authorized Newspapers designated for the
purposes of giving notices to Holders are published;
(24) whether the Debt Securities of the series shall be issued in
whole or in part in the form of one or more Global Notes and, in such case, the
U.S. Depositary or any Common Depositary for such Global Note or Notes; and if
the Debt Securities of the series are issuable only as Registered Securities,
the manner in which and the circumstances under which Global Notes representing
Debt Securities of the series may be exchanged for Registered Securities in
definitive form, if other than, or in addition to, the manner and circumstances
specified in Section 3.04(c);
(25) the designation, if any, of the U.S. Depositary; and the
designation of any trustees (other than the Trustee), depositaries,
Authenticating Agents, Paying Agents, Security Registrars, or any other agents
with respect to the Debt Securities of such series;
(26) if the Debt Securities of such series are to be issuable in
definitive form (whether upon original issuance or upon exchange of a temporary
Debt Security of such series) only upon
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receipt of certain certificates or other documents or satisfaction of other
conditions, the form and terms of such certificates, documents or conditions;
(27) if other than as specified in Article Sixteen, the
subordination provisions applicable with respect to the Debt Securities of the
series, including a different definition of the terms "Senior Indebtedness" or
"Other Financial Obligations"; and
(27) any other terms of the series (which other terms shall not be
inconsistent with the provisions of this Indenture).
All Debt Securities of any one series and Coupons, if any, shall be
substantially identical to all other debt securities of such series except as to
denomination, rate of interest, Stated Maturity and the date from which
interest, if any, shall accrue, which, as set forth above, may be determined by
the Company from time to time as to Debt Securities of a series if so provided
in or established pursuant to the authority granted in a Board Resolution or in
any such indenture supplemental hereto, and except as may otherwise be provided
in or pursuant to such Board Resolution and (subject to Section 3.03) set forth
in such Officers' Certificate, or in any such indenture supplemental hereto. All
Debt Securities of any one series need not be issued at the same time, and
unless otherwise provided, a series may be reopened for issuance of additional
Debt Securities of such series.
If any of the terms of a series of Debt Securities is established in or
pursuant to a Board Resolution, a copy of such Board Resolution shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 3.02. Denominations.
In the absence of any specification pursuant to Section 3.01 with
respect to the Debt Securities of any series, the Debt Securities of such series
shall be issuable only as Registered Securities in denominations of $1,000 and
any integral multiple thereof and shall be payable only in Dollars.
Section 3.03. Execution, Authentication, Delivery and Dating.
The Debt Securities and the Coupons, if any, of any series shall be
executed on behalf of the Company by its Chairman, its President, one of its
Executive Vice Presidents, its Chief Accounting Officer or its Treasurer, under
its corporate seal reproduced thereon and attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers may be manual
or facsimile.
Debt Securities and Coupons 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
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delivery of such Debt Securities and Coupons or did not hold such offices at the
date of such Debt Securities and Coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debt Securities, with appropriate
Coupons, if any, of any series, executed by the Company, to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Debt Securities and Coupons and the Trustee in accordance with
the Company Order shall authenticate and deliver such Debt Securities and
Coupons, subject, in the case of Bearer Securities, to Section 3.04(b);
provided, however, that, in connection with its sale during the "restricted
period" (as defined in Section 1.1635(c)(2)(i)(D)(7) of the United States
Treasury Regulations), no Bearer Security shall be mailed or otherwise delivered
to any location in the United States; and provided, further, that a Bearer
Security (other than a temporary Global Note in bearer form) may be delivered
outside the United States in connection with its original issuance only if the
Person entitled to receive such Bearer Security shall have furnished to the
Euroclear Operator or to Cedelbank a certificate substantially in the form set
forth in Exhibit A to this Indenture and if the Euroclear Operator or Cedelbank
has furnished the Trustee a certificate substantially in the form set forth in
Exhibit B. If all the Debt Securities of any one series are not to be issued at
one time and if a Board Resolution or supplemental indenture relating to such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Debt Securities and other matters which
are subject to variation, such as interest rate, Stated Maturity, date of
issuance and date from which interest, if any, shall accrue. If any Debt
Security shall be represented by a permanent Global Note, then, for purposes of
this Section and Section 3.04, the notation by the Common Depositary of a
beneficial owner's interest therein upon original issuance of such Debt Security
or upon exchange of a portion of a temporary Global Note shall be deemed to be
delivery in connection with the original issuance of such beneficial owner's
interest in such permanent Global Note. Except as permitted by Section 3.06 or
3.07, the Trustee shall not authenticate and deliver any Bearer Security unless
all Coupons for interest then matured have been detached and canceled.
The Trustee shall be entitled to receive, and (subject to Section 6.01)
shall be fully protected in relying upon, prior to the authentication and
delivery of the Debt Securities and Coupons of such series, (i) the supplemental
indenture or the Board Resolution by or pursuant to which the form and terms of
such Debt Securities and Coupons have been approved, (ii) the certificates and
opinions required pursuant to Section 1.02 and (iii) one or more Opinions of
Counsel substantially to the effect that:
(1) all instruments furnished by the Company to the Trustee in
connection with the authentication and delivery of such Debt Securities and
Coupons conform to the requirements of this Indenture and constitute sufficient
authority hereunder for the Trustee to authenticate and deliver such Debt
Securities and Coupons;
(2) the forms and terms of such Debt Securities and Coupons have
been established in conformity with the provisions of this Indenture;
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(3) in the event that the forms or terms of such Debt Securities
and Coupons have been established in a supplemental indenture, the execution and
delivery of such supplemental indenture has been duly authorized by all
necessary corporate action of the Company, such supplemental indenture has been
duly executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Trustee, is a valid and binding obligation
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law);
(4) the execution and delivery of such Debt Securities and Coupons
have been duly authorized by all necessary corporate action of the Company and
such Debt Securities and Coupons have been duly executed by the Company and,
assuming due authentication by the Trustee and delivery by the Company, are
valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, entitled to the benefit of the Indenture, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law) and subject to such other exceptions as counsel shall reasonably request
and as to which the Trustee shall not reasonably object; and
(5) to the best of such counsel's knowledge, all governmental
consents, authorizations and approvals which are required for the execution and
delivery of the Indenture and the Debt Securities under all applicable Federal,
Commonwealth and State of New York laws, and any other applicable law, if any,
have been received other than such as may be required by the securities or blue
sky laws of the various states in connection with the offer and sale of the Debt
Securities.
Notwithstanding the provisions of Section 3.01 and of the
preceding two paragraphs, if not all of the Debt Securities of any series are to
be issued at one time, it shall not be necessary to deliver the Officers'
Certificate required by Section 3.01 or the Opinion of Counsel otherwise
required by clause (iii) of the preceding paragraph prior to or at the time of
issuance of each Debt Security of such series, but such documents shall be
delivered prior to or at the time of delivery of the first Debt Security of such
series.
For purposes of this opinion, such counsel may rely as to factual
matters upon certificates or written statements from officers or other
appropriate representatives of the Company or upon certificates of public
officials and such opinion may contain assumptions, limitations, exceptions and
restrictions which are reasonably satisfactory to the Trustee and its counsel.
The Trustee shall not be required to authenticate such Debt Securities
and Coupons if the issuance of such Debt Securities and Coupons pursuant to this
Indenture will affect the Trustee's own rights, duties or immunities under the
Debt Securities and this Indenture in a manner which is not reasonably
acceptable to the Trustee.
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Each Registered Security shall be dated the date of its authentication.
Each Bearer Security (including any temporary or permanent or other definitive
Bearer Security in global form) shall be dated as of the date of original
issuance of the first Debt Security of such series to be issued, except as
otherwise provided pursuant to Section 3.01 with respect to the Bearer
Securities of any series.
No Debt Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Debt
Security a certificate of authentication substantially in one of the forms
provided for herein duly executed by the Trustee or by an Authenticating Agent,
and such certificate upon any Debt Security shall be conclusive evidence, and
the only evidence, that such Debt Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Debt Security shall have been duly
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Debt Security to the Trustee for cancellation
as provided in Section 3.08 together with a written statement (which need not
comply with Section 1.02) stating that such Debt Security has never been issued
and sold by the Company, for all purposes of this Indenture such Debt Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
Section 3.04. Temporary Debt Securities; Exchange of Temporary Global
Notes for Definitive Bearer Securities; Global Notes Representing Registered
Securities.
(a) Pending the preparation of definitive Registered Securities of
any series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Registered Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination for Registered Securities of such series, substantially of the
tenor of the definitive Registered Securities in lieu of which they are issued
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Registered Securities may determine,
as conclusively evidenced by their execution of such Registered Securities.
Every such temporary Registered Security shall be executed by the Company and
shall be authenticated and delivered by the Trustee upon the same conditions and
in substantially the same manner, and with the same effect, as the definitive
Registered Securities in lieu of which they are issued. In the case of any
series issuable as Bearer Securities, such temporary Debt Securities may be in
global form, representing such of the Outstanding Debt Securities of such series
as shall be specified therein.
Except in the case of temporary Debt Securities in global form
(which shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Debt Securities of any series are issued, the Company
will cause definitive Debt Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Debt Securities of such
series, the temporary Debt Securities of such series shall be exchangeable for
definitive Debt Securities of such series, of a like Stated Maturity and with
like terms and provisions, upon surrender of the temporary Debt Securities of
such series at the office or agency of the Company in a Place of Payment for
such series, without charge to the Holder, except as provided in Section 3.05 in
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connection with a transfer. Upon surrender for cancellation of any one or more
temporary Debt Securities of any series (accompanied by any unmatured Coupons),
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Debt Securities of the
same series of authorized denominations and of a like Stated Maturity and like
terms and provisions; provided, however, that no definitive Bearer Security
shall be delivered in exchange for a temporary Registered Security; and
provided, further, that a definitive Bearer Security (including a permanent
Bearer Security in global form) shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section
3.03. Until so exchanged, the temporary Registered Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Registered Securities of such series.
(b) Unless otherwise specified pursuant to Section 3.01, all
Bearer Securities of a series shall be initially issued in the form of a single
temporary Bearer Security in global form (a "temporary Global Note"). The
Company shall execute, and upon Company Order the Trustee (or other agent
specified under Section 3.01) shall authenticate, any temporary Global Note and
any permanent Bearer Security in global form (as described below, a "permanent
Global Note") upon the same conditions and in substantially the same manner, and
with the same effect, as definitive Bearer Securities, and the temporary or
permanent Global Note, as the case may be, shall, unless otherwise specified
therein, be delivered by the Trustee (or such other agent) to the London office
of a depositary or common depositary (the "Common Depositary"), for the benefit
of the Euroclear Operator or Cedelbank, as the case may be, for credit to the
account of the Company (in the case of sales of Bearer Securities by the Company
directly to investors) or the managing underwriter (in the case of sales of
Bearer Securities by the Company to underwriters) or such other accounts as the
Company or the managing underwriter, respectively, may direct in writing.
On or after the date specified in or determined pursuant to
the terms of any temporary Global Note which (subject to any applicable laws and
regulations) shall be at least 40 days after the issue date of a temporary
Global Note (the "Exchange Date"), the Debt Securities represented by such
temporary Global Note may be exchanged for definitive Debt Securities (subject
to the second succeeding paragraph) or Debt Securities to be represented
thereafter by one or more permanent Global Notes in definitive form without
Coupons. On or after the Exchange Date such temporary Global Note shall be
surrendered by the Common Depositary to the Trustee (or such other agent as is
specified for the purpose pursuant to Section 3.01), as the Company's agent for
such purpose, at such place specified outside the United States pursuant to
Section 3.01 and following such surrender, the Trustee (or such other agent)
shall (1) endorse the temporary Global Note to reflect the reduction of its
principal amount by an equal aggregate principal amount of such Debt Security,
(2) endorse the applicable permanent Global Note, if any, to reflect the initial
amount, or an increase in the amount of Debt Securities represented thereby, (3)
manually authenticate such definitive Debt Securities (including any permanent
Global Note), (4) deliver such definitive Debt Securities to the Holder thereof
or, if such definitive Debt Security is a permanent Global Note, deliver such
permanent Global Note to the Common Depositary to be held outside the United
States for the accounts of the Euroclear Operator or Cedelbank, as the case may
be, for credit to the respective accounts at Euroclear Operator or Cedelbank, as
the case may be, designated by or on behalf of the
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beneficial owners of such Debt Securities (or to such other accounts as they may
direct) and (5) redeliver such temporary Global Note to the Common Depositary,
unless such temporary Global Note shall have been canceled in accordance with
Section 3.08 hereof; provided, however, that, unless otherwise specified in such
temporary Global Note, upon such presentation by the Common Depositary, such
temporary Global Note shall be accompanied by a certificate dated the Exchange
Date or a subsequent date and signed by the Euroclear Operator, as to the
portion of such temporary Global Note held for its account then to be exchanged
for definitive Debt Securities (including any permanent Global Note), and a
certificate dated the Exchange Date or a subsequent date and signed by
Cedelbank, as to the portion of such temporary Global Note held for its account
then to be exchanged for definitive Debt Securities (including any permanent
Global Note), each substantially in the form set forth in Exhibit B to this
Indenture. Each certificate substantially in the form of Exhibit B hereto of the
Euroclear Operator or Cedelbank, as the case may be, shall be based on
certificates of the account holders listed in the records of the Euroclear
Operator or Cedelbank, as the case may be, as being entitled to all or any
portion of the applicable temporary Global Note. An account holder of the
Euroclear Operator or Cedelbank, as the case may be, desiring to effect the
exchange of an interest in a temporary Global Note for an interest in definitive
Debt Securities (including any permanent Global Note) shall instruct the
Euroclear Operator or Cedelbank, as the case may be, to request such exchange on
its behalf and shall deliver to the Euroclear Operator or Cedelbank, as the case
may be, a certificate substantially in the form of Exhibit A hereto and dated no
earlier than 10 days prior to the Exchange Date. Until so exchanged, temporary
Global Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Debt Securities (including any permanent Global Note) of
the same series authenticated and delivered hereunder, except as to payment of
interest, if any.
The delivery to the Company, its agent or the Trustee by the
Euroclear Operator or Cedelbank of any certificate substantially in the form of
Exhibit B hereto may be relied upon by the Company, its agent and the Trustee as
conclusive evidence that a corresponding certificate or certificates has or have
been delivered to the Euroclear Operator or Cedelbank, as the case may be,
pursuant to the terms of this Indenture.
On or prior to the Exchange Date, the Company shall deliver to
the Trustee (or such other agent as may be specified as the Company's agent for
such purpose pursuant to Section 3.01) definitive Debt Securities in an
aggregate principal amount equal to the principal amount of such temporary
Global Note, executed by the Company. At any time, on or after the Exchange
Date, upon 30 days' notice to the Trustee (and such other agents as may be
specified for such purpose pursuant to Section 3.01) by the Euroclear Operator
or Cedelbank, as the case may be, acting at the request of or on behalf of the
beneficial owner, a Debt Security represented by a temporary Global Note or a
permanent Global Note, as the case may be, may be exchanged, in whole or from
time to time in part, for definitive Debt Securities without charge and the
Trustee (or such agent) shall authenticate and deliver, in exchange for each
portion of such temporary Global Note or such permanent Global Note, an equal
aggregate principal amount of definitive Debt Securities of the same series of
authorized denominations and of a like Stated Maturity and with like terms and
conditions, as the portion of such temporary Global Note or such permanent
Global Note to be
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exchanged, which, unless the Debt Securities of the series are not issuable both
as Bearer Securities and as Registered Securities, as contemplated by Section
3.01, shall be in the form of Bearer Securities or Registered Securities, or any
combination thereof, as shall be specified by the beneficial owner thereof;
provided, however, that definitive Bearer Securities shall be delivered in
exchange for a portion of the temporary Global Note or the permanent Global Note
only in compliance with the requirements of the second preceding paragraph. On
or prior to the forty-fifth day following receipt by the Trustee (and such agent
as may be specified as the Company's agent for such purpose pursuant to Section
3.01) of such notice with respect to a Debt Security, or, if such day is not a
Business Day, the next succeeding Business Day, the temporary Global Note or the
permanent Global Note, as the case may be, shall be surrendered by the Common
Depositary to the Trustee (or such other agent as may be specified as the
Company's agent for such purpose pursuant to Section 3.01), as the Company's
agent for such purpose, to be exchanged, in whole or from time to time in part,
for definitive Debt Securities without charge following such surrender, upon the
request of the Euroclear Operator or Cedelbank, as the case may be, and the
Trustee (or such agent) shall (1) endorse the applicable temporary Global Note
or the permanent Global Note to reflect the reduction of its principal amount by
the aggregate principal amount of such Debt Security, (2) cause the terms of
such Debt Security and Coupons, if any, to be entered on a definitive Debt
Security, (3) manually authenticate such definitive Debt Security, and (4) if a
Bearer Security is to be delivered, deliver such definitive Debt Security
outside the United States to the Euroclear Operator or Cedelbank, as the case
may be, for or on behalf of the beneficial owner thereof, in exchange for a
portion of such temporary Global Note or the permanent Global Note.
Unless otherwise specified in such temporary Global Note or
the permanent Global Note, any such exchange shall be made free of charge to the
beneficial owners of such temporary Global Note or the permanent Global Note,
except that a Person receiving definitive Debt Securities must bear the cost of
insurance, postage, transportation and the like in the event that such Person
does not take delivery of such definitive Debt Securities in person at the
offices of the Euroclear Operator or Cedelbank. Definitive Debt Securities in
bearer form to be delivered in exchange for any portion of a temporary Global
Note or the permanent Global Note shall be delivered only outside the United
States. Notwithstanding the foregoing, in the event of redemption or
acceleration of all or any part of a temporary Global Note prior to the Exchange
Date, a permanent Global Note or definitive Bearer Securities, as the case may
be, will not be issuable in respect of such temporary Global Note or such
portion thereof, and payment thereon will instead be made as provided in such
temporary Global Note.
Until exchanged in full as hereinabove provided, any temporary
Global Note or the permanent Global Note shall in all respects be entitled to
the same benefits under this Indenture as definitive Debt Securities of the same
series and tenor authenticated and delivered hereunder, except that, unless
otherwise specified as contemplated by Section 3.01, interest payable on such
temporary Global Note on an Interest Payment Date for Debt Securities of such
series occurring prior to the applicable Exchange Date shall be payable to the
Euroclear Operator or Cedelbank on such Interest Payment Date upon delivery by
the Euroclear Operator or Cedelbank to the Trustee (or such agent as may be
specified pursuant to Section 3.01) of a certificate or certificates
substantially in the form
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set forth in Exhibit B to this Indenture, for credit without further interest on
or after such Interest Payment Date to the respective accounts of the Persons
who are the beneficial owners of such temporary Global Note on such Interest
Payment Date and who have each delivered to the Euroclear Operator or Cedelbank,
as the case may be, a certificate substantially in the form set forth in Exhibit
A to this Indenture.
Any definitive Bearer Security authenticated and delivered by
the Trustee (or such agent) in exchange for a portion of a temporary Global Note
or the permanent Global Note shall not bear a coupon for any interest which
shall theretofore have been duly paid by the Trustee to the Euroclear Operator
or Cedelbank, or by the Company to the Trustee (or such agent) in accordance
with the provisions of this Section 3.04.
With respect to Exhibits A and B to this Indenture, the
Company may, in its discretion and if required or desirable under applicable
law, substitute one or more other forms of such Exhibits for such Exhibits,
eliminate the requirement that any or all certificates be provided, or change
the time that any certificate may be required, provided that such substitute
form or forms or notice of elimination or change of such certification
requirement have theretofore been delivered to the Trustee (and any agent of the
Company appointed pursuant to Section 3.01 and referred to above) with a Company
Request and such form or forms, elimination or change is reasonably acceptable
to the Trustee (and any such agent).
(c) If the Company shall establish pursuant to Section 3.01 that
the Registered Securities of a series are to be issued in whole or in part in
the form of one or more Global Notes, then the Company shall execute and the
Trustee shall, in accordance with Section 3.03 and the Company Order with
respect to such series, authenticate and deliver one or more Global Notes in
temporary or permanent form that (i) shall represent and shall be denominated in
an amount equal to the aggregate principal amount of the Outstanding Debt
Securities of such series to be represented by one or more Global Notes, (ii)
shall be registered in the name of the U.S. Depositary for such Global Note or
Notes or the nominee of such depositary, and (iii) shall bear a legend
substantially to the following effect:
"This Debt Security may not be 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,
unless and until this Debt Security is exchanged in
whole or in part for Debt Securities in definitive
form."
Notwithstanding any other provision of this Section or Section
3.05, unless and until it is exchanged in whole or in part for Registered
Securities in definitive form, a Global Note representing all or a portion of
the Registered Securities of a series may not be transferred except as a whole
by the U.S. Depositary for such series to a nominee of such depositary or by a
nominee of such depositary to such depositary or another nominee of such
depositary or by such depositary or
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any such nominee to a successor U.S. Depositary for such series or a nominee of
such successor depositary.
If at any time the U.S. Depositary for the Debt Securities of
a series notifies the Company that it is unwilling or unable to continue as U.S.
Depositary for the Debt Securities of such series or if at any time the U.S.
Depositary for Debt Securities of a series shall no longer be a clearing agency
registered and in good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Company shall appoint a
successor U.S. Depositary with respect to the Debt Securities of such series. If
a successor U.S. Depositary for the Debt Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, the Company will execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Debt Securities of such series, will authenticate and deliver,
Registered Securities of such series in definitive form in an aggregate
principal amount equal to the principal amount of the Global Note or Notes
representing such series in exchange for such Global Note or Notes.
The Company may at any time and in its sole discretion
determine that the Registered Securities of any series issued in the form of one
or more Global Notes shall no longer be represented by such Global Note or
Notes. In such event, the Company will execute, and the Trustee, upon receipt of
a Company Order for the authentication and delivery of definitive Debt
Securities of such series, will authenticate and deliver, Registered Securities
of such series in definitive form and in an aggregate principal amount equal to
the principal amount of the Global Note or Notes representing such series in
exchange for such Global Note or Notes.
If the Registered Securities of any series shall have been
issued in the form of one or more Global Notes and if an Event of Default with
respect to the Debt Securities of such series shall have occurred and be
continuing, the Company will promptly execute, and the Trustee, upon receipt of
a Company Order for the authentication and delivery of definitive Debt
Securities of such series, will authenticate and deliver, Registered Securities
of such series in definitive form and in an aggregate principal amount equal to
the principal amount of the Global Note or Notes representing such series in
exchange for such Global Note or Notes.
If specified by the Company pursuant to Section 3.01 with
respect to Registered Securities of a series, the U.S. Depositary for such
series of Registered Securities may surrender a Global Note for such series of
Debt Securities in exchange in whole or in part for Registered Securities of
such series in definitive form on such terms as are acceptable to the Company
and such depositary. Thereupon, the Company shall execute and the Trustee shall
authenticate and deliver, without charge:
(i) to each Person specified by the U.S. Depositary a new
Registered Security or Securities of the same series, of any authorized
denomination as requested by such Person in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Note; and
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(ii) to the U.S. Depositary a new Global Note in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Note and the aggregate principal
amount of Registered Securities delivered to Holders thereof.
Upon the exchange of a Global Note for Registered Securities in
definitive form, such Global Note shall be canceled by the Trustee. Debt
Securities issued in exchange for a Global Note pursuant to this subsection (c)
shall be registered in such names and in such authorized denominations as the
U.S. Depositary for such Global Note, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debt Securities to the Persons in whose names such Debt
Securities are so registered.
Section 3.05. Registration, Transfer and Exchange.
(a) The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the registers maintained in such office and in
any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Registered Securities and of transfers and exchanges of
Registered Securities. The Trustee is hereby appointed "Security Registrar" for
the purpose of registering Registered Securities and registering transfers and
exchanges of Registered Securities as herein provided; provided, however, that
the Company may appoint co-Security Registrars.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency of the Company maintained for
such purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee, one or more new Registered
Securities of the same series of like aggregate principal amount of such
denominations as are authorized for Registered Securities of such series and of
a like Stated Maturity and with like terms and conditions.
Except as otherwise provided in Section 3.04 and this Section
3.05, at the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of like aggregate
principal amount and of a like Stated Maturity and with like terms and
conditions, upon surrender of the Registered Securities to be exchanged at such
office or agency. Whenever any Registered Securities are surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Securities which the Holder making the exchange is
entitled to receive.
(b) If and to the extent specified pursuant to Section 3.01, the
provisions of this Section 3.05(b) shall be applicable to Debt Securities of any
series which are Bearer Securities. At the option of the Holder thereof, to the
extent permitted by law, any Bearer Security of any series which by its terms is
registrable as to principal and interest may be exchanged for a Registered
Security of such series of like aggregate principal amount and of a like Stated
Maturity and with like terms and conditions upon surrender of such Bearer
Security at the Corporate Trust Office or at any other office
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or agency of the Company designated pursuant to Section 3.01 for the purpose of
making any such exchanges. Any Coupon Security surrendered for exchange shall be
surrendered with all unmatured Coupons and any matured Coupons in default
attached thereto. If the Holder of a Bearer Security is unable to produce any
such unmatured Coupon or Coupons or matured Coupon or Coupons in default, such
exchange may be effected if the Bearer Securities are accompanied by payment in
funds acceptable to the Company in an amount equal to the face amount of such
missing Coupon or Coupons, or the surrender of such missing Coupon or Coupons
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Bearer Security shall surrender
to any Paying Agent any such missing Coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that except as otherwise provided in Section
12.03, interest represented by Coupons shall be payable only upon presentation
and surrender of those Coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series and of a like Stated Maturity and with like terms
and conditions after the close of business at such office or agency 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 Defaulted Interest, such Bearer Security shall be
surrendered without the Coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be (or, if such Coupon is so
surrendered with such Bearer Security, such Coupon shall be returned to the
Person so surrendering the Bearer Security), and interest or Defaulted Interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture. The Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Security or Securities which the Holder making the
exchange is entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer
Securities for Registered Securities will be subject to the provisions of United
States income tax laws and regulations applicable to Debt Securities in effect
at the time of such exchange.
(c) Except as otherwise specified pursuant to Section 3.01, in no
event may Registered Securities, including Registered Securities received in
exchange for Bearer Securities, be exchanged for Bearer Securities.
(d) All Debt Securities issued upon any transfer or exchange of
Debt Securities shall be valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debt
Securities surrendered for such transfer or exchange.
Every Registered Security presented or surrendered for
transfer or exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written
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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 will be made for any transfer or exchange of
Debt Securities except as provided in Section 3.04(b) or 3.06. 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, transfer or
exchange of Debt Securities, other than those expressly provided in this
Indenture to be made at the Company's own expense or without expense or without
charge to the Holders.
The Company shall not be required (i) to register, transfer or
exchange Debt Securities of any series during a period beginning at the opening
of business 15 days before the day of the transmission of a notice of redemption
of Debt Securities of such series selected for redemption under Section 13.03
and ending at the close of business on the day of such transmission, or (ii) to
register, transfer or exchange any Debt Security so selected for redemption in
whole or in part, except the unredeemed portion of any Debt Security being
redeemed in part.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt Securities.
If (i) any mutilated Debt Security or any mutilated Coupon with the
Coupon Security to which it appertains (and all unmatured Coupons attached
thereto) is surrendered to the Trustee, or (ii) the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Debt Security or any Coupon, and there is delivered to the Company and the
Trustee such security or indemnity as may be required by them to save each of
them and any Paying Agent harmless, and neither the Company nor the Trustee
receives notice that such Debt Security or Coupon has been acquired by a bona
fide purchaser, then the Company shall execute and upon Company Request the
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Debt Security or in exchange for the Coupon
Security to which such mutilated, destroyed, lost or stolen Coupon appertained,
a new Debt Security of the same series of like Stated Maturity and with like
terms and conditions and like principal amount, bearing a number not
contemporaneously Outstanding, and, in the case of a Coupon Security, with such
Coupons attached thereto that neither gain nor loss in interest shall result
from such exchange or substitution.
In case any such mutilated, destroyed, lost or stolen Debt Security or
Coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Debt Security, pay the amount due on
such Debt Security or Coupon in accordance with its terms; provided, however,
that principal of (and premium, if any) and any interest on Bearer Securities
shall, except as otherwise provided in Section 12.03, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 3.01 or except as otherwise provided in
this Section 3.06, any interest on Bearer Securities shall be payable only upon
presentation and surrender of the Coupons appertaining thereto.
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Upon the issuance of any new Debt 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 respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debt Security or Coupon of any series issued pursuant to this
Section shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Debt Security or Coupon
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
Debt Securities or Coupons of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debt Securities or Coupons.
Section 3.07. Payment of Interest; Interest Rights Preserved.
(a) Interest on any Registered 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 such Registered Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest notwithstanding the cancellation of such Registered Security
upon any transfer or exchange subsequent to the Regular Record Date. Unless
otherwise specified as contemplated by Section 3.01 with respect to the Debt
Securities of any series, payment of interest on Registered Securities shall be
made at the place or places specified pursuant to Section 3.01 or, at the option
of the Company, by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or, if provided pursuant to
Section 3.01, by wire transfer to an account designated by the Registered
Holder.
(b) Interest on any Coupon Security which is payable and is
punctually paid or duly provided for on any Interest Payment Date shall, except
as otherwise provided in Section 12.03, be paid to the Holder of the Coupon
which has matured on such Interest Payment Date upon surrender of such Coupon on
such Interest Payment Date at an office or agency of the Company in a Place of
Payment located outside the United States specified pursuant to Section 3.01.
Interest on any Bearer Security (other than a Coupon Security)
which is payable and is punctually paid or duly provided for on any Interest
Payment Date shall be paid to the Holder of the Bearer Security upon
presentation of such Bearer Security and notation thereon on such Interest
Payment Date at an office or agency of the Company in a Place of Payment located
outside the United States specified pursuant to Section 3.01.
Unless otherwise specified pursuant to Section 3.01, at the
direction of the Holder of any Bearer Security or Coupon payable in Dollars,
payment on such Bearer Security or Coupon will be made by check or, if agreeable
to the Trustee (or the Paying Agent specified pursuant to
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Section 3.01), by wire transfer to a Dollar account maintained by such Holder
outside the United States. If such payment at the offices of all Paying Agents
outside the United States becomes illegal or is effectively precluded because of
the imposition of exchange controls or similar restrictions on the full payment
or receipt of such amounts in Dollars, the Company will appoint an office or
agent in the United States at which such payment may be made. Unless otherwise
specified pursuant to Section 3.01, at the direction of the Holder of any Bearer
Security or Coupon payable in a Foreign Currency, payment on such Bearer
Security or Coupon will be made by a check drawn on a bank outside the United
States or, if acceptable to the Trustee or such Paying Agent, by wire transfer
to an appropriate account maintained by such Holder outside the United States.
Except as provided in this paragraph, no payment on any Bearer Security or
Coupon will be made by mail to an address in the United States or by wire
transfer to an account in the United States.
(c) Any interest on any Debt Security which is payable but is not
punctually paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest") shall, if such Debt Security is a Registered Security,
forthwith cease to be payable to the Registered Holder on the relevant Regular
Record Date by virtue of his having been such Registered Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names such Registered 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, at least 25 days prior to
the date of the proposed payment, notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Registered Security and the
date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money in the Currency or Currency Unit in which
the Debt Securities of such series are payable (except as otherwise specified
pursuant to Section 3.01 or 3.10) equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which date shall be not more than 20 days and not less than
10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first class postage prepaid, to the Holders of such Registered
Securities at their addresses as they appear 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
mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names such Registered 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 clause (2).
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(2) The Company may make payment of any Defaulted
Interest on Registered Securities in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Registered
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
(d) Any Defaulted Interest payable in respect of Bearer Securities
of any series shall be payable pursuant to such procedures as may be
satisfactory to the Trustee in such manner that there is no discrimination
between the Holders of Registered Securities (if any) and Bearer Securities of
such series, and notice of the payment date therefor shall be given by the
Trustee, in the name and at the expense of the Company, in the manner provided
in Section 1.05 not more than 20 days and not less than 10 days prior to the
date of the proposed payment.
(e) Subject to the foregoing provisions of this Section, each Debt
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debt Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Debt Security.
Section 3.08. Cancellation.
Unless otherwise specified pursuant to Section 3.01 for Debt Securities
of any series, all Debt Securities surrendered for payment, redemption,
transfer, exchange or credit against any sinking fund and all Coupons
surrendered for payment or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee. All Registered Securities and
matured Coupons so delivered shall be promptly canceled by the Trustee. All
Bearer Securities and unmatured Coupons so delivered shall be held by the
Trustee and, upon instruction by the Company Order, shall be canceled or held
for reissuance. Bearer Securities and unmatured Coupons held for reissuance may
be reissued only in exchange for Bearer Securities of the same series and of
like Stated Maturity and with like terms and conditions pursuant to Section 3.05
or in replacement of mutilated, lost, stolen or destroyed Bearer Securities of
the same series and of like Stated Maturity and with like terms and conditions
or the related Coupons pursuant to Section 3.06. All Bearer Securities and
unmatured Coupons held by the Trustee pending such cancellation or reissuance
shall be deemed to be delivered for cancellation for all purposes of this
Indenture and the Debt Securities. The Company may at any time deliver to the
Trustee for cancellation any Debt Securities or Coupons previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and the Company may deliver to the Trustee (or to any other Person
for delivery to the Trustee) for cancellation any Debt Securities previously
authenticated hereunder which the Company has not issued, and all Debt
Securities or Coupons so delivered shall be promptly canceled by the Trustee. No
Debt Securities or Coupons shall be authenticated in lieu of or in exchange for
any Debt Securities or Coupons canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Debt Securities and Coupons
held by the Trustee shall be destroyed by the Trustee in accordance with its
customary procedures and a certificate of destruction shall be delivered to the
Company upon Company Request. The acquisition of any Debt Securities or
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Coupons by the Company shall not operate as a redemption or satisfaction of the
indebtedness represented thereby unless and until such Debt Securities or
Coupons are surrendered to the Trustee for cancellation. In the case of any
temporary Global Note which shall be destroyed if the entire aggregate principal
amount of the Debt Securities represented thereby has been exchanged, the
certificate of destruction shall state that all certificates required pursuant
to Section 3.04 hereof and substantially in the form of Exhibit B hereto, to be
given by the Euroclear Operator or Cedelbank, have been duly presented to the
Trustee by the Euroclear Operator or Cedelbank, as the case may be. Permanent
Global Notes shall not be destroyed until exchanged in full for definitive Debt
Securities or until payment thereon is made in full.
Section 3.09. Computation of Interest.
Except as otherwise specified pursuant to Section 3.01 for Debt
Securities of any series, interest on the Debt Securities of each series shall
be computed on the basis of a 360 day year of twelve 30 day months.
Section 3.10. Currency of Payments in Respect of Debt Securities.
(a) Except as otherwise specified pursuant to Section 3.01 for
Bearer Securities of any series, payment of the principal of (and premium, if
any) and interest on Bearer Securities of such series denominated in any
Currency will be made in such Currency.
(b) With respect to Registered Securities of any series not
permitting the election provided for in paragraph (c) below or the Holders of
which have not made the election provided for in paragraph (c) below, except as
provided in paragraph (e) below, payment of the principal of (and premium, if
any) and any interest on any Registered Security of such series will be made in
the Currency in which such Registered Security is payable.
(c) It may be provided pursuant to Section 3.01 with respect to
the Registered Securities of any series that Holders shall have the option,
subject to paragraphs (e) and (f) below, to receive payments of principal of
(and premium, if any) and any interest on such Registered Securities in any of
the Currencies which may be designated for such election by delivering to the
Trustee a written election, to be in form and substance reasonably satisfactory
to the Trustee, not later than the close of business on the Election Date
immediately preceding the applicable payment date. If a Holder so elects to
receive such payments in any such Currency, such election will remain in effect
for such Holder or any transferee of such Holder until changed by such Holder or
such transferee by written notice to the Trustee (but any such change must be
made not later than the close of business on the Election Date immediately
preceding the next payment date to be effective for the payment to be made on
such payment date and no such change or election may be made with respect to
payments to be made on any Registered Security of such series with respect to
which an Event of Default has occurred or notice of redemption has been given by
the Company pursuant to Article Thirteen). Any Holder of any such Registered
Security who shall not have delivered any such election to the Trustee
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by the close of business on the applicable Election Date will be paid the amount
due on the applicable payment date in the relevant Currency as provided in
paragraph (b) of this Section 3.10.
(d) If the election referred to in paragraph (c) above has been
provided for pursuant to Section 3.01, then not later than the fourth Business
Day after the Election Date for each payment date, the Trustee will deliver to
the Company a written notice specifying, in the Currency in which each series of
the Registered Securities is payable, the respective aggregate amounts of
principal of (and premium, if any) and any interest on the Registered Securities
to be paid on such payment date, specifying the amounts so payable in respect of
the Registered Securities as to which the Holders of Registered Securities
denominated in any Currency shall have elected to be paid in another Currency as
provided in paragraph (c) above. If the election referred to in paragraph (c)
above has been provided for pursuant to Section 3.01 and if at least one Holder
has made such election, then, on the second Business Day preceding each payment
date, the Company will deliver to the Trustee an Exchange Rate Officer's
Certificate in respect of the Currency payments to be made on such payment date.
The Currency amount receivable by Holders of Registered Securities who have
elected payment in a Currency as provided in paragraph (c) above shall be
determined by the Company on the basis of the applicable Market Exchange Rate in
effect on the third Business Day (the "Valuation Date") immediately preceding
each payment date.
(e) If a Conversion Event occurs with respect to a Foreign
Currency, the ECU or any other Currency Unit in which any of the Debt Securities
are denominated or payable other than pursuant to an election provided for
pursuant to paragraph (c) above, then with respect to each date for the payment
of principal of (and premium, if any) and any interest on the applicable Debt
Securities denominated or payable in such Foreign Currency, the ECU or such
other Currency Unit occurring after the last date on which such Foreign
Currency, the ECU or such other Currency Unit was used (the "Conversion Date"),
the Dollar shall be the Currency of payment for use on each such payment date.
The Dollar amount to be paid by the Company to the Trustee and by the Trustee or
any Paying Agent to the Holders of such Debt Securities with respect to such
payment date shall be the Dollar Equivalent of the Foreign Currency or, in the
case of a Currency Unit, the Dollar Equivalent of the Currency Unit, in each
case as determined by the Currency Determination Agent, in the manner provided
in paragraph (g) or (h) below.
(f) If the Holder of a Registered Security denominated in any
Currency shall have elected to be paid in another Currency as provided in
paragraph (c) above, and a Conversion Event occurs with respect to such elected
Currency, such Holder shall receive payment in the Currency in which payment
would have been made in the absence of such election. If a Conversion Event
occurs with respect to the Currency in which payment would have been made in the
absence of such election, such Holder shall receive payment in Dollars as
provided in paragraph (e) of this Section 3.10.
(g) The "Dollar Equivalent of the Foreign Currency" shall be
determined by the Currency Determination Agent, and shall be obtained for each
subsequent payment date by converting the specified Foreign Currency into
Dollars at the Market Exchange Rate on the Valuation Date.
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(h) The "Dollar Equivalent of the Currency Unit" shall be
determined by the Currency Determination Agent, and subject to the provisions of
paragraph (i) below, shall be the sum of each amount obtained by converting the
Specified Amount of each Component Currency into Dollars at the Market Exchange
Rate for such Component Currency on the Valuation Date with respect to each
payment.
(i) For purposes of this Section 3.10 the following terms shall
have the following meanings:
A "Component Currency" shall mean any Currency which, on the
Conversion Date, was a component Currency of the relevant Currency Unit,
including, but not limited to, the ECU.
A "Specified Amount" of a Component Currency shall mean the
number of units of such Component Currency or fractions thereof which were
represented in the relevant Currency Unit, including, but not limited to, the
ECU, on the Conversion Date. If after the Conversion Date the official unit of
any Component Currency is altered by way of combination or subdivision, the
Specified Amount of such Component Currency shall be divided or multiplied in
the same proportion. If after the Conversion Date two or more Component
Currencies are consolidated into a single Currency, the respective Specified
Amounts of such Component Currencies shall be replaced by an amount in such
single Currency equal to the sum of the respective Specified Amounts of such
consolidated Component Currencies expressed in such single Currency, and such
amount shall thereafter be a Specified Amount and such single Currency shall
thereafter be a Component Currency. If after the Conversion Date any Component
Currency shall be divided into two or more Currencies, the Specified Amount of
such Component Currency shall be replaced by amounts of such two or more
Currencies with appropriate Dollar equivalents at the Market Exchange Rate on
the date of such replacement equal to the Dollar equivalent of the Specified
Amount of such former Component Currency at the Market Exchange Rate on such
date, and such amounts shall thereafter be Specified Amounts and such Currencies
shall thereafter be Component Currencies. If after the Conversion Date of the
relevant Currency Unit, including but not limited to, the ECU, a Conversion
Event (other than any event referred to above in this definition of "Specified
Amount") occurs with respect to any Component Currency of such Currency Unit,
the Specified Amount of such Component Currency shall, for purposes of
calculating the Dollar Equivalent of the Currency Unit, be converted into
Dollars at the Market Exchange Rate in effect on the Valuation Date of such
Component Currency.
"Election Date" shall mean the record date with respect to any
payment date, and with respect to the Maturity shall mean the record date (if
within 16 or fewer days prior to the Maturity) immediately preceding the
Maturity, and with respect to any series of Debt Securities whose record date
immediately preceding the Maturity is more than 16 days prior to the Maturity or
any series of Debt Securities for which no record dates are provided with
respect to interest payments, shall mean the date which is 16 days prior to the
Maturity.
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(j) All decisions and determinations of the Currency Determination
Agent, if any, regarding the Dollar Equivalent of the Foreign Currency, the
Dollar Equivalent of the Currency Unit and the Market Exchange Rate shall be in
its sole discretion and shall, in the absence of manifest error, be conclusive
for all purposes and irrevocably binding upon the Company and all Holders of the
Debt Securities denominated or payable in the relevant Currency. In the event of
a Conversion Event with respect to a Foreign Currency, the Company, after
learning thereof, will immediately give written notice thereof to the Trustee
(and the Trustee will promptly thereafter give notice in the manner provided in
Section 1.05 to the Holders) specifying the Conversion Date. In the event of a
Conversion Event with respect to the ECU or any other Currency Unit in which
Debt Securities are denominated or payable, the Company, after learning thereof,
will immediately give written notice thereof to the Trustee (and the Trustee
will promptly thereafter give written notice in the manner provided in Section
1.05 to the Holders) specifying the Conversion Date and the Specified Amount of
each Component Currency on the Conversion Date. In the event of any subsequent
change in any Component Currency as set forth in the definition of Specified
Amount above, the Company, after learning thereof, will similarly give written
notice to the Trustee. The Trustee shall be fully justified and protected in
relying and acting upon information received by it from the Company and the
Currency Determination Agent, if any and may, notwithstanding any other
provision of this Indenture, conclusively assume that no Conversion Event or
other event of which it is entitled to notice hereunder has occurred unless it
receives written notice thereof as provided herein, and shall not otherwise have
any duty or obligation to determine such information independently.
(k) For purposes of any provision of this Indenture where the
Holders of Outstanding Debt Securities may perform an Act which requires that a
specified percentage of the Outstanding Debt Securities of all series perform
such Act and for purposes of any decision or determination by the Trustee of
amounts due and unpaid for the principal (and premium, if any) and interest on
the Debt Securities of all series in respect of which moneys are to be disbursed
ratably, the principal of (and premium, if any) and interest on the Outstanding
Debt Securities denominated in a Foreign Currency will be the amount in Dollars
based upon the Market Exchange Rate for Debt Securities of such series, as of
the date for determining whether the Holders entitled to perform such Act have
performed it, or as of the Business Day immediately prior to the date of such
decision or determination by the Trustee, as the case may be.
Section 3.11. Judgments.
If for the purpose of obtaining a judgment in any court with respect to
any obligation of the Company hereunder or under any Debt Security, it shall
become necessary to convert into any other Currency any amount in the Currency
due hereunder or under such Debt Security, then such conversion shall be made at
the Market Exchange Rate as in effect on the date the Company shall make payment
to any Person in satisfaction of such judgment. If pursuant to any such
judgment, conversion shall be made on a date other than the date payment is made
and there shall occur a change between such Market Exchange Rate and the Market
Exchange Rate as in effect on the date of payment, the Company agrees to pay
such additional amounts (if any) as may be necessary to ensure that the amount
paid is equal to the amount in such other Currency which, when converted
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at the Market Exchange Rate as in effect on the date of payment or distribution,
is the amount then due hereunder or under such Debt Security. Any amount due
from the Company under this Section 3.11 shall be due as a separate debt and is
not to be affected by or merged into any judgment being obtained for any other
sums due hereunder or in respect of any Debt Security. In no event, however,
shall the Company be required to pay more in the Currency or Currency Unit due
hereunder or under such Debt Security at the Market Exchange Rate as in effect
when payment is made than the amount of Currency stated to be due hereunder or
under such Debt Security so that in any event the Company's obligations
hereunder or under such Debt Security will be effectively maintained as
obligations in such Currency, and the Company shall be entitled to withhold (or
be reimbursed for, as the case may be) any excess of the amount actually
realized upon any such conversion over the amount due and payable on the date of
payment or distribution.
Section 3.12. Exchange Upon Default.
If default is made in the payments referred to in Section 12.01, the
Company hereby undertakes that upon presentation and surrender of a permanent
Global Note to the Trustee (or to any other Person or at any other address as
the Company may designate in writing), on any Business Day on or after the
maturity date thereof the Company will issue and, upon receipt of a Company
Order, the Trustee will authenticate and deliver to the bearer of such permanent
Global Note duly executed and authenticated definitive Debt Securities with the
same issue date and maturity date as set out in such permanent Global Note.
Section 3.13. CUSIP Numbers.
The Company in issuing the Debt Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Debt Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debt Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
This Indenture, with respect to the Debt Securities of any series (if
all series issued under this Indenture are not to be affected), shall, upon
Company Request, cease to be of further effect (except as to any surviving
rights of registration of transfer or exchange or conversion of such Debt
Securities herein expressly provided for or expressly provided in the terms of
the Debt Securities of
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such series pursuant to Section 3.01, and rights to receive payments of
principal (and premium, if any) and interest on such Debt Securities) and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Debt Securities and the Coupons, if any, of such
series theretofore authenticated and delivered (other than (i) Debt
Securities and Coupons of such series which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
3.06, (ii) Coupons appertaining to Bearer Securities surrendered for
exchange for Registered Securities and maturing after such exchange,
whose surrender is not required or has been waived under Section 3.05,
(iii) Coupons appertaining to Bearer Securities called for redemption
and maturing after the relevant Redemption Date, whose surrender has
been waived as provided in Section 13.06, and (iv) Debt Securities and
Coupons of such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 12.04) have been delivered to the Trustee for
cancellation; or
(B) all Debt Securities and the Coupons, if any, of such
series 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 by the Trustee in the name, and at
the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) of this subclause
(B), has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for such purpose an amount in the
Currency in which such Debt Securities are denominated (except as
otherwise provided pursuant to Section 3.01 or 3.10) sufficient to pay
and discharge the entire indebtedness on such Debt Securities for
principal (and premium, if any) and interest to the date of such
deposit (in the case of Debt Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may
be; provided, however, in the event a petition for relief under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, State or Commonwealth bankruptcy, insolvency or
other similar law, is filed with respect to the Company within 91 days
after the deposit and the Trustee is required to return the deposited
money to the Company, the obligations of the Company under this
Indenture with respect to such Debt Securities shall not be deemed
terminated or discharged;
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(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company;
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this Indenture
with respect to such series have been complied with; and
(4) the Company has delivered to the Trustee an Opinion
of Counsel or a ruling by the Internal Revenue Service to the effect that such
deposit and discharge will not cause Holders of the Debt Securities of the
series to recognize income, gain or loss for Federal income tax purposes.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07, the obligations of
the Trustee to any Authenticating Agent under Section 6.14, the obligations of
the Company under Section 12.01, and, if money shall have been deposited with
the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 4.02 and the last paragraph of Section
12.04, shall survive. If, after the deposit referred to in subclause (B) of
clause 1 of this Section has been made, (x) the Holder of a Debt Security is
entitled to, and does, elect pursuant to Section 3.10(c), to receive payment in
a Currency other than that in which such deposit was made, or (y) if a
Conversion Event occurs with respect to the Currency in which such deposit was
made or elected to be received by the Holder pursuant to Section 3.10(c), then
the indebtedness represented by such Debt Security shall be fully discharged to
the extent that such deposit made with respect to such Debt Security shall be
converted into the Currency in which such payment is made.
Section 4.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 12.04, all
money deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Debt Securities and
Coupons, if any, and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee.
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ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default.
"Event of Default" wherever used herein with respect to Debt Securities
of any series means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law, pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, State or Commonwealth bankruptcy, insolvency or other
similar law, or 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, State or Commonwealth law, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of the
Company or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(2) the commencement by the Company of a voluntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, State or Commonwealth bankruptcy, insolvency or other
similar law, or the consent by it to the entry of an order for relief in an
involuntary case under any such law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of its creditors, or the admission
by it in writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company in furtherance of any such
action; or
(3) any other Event of Default provided with respect to Debt
Securities of that series pursuant to Section 3.01.
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Debt Securities of any series at
that time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of such series may declare the principal amount (or,
if any Debt Securities of such series are Discount Securities, such portion of
the principal amount of such Discount Securities as may be specified in the
terms of such Discount Securities) of all the Debt Securities of such series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such
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principal amount (or specified amount), plus accrued and unpaid interest (and
premium, if any), shall become immediately due and payable. Upon payment of such
amount in the Currency in which such Debt Securities are denominated (except as
otherwise provided pursuant to Section 3.01 or 3.10), all obligations of the
Company in respect of the payment of principal of the Debt Securities of such
series shall terminate.
At any time after such a declaration of acceleration with respect to
Debt Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Debt Securities of such series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum in
the Currency in which such Debt Securities are denominated (except as otherwise
provided pursuant to Section 3.01 or 3.10) sufficient to pay
(A) all overdue installments of interest on all Debt
Securities or all overdue payments with respect to
any Coupons of such series,
(B) the principal of (and premium, if any, on) any Debt
Securities of such series which have become due
otherwise than by such declaration of acceleration
and interest thereon at the rate or rates prescribed
therefor in such Debt Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of
interest on each Debt Security of such series or upon
overdue payments on any Coupons of such series at the
Overdue Rate, 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; provided, however, that all sums payable
under this clause (D) shall be paid in Dollars; and
(2) All Events of Default with respect to Debt Securities of such
series, other than the nonpayment of the principal of Debt Securities of such
series which has become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 5.13.
No such rescission and annulment shall affect any subsequent
default or impair any right consequent thereon.
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of interest
on any Debt Security or any payment with respect to any Coupons when such
interest or payment becomes due and payable and such default continues for a
period of 30 days,
(2) default is made in the payment of principal of (or premium, if
any, on) any Debt Security at the Maturity thereof, or
(3) default is made in the making or satisfaction of any sinking
fund payment or analogous obligation when the same becomes due pursuant to the
terms of the Debt Securities of any series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debt Securities or of such Coupons, (i) the amount then due and
payable on such Debt Securities or matured Coupons for the principal (and
premium, if any) and interest, if any, (ii) to the extent that payment of such
interest shall be legally enforceable, interest upon the overdue principal (and
premium, if any) and upon overdue installments of interest, at the Overdue Rate,
and (iii) thereafter, 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 amount 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, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Debt Securities and Coupons,
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 such Debt
Securities and Coupons wherever situated.
If any default in the payments referred to in Section 12.01 or Event of
Default with respect to Debt Securities of any series occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights and
the rights of the Holders of Debt Securities and Coupons of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
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Section 5.04. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings, or any voluntary or involuntary case under the applicable
federal, State or Commonwealth bankruptcy, insolvency or similar law, as now or
hereafter constituted, relative to the Company or any other obligor upon the
Debt Securities and Coupons, if any, of a particular series or the property of
the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of such Debt Securities shall then be due
and payable as therein expressed or by declaration of acceleration 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,
(i) to file and prove a claim for the whole amount of principal (or, if
the Debt Securities of such series are Discount Securities, such portion of the
principal amount as may be due and payable with respect to such series pursuant
to a declaration in accordance with Section 5.02) (and premium, if any) and
interest owing and unpaid in respect of the Debt Securities and Coupons of such
series and to file such other papers or documents and take such other actions,
including participating as a member, voting or otherwise, of any committee of
creditors appointed in the matter, 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 of such Debt Securities and Coupons allowed in
such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
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 such 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 6.07.
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 Debt
Securities and any Coupons of such series 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.
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Section 5.05. Trustee May Enforce Claims Without Possession of Debt
Securities.
All rights of action and claims under this Indenture or the Debt
Securities and the Coupons, if any, of any series may be prosecuted and enforced
by the Trustee without the possession of any of such Debt Securities or Coupons
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 Debt Securities or Coupons in respect of which such judgment
has been recovered.
Section 5.06. 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 (and premium,
if any) or interest, upon presentation of the Debt Securities or Coupons of any
series in respect of which money has been collected 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
6.07.
SECOND: Subject to Article Sixteen, to the payment of the amounts then
due and unpaid for principal of (and premium, if any) and interest on
the Debt Securities or Coupons of such series, 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 Debt Securities or Coupons for principal (and premium,
if any) and interest, respectively; and
THIRD: Subject to Article Sixteen, the balance, if any, to the Person
or Persons entitled thereto.
Section 5.07. Limitation on Suits.
No Holder of any Debt Security or Coupon of any series shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to such series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60 day period by the Holders of a majority in
principal amount of the Outstanding Debt Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders or of the Holders of Outstanding Debt Securities or Coupons of any other
series, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders. For the protection and enforcement of the provisions of this Section
5.07, each and every Holder of Debt Securities or Coupons of any series and the
Trustee for such series shall be entitled to such relief as can be given at law
or in equity.
Section 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Debt Security or of any Coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 3.07) interest on such Debt Security or Coupon on the
respective Stated Maturity or Maturities expressed in such Debt Security or
Coupon (or, in the case of redemption, on the Redemption Date) and to institute
suit for the enforcement of any such payment and interest thereon, and such
right shall not be impaired without the consent of such Holder.
Section 5.09. 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 the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
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Section 5.10. Rights and Remedies Cumulative.
Except as otherwise expressly provided elsewhere in this Indenture, 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 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default or default in the payments
referred to in Section 12.01 shall impair any such right or remedy or constitute
a waiver of any such Event of Default or default or any acquiescence therein.
Every right and remedy given by this Indenture 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 5.12. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of such series, provided, that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture;
(2) subject to the provisions of Section 6.01, the Trustee shall
have the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Responsible Officers of the Trustee,
determine that the proceeding so directed would be unjustly prejudicial to the
Holders of Debt Securities of such series not joining in any such direction;
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(4) this provision shall not affect the rights of the Trustee set
forth in Section 6.01(c)(4).
Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
the Debt Securities of any such series
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waive, by notice to the Trustee and the Company, any past default or Event of
Default hereunder with respect to such series and its consequences, except a
default
(1) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series, or in the payment of any sinking
fund instalment or analogous obligation with respect to the Debt Securities of
such series, or
(2) in respect of a covenant or provision hereof which pursuant to
Article Eleven cannot be modified or amended without the consent of the Holder
of each Outstanding Debt Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of the Debt Securities of such series under this Indenture, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
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Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Debt
Security or any Coupon 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 other than the Trustee of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant, but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder or group of
Holders holding in the aggregate more than 10% in principal amount of the
Outstanding Debt Securities of any series, or to any suit instituted by any
Holder of a Debt Security or Coupon for the enforcement of the payment of the
principal of (or premium, if any) or interest on such Debt Security or the
payment of any Coupon on or after the respective Stated Maturity or Maturities
expressed in such Debt Security or Coupon (or, in the case of redemption, on or
after the Redemption Date).
Section 5.15. 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 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of a default in the payments
referred to in Section 12.01 or an Event of Default with respect to the Debt
Securities of any series,
(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
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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
provisions 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.
(b) In case a default in the payments referred to in Section 12.01
or an Event of Default with respect to Debt Securities of any series has
occurred and is continuing, the Trustee shall, with respect to the Debt
Securities of such series, 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) Subject to Section 6.04, 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 shall not be construed to limit the
effect of subsection (a) of this Section;
(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, suffered or omitted to be taken by it with respect to Debt
Securities of any series in good faith in accordance with the direction of the
Holders of a majority in principal amount of the Outstanding Debt Securities of
such series 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;
(4) the Trustee shall not be required to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it; and
(5) the Trustee shall not be charged with knowledge of
any default or Event of Default or any other act or circumstance upon the
occurrence of which the Trustee may be required to take action unless a
Responsible Officer of the Trustee obtains actual knowledge of such default,
Event of Default, act or circumstance or unless written notice referencing this
Indenture or the Debt Securities is received by the Trustee at the Corporate
Trust Office.
(d) 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.
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Section 6.02. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to Debt Securities or Coupons, if any, of any series, the Trustee shall
give notice to all Holders of Debt Securities and Coupons of such series 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 Debt
Security or Coupon of such series or in the payment of any sinking fund
installment with respect to Debt Securities of such series, 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 and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Debt Securities and of Coupons of
such series. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Debt Securities of such series.
Notice given pursuant to this Section 6.02 with respect to Registered
Securities shall be transmitted by mail:
(1) to all Registered Holders, as the names and addresses of the
Registered Holders appear in the Security Register;
(2) to such Holders of Bearer Securities of any series as have
within two years preceding such transmission, filed their names and addresses
with the Trustee for such series for that purpose;
(3) to each Holder of a Debt Security of any series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 7.02(a) of this Indenture; and
(4) to the Company.
Notice given pursuant to this Section 6.02 with respect to Bearer
Securities shall be transmitted in the manner set forth in Section 1.05.
Section 6.03. Certain Rights of Trustee.
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
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(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall 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 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 of Debt Securities of any series pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent (including any agent appointed pursuant to
Section 3.10(j)) or attorney appointed with due care by it hereunder.
Section 6.04. Not Responsible for Recitals or Issuance of Debt
Securities.
The recitals contained herein and in the Debt 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 Debt Securities or Coupons, if any, of any series. The
Trustee shall not be accountable for the use or application by the Company of
any Debt Securities or the proceeds thereof. The Trustee assumes no
responsibility for the accuracy of any statements in any registration statement
relating to the Debt Securities.
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Section 6.05. May Hold Debt Securities.
The Trustee, any Paying Agent, the Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Debt Securities or Coupons, and, subject to Sections 6.08
and 6.13, may otherwise deal with the Company with the same rights it would have
if it were not Trustee, Paying Agent, Security Registrar or such other agent.
Section 6.06. Money Held in Trust.
Money in any Currency held by the Trustee or any Paying Agent in trust
hereunder need not be segregated from other funds except to the extent required
by law. Neither the Trustee nor any Paying Agent shall be under any liability
for interest on any money received by it hereunder except as otherwise agreed
with the Company.
Section 6.07. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation in
Dollars as the Company and the Trustee shall from time to time agree in writing
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee in Dollars upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in connection with
the administration of the trusts herein set forth (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify in Dollars the Trustee for, and to hold it
harmless against, any loss, liability, damage, claims or expense, including
taxes (other than taxes based upon, measured by or determined by income of the
Trustee), incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this trust or
performance of its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section and in addition to its rights under Section 5.06, the Trustee shall
have a claim prior to the Debt Securities and Coupons, if any, upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the payment of amounts due on particular Debt Securities and Coupons. The
fees and expenses incurred by the Trustee in connection with any bankruptcy of
the Company shall
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constitute fees and expenses of administration; provided, however, that this
shall not affect the Trustee's rights as set forth in the preceding sentence or
Section 5.06.
Section 6.08. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest,
as defined in this Section with respect to the Debt Securities of any series,
then, within 90 days after ascertaining that it has such conflicting interest,
and if the default (as hereinafter defined) to which such conflicting interest
relates has not been cured or duly waived or otherwise eliminated before the end
of such 90 day period, the Trustee shall either eliminate such conflicting
interest or, except as otherwise provided below, resign with respect to the Debt
Securities of such series, and the Company shall take prompt steps to have a
successor appointed, 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 (a) of this Section with respect to the Debt Securities
of any series, the Trustee shall, within 10 days after the expiration of such 90
day period, transmit to all Holders of Debt Securities of such series notice of
such failure.
Notice given pursuant to this Section 6.08(b) with respect to
Registered Securities shall be transmitted by mail:
(1) to all Registered Holders, as the names and addresses
of the Registered Holders appear in the Security Register;
(2) to such Holders of Bearer Securities of any series as
have, within two years preceding such transmission, filed their names and
addresses with the Trustee for such series for that purpose;
(3) to each Holder of a Debt Security of any series whose
name and address appear in the information preserved at the time by the Trustee
in accordance with Section 7.02(a) of this Indenture; and
(4) to the Company.
Notice given pursuant to this Section 6.08(b) with
respect to Bearer Securities shall be transmitted in the manner set forth in
Section 1.05.
(c) For the purposes of this Section, the Trustee shall be deemed
to have a conflicting interest with respect to the Debt Securities of any
series, if there shall exist an Event of Default (as such term is defined
herein, but exclusive of any period of grace or requirement of notice) or a
default in the payments referred to in Section 12.01 with respect to such Debt
Securities and
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(1) the Trustee is trustee under this Indenture with
respect to the Outstanding Debt Securities of any series other than that series
or 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 Debt Securities issued
under this Indenture, provided that there shall be excluded from the operation
of this paragraph this Indenture with respect to the Debt Securities of any
series other than that series and any other indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or
indentures (and all series of securities issuable thereunder) 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 with respect
to the Debt Securities of such series and one or more other series or
the provisions of such other indenture or indentures which are 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 this Indenture with
respect to the Debt Securities of such series and such other series or
under 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 with respect to
the Debt Securities of such series and such other series or 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 this Indenture with respect to the Debt Securities of such series
and such other series or under such other indenture or 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
Trustee and 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
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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, 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% 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 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 Debt
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, 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, 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 such Event of Default or
any anniversary of such Event of Default while such Event of Default remains
outstanding, 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. As to any such securities of which the Trustee
acquired ownership through becoming 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 dates of any such Event of Default and annually in
each succeeding year that such Event of Default continues, the Trustee shall
make a check of its holdings of such securities in any of the abovementioned
capacities as of such dates. If the Company fails to make payment in full of the
principal of (or premium, if any) or interest on any of the Debt Securities when
and as the same becomes due and payable, and such failure continues for 30 days
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thereafter, the Trustee shall make a prompt check of its holdings of such
securities in any of the abovementioned 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 be
considered as though beneficially owned by the Trustee for the purposes of
paragraphs (6), (7) and (8) of this subsection; or
(10) except under the circumstances described in paragraph
(1), (3), (4), (5) or (6) of Section 6.13(b) of this Indenture, the Trustee
shall be or shall become a creditor of the Company.
For the purposes of paragraph (1) of this subsection, the term
"series of securities" or "series" means a series, class or group of securities
issuable under an indenture pursuant to whose terms holders of one such series
may vote to direct the Trustee, or otherwise take action pursuant to a vote of
such holders, separately from holders of another series; provided, that "series
of securities" or "series" shall not include any series of securities issuable
under an indenture if all such series rank equally and are wholly unsecured.
The specification of percentages in paragraphs (5) to (9),
inclusive, of this subsection 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.
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection 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 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 one year 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
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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 estate, 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 arrangements whereby a trustee or trustees or agent or agents for
the owner or holder of such security are presently entitled to vote in the
direction or management of the affairs of a person.
(5) The term "Company" means any obligor upon the Debt
Securities of any series.
(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 with 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.
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(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;
(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 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.
(f) Except in the case of a default in the payment of the
principal of or interest on any Debt Security of any series, or in the payment
of any sinking or purchase fund installment, the Trustee shall not be required
to resign as provided by this Section if the Trustee shall have sustained the
burden of proving, on application to the Commission and after opportunity for
hearing thereon, that:
(1) the Event of Default or default in the payments referred
to in Section 12.01 may be cured or waived during a reasonable period and under
the procedures described in such application; and
(2) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of the Debt Securities.
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The filing of such an application shall automatically stay the performance of
the duty to resign until the Commission orders otherwise.
Section 6.09. 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, the Commonwealth or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, subject to supervision or
examination by Federal, State, Commonwealth or District of Columbia authority
and eligible to act as Trustee hereunder in compliance with Section 310(a)(1) of
the Trust Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. Neither the Company nor any person directly or indirectly
controlling, controlled by, or under common control with the Company shall serve
as Trustee upon any Debt Securities.
Section 6.10. 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 6.11.
(b) The Trustee may resign at any time with respect to the Debt
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of 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 with respect to the Debt
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Debt
Securities of any series, and a successor Trustee appointed, by Act of the
Holders of a majority in principal amount of the Outstanding Debt Securities of
such series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08(a) with
respect to the Debt Securities of any series after written request therefor by
the Company or by any Holder who has been a bona fide Holder of a Debt Security
of such series for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09
with respect to the Debt Securities of any series and shall fail to resign after
written request therefor by the Company or by any such Holder, or
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(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 with respect to all Debt Securities, or (ii) subject to Section 5.14,
any Holder who has been a bona fide Holder of a Debt Security of any series 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 for the Debt Securities of such series.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Debt Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Debt Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Debt Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Debt Securities of any particular series) and shall
comply with the applicable requirements of Section 6.11. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Debt Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to the
Debt Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Debt Securities of any series shall have been so appointed by the Company or the
Holders of such series and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Debt Security of such
series for at least six months may, subject to Section 5.14, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Debt
Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Debt Securities of any series and each
appointment of a successor Trustee with respect to the Debt Securities of any
series in the manner and to the extent provided in Section 1.05 to the Holders
of Debt Securities of such series. Each notice shall include the name of the
successor Trustee with respect to the Debt Securities of such series and the
address of its corporate trust office.
Section 6.11. Acceptance of Appointment by Successor.
(a) In the case of an appointment hereunder of a successor Trustee with
respect to all Debt Securities, each such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
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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, subject nevertheless to its
claim, if any, provided for in Section 6.07.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Debt Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Debt
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Debt Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debt Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in any such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any other trust or trusts hereunder administered by any other such Trustee; and
upon the execution and delivery of any such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Debt Securities of that
or those series to which the appointment of such successor Trustee relates, but,
on request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Debt
Securities of that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
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Section 6.12. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that 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 Debt 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 Debt Securities so authenticated
with the same effect as if such successor Trustee had itself authenticated such
Debt Securities. In case any Debt Securities shall not have been authenticated
by such predecessor Trustee, any such successor Trustee may authenticate and
deliver such Debt Securities, in either its own name or that of its predecessor
Trustee, with the full force and effect which this Indenture provides for the
certificate of authentication of the Trustee.
Section 6.13. Preferential Collection of Claims Against Company.
(a) Subject to subsection (b) of this Section, 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 (c) of
this Section, or subsequent to such 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 Debt Securities and
of the Coupons, if any, and the holders of other indenture securities (as
defined in subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in 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, or from the exercise of any right of set-off which the Trustee could
have exercised if a voluntary or involuntary case had been commenced in respect
of the Company under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, State or Commonwealth bankruptcy,
insolvency or other similar law 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:
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(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 or
reorganization pursuant to the Federal bankruptcy laws, as now
or hereafter constituted, or any other applicable Federal,
State or Commonwealth bankruptcy, insolvency or other similar
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 (c) of this Section, would
occur within three months, or
(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 among 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 laws, as now or hereafter constituted or any other applicable
Federal, State or Commonwealth bankruptcy, insolvency or other similar 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 and the holders
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of other indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, State or Commonwealth bankruptcy, insolvency or other
similar 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 laws, as now or hereafter constituted, or any other applicable
Federal, State or Commonwealth bankruptcy, insolvency or other similar 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 among 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 claim, 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 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 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 (a)of
this Section 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;
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(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction or by this Indenture, for the purpose of preserving
any property which 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 (c) of this
Section;
(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; and
(6) The acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) of this
Section.
(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 Debt 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, 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 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
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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 Debt
Securities.
Section 6.14. Appointment of Authenticating Agent.
As long as any Debt Securities of a series remain Outstanding, upon a
Company Request, there shall be an authenticating agent (the "Authenticating
Agent") appointed, for such period as the Company shall elect, by the Trustee
for such series of Debt Securities to act as its agent on its behalf and subject
to its direction in connection with the authentication and delivery of each
series of Debt Securities for which it is serving as Trustee. Debt Securities of
each such series authenticated by such Authenticating Agent shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by such Trustee. Wherever reference is made in this
Indenture to the authentication and delivery of Debt Securities of any series by
the Trustee for such series or to the Trustee's Certificate of Authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee for such series by an Authenticating Agent for such series and a
Certificate of Authentication executed on behalf of such Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any State or the Commonwealth, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $5,000,000 and subject to supervision or examination by Federal, State or
Commonwealth authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for 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 any 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 any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Debt Securities for which it served as Authenticating
Agent without the execution or filing of any paper or any further act on the
part of the Trustee for such series or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the applicable Trustee
and to the Company.
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Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.14 with respect to one or more
or all series of Debt Securities, the Trustee for such series shall upon Company
Request appoint a successor Authenticating Agent, and the Company shall provide
notice of such appointment to all Holders of Debt Securities of such series in
the manner and to the extent provided in Section 1.05. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent
herein. The Trustee for the Debt Securities of such series agrees to pay to the
Authenticating Agent for such series from time to time reasonable compensation
for its services, and the Trustee shall be entitled to be reimbursed for such
payment, subject to the provisions of Section 6.07. The Authenticating Agent for
the Debt Securities of any series shall have no responsibility or liability for
any action taken by it as such in good faith and without negligence at the
direction of the Trustee for such series.
If an appointment with respect to one or more series is made pursuant
to this Section, the Debt Securities of such series may have endorsed thereon,
in addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Debt Securities of the series designated therein
referred to in the within mentioned Indenture.
---------------------------------------,
As Trustee
Dated: By:
---------------------------
As Authenticating Agent
By:
---------------------------
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee with
respect to Registered Securities of each series for which it acts as Trustee:
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(a) semi-annually on a date not more than 15 days after each Regular
Record Date with respect to an Interest Payment Date, if any, for the Registered
Securities of such series (or on semiannual dates in each year to be determined
pursuant to Section 3.01 if the Registered Securities of such series do not bear
interest), a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Registered Holders as of the date 15 days next
preceding each such Regular Record Date (or such semiannual dates, as the case
may be); and
(b) at such other times as the Trustee may request in writing, within
15 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar for such series, no such list need be furnished.
The Company shall also be required to furnish to the Trustee at all
such times set forth above all information in the possession or control of the
Company or any of its Paying Agents other than the Trustee as to the names and
addresses of the Holders of Bearer Securities of all series; provided, however,
that the Company shall have no obligation to investigate any matter relating to
any Holders of Bearer Securities of any series.
Section 7.02. Preservation of Information; Communication to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of Holders
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 received by it in the capacity of Paying Agent (if so acting)
hereunder, and filed with it within the two preceding years pursuant to Section
7.03(c)(2).
The Trustee may destroy any list furnished to it as provided
in Section 7.01 upon receipt of a new list so furnished, destroy any information
received by it as Paying Agent (if so acting) hereunder upon delivering to
itself as Trustee, not earlier than 45 days after an Interest Payment Date, a
list containing the names and addresses of the Holders obtained from such
information since the delivery of the next previous list, if any, destroy any
list delivered to itself as Trustee which was compiled from information received
by it as Paying Agent (if so acting) hereunder upon the receipt of a new list so
delivered, and destroy not earlier than two years after filing, any information
filed with it pursuant to Section 7.03(c)(2).
(b) If three or more Holders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Debt 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
of Debt Securities of a particular series (in which case the applicants must
hold Debt Securities of such series) or with all Holders of Debt Securities with
respect to their rights under this Indenture or under the Debt Securities and is
accompanied by a copy of the form of proxy or other communication which such
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applicants propose to transmit, then the Trustee shall, within five Business
Days after the 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 Section
7.02(a), or
(ii) inform such applicants as to the approximate number of
Holders of Debt Securities of such series or of all Debt Securities, as
the case may be, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section
7.02(a), and as to the approximate cost of mailing to such Holders the
form of proxy or other communication, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon written request of such
applicants, mail to the Holders of Debt Securities of such series or all
Holders, as the case may be, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 7.02(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 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 mailing would be contrary to the best interests of the Holders
of Debt Securities of such series or all Holders, as the case may be, 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 Debt Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee 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
Section 7.02(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
of any material pursuant to a request made under Section 7.02(b).
Section 7.03. Reports by Trustee.
(a) Within 60 days after May 30 of each year, commencing May 30, 2000,
the Trustee shall, to the extent required by the Trust Indenture Act, transmit
to all Holders of Debt Securities of any series with respect to which it acts as
Trustee, in the manner hereinafter provided in this Section
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7.03, a brief report dated as of such date 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 6.09 and its
qualifications under Section 6.08;
(2) the creation of or any material change to a relationship
specified in paragraph (1) through (10) of Section 6.08(c) of this Indenture;
(3) 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 or charge,
prior to that of the Debt Securities of such series, 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
Outstanding Debt Securities of such series on the date of such report;
(4) any change to the amount, interest rate and maturity date
of all other indebtedness owing by the Company (or any other obligor on the Debt
Securities of such series) 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 6.13(b)(2), (3), (4) or (6);
(5) any change to the property and funds, if any, physically
in the possession of the Trustee as such on the date of such report;
(6) any additional issue of Debt Securities which the Trustee
has not previously reported; and
(7) 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 Debt Securities of such series, except action in respect
of a default, notice of which has been or is to be withheld by the Trustee in
accordance with Section 6.02.
(b) The Trustee shall transmit by mail to all Holders of Debt
Securities of any series (whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 7.02 (a)) for
which it acts as the Trustee, as hereinafter provided, a brief report with
respect to 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) since the date of the last report transmitted pursuant to
subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this Indenture) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Debt Securities of such series, on property or funds
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held or collected by it as Trustee, and which it has not previously reported
pursuant to this subsection, except that the Trustee for each series 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 amount of the Debt
Securities of such series Outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) Reports pursuant to this Section 7.03 with respect to Registered
Securities shall be transmitted by mail:
(1) to all Holders of Registered Securities, as the names and
addresses of such Holders of Registered Securities appear in the Security
Register;
(2) to such Holders of Bearer Securities of any series as
have, within two years preceding such transmission, filed their names and
addresses with the Trustee for such series for that purpose; and
(3) except in the cases of reports pursuant to subsection (b)
of this Section 7.03, to each Holder of a Debt Security of any series whose name
and address appear in the information preserved at the time by the Trustee in
accordance with Section 7.02(a).
Reports pursuant to this Section 7.03 with respect to Bearer Securities shall be
published in accordance with Section 1.05.
(d) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any Debt
Securities of such series are listed, with the Commission and also with the
Company. The Company will notify the Trustee when any series of Debt Securities
are listed on any stock exchange.
Section 7.04. Reports by Company.
The Company will:
(1) 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,
as amended; or, if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it will 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, as amended, in respect of a security
listed and registered on a national securities exchange as may be required from
time to time in such rules and regulations;
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(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional
information, 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; and
(3) transmit to all Holders of Debt Securities, in the manner and to
the extent provided in Section 7.03, 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 paragraphs (1) and (2) of this
Section as may be required by rules and regulations prescribed from time to time
by the Commission.
ARTICLE EIGHT
CONCERNING THE HOLDERS
Section 8.01. Acts of Holders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent or proxy 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. Whenever in this Indenture it is provided that
the Holders of a specified percentage in aggregate principal amount of the
Outstanding Debt Securities of any series may take any Act, the fact that the
Holders of such specified percentage have joined therein may be evidenced (a) by
the instrument or instruments executed by Holders in person or by agent or proxy
appointed in writing, or (b) by the record of Holders voting in favor thereof at
any meeting of such Holders duly called and held in accordance with the
provisions of Article Nine, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Holders.
Section 8.02. Proof of Ownership; Proof of Execution of Instruments by
Holder.
The ownership of Registered Securities of any series shall be proved by
the Security Register for such series or by a certificate of the Security
Registrar for such series.
The ownership of Bearer Securities shall be proved by production of
such Bearer Securities or by a certificate executed by any bank or trust
company, which certificate shall be dated and shall state that on the date
thereof a Bearer Security bearing a specified identifying number or other mark
was deposited with or exhibited to the person executing such certificate by the
person named in such
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certificate, or by any other proof of possession reasonably satisfactory to the
Trustee. The holding by the person named in any such certificate of any Bearer
Security specified therein shall be presumed to continue for a period of one
year unless at the time of determination of such holding (1) another certificate
bearing a later date issued in respect of the same Bearer Security shall be
produced, (2) such Bearer Security shall be produced by some other person, (3)
such Bearer Security shall have been registered on the Security Register, if,
pursuant to Section 3.01, such Bearer Security can be so registered, or (4) such
Bearer Security shall have been canceled or paid.
Subject to the provisions of Sections 6.01, 6.03 and 9.05, proof of the
execution of a writing appointing an agent or proxy and of the execution of any
instrument by a Holder or his agent or proxy shall be sufficient and conclusive
in favor of the Trustee and the Company if made in the following manner:
The fact and date of the execution by any such person of any instrument
may be proved by the certificate of any notary public, or other officer
authorized to take acknowledgments of deeds, that the person executing such
instrument acknowledged to him the execution thereof, or by an affidavit of a
witness to such execution sworn to before any such notary or other such officer.
Where such execution is by an officer of a corporation or association or a
member of a partnership on behalf of such corporation, association or
partnership, as the case may be, or by any other person acting in a
representative capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
The record of any Holders' meeting shall be proved in the manner
provided in Section 9.06.
The Trustee may in any instance require further proof with respect to
any of the matters referred to in this Section so long as the request is a
reasonable one.
Section 8.03. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of the
principal of (and premium, if any) and (subject to Section 3.07) interest, if
any, on such Registered Security and for all other purposes whatsoever, whether
or not such Registered 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. The Company, the Trustee, and any agent of the Company or the Trustee
may treat the Holder of any Bearer Security or of any Coupon as the absolute
owner of such Bearer Security or Coupon for the purposes of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Bearer Security or Coupon 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. All payments made to any Holder, or upon his order, shall be
valid, and, to the extent of the sum or sums paid, effectual to satisfy and
discharge the liability for moneys payable upon such Debt Security or Coupon.
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Section 8.04. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any Act by the Holders of the
percentage in aggregate principal amount of the Outstanding Debt Securities
specified in this Indenture in connection with such Act, any Holder of a Debt
Security the number, letter or other distinguishing symbol of which is shown by
the evidence to be included in the Debt Securities the Holders of which have
consented to such Act may, by filing written notice with the Trustee at the
Corporate Trust Office and upon proof of ownership as provided in Section 8.02,
revoke such Act so far as it concerns such Debt Security. Except as aforesaid,
any such Act taken by the Holder of any Debt Security shall be conclusive and
binding upon such Holder and, subject to the provisions of Section 5.08, upon
all future Holders of such Debt Security and all past, present and future
Holders of Coupons, if any, appertaining thereto and of any Debt Securities and
Coupons issued on transfer or in lieu thereof or in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such Debt Security or Coupons or such other Debt Securities or Coupons.
ARTICLE NINE
HOLDERS' MEETINGS
Section 9.01. Purposes of Meetings.
A meeting of Holders of any or all series may be called at any time and
from time to time pursuant to the provisions of this Article Nine for any of the
following purposes:
(1) to give any notice to the Company or to the Trustee for such
series, or to give any directions to the Trustee for such series, or to consent
to the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by Holders
pursuant to any of the provisions of Article Five;
(2) to remove the Trustee for such series and appoint a successor
Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount of the Outstanding Debt
Securities of any one or more or all series, as the case may be, under any other
provision of this Indenture or under applicable law.
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Section 9.02. Call of Meetings by Trustee.
The Trustee for any series may at any time call a meeting of Holders of
such series to take any action specified in Section 9.01, to be held at such
time or times and at such place or places as the Trustee for such series shall
determine. Notice of every meeting of the Holders of any series, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given to Holders of such series in the
manner and to the extent provided in Section 1.05. Such notice shall be given
not less than 20 days nor more than 90 days prior to the date fixed for the
meeting.
Section 9.03. Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least 10% in aggregate principal amount of the Outstanding Debt
Securities of a series or of all series, as the case may be, shall have
requested the Trustee for such series to call a meeting of Holders of any or all
such series by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have given the
notice of such meeting within 20 days after the receipt of such request, then
the Company or such Holders may determine the time or times and the place or
places for such meetings and may call such meetings to take any action
authorized in Section 9.01, by giving notice thereof as provided in Section
9.02.
Section 9.04. Qualifications for Voting.
To be entitled to vote at any meeting of Holders a Person shall be (a)
a Holder of a Debt Security of the series with respect to which such meeting is
being held or (b) a Person appointed by an instrument in writing as agent or
proxy by such Holder. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the Persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee for the series
with respect to which such meeting is being held and its counsel and any
representatives of the Company and its counsel.
Section 9.05. Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee for
any series may make such reasonable regulations as it may deem advisable for any
meeting of Holders of such series, in regard to proof of the holding of Debt
Securities of such series and of the appointment of proxies, and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of such series as provided in Section 9.03, in which case
the Company or the Holders calling the meeting, as the case may be,
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shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by a majority vote of the
meeting.
Subject to the provisos in the definition of "Outstanding," at any
meeting each Holder of a Debt Security of the series with respect to which such
meeting is being held or proxy therefor shall be entitled to one vote for each
$1,000 principal amount (or such other amount as shall be specified as
contemplated by Section 3.01) of Debt Securities of such series held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Debt Security challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote other than by virtue of Outstanding Debt
Securities of such series held by him or instruments in writing duly designating
him as the person to vote on behalf of Holders of Debt Securities of such
series. Any meeting of Holders with respect to which a meeting was duly called
pursuant to the provisions of Section 9.02 or 9.03 may be adjourned from time to
time by a majority of such Holders present and the meeting may be held as so
adjourned without further notice.
Section 9.06. Voting.
The vote upon any resolution submitted to any meeting of Holders with
respect to which such meeting is being held shall be by written ballots on which
shall be subscribed the signatures of such Holders or of their representatives
by proxy and the serial number or numbers of the Debt Securities held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Holders shall be taken
and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was transmitted as provided in Section
9.02. The record shall show the serial numbers of the Debt Securities voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 9.07. No Delay of Rights by Meeting.
Nothing contained in this Article Nine shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to any Holder under any of the provisions of this Indenture or of the
Debt Securities of any series.
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ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 10.01. 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 properties
and assets 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 properties and assets 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 properties and assets 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 properties and assets 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 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 Debt Securities and the performance of every
covenant of this Indenture on the part of the Company to be performed
or observed;
(2) immediately after giving effect to such transaction, 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; and
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the Company
would become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by this Indenture, the
Company or such successor Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Debt Securities
equally and ratably with (or prior to) all Indebtedness secured
thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
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Section 10.02. 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 10.01, 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 Debt Securities.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of Holders.
Without prior notice to or 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 Corporation to the rights of
the Company and the assumption by such successor of the covenants and other
obligations of the Company herein and in the Debt Securities and Coupons, if
any, contained; or
(2) to add to the covenants of the Company, for the benefit of the
Holders of all or any series of Debt Securities and the Coupons, if any,
appertaining thereto (and if such covenants are to be for the benefit of less
than all series, stating that such covenants are expressly being included solely
for the benefit of such series), or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all series, stating that such Events
of Default are expressly being included solely to be applicable to such series);
or
(4) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Debt
Securities of any series in bearer form, registrable or not registrable, and
with or without Coupons, to permit Bearer Securities to be issued in exchange
for Registered Securities, to permit Bearer Securities to be issued in exchange
for Bearer Securities of other authorized denominations or to permit the
issuance of Debt Securities of any
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series in uncertificated form, provided that any such action shall not adversely
affect the interests of the Holders of Debt Securities of any series or any
related Coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Outstanding Debt Security or Coupon of any series created prior to
the execution of such supplemental indenture which is entitled to the benefit of
such provision and as to which such supplemental indenture would apply; or
(6) to secure the Debt Securities; or
(7) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Article Four or Fifteen,
provided that any such action shall not adversely affect the interests of the
Holders of Debt Securities of such series or any other series of Debt Securities
or any related Coupons in any material respect; or
(8) to establish the form or terms of Debt Securities and Coupons, if
any, of any series as permitted by Sections 2.01 and 3.01; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to one or more series of Debt
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, pursuant to the requirements of Section
6.11; or
(10) to make provision with respect to the conversion rights of Holders
of Debt Securities of any series pursuant to the requirements of Section 17.04,
unless otherwise provided pursuant to Section 3.01; or
(11) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
to eliminate any conflict between the terms of this Indenture or the Debt
Securities and the Trust Indenture Act or to make any other provisions with
respect to matters or questions arising under this Indenture which shall not be
inconsistent with any provision of this Indenture; provided such other
provisions shall not adversely affect the interests of the Holders of
Outstanding Debt Securities or Coupons, if any, of any series created prior to
the execution of such supplemental indenture in any material respect.
Section 11.02. Supplemental Indentures With Consent of Holders.
With the written consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such supplemental indenture voting separately, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or
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eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders under this Indenture of such Debt Securities or
Coupons, if any; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Debt Security of each such
series affected thereby,
(1) change the Stated Maturity of the principal of, or installment of
interest, if any, on, any Debt Security, or reduce the principal amount thereof
or the interest thereon or any premium payable upon redemption thereof, or
change the Stated Maturity of or reduce the amount of any payment to be made
with respect to any Coupon, or change the Currency or Currencies in which the
principal of (and premium, if any) or interest on such Debt Security is
denominated or payable, or reduce the amount of the principal of a Discount
Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 5.02, or adversely affect the right of
repayment or repurchase, if any, at the option of the Holder, or reduce the
amount of, or postpone the date fixed for, any payment under any sinking fund or
analogous provisions for any Debt Security, or impair the right to institute
suit for the enforcement of any payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or limit the
obligation of the Company to maintain a paying agency outside the United States
for payment on Bearer Securities as provided in Section 12.03; or
(2) reduce the percentage in principal amount of the Outstanding Debt
Securities of any series, the consent of whose Holders is required for any
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults or Events of Default hereunder and their consequences provided for in
this Indenture; or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 12.07, 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 Debt Security of each series affected
thereby; provided, however, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references to "the Trustee"
and concomitant changes in this Section and Section 12.07, or the deletion of
this proviso, in accordance with the requirements of Sections 6.11 and 11.01(7);
or
(4) modify any of the provisions of this Indenture relating to the
subordination of the Debt Securities in a manner adverse to the Holders.
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.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture with respect to one or more particular series
of Debt Securities and Coupons, if any, or which modifies the rights of the
Holders of Debt Securities and Coupons of such series with
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respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Debt Securities and Coupons, if
any, of any other series.
Section 11.03. 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 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which adversely affects
the Trustee's own rights, duties or immunities under this Indenture or otherwise
in a material way.
Section 11.04. 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 Debt Securities and Coupons theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 11.05. 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 11.06. Reference in Debt Securities to Supplemental
Indentures.
Debt Securities and Coupons, if any, of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Debt Securities and Coupons of
any series 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 Debt Securities and Coupons of such series.
Section 11.07. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the appropriate Trustee
of any supplemental indenture pursuant to Section 11.02, the Company shall
transmit, in the manner and to the extent provided in Section 1.05, to all
Holders of any series of the Debt Securities affected thereby, a notice setting
forth in general terms the substance of such supplemental indenture.
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Section 11.08. Effect on Senior Indebtedness.
No supplemental indenture entered into under this Article 11 shall
modify, directly or indirectly, the provisions of Article Sixteen or the
definition of Senior Indebtedness in Section 1.01 in any manner that might alter
or impair the subordination of the Debt Securities with respect to the Senior
Indebtedness then outstanding, unless each holder of such Senior Indebtedness
has consented thereto in writing.
ARTICLE TWELVE
COVENANTS
Section 12.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Debt
Securities and Coupons, if any, that it will duly and punctually pay the
principal of (and premium, if any) and interest on the Debt Securities in
accordance with the terms of the Debt Securities, the Coupons and this
Indenture. Unless otherwise specified as contemplated by Section 3.01 with
respect to any series of Debt Securities or except as otherwise provided in
Section 3.06, any interest due on Bearer Securities on or before Maturity shall
be payable only upon presentation and surrender of the several Coupons for such
interest installments as are evidenced thereby as they severally mature. If so
provided in the terms of any series of Debt Securities established as provided
in Section 3.01, the interest, if any, due in respect of any temporary Global
Note or permanent Global Note, together with any additional amounts payable in
respect thereof, as provided in the terms and conditions of such Debt Security,
shall be payable only upon presentation of such Debt Security to the Trustee for
notation thereon of the payment of such interest.
Section 12.02. Officer's Certificate as to Default.
The Company will deliver to the Trustee, on or before a date not more
than four months after the end of each fiscal year of the Company (which on the
date hereof is the calendar year) ending after the date hereof, a certificate of
the principal executive officer, principal financial officer or principal
accounting officer of the Company stating whether or not to the best knowledge
of the signer thereof the Company is in compliance with all covenants and
conditions under this Indenture, and, if the Company shall be in default,
specifying all such defaults and the nature thereof of which such signer may
have knowledge. For purposes of this Section, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
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Section 12.03. Maintenance of Office or Agency.
If Debt Securities of a series are issuable only as Registered
Securities, the Company will maintain or cause to be maintained in each Place of
Payment for such series an office or agency where Debt Securities of that series
may be presented or surrendered for payment, where Debt Securities of that
series may be surrendered for registration of transfer or exchange or
redemption, and where notices and demands to or upon the Company in respect of
the Debt Securities of that series and this Indenture may be served. If Debt
Securities of a series are issuable as Bearer Securities, the Company will
maintain (A) in the Borough of Manhattan, The City and State of New York, an
office or agency where any Registered Securities of that series, if any, may be
presented or surrendered for payment, where any Registered Securities of that
series, if any, may be surrendered for registration of transfer, where Debt
Securities of that series may be surrendered for exchange or redemption, where
Debt Securities of that series that are convertible may be surrendered for
conversion, where notices and demands to or upon the Company in respect of the
Debt Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related Coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise), (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Bearer Securities of that series and related Coupons may
be presented and surrendered for payment (including payment of any additional
amounts payable on Debt Securities of that series, if so provided pursuant to
Section 3.01); provided, however, that if the Debt Securities of that series are
listed on The Stock Exchange of the United Kingdom and the Republic of Ireland,
the Luxembourg Stock Exchange or any other stock exchange located outside the
United States and such stock exchange shall so require, the Company will
maintain a Paying Agent for the Debt Securities of that series in London,
Luxembourg or any other required city located outside the United States, as the
case may be, so long as the Debt Securities of that series are listed on such
exchange, and (C) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series located outside the United States an office or
agency where any Registered Securities of that series may be surrendered for
registration of transfer, where Debt Securities of that series may be
surrendered for exchange and redemption, and where notices and demands to or
upon the Company in respect of the Debt Securities of that series and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the locations, and any change in the locations, of such offices or
agencies. 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, except that Bearer Securities of that
series and the related Coupons may be presented and surrendered for payment at
the offices specified in the applicable Debt Security, and the Company hereby
appoints the Trustee, or in the case of Bearer Securities, such other agent as
is specified pursuant to Section 3.01, as its agent to receive all
presentations, surrenders, notices and demands.
No payment of principal, premium or interest on Bearer Securities shall
be made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided,
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however, that, if the Debt Securities of a series are denominated and payable in
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any additional amounts payable on Securities of such series,
if so provided pursuant to Section 3.01) shall be made at the office of the
Trustee or the Company's Paying Agent in the Borough of Manhattan, The City and
State of New York, if (but only if) payment in Dollars of the full amount of
such principal, premium, interest or additional amounts, as the case may be, at
all offices or agencies outside the United States maintained for the purpose by
the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or outside
of such Place of Payment), and may from time to time rescind any such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligations described in the preceding
paragraph. The Company will give prompt written notice to the Trustee of any
such additional designation or rescission of designation and any change in the
location of any such different or additional office or agency.
Section 12.04. Money for Debt Securities; Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Debt Securities and Coupons, if any, it will, on or
before each due date of the principal of (and premium, if any) or interest on
any of the Debt Securities of such series, 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 with respect
to any series of Debt Securities and Coupons, it will, by or on each due date of
the principal (and premium, if any) or interest on any Debt Securities of such
series, deposit with any such 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 thereto, and (unless any 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 with respect to any series of
Debt Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Debt Securities of such series 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;
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(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Debt Securities of such series) in the making of any payment of
principal (and premium, if any) or interest on the Debt Securities of such
series; 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.
Subject to any applicable abandoned property law, 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 Debt
Security of any series and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company upon Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Debt Security or Coupon
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may, in its sole
discretion, at the expense of the Company cause to be transmitted in the manner
and to the extent provided by Section 1.05, 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 notification, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 12.05. Corporate Existence.
Subject to the provisions of Article Ten, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate 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.
Section 12.06. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 12.05 (and, if so specified
pursuant to Section 3.01, any other covenant not set forth herein and specified
pursuant to Section 3.01 to be applicable to the Debt Securities of any series,
except as otherwise provided pursuant to Section 3.01) with respect to the Debt
Securities
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of any series if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Debt Securities of such series
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to the
extent expressly so waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES
Section 13.01. Applicability of Article.
Debt Securities of any series which are redeemable before their
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified pursuant to Section 3.01 for Debt Securities of any series)
in accordance with this Article.
Section 13.02. Election to Redeem; Notice to Trustee.
The election of the Company to redeem (or, in the case of Discount
Securities, to permit the Holders to elect to surrender for redemption) any Debt
Securities shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company of less than all of the Debt Securities of any
series pursuant to Section 13.03, the Company shall, at least 60 days before 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 Debt Securities of such series to be redeemed. In the
case of any redemption of Debt Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Debt Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restrictions.
Section 13.03. Selection by Trustee of Debt Securities to Be Redeemed.
Except in the case of a redemption in whole of the Bearer Securities or
the Registered Securities of such series, if less than all the Debt Securities
of any series are to be redeemed at the election of the Company, the particular
Debt Securities to be redeemed shall be selected not more than 60 days prior to
the Redemption Date by the Trustee, from the Outstanding Debt Securities of such
series not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to the minimum authorized denomination for Debt Securities of
such series or any integral multiple thereof) of the principal amount of Debt
Securities of such series in a denomination larger than the minimum authorized
denomination for Debt Securities of such series pursuant to Section 3.02 in the
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Currency in which the Debt Securities of such series are denominated. The
portions of the principal amount of Debt Securities so selected for partial
redemption shall be equal to the minimum authorized denominations for Debt
Securities of such series pursuant to Section 3.02 in the Currency in which the
Debt Securities of such series are denominated or any integral multiple thereof,
except as otherwise set forth in the applicable form of Debt Securities. In any
case when more than one Registered Security of such series is registered in the
same name, the Trustee in its discretion may treat the aggregate principal
amount so registered as if it were represented by one Registered Security of
such series.
The Trustee shall promptly notify the Company in writing of the Debt
Securities selected for redemption and, in the case of any Debt 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 Debt Securities shall
relate, in the case of any Debt Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Debt Security which has
been or is to be redeemed.
Section 13.04. Notice of Redemption.
Notice of redemption 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, not less
than 30 days and not more than 60 days prior to the Redemption Date to the
Holders of Debt Securities of any series to be redeemed in whole or in part
pursuant to this Article Thirteen, in the manner provided in Section 1.05. Any
notice so given shall be conclusively presumed to have been duly given, whether
or not the Holder receives such notice. Failure to give such notice, or any
defect in such notice to the Holder of any Debt Security of a series designated
for redemption, in whole or in part, shall not affect the sufficiency of any
notice of redemption with respect to the Holder of any other Debt Security of
such series.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) that Debt Securities of such series are being redeemed by the
Company pursuant to provisions contained in this Indenture or the terms of the
Debt Securities of such series or a supplemental indenture establishing such
series, if such be the case, together with a brief statement of the facts
permitting such redemption;
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(4) if less than all Outstanding Debt Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Debt Securities to be redeemed;
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debt Security to be redeemed, and that interest
thereon, if any, shall cease to accrue on and after said date;
(6) that, unless otherwise specified in such notice, Coupon Securities
of any series, if any, surrendered for redemption must be accompanied by all
Coupons maturing subsequent to the date fixed for redemption, failing which the
amount of any such missing Coupon or Coupons will be deducted from the
Redemption Price;
(7) the Place or Places of Payment where such Debt Securities are to be
surrendered for payment of the Redemption Price;
(8) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities not subject to redemption
on this Redemption Date pursuant to Section 3.05(b) or otherwise, the last date
on which such exchanges may be made; and
(9) that the redemption is for a sinking fund, if such is the case.
Section 13.05. Deposit of Redemption Price.
On or prior to the Redemption Date for any Debt Securities, 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 12.04) an amount of money in the Currency or Currencies in which such
Debt Securities are denominated (except as provided pursuant to Section 3.01 or
3.10) sufficient to pay the Redemption Price of such Debt Securities or any
portions thereof which are to be redeemed on that date.
Section 13.06. Debt Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, any Debt
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price in the Currency in which the Debt Securities of
such series are payable (except as otherwise specified pursuant to Section 3.01
or 3.10), and from and after such date (unless the Company shall default in the
payment of the Redemption Price) such Debt Securities shall cease to bear
interest. Upon surrender of any such Debt Security for redemption in accordance
with said notice, such Debt Security shall be paid by the Company at the
Redemption Price; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 12.03)
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and, unless otherwise specified as contemplated by Section 3.01, only upon
presentation and surrender of Coupons for such interest; and provided, further,
that, unless otherwise specified as contemplated by Section 3.01, installments
of interest on Registered Securities which have a Stated Maturity on or prior to
the Redemption Date for such Debt Securities shall be payable according to the
terms of such Debt Securities and the provisions of Section 3.07.
If any Debt 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 prescribed
therefor in the Debt Security.
If any Coupon Security surrendered for redemption shall not be
accompanied by all Coupons appertaining thereto maturing on or after the
Redemption Date, the Redemption Price for such Coupon Security may be reduced by
an amount equal to the face amount of all such missing Coupons. If thereafter
the Holder of such Coupon shall surrender to any Paying Agent outside the United
States any such missing Coupon in respect of which a deduction shall have been
made from the Redemption Price, such Holder shall be entitled to receive the
amount so deducted. The surrender of such missing Coupon or Coupons may be
waived by the Company and the Trustee, if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless.
Section 13.07. Debt Securities Redeemed in Part.
Any Debt Security which is to be redeemed only in part shall be
surrendered at the Corporate Trust Office or such other office or agency of the
Company as is specified pursuant to Section 3.01 (in the case of Registered
Securities) and at an office of the Trustee or such other office or agency of
the Company outside the United States as is specified pursuant to Section 3.01
(in the case of Bearer Securities) with, if the Company, the Security Registrar
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company, the Security Registrar and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing, and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Debt Security without service charge, a new Debt
Security or Debt Securities of the same series, of like tenor and form, 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 Debt Security so surrendered, and, in the case of a Coupon Security, with
appropriate Coupons attached. In the case of a Debt Security providing
appropriate space for such notation, at the option of the Holder thereof, the
Trustee, in lieu of delivering a new Debt Security or Debt Securities as
aforesaid, may make a notation on such Debt Security of the payment of the
redeemed portion thereof.
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ARTICLE FOURTEEN
SINKING FUNDS
Section 14.01. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Debt Securities of a series except as otherwise specified
pursuant to Section 3.01 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debt Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount provided
for by the terms of Debt Securities of any series is herein referred to as an
"optional sinking fund payment." If provided for by the terms of Debt Securities
of any series, the amount of any cash sinking fund payment may be subject to
reduction as provided in Section 14.02. Each sinking fund payment shall be
applied to the redemption of Debt Securities of any series as provided for by
the terms of Debt Securities of such series.
Section 14.02. Satisfaction of Mandatory Sinking Fund Payments with
Debt Securities.
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Debt Securities of a series in cash, the Company may at its
option, at any time no more than sixteen months and no less than 45 days prior
to the date on which such sinking fund payment is due, deliver to the Trustee
Debt Securities of such series (together with the unmatured Coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Company, except Debt Securities of such series which have been redeemed through
the application of mandatory sinking fund payments pursuant to the terms of the
Debt Securities of such series, accompanied by a Company Order instructing the
Trustee to credit such sinking fund payment and stating that the Debt Securities
of such series were originally issued by the Company by way of bona fide sale or
other negotiation for value, provided that such Debt Securities shall not have
been previously so credited. Such Debt Securities shall be received and credited
for such purpose by the Trustee at the Redemption Price specified in such Debt
Securities for redemption through operation of the sinking fund and the amount
of such mandatory sinking fund payment shall be reduced accordingly.
Section 14.03. Redemption of Debt Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Debt Securities (unless a shorter period shall be satisfactory to
the Trustee), the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash in the Currency or Currencies in which the
Debt Securities of such series are denominated (except as provided pursuant to
Section 3.01 or 3.10) and the portion thereof, if any,
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which is to be satisfied by delivering and crediting Debt Securities of such
series pursuant to Section 14.02 and whether the Company intends to exercise
its rights to make a permitted optional sinking fund payment with respect to
such series. Such certificate shall be irrevocable and upon its delivery the
Company shall be obligated to make the cash payment or payments therein
referred to, if any, on or before the next succeeding sinking fund payment
date. In the case of the failure of the Company to deliver such certificate,
the sinking fund payment due on the next succeeding sinking fund payment date
for such series shall be paid entirely in cash and shall be sufficient to
redeem the principal amount of the Debt Securities of such series subject to a
mandatory sinking fund payment without the right to deliver or credit Debt
Securities as provided in Section 14.02 and without the right to make any
optional sinking fund payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Debt Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent) on
the sinking fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Debt
Securities of such series at the Redemption Price specified in such Debt
Securities with respect to the sinking fund. Any sinking fund moneys not so
applied or allocated by the Trustee (or by the Company if the Company is acting
as its own Paying Agent) to the redemption of Debt Securities shall be added to
the next sinking fund payment received by the Trustee (or if the Company is
acting as its own Paying Agent, segregated and held in trust as provided in
Section 12.04) for such series and, together with such payment (or such amount
so segregated) shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys with respect to the Debt Securities of
any particular series held by the Trustee (or if the Company is acting as its
own Paying Agent, segregated and held in trust as provided in Section 12.04) on
the last sinking fund payment date with respect to Debt Securities of such
series and not held for the payment or redemption of particular Debt Securities
of such series shall be applied by the Trustee (or by the Company if the Company
is acting as its own Paying Agent), together with other moneys, if necessary, to
be deposited (or segregated) sufficient for the purpose, to the payment of the
principal of the Debt Securities of such series at Maturity.
The Trustee shall select or cause to be selected the Debt Securities to
be redeemed upon such sinking fund payment date in the manner specified in
Section 13.03 and the Company shall cause notice of the redemption thereof to be
given in the manner provided in Section 13.04. Such notice having been duly
given, the redemption of such Debt Securities shall be made upon the terms and
in the manner stated in Section 13.06.
On or before each sinking fund payment date, the Company shall pay to
the Trustee (or, if the Company is acting as its own Paying Agent, the Company
shall segregate and hold in trust as provided in Section 12.04) in cash a sum,
in the Currency or Currencies in which Debt Securities of such series are
denominated (except as provided pursuant to Sections 3.01 or 3.10), equal to the
principal and any interest accrued to the Redemption Date for Debt Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section.
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Neither the Trustee nor the Company shall redeem any Debt Securities of
a series with sinking fund moneys or mail any notice of redemption of Debt
Securities of such series by operation of the sinking fund for such series
during the continuance of a default in payment of interest, if any, on any Debt
Securities of such series or of any Event of Default (other than an Event of
Default occurring as a consequence of this paragraph) with respect to the Debt
Securities of such series, except that if the notice of redemption shall have
been provided in accordance with the provisions hereof, the Trustee (or the
Company, if the Company is then acting as its own Paying Agent) shall redeem
such Debt Securities if cash sufficient for that purpose shall be deposited with
the Trustee (or segregated by the Company) for that purpose in accordance with
the terms of this Article. Except as aforesaid, any moneys in the sinking fund
for such series at the time when any such default or Event of Default shall
occur and any moneys thereafter paid into such sinking fund shall, during the
continuance of such default or Event of Default, be held as security for the
payment of the Debt Securities and Coupons, if any, of such series; provided,
however, that in case such default or Event of Default shall have been cured or
waived as provided herein, such moneys shall thereafter be applied on or prior
to the next sinking fund payment date for the Debt Securities of such series on
which such moneys may be applied pursuant to the provisions of this Section.
ARTICLE FIFTEEN
INTENTIONALLY OMITTED
ARTICLE SIXTEEN
SUBORDINATION
Section 16.01. Agreement to Subordinate.
The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of Debt Securities of any series (or of any Coupons
appertaining thereto) by his acceptance thereof, likewise covenants and agrees,
that the indebtedness represented by the Debt Securities of such series then
Outstanding (and any Coupons appertaining thereto) and the payment of the
principal of (and premium, if any) and interest on each and all of the Debt
Securities of such series (including, without limitation, any payment of Coupons
appertaining thereto) is hereby expressly subordinated, to the extent and in the
manner hereinafter set forth, in right of payment to the prior payment in full
of all Senior Indebtedness. Each reference in this Article to a "Debt Security"
or "Debt Securities" refers to the Debt Securities of a particular series, and
references to a "Coupon" or "Coupons" refer to the Coupons, if any, appertaining
to the Debt Securities of such series. Without limiting the generality of the
immediately preceding sentence, if more than one series of Debt Securities are
outstanding at any time, (i) the provisions of this Article shall be applied
separately to each such series, and (ii) references to the Trustee refer to the
Trustee for the Debt Securities of such series.
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Section 16.02. Distribution on Dissolution, Liquidation and
Reorganization; Subrogation of Debt Securities.
Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization, of the Company, whether voluntary or
involuntary and whether in bankruptcy, insolvency, reorganization, receivership
or other proceedings or upon an assignment for the benefit of creditors or any
other marshalling of the assets and liabilities of the Company or otherwise
(subject to the power of a court of competent jurisdiction to make other
equitable provision reflecting the rights conferred in this Indenture upon the
Senior Indebtedness and the holders thereof with respect to the Debt Securities
and the Holders thereof by a plan of reorganization under applicable bankruptcy
law):
(a) the holders of all Senior Indebtedness shall be entitled to receive
payment in full of the principal thereof (and premium, if any) and interest due
thereon before the Holders of the Debt Securities (or of any Coupons) are
entitled to receive any payment upon the principal (and premium, if any) or
interest on indebtedness evidenced by the Debt Securities (or any payment of any
Coupons); and
(b) any payment or distribution of the Company of any kind or
character, whether in cash, property or securities, to which the Holders of the
Debt Securities (or of any Coupons) or the Trustee would be entitled except for
the provisions of this Article Sixteen shall be paid by the liquidating trustee
or agent or other person making such payment or distribution, whether a trustee
in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the
holders of Senior Indebtedness or their representative or representatives or to
the trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, ratably
according to the aggregate amounts remaining unpaid on account of the principal
of (and premium, if any) and interest on the Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by the Trustee, any Paying Agent or
the Holders of the Debt Securities (or any Coupons) before all Senior
Indebtedness is paid in full, such payment or distribution shall be paid over,
upon written notice to the Trustee or such Paying Agent, to the holder of such
Senior Indebtedness or their representative or representatives or to the trustee
or trustees under any indenture under which any instrument evidencing any of
such Senior Indebtedness may have been issued, ratably as aforesaid, for
application to payment of all Senior Indebtedness remaining unpaid until all
such Senior Indebtedness shall have been paid in full, after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness.
The consolidation of the Company with, or the merger of the Company
into, another corporation or the liquidation or dissolution of the Company
following the conveyance or transfer
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of its property as an entirety, or substantially as an entirety, to another
corporation shall not be deemed a dissolution, winding up, liquidation or
reorganization for the purposes of this Section 16.02.
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Debt Securities (and of any Coupons) shall be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to Senior Indebtedness until
the principal of (and premium, if any) and interest on the Debt Securities
(including, without limitation, payment of the Coupons) shall be paid in full,
and no such payments or distributions to the Holders of the Debt Securities (or
of any Coupons) of cash, property, or securities otherwise distributable to the
holders of Senior Indebtedness shall, as between the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders of the Debt
Securities (and of any Coupons) be deemed to be a payment by the Company to or
on account of the Debt Securities (or of any Coupons). It is understood that the
provisions of this Article Sixteen are and are intended solely for the purpose
of defining the relative rights of the Holders of the Debt Securities (and of
any Coupons), on the one hand, and the holders of the Senior Indebtedness, on
the other hand.
Nothing contained in this Article Sixteen or elsewhere in this
Indenture or in the Debt Securities (or any Coupons) is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders of the Debt Securities (and of any Coupons), the
obligation of the Company, which is unconditional and absolute (and which,
subject to the rights under this Article of the holders of Senior Indebtedness
and the rights under Section 16.11 of Entitled Persons in respect of Other
Financial Obligations, is intended to rank equally with all other obligations of
the Company), to pay to the Holders of the Debt Securities (and of any Coupons)
the principal of (and premium, if any) and interest on the Debt Securities
(including, without limitation, payment of any Coupons) as and when the same
shall become due and payable in accordance with their terms, or to affect the
relative rights of the Holders of the Debt Securities (or of any Coupons) and
creditors of the Company other than the holders of Senior Indebtedness, nor
shall anything herein or in the Debt Securities (or Coupons) prevent the Trustee
or the Holder of any Debt Security (or any Coupon) from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article Sixteen of the holders of Senior
Indebtedness, and under Section 16.11 of Entitled Persons in respect of Other
Financial Obligations, in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Section 16.02, the Trustee and any Paying Agent, subject to the
provisions of Section 6.03, shall be entitled to rely upon a certificate or
other writing of the liquidating trustee or agent or other Person making any
distribution to the Trustee for the purpose of ascertaining the Persons entitled
to participate in such distribution, the holders of Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent to
this Article Sixteen.
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Except as specifically set forth herein, neither the Trustee nor any
Paying Agent, however, shall be deemed to owe any fiduciary or other duty to the
holders of Senior Indebtedness or Entitled Persons in respect of Other Financial
Obligations. Neither the Trustee nor any Paying Agent shall be liable to any
such holder or Entitled Person if it shall in good faith pay or distribute to or
on behalf of Holders of Debt Securities (or of any Coupons) of the Company
moneys or assets to which any holder of Senior Indebtedness or Entitled Persons
in respect of Other Financial Obligations shall be entitled by virtue of this
Article Sixteen or any other instrument.
If the Trustee or any Holder of Debt Securities (and of any Coupons)
does not file a proper claim or proof of debt in the form required in any
proceeding referred to above prior to 30 days before the expiration of the time
to file such claim in such proceeding, then the holder of any Senior
Indebtedness is hereby authorized, and has the right, to file an appropriate
claim or claims for or on behalf of such Holder of Debt Securities (or of any
Coupons).
Section 16.03. No Payment on Debt Securities in Event of Default on
Senior Indebtedness.
No payment by the Company on account of principal (or premium, if any),
sinking funds or interest on the Debt Securities (including, without limitation,
payment of any Coupons) shall be made unless full payment of amounts then due
for principal, premium, if any, sinking funds, and interest on Senior
Indebtedness has been made or duly provided for. In the event that any event of
default with respect to any Senior Indebtedness shall have occurred and be
continuing permitting the holders of such Senior Indebtedness (or a trustee on
behalf of the holders thereof) to declare such Senior Indebtedness due and
payable prior to the date on which it would otherwise have become due and
payable, unless and until such event of default shall have been cured or waived
or shall have ceased to exist and such acceleration shall have been rescinded or
annulled, or (b) in the event any judicial proceeding shall be pending with
respect to any such default in payment, or event of default, then no payment
shall be made by the Company on account of principal of (or premium, if any) or
interest on the Debt Securities of any series or on account of the purchase or
other acquisition of Debt Securities of any series; provided, however, that
nothing in this Section shall prevent the satisfaction of any sinking fund
payment in accordance with Article Fourteen by delivering and crediting pursuant
to Section 14.02 Debt Securities of such series which have been acquired (upon
redemption or otherwise) prior to such default in payment or event of default.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Debt Security of any series
prohibited by the foregoing provisions of this Section, and if such fact shall,
at or prior to the time of such payment, have been made known to the Trustee or,
as the case may be, such Holder, then and in such event such payment shall be
paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 16.02 would be applicable.
Section 16.04. Payments on Debt Securities Permitted.
Nothing contained in this Indenture or in any of the Debt Securities
(or any Coupons) shall (a) affect the obligation of the Company to make, or
prevent the Company from making, at any time except as provided in Sections
16.02 and 16.03, payments of principal (and premium, if any) or interest on the
Debt Securities (including, without limitation, payment of any Coupons) or (b)
prevent the application by the Trustee of any moneys deposited with it hereunder
to the payment of or on account of the principal of (and premium, if any) or
interest on the Debt Securities (including, without limitation, the payment of
any Coupons), unless the Trustee shall have received at its Corporate Trust
Office written notice of any event prohibiting the making of such payment more
than two Business Days prior to the date fixed for such payment.
Section 16.05. Authorization of Holders to Trustee to Effect
Subordination.
Each Holder of Debt Securities (or of any Coupons) by his acceptance
thereof and any Paying Agent (other than the Company) authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article Sixteen and appoints
the Trustee his attorney-in-fact for any and all such purposes.
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Section 16.06. Notices to Trustee.
The Company shall give prompt written notice to the Trustee and any
Paying Agent (other than the Company) of any fact known to the Company which
would prohibit the making of any payment to or by the Trustee or such Paying
Agent in respect of the Debt Securities (or any Coupons) pursuant to this
Article Sixteen. Failure to give such notice shall not affect the subordination
of the Debt Securities (or any Coupons) to Senior Indebtedness. Notwithstanding
the provisions of this Article or any other provisions of this Indenture,
neither the Trustee nor any Paying Agent (other than the Company) shall be
charged with knowledge of the existence of any Senior Indebtedness or Other
Financial Obligations or of any event which would prohibit the making of any
payment of moneys to or by the Trustee or such Paying Agent, unless and until
the Trustee or such Paying Agent shall have received (in the case of the
Trustee, at its Corporate Trust Office) written notice thereof from the Company
or from the holder of any Senior Indebtedness or from the trustee for any such
holder or from any Entitled Person in respect of Other Financial Obligations,
together with proof satisfactory to the Trustee of such holding of Senior
Indebtedness or Other Financial Obligations or of the authority of such trustee;
provided, however, that if at least two Business Days prior to the date upon
which by the terms hereof any such moneys may become payable for any purpose
(including, without limitation, the payment of either the principal of (and
premium, if any) or interest on any Debt Security (including, without
limitation, the payment of any Coupons)) the Trustee or any such Paying Agent
shall not have received with respect to such moneys the notice provided for in
this Section 16.06, then, anything herein contained to the contrary
notwithstanding, the Trustee or any such Paying Agent shall have full power and
authority to receive such moneys and to apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary,
which may be received by it less than two Business Days prior to such date. The
Trustee or any such Paying Agent shall be entitled to rely on the delivery to it
of a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) or an Entitled Person in
respect of Other Financial Obligations to establish that such a notice has been
given by a holder of Senior Indebtedness or a trustee on behalf of any such
holder or an Entitled Person in respect of Other Financial Obligations. In the
event that the Trustee or any such Paying Agent determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness or an Entitled Person in respect of Other Financial
Obligations to participate in any payment or distribution pursuant to this
Article Sixteen, the Trustee or any such Paying Agent may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee or any such
Paying Agent as to the amount of Senior Indebtedness or Other Financial
Obligations held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Sixteen and, if such evidence is not
furnished, the Trustee or any such Paying Agent may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
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Section 16.07. Trustee as Holder of Senior Indebtedness.
Subject to the provisions of Section 6.13, the Trustee in its
individual capacity shall be entitled to all the rights set forth in this
Article Sixteen in respect of any Senior Indebtedness at any time held by it and
with respect to any Other Financial Obligations owed to the Trustee as an
Entitled Person, to the same extent as any other holder of Senior Indebtedness
or Entitled Person in respect of Other Financial Obligations and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder or Entitled Person.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.07.
Section 16.08. Modifications of Terms of Senior Indebtedness.
Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under any instrument creating or evidencing Senior Indebtedness,
including, without limitation, the waiver of default thereunder, may be made or
done all without notice to or assent from the Holders of the Debt Securities (or
of any Coupons) or the Trustee.
No compromise, alteration, amendment, modification, extension, renewal
or other change of, or waiver, consent or other action in respect of, any
liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Indebtedness is outstanding or of such Senior Indebtedness, whether or
not such release is in accordance with the provisions of any applicable
document, shall in any way alter or affect any of the provisions of this Article
Sixteen or of the Debt Securities (or of any Coupons) relating to the
subordination thereof.
Section 16.09. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article Sixteen, the Trustee and the Holders of the Debt Securities (and
of any Coupons) shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which any insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or upon a certificate of the trustee in
bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Debt Securities (or of any
Coupons), for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of Senior Indebtedness and other
indebtedness of the Company and the Entitled Persons in respect of Other
Financial Obligations, the amount thereof or payable therein, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article Sixteen.
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Section 16.10. Article Sixteen Not to Prevent Events of Default.
No provision of this Article Sixteen shall prevent the occurrence of
any default or Event of Default hereunder.
Section 16.11. Payment of Proceeds in Certain Cases.
(a) If, after giving effect to the provisions of Section 16.02, any
amount of cash, property or securities shall be available for payment or
distribution in respect of the Debt Securities ("Excess Proceeds"), and any
Entitled Persons in respect of Other Financial obligations shall not have
received payment in full of all amounts due or to become due on or in respect of
such Other Financial Obligations (and provision shall not have been made for
such payment in money or money's worth), then such Excess Proceeds shall first
be applied by the liquidating trustee or other person making such payment or
distribution (ratably with any amount of cash, property or securities available
for payment or distribution in respect of any other Indebtedness of the Company
that by its express terms provides for the payment over of amounts corresponding
to Excess Proceeds to Entitled Persons in respect of Other Financial
Obligations) to pay or provide for the payment of the Other Financial
Obligations remaining unpaid, to the extent necessary to pay all Other Financial
Obligations in full, after giving effect to any concurrent payment or
distribution to or for Entitled Persons in respect of Other Financial
Obligations. Any Excess Proceeds remaining after the payment (or provision for
payment) in full of all Other Financial obligations shall be available for
payment or distribution in respect of the Debt Securities.
(b) In the event that, notwithstanding the foregoing provisions of
subsection (a) of this Section, the Trustee or Holder of any Debt Security shall
have received any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, before all Other
Financial Obligations are paid in full or payment thereof duly provided for, and
if such fact shall, at or prior to the time of such payment or distribution have
been made known to the Trustee in accordance with Section 16.06 or, as the case
may be, such Holder, then and in such event, subject to any obligation that the
Trustee or such Holder may have pursuant to Section 16.02, upon written notice
to the Trustee such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for payment in accordance with subsection (a).
(c) Subject to the payment in full of all Other Financial Obligations,
the Holders of the Debt Securities shall be subrogated (equally and ratably with
the holders of all Indebtedness of the Company that by its express terms
provides for the payment over of amounts corresponding to Excess Proceeds to
Entitled Persons in respect of other Financial Obligations and is entitled to
like rights of subrogation) to the rights of the Entitled Persons in respect of
Other Financial Obligations to receive payments and distributions of cash,
property and securities applicable to the Other Financial Obligations until the
principal of and interest on the Debt Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to Entitled Persons
in respect of Other Financial Obligations of any cash, property or securities to
which Holders of the Debt Securities or the Trustee would be entitled except for
the provisions of this Section, and no payments
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over pursuant to the provisions of this Section to Entitled Persons in respect
of Other Financial Obligations by Holders of Debt Securities or the Trustee,
shall, as among the Company, its creditors other than Entitled Persons in
respect of Other Financial Obligations and the Holders of Securities be deemed
to be a payment or distribution by the Company to or on account of the Other
Financial Obligations.
(d) The provisions of subsections (a), (b) and (c) of this Section
are and are intended solely for the purpose of defining the relative rights of
the Holders of the Debt Securities, on the one hand, and the Entitled Persons in
respect of Other Financial Obligations, on the other hand, after giving effect
to the rights of the holders of Senior Indebtedness, as provided in this
Article. Nothing contained in subsections (a), (b) and (c) of this Section is
intended to or shall affect the relative rights against the Company of the
Holders of the Debt Securities and (1) the holders of Senior Indebtedness or (2)
other creditors of the Company other than Entitled Persons in respect of Other
Financial Obligations.
-------------
This instrument may be executed in any number of counterparts, each of
which so executed shall constitute an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
DORAL FINANCIAL CORPORATION
By:
----------------------------------
Title:
-------------------------------
Attest:
- ------------------------------
Title:
Seal BANKERS TRUST COMPANY,
as Trustee
By:
----------------------------------
Title:
-------------------------------
Attest:
- ------------------------------
Title:
Seal
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STATE OF NEW YORK )
: ss.:
COUNTY OF )
On the ______ day of _______________, 199__, before me personally came
_____________________________ to me known, who, being by me duly sworn, did
depose and say that his/her office is located at 1159 Franklin D. Roosevelt
Avenue, San Juan, Puerto Rico 00920; that he/she is ________________ of Doral
Financial Corporation, one of the corporations described in and which executed
the foregoing instrument; that he/she knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that
he/she signed his/her name thereto by like authority.
------------------------------------
Notary Public
Seal
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<PAGE> 110
____________________________)
: ss:
____________________________)
On the __ day of ____, 199__, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that his/her office is located at ________________________________________; that
he/she is __________________________ of [TRUSTEE], one of the corporations
described in and which executed the foregoing instrument; that he/she knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that he/she signed his/her name thereto by like authority.
------------------------------------
Notary Public
SEAL
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EXHIBIT A
[FORMS OF CERTIFICATION]
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
- ------------------------------
[Insert title or sufficient description
of Debt Securities to be delivered]
This certificate is delivered pursuant to the Indenture, dated
as of _________ __, 199__ (as amended, supplemented or otherwise modified from
time to time, the "Indenture"), between Doral Financial Corporation and [ ], as
Trustee. Unless otherwise defined herein, terms defined in the Indenture are
used herein as so defined.
This is to certify that as of the date hereof and except as
set forth below ___________ principal amount of the above captioned securities
(the "Debt Securities") held by you for our account (i) is owned by person(s)
that are not United States person(s) (as defined below), (ii) is owned by United
States person(s) that are (a) foreign branches of United States financial
institutions (as defined in Section 1.16512(c)(1)(v) of the United States
Treasury regulations) ("financial institutions") purchasing for their own
account or for resale, or (b) United States person(s) who acquired the Debt
Securities through foreign branches of United States financial institutions and
who hold the Debt Securities through such United States financial institutions
on the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise the Company or the Company's agent that it will comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as amended, and the Treasury regulations
thereunder), or (iii) is owned by United States or foreign financial
institution(s) for the purpose of resale during the restricted period (as
defined in Section 1.1635(c)(2)(i)(D)(7) of the United States Treasury
regulations), and in addition if the owner of the Debt Securities is a United
States or foreign financial institution described in clause (iii) above (whether
or not also described in clause (i) or (ii)) this is to further certify that
such financial institution has not acquired the Debt Securities for the purpose
of resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
We undertake to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the beneficial interest in the temporary Global
-1-
<PAGE> 112
Note held by you for our account in accordance with your operating procedures if
any applicable statement herein is not correct on such date, and in the absence
of any such notification it may be assumed that this certification applies as of
such date.
This certificate excepts and does not relate to ___________
principal amount of Debt Securities held by you for our account as to which we
are not able to provide a certificate in this form. We understand that exchange
of such portion of the temporary Global Note for definitive Bearer Securities or
interests in a permanent Global Note cannot be made until we are able to provide
a certificate in this form.
We understand that this certificate is required in connection
with certain tax laws and regulations of the United States. If administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or organized
in or under the laws of the United States and any estate or trust the income of
which is subject to United States federal income taxation regardless of its
source. "United States" means the United States of America (including the States
and the District of Columbia) and its "possessions" which include the
Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
Dated: _______________________, 19__
[To be dated no earlier than the 10th day before the Exchange Date]
By:
-------------------------------
As, or as agent for, the
beneficial owner(s) of the
portion of the temporary global
Note to which this certificate
relates.
-2-
<PAGE> 113
EXHIBIT B
[FORM OF CERTIFICATE TO BE GIVEN BY [EUROCLEAR] AND
[Cedelbank, S.A.] IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL NOTE]
CERTIFICATE
- --------------------------
(Insert title or sufficient description
of Debt Securities to be delivered]
This certificate is delivered pursuant to the Indenture, dated
as of _________ __, 199__ (as amended, supplemented or otherwise modified from
time to time, the "Indenture"), between Doral Financial Corporation and [ ], as
Trustee. Unless otherwise defined herein, terms defined in the Indenture are
used herein as so defined.
The undersigned certifies that, based solely on certifications
we have received in writing, by tested telex or by electronic transmission from
member organizations appearing in our records as persons being entitled to a
portion of the principal amount set forth below (our "Member Organizations")
substantially to the effect set forth in the Indenture as of the date hereof,
__________ principal amount of the above-captioned Debt Securities (i) is owned
by person(s) that are not United States person(s) (as defined below), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (as defined in Section 1.16512(c)(1)(v) of the United
States Treasury regulations) ("financial institutions") purchasing for their own
account or for resale, or (b) United States person(s) who acquired the Debt
Securities through foreign branches of United States financial institutions and
who hold the Debt Securities through such United States financial institutions
on the date hereof (and in either case (a) or (b), each such United States
financial institution has agreed, on its own behalf or through its agent, that
we may advise the Company or the Company's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the Treasury regulations thereunder), or (iii) is owned by
United States or foreign financial institution(s) for the purpose of resale
during the restricted period (as defined in Section 1.1635(c)(2)(i)(D)(7) of the
United States Treasury regulations), and in addition United States or foreign
financial institutions described in clause (iii) above (whether or not also
described in clause (i) or (ii)) have certified that they have not acquired the
Debt Securities for the purpose of resale directly or indirectly to a United
States person or to a person within the United States or its possessions.
-3-
<PAGE> 114
We further certify (i) that we are not making available for
exchange or collection of any interest any portion of the temporary Global Note
excepted in such certifications and (ii) that as of the date hereof we have not
received any notification from any of our Member Organizations to the effect
that the statements made by such Member Organizations with respect to any
portion of the part submitted herewith for exchange or collection of any
interest are no longer true and cannot be relied upon as of the date hereof.
We understand that this certificate is required in connection
with certain tax laws and regulations of the United States. If administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
"United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or organized
in or under the laws of the United States and any estate or trust the income of
which is subject to United States federal income taxation regardless of its
source. "United States" means the United States of America (including the States
and the District of Columbia) and its "possessions" which include the
Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
Dated: _________________________, 19__
[To be dated no earlier than the
Exchange Date]
By:
---------------------------------
Operator of the Euroclear System]
[Cedelbank,]
-4-
<PAGE> 1
EXHIBIT 4.4
FORM OF SUBORDINATED FIXED RATE GLOBAL MEDIUM-TERM NOTE
THIS NOTE IS A DIRECT, UNCONDITIONAL AND UNSECURED OBLIGATION OF DORAL FINANCIAL
CORPORATION, IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER OBLIGATION OF ANY BANK
OR NONBANK SUBSIDIARY OF DORAL FINANCIAL CORPORATION AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THE
OBLIGATIONS OF DORAL FINANCIAL CORPORATION EVIDENCED BY THIS NOTE ARE, TO THE
EXTENT AND IN THE MANNER SET FORTH IN THE INDENTURE HEREINAFTER REFERRED TO,
SUBORDINATE TO DORAL FINANCIAL CORPORATION'S OBLIGATIONS TO HOLDERS OF ITS
SENIOR INDEBTEDNESS.
THIS DEBT SECURITY MAY NOT BE 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, UNLESS AND
UNTIL THIS DEBT SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR DEBT SECURITIES IN
DEFINITIVE FORM. REGISTERED PRINCIPAL AMOUNT
No. FX ________________ CUSIP No. ________________ $____________________
DORAL FINANCIAL CORPORATION
SUBORDINATED MEDIUM-TERM NOTE
(Fixed Rate)
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE: INTEREST RATE: STATED MATURITY:
INTEREST PAYMENT DATES: RECORD DATE:
( and , unless otherwise specified) (Fifteen days prior to the applicable
Interest Payment Date, unless
otherwise specified)
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: PERCENTAGE REDUCTION:
OPTIONAL REPAYMENT DATE(S):
DENOMINATIONS: ADDENDUM ATTACHED:
(Integral multiples of $1,000, unless otherwise specified) : Yes
: No
OTHER PROVISIONS:
</TABLE>
<PAGE> 2
DORAL FINANCIAL CORPORATION, a corporation organized under the laws of
the Commonwealth of Puerto Rico ("Issuer" or the "Company," which terms include
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of
DOLLARS
on the Stated Maturity specified above (except to the extent redeemed or repaid
prior to the Stated Maturity), and to pay interest thereon at the Interest Rate
per annum specified above, until the principal hereof is paid or duly made
available for payment. Reference herein to "this Note", "hereof", "herein" and
comparable terms shall include an Addendum hereto if an Addendum is specified
above.
The Company will pay interest on each Interest Payment Date specified
above, commencing on the first Interest Payment Date next succeeding the
Original Issue Date specified above, and on the Stated Maturity or any
Redemption Date or Optional Repayment Date (as defined below) (the date of each
such Stated Maturity, Redemption Date and Optional Repayment Date and the date
on which principal or an installment of principal is due and payable by
declaration of acceleration pursuant to the Indenture being referred to
hereinafter as a "Maturity" with respect to principal payable on such date);
provided, however, that if the Original Issue Date is between a Regular Record
Date (as defined below) and the next succeeding Interest Payment Date, interest
payments will commence on the second Interest Payment Date succeeding the
Original Issue Date. Unless otherwise specified above, the "Regular Record Date"
shall be the date 15 calendar days (whether or not a Business Day) prior to the
applicable Interest Payment Date. Interest on this Note will accrue from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for or, if no interest has been paid, from the Original Issue
Date specified above, to, but excluding such Interest Payment Date. If the
Maturity or an Interest Payment Date falls on a day which is not a Business Day,
the payment due on such Maturity or Interest Payment Date will be paid on the
next succeeding Business Day with the same force and effect as if made on such
Maturity or Interest Payment Date, as the case may be, and no interest shall
accrue with respect to such payment for the period from and after such Maturity
or Interest Payment Date. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will as provided in the Indenture be
paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such Interest Payment Date. Any such interest which is payable, but not
punctually paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest"), shall forthwith cease to be payable to the registered
Holder on such Regular Record Date, and may be paid to the Person in whose name
this Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to the Holder of this
Note not less than 10 days prior to such Special Record Date, or may be paid at
any time in any other lawful manner, all as more fully provided in the
Indenture.
Payment of the principal of and interest on this Note will be made at
the Office or Agency of the Company maintained by the Company for such purpose
in the Borough of
2
<PAGE> 3
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts.
Unless the certificate of authentication hereon has been executed by or
on behalf of Bankers Trust Company, the Trustee for this Note under the
Indenture, or its successor thereunder, by the manual signature of one of its
authorized officers, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Debt Securities
(hereinafter called the "Securities") of the Company designated as its
Subordinated Senior Medium-Term Notes (the "Notes"). The Securities are issued
and to be issued under a Subordinated indenture (the "Indenture") dated as of
May [ ], 1999, between the Company and Bankers Trust Company (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 thereunder of the Company, the Trustee
and the Holders of the Notes and the terms upon which the Notes are to be
authenticated and delivered. The terms of individual Notes may vary with respect
to interest rates or interest rate formulas, issue dates, maturity, redemption,
repayment, currency of payment and otherwise as provided in the Indenture.
The indebtedness evidenced by this Note is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of the principal of (and premium, if any) and interest
on all Senior Indebtedness as defined in the Indenture, and this Security is
issued subject to such provisions and each Holder of this Note, by accepting the
same, agrees to and shall be bound by such provisions, and authorizes the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate such subordination as provided in the Indenture and
appoints the Trustee as such Holder's attorney-in-fact for such purpose.
The Notes are issuable only in registered form without coupons in
denominations, unless otherwise specified above, of $1,000 and integral
multiples thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes as requested by the Holder surrendering the same. If
(x) the Depository is at any time unwilling or unable to continue as depository
and a successor depository is not appointed by the Company within 90 days, (y)
the Company executes and delivers to the Trustee a Company Order to the effect
that this Note shall be exchangeable or (z) an Event of Default has occurred and
is continuing with respect to the Notes, this Note shall be exchangeable for
Notes in definitive form of like tenor and of an equal aggregate principal
amount, in authorized denominations. Such definitive Notes shall be registered
in such name or names as the Depository shall instruct the Trustee. If
definitive Notes are so delivered, the Company may make such changes to the form
of this Note as are necessary or appropriate to allow for the issuance of such
definitive Notes.
This Note is not subject to any sinking fund.
3
<PAGE> 4
This Note may be subject to repayment at the option of the Holder prior
to its Stated Maturity on any Holder's Optional Repayment Date(s), if any,
indicated above. If no Optional Repayment Dates are set forth above, this Note
may not be so repaid at the option of the Holder hereof prior to the Stated
Maturity. On any Optional Repayment Date this Note shall be repayable in whole
or in part in an amount equal to $1,000 or any integral multiple thereof
(provided that any remaining principal amount shall be an authorized
denomination) at the option of the Holder hereof at a repayment price equal to
100% of the principal amount to be repaid, together with interest thereon
payable to the date of repayment. For this Note to be repaid in whole or in part
at the option of the Holder hereof, this Note must be received, with the form
entitled "Option to Elect Repayment" below duly completed, by the Trustee at its
office at Four Albany Street, New York, New York 10006 or such address which the
Company shall from time to time notify the Holder hereof ("Corporate Trust
Office"), not more than 60 nor less than 30 days prior to an Optional Repayment
Date. This Note must be received by the Trustee by 5:00 P.M., New York City
time, on the last day for giving such notice. Exercise of such repayment option
by the Holder hereof shall be irrevocable. In the event of payment of this Note
in part only, a new Note for the unpaid portion hereof shall be issued in the
name of the Holder hereof upon the surrender hereof.
This Note may be redeemed at the option of the Company prior to its
Stated Maturity on any date on and after the Initial Redemption Date, if any,
specified above (the "Redemption Date"). If no Initial Redemption Date is set
forth above, this Note may not be redeemed at the option of the Company prior to
the Stated Maturity. On and after the Initial Redemption Date, if any, this Note
may be redeemed at any time in whole or from time to time in part in increments
of $1,000 (provided that any remaining principal amount shall be an authorized
denomination) at the option of the Company at the applicable Redemption Price
(as defined below) together with interest thereon payable to the Redemption
Date, on notice given not more than 60 nor less than 30 days prior to the
Redemption Date. In the event of redemption of this Note in part only, a new
Note for the unredeemed portion hereof shall be issued in the name of the Holder
hereof upon the surrender hereof.
If this Note is redeemable at the option of the Company prior to its
Stated Maturity, the "Redemption Price" shall initially be the Initial
Redemption Percentage, specified above, of the principal amount of this Note to
be redeemed and shall decline at each anniversary of the Initial Redemption Date
by the Annual Redemption Percentage Reduction, if any, specified above, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
Interest payments on this Note shall include interest accrued from, and
including, the Original Issue Date indicated above, or the most recent date to
which interest has been paid or duly provided for, to, but excluding, the
related Interest Payment Date or Maturity, as the case may be, at the rate per
annum stated on the face hereof until the principal amount hereof is paid or
made available for payment. Unless otherwise specified above, interest will be
computed on the basis of a 360-day year of twelve 30-day months for the period
specified hereunder.
4
<PAGE> 5
Any provision contained herein with respect to the calculation of the
rate of interest applicable to this Note, its payment dates or any other matter
relating hereto may be modified as specified in an Addendum relating hereto if
so specified above or as set forth under Other Provisions if so set forth above.
If an Event of Default (as defined in the Indenture) with respect to
the Notes shall occur and be continuing, the principal of all the Notes may be
declared due and payable in the manner and with the effect provided in the
Indenture. A default in the payment of principal or interest or in the
performance of any covenant or agreement in this Note or in the Indenture is not
an Event of Default under the Indenture and shall not provide for any right of
acceleration of the payment of the principal hereof. However, in the event of a
default in the payment of principal or interest, a Holders shall have the right
to institute a suit for the collection of such overdue payment.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding, as defined in the Indenture, of each series
affected thereby. The Indenture also contains provisions permitting the Holders
of specified percentages in aggregate principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all the Securities
of each series, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note 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 Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the time, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein and on the face hereof, the transfer of this Note may be
registered on the Security Register of the Company, upon surrender of this Note
for registration of transfer at the office or agency of the Company in the
Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company duly
executed by, the Holder hereof or by his attorney duly authorized in writing,
and thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
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.
5
<PAGE> 6
Prior to due presentment of this Note 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 Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
Dated:
----------
DORAL FINANCIAL CORPORATION
By:
-------------------------
[FACSIMILE OF SEAL]
Attest:
By:
-------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
of the series designated
therein referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:
-------------------------
Authorized Officer
6
<PAGE> 7
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to the principal amount hereof together with interest to
the repayment date, to the undersigned, at
- -------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its Corporate
Trust Office, or at such other place or places of which the Company shall from
time to time notify the Holder of this Note, not more than 60 nor less than 30
days prior to an Optional Repayment Date, if any, shown on the face of this
Note, this Note with this "Option to Elect Repayment" form duly completed. This
Note notice must be received by the Trustee by 5:00 P.M., New York City time, on
the last day for giving such notice.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in an amount equal to $1,000 or an
integral multiple thereof, provided that any remaining principal amount is equal
to an authorized denomination) which the Holder elects to have repaid and
specify the denomination or denominations (which shall be in an amount equal to
an authorized denomination) of the Notes to be issued to the Holder for the
portion of this Note not being repaid (in the absence of any such specification,
one such Note will be issued for the portion not being repaid).
$
---------------------- --------------------------------------------------
NOTICE: The signature on this Option to Elect
Date Repayment must correspond with the name as written
------------------- upon the face of this Note in every particular,
without alteration or enlargement or any change
whatever.
7
<PAGE> 8
ASSIGNMENT/TRANSFER FORM
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto (insert Taxpayer Identification No.)
------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
- -------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ________________________________________ attorney to transfer said
Note on the books of the Company with full power of substitution in the
premises.
Date
----------------------- -----------------------------------------------
NOTICE: The signature of the registered Holder
to this assignment must correspond with the name
as written upon the face of the within
instrument in every particular, without
alteration or enlargement or any change
whatsoever.
8
<PAGE> 9
FORM OF SUBORDINATED FLOATING RATE GLOBAL MEDIUM-TERM NOTE
THIS NOTE IS A DIRECT, UNCONDITIONAL AND UNSECURED OBLIGATION OF DORAL FINANCIAL
CORPORATION, IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER OBLIGATION OF ANY BANK
OR NONBANK SUBSIDIARY OF DORAL FINANCIAL CORPORATION AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THE
OBLIGATIONS OF DORAL FINANCIAL CORPORATION EVIDENCED BY THIS NOTE ARE, TO THE
EXTENT AND IN THE MANNER SET FORTH IN THE INDENTURE HEREINAFTER REFERRED TO,
SUBORDINATE TO DORAL FINANCIAL CORPORATION'S OBLIGATIONS TO HOLDERS OF ITS
SENIOR INDEBTEDNESS.
THIS DEBT SECURITY MAY NOT BE 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, UNLESS AND
UNTIL THIS DEBT SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR DEBT SECURITIES IN
DEFINITIVE FORM.
<TABLE>
<S> <C> <C>
REGISTERED PRINCIPAL AMOUNT
No. FLR CUSIP No. $
-------------- ------------------ -------------------------
</TABLE>
DORAL FINANCIAL CORPORATION
SUBORDINATED MEDIUM-TERM NOTE
(Floating Rate)
<TABLE>
<CAPTION>
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
<S> <C> <C>
IF LIBOR: IF CMT RATE:
[ ] LIBOR Reuters Designated CMT Telerate Page:
[ ] LIBOR Telerate If Telerate Page 7052:
INDEX CURRENCY: [ ] Weekly Average
LIBOR CURRENCY: [ ] Monthly Average
Designated CMT Maturity Index:
INDEX MATURITY: INITIAL INTEREST RATE: INTEREST PAYMENT DATES:
SPREAD (PLUS OR MINUS): INITIAL INTEREST RESET DATE: INTEREST RESET DATES:
SPREAD MULTIPLIER: INITIAL REDEMPTION DATE:
MAXIMUM INTEREST RATE: MINIMUM INTEREST RATE: OPTIONAL REPAYMENT DATE(S):
INITIAL REDEMPTION PERCENTAGE: ANNUAL REDEMPTION PERCENTAGE REDUCTION:
CALCULATION AGENT:
</TABLE>
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate from to .
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: from to .
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: from to .
<TABLE>
<S> <C> <C>
SPECIFIED CURRENCY: DISCOUNT NOTE: AUTHORIZED DENOMINATION:
(if other than [ ] Yes [ ] $1,000 and integral
U.S. dollars) [ ] No multiples thereof
Issue Price: % [ ] Other
</TABLE>
ADDENDUM ATTACHED: OTHER PROVISIONS:
[ ] Yes
[ ] No
1
<PAGE> 10
DORAL FINANCIAL CORPORATION, a bank holding company organized under the
laws of the Commonwealth of Puerto Rico ("Issuer" or the "Company," which terms
include any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of
DOLLARS on the Stated Maturity specified above (except to the extent redeemed or
repaid prior to the Stated Maturity Date), and to pay interest thereon, at a
rate per annum equal to the Initial Interest Rate specified above until the
Initial Interest Reset Date specified above and thereafter at a rate per annum
determined in accordance with the provisions hereof and any Addendum relating
hereto depending upon the Interest Rate Basis or Bases, and such other terms
specified above, until the principal hereof is paid or duly made available for
payment. Reference herein to "this Note", "hereof", "herein" and comparable
terms shall include an Addendum hereto if an Addendum is specified above.
The Company will pay interest on each Interest Payment Date specified
above, commencing on the first Interest Payment Date specified above next
succeeding the Original Issue Date specified above, and on the Stated Maturity
or any Redemption Date or Optional Repayment Date (as defined below) (the date
of each such Stated Maturity, Redemption Date and Optional Repayment Date and
the date on which principal or an installment of principal is due and payable by
declaration of acceleration pursuant to the Indenture being referred to
hereinafter as a "Maturity" with respect to principal payable on such date);
provided, however, that if the Original Issue Date is between a Regular Record
Date (as defined below) and the next succeeding Interest Payment Date, interest
payments will commence on the second Interest Payment Date succeeding the
Original Issue Date; and provided, further, that if an Interest Payment Date
(other than an Interest Payment Date at Maturity) would fall on a day that is
not a Business Day (as defined below), such Interest Payment Date shall be
postponed to the next succeeding day that is a Business Day, except that in the
case the Interest Rate Basis is LIBOR, as indicated above, if such next Business
Day falls in the next calendar month, the applicable Interest Payment Date shall
be the immediately preceding Business Day. Except as provided above, interest
payments will be made on the Interest Payment Dates shown above. Unless
otherwise specified above, the "Regular Record Date" shall be the date 15
calendar days (whether or not a Business Day) prior to the applicable Interest
Payment Date. Interest on this Note will accrue from and including the Original
Issue Date specified above, at the rates determined from time to time as
specified herein, until the principal hereof has been paid or made available for
payment. If the Maturity falls on a day which is not a Business Day as defined
below, the payment due on such Maturity will be paid on the next succeeding
Business Day with the same force and effect as if made on such Maturity and no
interest shall accrue with respect to such payment for the period from and after
such Maturity. The interest so payable and punctually paid or duly provided for
on any Interest Payment Date will as provided in the Indenture be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such Interest
Payment Date. Any such interest which is payable, but not punctually paid or
duly provided for on any Interest Payment Date (herein called "Defaulted
Interest"), shall forthwith cease to be payable to the registered Holder on such
Regular Record Date, and may be paid to the Person in whose name this Note (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to the Holder of this Note not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner, all as more fully provided in the Indenture.
Payment of the principal of and interest on this Note will be made at
the Office or Agency of the Company maintained by the Company for such purpose
in the Borough of Manhattan, The City of New York, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless the certificate of authentication hereon has been executed by or
on behalf of Bankers Trust Company, the Trustee with respect to the Notes under
the Indenture, or its successor thereunder, by the manual signature of one of
its authorized officers, this Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
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<PAGE> 11
This Note is one of a duly authorized issue of Debt Securities
(hereinafter called the "Securities") of the Company designated as its
Subordinated Medium-Term Notes. The Securities are issued and to be issued under
a subordinated indenture (the "Indenture") dated as of May [ ], 1999, between
the Company and Bankers Trust Company (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 thereunder of the Company, the Trustee and the Holders of the
Notes and the terms upon which the Notes are to be authenticated and delivered.
The terms of individual Notes may vary with respect to interest rates or
interest rate formulas, issue dates, maturity, redemption, repayment, currency
of payment and otherwise as provided in the Indenture.
The indebtedness evidenced by this Note is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of the principal of (and premium, if any) and interest
on all Senior Indebtedness as defined in the Indenture, and this Security is
issued subject to such provisions and each Holder of this Note, by accepting the
same, agrees to and shall be bound by such provisions, and authorizes the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate such subordination as provided in the Indenture and
appoints the Trustee as such Holder's attorney-in-fact for such purpose.
The Notes are issuable only in registered form without coupons in
denominations of, unless otherwise specified above, $1,000 and integral
multiples thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes as requested by the Holder surrendering the same. If
(x) the Depository is at any time unwilling or unable to continue as depository
and a successor depository is not appointed by the Company within 90 days, (y)
the Company executes and delivers to the Trustee a Company Order to the effect
that this Note shall be exchangeable or (z) an Event of Default has occurred and
is continuing with respect to the Notes, this Note shall be exchangeable for
Notes in definitive form of like tenor and of an equal aggregate principal
amount, in authorized denominations. Such definitive Notes shall be registered
in such name or names as the Depository shall instruct the Trustee. If
definitive Notes are so delivered, the Company may make such changes to the form
of this Note as are necessary or appropriate to allow for the issuance of such
definitive Notes.
This Note is not subject to any sinking fund.
This Note may be subject to repayment at the option of the Holder prior
to its Stated Maturity on the Holder's Optional Repayment Date(s), if any,
indicated on the face hereof. If no Holder's Optional Repayment Dates are set
forth on the face hereof, this Note may not be so repaid at the option of the
Holder hereof prior to the Stated Maturity. On any Holder's Optional Repayment
Date, this Note shall be repayable in whole or in part in an amount equal to
$1,000 or integral multiples thereof (provided that any remaining principal
amount shall be an authorized denomination) at the option of the Holder hereof
at a repayment price equal to 100% of the principal amount to be repaid,
together with interest thereon payable to the date of repayment. For this Note
to be repaid in whole or in part at the option of the Holder hereof, this Note
must be received, with the form entitled "Option to Elect Repayment" below duly
completed, by the Trustee at its office at Four Albany Street, New York, New
York 10006 or such address which the Company shall from time to time notify the
Holders of the Medium-Term Notes (the "Corporate Trust Office"), not more than
60 nor less than 30 days prior to a Holder's Optional Repayment Date. This Note
must be received by the Trustee by 5:00 P.M., New York City time, on the last
day for giving such notice. Exercise of such repayment option by the Holder
hereof shall be irrevocable. In the event of payment of this Note in part only,
a new Note for the unpaid portion hereof shall be issued in the name of the
Holder hereof upon the surrender hereof.
This Note may be redeemed at the option of the Company prior to its
Stated Maturity on any date on and after the Initial Redemption Date, if any,
specified on the face hereof (the "Redemption Date"). If no Initial Redemption
Date is set forth on the face hereof, this Note may not be redeemed at the
option of the Company prior to the Stated Maturity. On and after the Initial
Redemption Date, if any, this Note may be redeemed at any time in whole or from
time to time in part in increments of $1,000 or integral multiples thereof
(provided that any remaining principal amount shall be an authorized
denomination) at the option of the Company at the applicable Redemption
3
<PAGE> 12
Price (as defined below) together with interest thereon payable to the
Redemption Date, on notice given not more than 60 nor less than 30 days prior to
the Redemption Date. In the event of redemption of this Note in part only, a new
Note for the unredeemed portion hereof shall be issued in the name of the Holder
hereof upon the surrender hereof.
If this Note is redeemable at the option of the Company prior to its
Stated Maturity, the "Redemption Price" shall initially be the Initial
Redemption Percentage, specified on the face hereof, of the principal amount of
this Note to be redeemed and shall decline at each anniversary of the Initial
Redemption Date by the Annual Redemption Percentage Reduction, if any, specified
on the face hereof, of the principal amount to be redeemed until the Redemption
Price is 100% of such principal amount.
The interest rate borne by this Note shall be determined as follows:
1. If this Note is designated as a Regular Floating Rate Note
above, then, except as described below, this Note shall bear interest
at the rate determined by reference to the applicable Interest Rate
Basis or Bases shown above (1) plus or minus the applicable Spread, if
any, and/or (2) multiplied by the applicable Spread Multiplier, if any,
specified and applied in the manner described above. Commencing on the
first Interest Reset Date, the rate at which interest on this Note is
payable will be reset as of each Interest Reset Date specified above;
provided, however, that the interest rate in effect for the period from
the Original Issue Date to the first Interest Reset Date will be the
Initial Interest Rate.
2. If this Note is designated as a Floating Rate/Fixed Rate
Note above, then, except as described below, this Note shall bear
interest at the rate determined by reference to the applicable Interest
Rate Basis or Bases shown above (1) plus or minus the applicable
Spread, if any, and/or (2) multiplied by the applicable Spread
Multiplier, if any, specified and applied in the manner described
above. Commencing on the first Interest Reset Date, the rate at which
interest on this Note is payable will be reset as of each Interest
Reset Date specified above; provided, however, that (i) the interest
rate in effect for the period from the date of issue to the first
Interest Reset Date will be the Initial Interest Rate, and (ii) the
interest rate in effect commencing on, and including, the date on which
interest begins to accrue on a fixed rate basis to Maturity will be the
Fixed Interest Rate, if the rate is specified above, or if no Fixed
Interest Rate is specified, the interest rate in effect on the Floating
Rate/Fixed Rate Note on the day immediately preceding the date on which
interest begins to accrue on a fixed rate basis.
3. If this Note is designated as an Inverse Floating Rate Note
above, then, except as described below, this Note will bear interest
equal to the Fixed Interest Rate indicated above minus the rate
determined by reference to the applicable Interest Rate Basis or Bases
shown above (1) plus or minus the applicable Spread, if any, and/or (2)
multiplied by the applicable Spread Multiplier, if any, specified and
applied in the manner described above; provided, however, that unless
otherwise specified on the face hereof, the interest rate hereon will
not be less than zero percent. Commencing on the first Interest Reset
Date, the rate at which interest on this Note is payable shall be reset
as of each Interest Reset Date specified above; provided, however, that
the interest rate in effect for the period from the Original Issue Date
to the Initial Interest Reset Date shall be the Initial Interest Rate.
4. Notwithstanding the foregoing, if this Note is designated
above as having an Addendum attached or as having Other Provisions
apply, the Note shall bear interest in accordance with the terms
described in such Addendum or specified under Other Provisions.
Except as provided above, the interest rate in effect on each day shall
be (a) if such day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date (as defined below) immediately preceding such
Interest Reset Date or (b) if such day is not an Interest Reset Date, the
interest rate determined as of the Interest Determination Date immediately
preceding the immediately preceding Interest Reset Date. Each Interest Rate
Basis shall be the rate determined in accordance with the applicable provision
below. If any Interest Reset Date (which term includes the term first Interest
Reset Date unless the context otherwise requires) would otherwise be a day that
4
<PAGE> 13
is not a Business Day, that Interest Reset Date shall be postponed to the next
succeeding day that is a Business Day, except that if an Interest Rate Basis
specified on the face hereof is LIBOR and the next Business Day falls in the
next succeeding calendar month, that Interest Reset Date shall be the
immediately preceding Business Day. In addition, if an Interest Rate Basis
specified on the face hereof is the Treasury Rate and the Interest Determination
Date would otherwise fall on an Interest Reset Date, then that Interest Reset
Date shall be postponed to the next succeeding Business Day.
Unless otherwise specified above, interest payable on this Note on any
Interest Payment Date shall be the amount of interest accrued from and including
the immediately preceding Interest Payment Date in respect of which interest has
been paid (or from and including the Original Issue Date specified above, if no
interest has been paid), to but excluding the related Interest Payment Date or
Maturity. Unless otherwise specified above, accrued interest hereon shall be an
amount calculated by multiplying the face amount hereof by an accrued interest
factor. The accrued interest factor shall be computed by adding the interest
factor calculated for each day in the period for which accrued interest is being
calculated. Unless otherwise specified above, the interest factor for each such
day shall be computed by dividing the interest rate applicable to such day by
360, if the Day Count Convention specified above is "Actual/360" for the period
specified thereunder or by the actual number of days in the year if the Day
Count Convention specified above is "Actual/Actual" for the period specified
thereunder. In the case of notes for which the Interest Rate Basis is the CD
Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate, the interest factor for each day
will be computed by dividing the interest rate applicable to each day by 360. In
the case of notes for which the Interest Rate Basis is the CMT Rate or the
Treasury Rate, the interest factor for each day will be computed by dividing the
interest rate applicable to each day by the actual number of days in the year.
The interest factor for notes for which the interest rate is calculated with
reference to two or more Interest Rate Bases will be calculated in each period
in the same manner as if only one of the applicable Interest Rate Bases applied.
Unless otherwise specified above, the "Interest Determination Date"
with respect to the CD Rate, the CMT Rate and the Commercial Paper Rate shall be
the second Business Day preceding each Interest Reset Date; the "Interest
Determination Date" with respect to the Federal Funds Rate and the Prime Rate
shall be the Business Day immediately preceding each Interest Reset Date; the
"Interest Determination Date" with respect to LIBOR shall be the second London
Business Day (as defined below) preceding each Interest Reset Date; the
"Interest Determination Date" with respect to the Eleventh District Cost of
Funds Rate shall be the last working day of the month immediately preceding each
Interest Reset Date on which the Federal Home Loan Bank of San Francisco (the
"FHLB of San Francisco") publishes the Index (as defined below); and the
"Interest Determination Date" with respect to the Treasury Rate shall be the day
in the week in which the related Interest Reset Date falls on which day Treasury
bills (as defined below) are normally auctioned. Treasury bills are normally
sold at auction on Monday of each week, unless that day is a legal holiday, in
which case the auction is normally held on the following Tuesday, except that
the auction may be held on the preceding Friday; provided, however, that if an
auction is held on the Friday of the week preceding the related Interest Reset
Date, the related Interest Determination Date shall be such preceding Friday;
and provided, further, that if an auction shall fall on any Interest Reset Date,
then the related Interest Reset Date shall instead be the first Business Day
following such auction. If the interest rate of this Note is determined with
reference to two or more Interest Rate Bases, the Interest Determination Date
pertaining to this Note will be the latest Business Day which is at least two
Business Days prior to such Interest Reset Date on which each Interest Rate
Basis shall be determinable. Each Interest Rate Basis shall be determined and
compared on such date, and the applicable interest rate shall take effect on the
related Interest Reset Date.
Unless otherwise specified above, the "Calculation Date", if
applicable, pertaining to any Interest Determination Date will be the earlier of
(i) the tenth calendar day after such Interest Determination Date or, if the
tenth calendar day is not a Business Day, the next succeeding Business Day, or
(ii) the Business Day preceding the applicable Interest Payment Date or date of
Maturity, as the case may be. All calculations on this Note shall be made by the
Calculation Agent specified above or such successor thereto as is duly appointed
by the Company.
All percentages resulting from any calculation on this Note will be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards. For
5
<PAGE> 14
example, 9.876545% or .09876545 would be rounded to 9.87655% or .0987655. All
dollar amounts used in or resulting from any calculation will be rounded to the
nearest cent with one-half cent being rounded upward.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close in The
City of New York; provided, however, that, with respect to non-United State
dollar denominated Notes, such day is also not a day on which commercial banks
are authorized or required by law, regulation or executive order to close in the
Principal Financial Center (as hereinafter defined) of the country issuing the
Specified Currency or, if the Specified Currency is EURO, the day is also a day
on which the Trans-European Automated Real-Time Gross Settlement Express
Transfer (TARGET) System is open; provided, further, that, with respect to Notes
as to which LIBOR is an applicable Interest Rate Basis, such day is also a
London Business Day (as hereinafter defined).
As used herein, "London Business Day" means a day on which commercial
banks are open for business, including dealings in the Index Currency in London.
As used herein, "Principal Financial Center" means,
(1) the capital city of the country issuing the Specified
Currency, except that with respect to United States dollars,
Australian dollars, Canadian dollars, Deutsche marks, Dutch
guilders, South African rand and Swiss francs, the "Principal
Financial Center" will be The City of New York, Sydney and
Melbourne, Toronto, Frankfurt, Amsterdam, Johannesburg and
Zurich, respectively, or
(2) the capital city of the country to which the LIBOR Currency
relates, except that with respect to United States dollars,
Canadian dollars, Deutsche marks, Dutch guilders, Portuguese
escudos, South African rand and Swiss francs, the "Principal
Financial Center" will be The City of New York, Toronto,
Frankfurt, Amsterdam, London, Johannesburg and Zurich,
respectively.
Determination of CD Rate. If an Interest Rate Basis for this Note is
the CD Rate, as indicated above, the CD Rate shall be determined on the
applicable Interest Determination Date (a "CD Rate Interest Determination Date")
as:
(1) the rate on the applicable CD Rate Interest Determination Date
for negotiable United States dollar certificates of deposit
having the Index Maturity specified above published in
H.15(519), as defined below, under the heading "CDs (secondary
market)", or
(2) if the rate referred to in clause (1) above is not so
published by 3:00 P.M., New York City time, on the related
Calculation Date, the rate on the applicable CD Rate Interest
Determination Date for negotiable United States dollar
certificates of deposit of the Index Maturity specified above
as published in H.15 Daily Update, as defined below, or other
recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "CDs
(secondary market)", or
(3) if the rate referred to in clause (2) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable CD Rate Interest
Determination Date calculated by the Calculation Agent as the
arithmetic mean of the secondary market offered rates as of
10:00 A.M., New York City time, on the applicable CD Rate
Interest Determination Date, of three leading non-bank dealers
in negotiable United States dollar certificates of deposit in
The City of New York selected by the Calculation Agent for
negotiable United States dollar certificates of deposit of
major United States money center banks for negotiable
certificates of deposit with a remaining maturity closest to
the Index Maturity specified above in an amount that is
representative for a single transaction in that market at that
time, or
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<PAGE> 15
(4) if the dealers selected by the Calculation Agent are not
quoting as mentioned in clause (3) above, the CD rate in
effect on the applicable CD Rate Interest Determination Date.
"H.15(519)" means the weekly statistical release designated as
H.15(519), or any successor publication, published by the Board of Governors of
the Federal Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available
through the world-wide-web site of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication.
Determination of CMT Rate. If an Interest Rate Basis for this Note is
the CMT Rate, as indicated above, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as:
(1) the rate displayed on the Designated CMT Telerate Page, as
defined below, under the caption "...Treasury Constant
Maturities... Federal Reserve Board Release H.15... Mondays
Approximately 3:45 P.M.", under the column for the Designated
CMT Maturity Index for:
(a) if the Designated CMT Telerate Page is 7051, the rate
on the applicable CMT Rate Interest Determination
Date, and
(b) if the Designated CMT Telerate Page is 7052, the
weekly or the monthly average, as specified above,
for the week or the month, as applicable, ended
immediately preceding the week or the month, as
applicable, in which the related CMT Rate Interest
Determination Date falls, or
(2) if the rate referred to in clause (1) is no longer displayed
on the relevant page or is not so displayed by 3:00 P.M., New
York City time, on the related Calculation Date, the treasury
constant maturity rate for the Designated CMT Maturity Index,
as defined below, published in H.15(519), or
(3) if the rate referred to in clause (2) is no longer published
or is not published by 3:00 P.M., New York City time, on the
related Calculation Date, the treasury constant maturity rate
for the Designated CMT Maturity Index, or other United States
Treasury rate for the Designated CMT Maturity Index, for the
applicable CD Rate Interest Determination Date with respect to
the applicable CMT Rate Interest Reset Date as may then be
published by either the Board of Governors of the Federal
Reserve System or the United States Department of the Treasury
that the Calculation Agent determines to be comparable to the
rate formerly displayed on the Designated CMT Telerate Page
and published in H.15(519), or
(4) if the rate referred to in clause (3) is not so published by
3:00 P.M., New York City time, on the applicable Calculation
Date, the rate on the applicable CMT Rate Interest
Determination Date calculated by the Calculation Agent as a
yield to maturity, based on the arithmetic mean of the
secondary market offered rates as of approximately 3:30 P.M.,
New York City time, on the applicable CMT Rate Interest
Determination Date reported, according to their written
records, by three leading primary United States government
securities dealers in The City of New York, which may include
the agents or their affiliates (each, a "Reference Dealer"),
selected by the Calculation Agent from five Reference Dealers
selected by the Calculation Agent after eliminating the
highest quotation, or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of
equality, one of the lowest, for the most recently issued
direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately
the Designated CMT Maturity Index and a remaining term to
maturity of not less than such Designated CMT Maturity Index
minus one year, or
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<PAGE> 16
(5) if the Calculation Agent is unable to obtain three applicable
Treasury Note quotations as referred to in clause (4), the
rate on the applicable CMT Rate Interest Determination Date
calculated by the Calculation Agent as a yield to maturity
based on the arithmetic mean of the secondary market offered
rates as of approximately 3:30 P.M., New York City time, on
the applicable CMT Rate Interest Determination Date of three
Reference Dealers in The City of New York selected by the
Calculation Agent from five Reference Dealers selected by the
Calculation Agent after eliminating the highest quotation or,
in the event of equality, one of the highest and the lowest
quotation or, in the event of equality, one of the lowest, for
Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least
$100 million, or
(6) if three or four and not five of Reference Dealers are quoting
as referred to in clause (5) above, the rate will be
calculated by the Calculation Agent as the arithmetic mean of
the offered rates obtained and neither the highest nor the
lowest of quotes will be eliminated, or
(7) if fewer than three Reference Dealers selected by the
Calculation Agent are quoting as mentioned in clause (6), the
rate in effect on the applicable CMT Rate Interest
Determination Date.
If two Treasury Notes with an original maturity as described
in clause (5) have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the Calculation Agent will obtain from
five Reference Dealers quotations for the Treasury Notes with the
shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on Bridge Telerate,
Inc. or any successor service on the page specified above or any other page as
may replace the specified page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519), or, if no page is
specified above, page 7052.
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities, either 1, 2, 3, 5, 7, 10, 20 or 30 years,
specified above with respect to which the CMT Rate will be calculated or, if no
maturity is specified above, 2 years.
Determination of Commercial Paper Rate. If an Interest Rate Basis for
this Note is the Commercial Paper Rate, as indicated above, the Commercial Paper
Rate shall be determined on the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date") as:
(1) the Money Market Yield, as defined below, on the applicable
Commercial Paper Rate Interest Determination Date of the rate
for commercial paper having the Index Maturity specified above
published in H.15(519) under the caption "Commercial
Paper-Nonfinancial", or
(2) if the rate described in clause (1) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Commercial Paper Rate
Interest Determination Date for commercial paper having the
Index Maturity specified above published in H.15 Daily Update,
or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "Commercial
Paper-Nonfinancial", or
(3) if the rate is referred to in clause (2) is not so published
by 3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Commercial Paper Rate
Interest Determination Date calculated by the Calculation
Agent as the Money Market Yield of the arithmetic mean of the
offered rates at approximately 11:00 A.M., New York City time,
on the applicable Commercial Paper Rate Interest Determination
Date of three leading dealers of United States dollar
commercial paper in The City of New York, which may include
the agents and their affiliates, selected by the Calculation
Agent for commercial paper having the Index Maturity specified
above
8
<PAGE> 17
placed for industrial issuers whose bond rating is "Aa", or
the equivalent, from a nationally recognized statistical
rating organization, or
(4) if the dealers selected by the Calculation Agent are not
quoting as mentioned in clause (3), the rate in effect on the
applicable Commercial Paper Rate Interest Determination Date.
"Money Market Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Money Market Yield = D x 360 x 100
----------------------
360 - ( D x M )
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Eleventh District Cost of Funds Rate. If an Interest Rate Basis for
this Note is the Eleventh District Cost of Funds Rate, as indicated above, the
Eleventh District Cost of Funds Rate shall be determined on the applicable
Interest Determination Date (an "Eleventh District Cost of Funds Rate Interest
Determination Date"), and shall be:
(1) the rate equal to the monthly weighted average cost of funds
for the calendar month immediately preceding the month in
which the applicable Eleventh District Cost of Funds Rate
Interest Determination Date falls as set forth under the
caption "11th District" on the display on Bridge Telerate,
Inc. or any successor service on page 7058 or any other page
as may replace the specified page on that service ("Telerate
Page 7058") as of 11:00 A.M., San Francisco time, on the
applicable Eleventh District Cost of Funds Rate Interest
Determination Date, or
(2) if the rate referred to in clause (1) does not appear on
Telerate Page 7058 on the related Eleventh District Cost of
Funds Rate Interest Determination Date, the monthly weighted
average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most
recently announced (the "Index") by the Federal Home Loan Bank
of San Francisco as the cost of funds for the calendar month
immediately preceding the applicable Eleventh District Cost of
Funds Rate Interest Determination Date, or
(3) if the Federal Home Loan Bank of San Francisco fails to
announce the Index on or before the applicable Eleventh
District Cost of Funds Rate Interest Determination Date for
the calendar month immediately preceding the applicable
Eleventh District Cost of Funds Rate Interest Determination
Date, the rate in effect on the applicable Eleventh District
Cost of Funds Rate Interest Determination Date.
Determination of Federal Funds Rate. If an Interest Rate Basis for this
Note is the Federal Funds Rate, as indicated above, the Federal Funds Rate shall
be determined on the applicable Interest Determination Date (a "Federal Funds
Rate Interest Determination Date"), and shall be:
(1) the rate on the applicable Federal Funds Rate Interest
Determination Date for United States dollar federal funds as
published in H.15(519) under the heading "Federal Funds
(Effective)", as displayed on Bridge Telerate, Inc. or any
successor service on page 120 or any other page as may replace
the applicable page on that service ("Telerate Page 120"), or
(2) if the rate referred to in clause (1) does not appear on
Telerate Page 120 or is not so published by 3:00 P.M., New
York City time, on the related Calculation Date, the rate on
the applicable Federal Funds Rate Interest Determination Date
for United States dollar federal funds published in H.15
9
<PAGE> 18
Daily Update, or other recognized electronic source used for
the purpose of displaying the applicable rate, under the
caption "Federal Funds/Effective Rate", or
(3) if the rate referred to in clause (2) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Federal Funds Rate Interest
Determination Date calculated by the Calculation Agent as the
arithmetic mean of the rates for the last transaction in
overnight United States dollar federal funds arranged by three
leading brokers of United States dollar federal funds
transactions in The City of New York, which may include the
agents or their affiliates, selected by the Calculation Agent
before 9:00 A.M., New York City time, on the applicable
Federal Funds Rate Interest Determination Date, or
(4) if the brokers selected by the Calculation Agent are not
quoting as mentioned in clause (3), the rate in effect on the
applicable Federal Funds Rate Interest Determination Date.
Determination of LIBOR. "LIBOR" means the rate determined by the
Calculation Agent in accordance with the following provisions:
(1) if "LIBOR Telerate" is specified above or if neither "LIBOR
Reuters" nor "LIBOR Telerate" is specified above as the method
for calculating LIBOR, LIBOR will be the rate for deposits in
the LIBOR Currency, as defined below, having the Index
Maturity specified above, commencing on the second London
Business Day immediately following that Interest Determination
Date that appears on the Designated LIBOR Page, as defined
below, as of 11:00 A.M., London time, on the applicable
Interest Determination Date, or
(2) if "LIBOR Reuters" is specified above, LIBOR will be the
arithmetic mean of the offered rates for deposits in the LIBOR
Currency having the Index Maturity specified above, commencing
on the second London Business Day immediately following that
Interest Determination Date, that appear, on the Designated
LIBOR Page specified above as of 11:00 A.M., London time, on
the applicable Interest Determination Date. If the Designated
LIBOR Page by its terms provides only for a single rate, then
the single rate will be used, or
(3) with respect to a LIBOR Interest Determination Date on which
fewer than two offered rates appear, or no rate appears, as
the case may be, on the designated LIBOR Page as specified in
clauses (1) and (2), the rate calculated by the Calculation
Agent as the arithmetic mean of at least two quotations
obtained by the Calculation Agent after requesting the
principal London offices of each of four major reference
banks, which may include affiliates of the agents, in the
London interbank market to provide the Calculation Agent with
its offered quotation for deposits in the LIBOR Currency for
the period of the Index Maturity specified above, commencing
on the second London Business Day immediately following the
applicable Interest Determination Date, to prime banks in the
London interbank market at approximately 11:00 A.M., London
time, on the applicable Interest Determination Date and in a
principal amount that is representative for a single
transaction in the applicable LIBOR Currency in that market at
that time, or
(4) if fewer than two quotations referred to in clause (3) are so
provided, the rate on the applicable Interest Determination
Date calculated by the Calculation Agent as the arithmetic
mean of the rates quoted at approximately 11:00 A.M., in the
applicable Principal Financial Center(s), on the applicable
Interest Determination Date by three major banks, which may
include affiliates of the agents, in the applicable Principal
Financial Center selected by the Calculation Agent for loans
in the LIBOR Currency to leading European banks, having the
Index Maturity specified designated above and in a principal
amount that is representative for a single transaction in the
applicable LIBOR Currency in that market at that time, or
10
<PAGE> 19
(5) if the banks so selected by the Calculation Agent are not
quoting as mentioned in clause (4), the rate in effect on the
applicable Interest Determination Date.
"LIBOR Currency" means the currency specified above as to which LIBOR
will be calculated or, if no currency is specified above, United States dollars.
"Designated LIBOR Page" means either:
- if "LIBOR Telerate" is designated above or neither "LIBOR
Reuters" nor "LIBOR Telerate" is specified above as the method
for calculating LIBOR, the display on Bridge Telerate, Inc. or
any successor service on the page specified in such pricing
supplement or any page as may replace the specified page on
that service for the purpose of displaying the London
interbank rates of major banks for the applicable LIBOR
Currency, or
- if "LIBOR Reuters" is specified above, the display on the
Reuter Monitor Money Rates Service or any successor service on
the page specified above or any other page as may replace the
specified page on that service for the purpose of displaying
the London interbank rates of major banks for the applicable
LIBOR Currency.
Determination of Prime Rate. If an Interest Rate Basis for this Note
specified above is the Prime Rate, the Prime Rate will be determined on the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date"). The "Prime Rate" means:
(1) the rate on the applicable Prime Rate Interest Determination
Date as published in H.15(519) under the heading "Bank Prime
Loan", or
(2) if the rate referred to in clause (1) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Prime Rate Interest
Determination Date published in H.15 Daily Update, or such
other recognized electronic source used for the purpose of
displaying the applicable rate under the caption "Bank Prime
Loan", or
(3) if the rate referred to in clause (2) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate calculated by the Calculation Agent as the
arithmetic mean of the rates of interest publicly announced by
at least four banks that appear on the Reuters Screen US PRIME
1 Page as the particular bank's prime rate or base lending
rate as of 11:00 A.M., New York City time, on the applicable
Prime Rate Interest Determination Date, or
(4) if fewer than four rates described in clause (3) by 3:00 P.M.,
New York City time, on the related Calculation Date as shown
on Reuters Screen US PRIME 1, the rate on the applicable Prime
Rate Interest Determination Date calculated by the Calculation
Agent as the arithmetic mean of the prime rates or base
lending rates quoted on the basis of the actual number of days
in the year divided by a 360-day year as of the close of
business on the applicable Prime Rate Interest Determination
Date by three major banks, which may include affiliates of the
agents, in The City of New York selected by the Calculation
Agent, or
(5) if the banks selected by the Calculation Agent are not quoting
as mentioned in clause (4), the rate in effect on the
applicable Prime Rate Interest Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter
Monitor Money Rates Service or any successor service on the "US PRIME 1" Page or
other page as may replace the US PRIME 1 Page on such service for the purpose of
displaying prime rates or base lending rates of major United States banks.
11
<PAGE> 20
Determination of Treasury Rate. If an Interest Rate Basis for this Note
specified above, is the Treasury Rate, the Treasury Rate shall be determined on
the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") "Treasury Rate" means:
(1) the rate from the auction held on the applicable Treasury Rate
Interest Determination Date (the "Auction") of direct
obligations of the United States ("Treasury Bills") having the
Index Maturity specified above under the caption "INVESTMENT
RATE" on the display on Bridge Telerate, Inc. or any successor
service on page 56 or any other page as may replace page 56 on
that service ("Telerate Page 56") or page 57 or any other page
as may replace page 57 on that service ("Telerate Page 57"),
or
(2) if the rate described in clause (1) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the Bond Equivalent Yield of the rate for the applicable
Treasury Bills as published in H.15 Daily Update, or other
recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "U.S.
Government Securities/Treasury Bills/Auction High", or
(3) if the rate described in clause (2) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the Bond Equivalent Yield of the auction rate of the
applicable Treasury Bills announced by the United States
Department of the Treasury, or
(4) in the event that the rate referred to in clause (3) is not
announced by the United States Department of the Treasury, or
if the Auction is not held, the Bond Equivalent Yield of the
rate on the applicable Treasury Rate Interest Determination
Date of Treasury Bills having the Index Maturity specified
above published in H.15(519) under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market", or
(5) if the rate referred to in clause (4) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Treasury Rate Interest
Determination Date of the applicable Treasury Bills as
published in H.15 Daily Update, or other recognized electronic
source used for the purpose of displaying the applicable rate,
under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market", or
(6) if the rate referred to in clause (5) is not so published by
3:00 P.M., New York City time, on the related Calculation
Date, the rate on the applicable Treasury Rate Interest
Determination Date calculated by the Calculation Agent as the
Bond Equivalent Yield of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 P.M., New York City
time, on the applicable Treasury Rate Interest Determination
Date, of three primary United States government securities
dealers, which may include the agents or their affiliates,
selected by the Calculation Agent, for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity
specified above, or
(7) if the dealers selected by the Calculation Agent are not
quoting as mentioned in clause (6), the rate in effect on the
applicable Treasury Rate Interest Determination Date.
"Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
D x N
Bond Equivalent Yield = ----------------------------- x 100
360 - ( D x M )
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest is
being calculated.
12
<PAGE> 21
Any provisions contained herein with respect to the determination of
one or more Interest Rate Bases, the specification of one or more Interest Rate
Bases, calculation of the Interest Rate applicable to this Note, its payment
dates the stated maturity date, any redemption or repayment provisions, or any
other matter relating hereto may be modified by the terms as specified above
under "Other Provisions" or in an Addendum relating hereto if so specified
above.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified above. In addition to any Maximum Interest Rate
applicable hereto pursuant to the above provisions, the interest rate on this
Note will in no event be higher than the maximum rate permitted by New York law,
as the same may be modified by United States law of general application. The
Calculation Agent shall calculate the interest rate hereon in accordance with
the foregoing on or before each Calculation Date. The Company hereby covenants
for the benefit of the Holder hereof, to the extent permitted by applicable law,
not to claim voluntarily the benefits of any laws concerning usurious rates of
interest against such Holder.
Unless otherwise above, the Trustee will be the "Calculation Agent". At
the request of the Holder hereof, the Calculation Agent shall provide to the
Holder hereof the interest rate hereon then in effect and, if determined, the
interest rate which shall become effective as of the next Interest Reset Date
with respect to this Note.
If an Event of Default (as defined in the Indenture) with respect to
the Notes shall occur and be continuing, the principal of all the Notes may be
declared due and payable in the manner and with the effect provided in the
Indenture. A default in the payment of principal or interest or in the
performance of any covenant or agreement in this Note or in the Indenture is not
an Event of Default under the Indenture and shall not provide for any right of
acceleration of the payment of the principal hereof. However, in the event of a
default in the payment of principal or interest, a Holders shall have the right
to institute a suit for the collection of such overdue payment.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders a majority in aggregate principal amount of the
Securities at any time Outstanding, as defined in the Indenture, of each series
affected thereby. The Indenture also contains provisions permitting the Holders
of specified percentages in aggregate principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all the Securities
of each series, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note 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 Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the time, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein and on the face hereof, the transfer of this Note may be
registered on the Security Register of the Company, upon surrender of this Note
for registration of transfer at the office or agency of the Company in the
Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company duly
executed by, the Holder hereof or by his attorney duly authorized in writing,
and thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
13
<PAGE> 22
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 Note 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 Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
14
<PAGE> 23
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
Dated:
------------------
DORAL FINANCIAL CORPORATION
By:
-----------------------------------------
[FACSIMILE OF SEAL]
Attest:
By:
-----------------------------------------
CERTIFICATE OF
AUTHENTICATION
This is one of
the Debt Securities of
the series designated
therein issued under the
within-mentioned
Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:
-------------------------------
Authorized Officer
15
<PAGE> 24
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to the principal amount hereof together with interest to
the repayment date, to the undersigned, at _____________________________________
________________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its Corporate
Trust Office, or at such other place or places of which the Company shall from
time to time notify the Holder of this Note, not more than 60 nor less than 30
days prior to an Optional Repayment Date, if any, shown on the face of this
Note, this Note with this "Option to Elect Repayment" form duly completed. This
Note must be received by the Trustee by 5:00 P.M., New York City time, on the
last day for giving such notice.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be in an amount equal to $1,000 or an
integral multiple thereof, provided that any remaining principal amount shall be
an authorized denomination) which the Holder elects to have repaid and specify
the denomination or denominations (which shall be in an amount equal to an
authorized denomination) of the Notes to be issued to the Holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).
$
------------------------ --------------------------------------------
NOTICE: The signature on this Option to
Date Elect Repayment must correspond with the
--------------------- name as written upon the face of this Note
in every particular, without alteration or
enlargement or any change whatever.
16
<PAGE> 25
ASSIGNMENT/TRANSFER FORM
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto (insert Taxpayer Identification No.)_____________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) ______________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _______________________________________ attorney to transfer said
Note on the books of the Company with full power of substitution in the
premises.
Date
--------------------- --------------------------------------------
NOTICE: The signature of the registered
Holder to this assignment must correspond
with the name as written upon the face of
the within instrument in every particular,
without alteration or enlargement or any
change whatsoever.
17
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF PIETRANTONI MENDEZ & ALVAREZ LLP]
May 4, 1999
Doral Financial Corporation
1159 Franklin D. Roosevelt Avenue
San Juan, Puerto Rico 00918
Re: Doral Financial Corporation
Registration Statement on Form S-3
Dear Ladies and Gentlemen:
We have acted as special counsel to Doral Financial Corporation, a
Puerto Rico corporation ("Doral"), in connection with the preparation of the
Registration Statement on Form S-3 (No. 333-76259) (the "Registration
Statement") filed with the Securities and Exchange Commission (the
"Commission") on April 14, 1999 under the Securities Act of 1933, as amended
(the "Securities Act"). The Registration Statement relates to the issuance and
sale from time to time, pursuant to Rule 415 of the General Rules and
Regulations of the Commission promulgated under the Securities Act, of the
following securities of Doral with an aggregate initial public offering price
of up to $250,000,000, or the equivalent thereof in one or more foreign
currencies or composite currencies: (i) senior or subordinated debt securities,
in one or more series (the "Debt Securities"), which may be issued under
Indentures (the "Indentures") proposed to be entered into among Doral and
Bankers Trust Company (the "Trustee"), and (ii) shares of Doral preferred
stock, par value $1.00 per share (the "Preferred Stock"), in one or more
series.
The Debt Securities and the Preferred Stock are collectively
referred to herein as the "Offered Securities."
This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K promulgated under the Securities Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of:
(i) the Registration Statement;
(ii) the forms of Indentures filed as exhibits to the
Registration Statement;
<PAGE> 2
(iii) the Second Restated Certificate of Incorporation of
Doral, as presently in effect;
(iv) the By-laws of Doral, as presently in effect; and
(v) certain resolutions of the Board of Directors of Doral
adopted at a meeting duly held on April 23, 1998 (the "Board Resolutions")
relating to the issuance and sale of the Offered Securities and related
matters, including a delegation of authority to Doral's Pricing Committee to
fix and determine the terms of certain of the Offered Securities.
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of Doral and such agreements,
certificates of public officials, certificates of officers or other
representatives of Doral and others, and such other documents, certificates and
records as we have deemed necessary or appropriate as a basis for the opinions
set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed or to be executed by parties other than
Doral, we have assumed that such parties had or will have the power, corporate
or other, to enter into and perform all obligations thereunder and have also
assumed the due authorization by all requisite action, corporate or other, and
execution and delivery by such parties of such documents and the validity and
binding effect thereof. As to any facts material to the opinions expressed
herein which were not independently established or verified, we have relied
upon oral or written statements and representations of officers and other
representatives of Doral and others.
We do not express any opinion as to the laws of any jurisdiction other
than those of the Commonwealth of Puerto Rico.
Based upon and subject to the foregoing, we are of the opinion that:
1. With respect to any series of Debt Securities (the "Offered
Debt Securities"), when (i) the authorized officers of Doral have taken all
necessary corporate action to fix and determine the terms of the Offered Debt
Securities in accordance with the Board Resolutions; (ii) the terms of the
Offered Debt Securities and of their issuance and sale have been duly
established in conformity with
2
<PAGE> 3
the applicable Indenture so as not to violate any applicable law, the Second
Restated Certificate of Incorporation or By-laws of Doral or result in a
default under or breach of any agreement or instrument binding upon Doral, and
so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over Doral; (iii) the applicable
Indenture has been duly executed and delivered; and (iv) the Offered Debt
Securities have been duly executed and authenticated in accordance with the
terms of the applicable Indenture and duly delivered to the purchasers thereof
upon payment of the agreed-upon consideration therefor, the issuance and sale
of the Offered Debt Securities (including any Offered Debt Securities duly
issued upon exchange or conversion of any shares of Preferred Stock that are
exchangeable or convertible into Debt Securities) will have been duly
authorized, and the Offered Debt Securities will be valid and binding
obligations of Doral entitled to the benefits of the applicable Indenture,
except to the extent that (x) enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally, (2) general principles of equity (regardless of whether
enforceability is considered in proceeding at law or in equity), and (3)
governmental authority to limit, delay or prohibit the making of payments
outside the United States or in foreign currency or composite currency and (y)
the waiver contained in Section 5.15 of the applicable Indenture may be deemed
unenforceable.
2. With respect to the shares of any series of Preferred Stock
(the "Offered Preferred Stock"), when (i) the Board of Directors or the Pricing
Committee has taken all necessary corporate action to fix and determine the
terms of the Offered Preferred Stock and authorize their issuance and sale in
accordance with the Company's Certificate of Incorporation and the Board
Resolutions, including the adoption of a Certificate of Designation for such
Preferred Stock in the form required by applicable law; (ii) such Certificate
of Designation has been duly filed with the Department of State of the
Commonwealth of Puerto Rico; (iii) certificates representing the shares of the
offered Preferred Stock have been manually signed by an authorized officer of
the transfer agent and registrar for the Preferred Stock and registered by such
transfer agent and registrar, and delivered to the purchasers thereof; and (iv)
Doral receives consideration per share of the offered Preferred Stock in such
amount (not less than the par value per share) as may be determined by the
Board of Directors or the Pricing Committee in the form of cash, services
rendered, personal property, real property, leases of real property, or a
combination thereof, the issuance and sale of the shares of Offered Preferred
Stock will have been duly authorized, and such shares will be validly issued,
fully paid and nonassessable.
3
<PAGE> 4
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also consent to the reference to
our firm under the caption "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are included in the
category of persons whose consent is required under Section 7 of the Securities
Act or the Rules and Regulations of the Commission.
Very truly yours,
/s/Pietrantoni Mendez & Alvarez LLP
4
<PAGE> 1
EXHIBIT 10.1
DORAL FINANCIAL CORPORATION
ADMINISTRATIVE PROCEDURES
FOR FIXED AND FLOATING RATE MEDIUM-TERM NOTES
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
DATED AS OF , 1999
Senior Medium-Term Notes (the "Senior Notes") and Subordinated
Medium-Term Notes (the "Subordinated Notes"), collectively the "Notes," are to
be offered on a continuing basis by Doral Financial Corporation, a corporation
organized under the laws of the Commonwealth of Puerto Rico (the "Corporation"),
to or through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Bears, Stearns & Co. Inc. (each, an "Agent" and, collectively,
the "Agents"), pursuant to a Distribution Agreement dated , 1999 (the
"Distribution Agreement") among the Corporation and the Agents. The Distribution
Agreement provides both for the sale of Notes by the Corporation to one or more
of the Agents as principal for resale to investors and other purchasers and for
the sale of Notes by the Corporation directly to investors (as may from time to
time be agreed to by the Corporation and the related Agents) in which case the
Agents will act as agents of the Corporation in soliciting Note purchases.
Unless otherwise agreed by the related Agents and the Corporation,
Notes will be purchased by the related Agents as principal. Such purchases will
be made in accordance with terms agreed upon by the related Agents and the
Corporation (which terms, unless otherwise agreed, shall be agreed upon orally,
with written confirmation prepared by the related Agents and mailed to the
Corporation). If agreed upon by the Corporation and the applicable Agent, such
Agent, acting solely for the Corporation and not as principal, will use its
reasonable efforts to solicit offers to purchase the Notes. Only those
provisions in these Administrative Procedures that are applicable to the
particular role that an Agent will perform shall apply.
The Senior Notes will be issued as a series of securities pursuant to a
Senior Indenture, dated as of , 1999, as may be amended and supplemented from
time to time (the "Senior Indenture"), between the Corporation and Bankers Trust
Company (the "Trustee"), as trustee with respect to the Senior Notes. The
Subordinated Notes will be issued as a series of securities pursuant to a
Subordinated Indenture dated as of , 1999, as may be amended or supplemented
from time to time (the "Subordinated Indenture"), between the Corporation and
Bankers Trust Company. The Senior Indenture and the Subordinated Indenture are
collectively referred to herein as the "Indentures." In accordance with the
provisions of the Indentures, the Trustee has been appointed Authenticating
Agent (in such capacity, the "Issuing Agent"). The Trustee will act as the
Corporation's Paying Agent with respect to the Notes (in such capacity the
"Paying Agent").
A Registration Statement (the "Registration Statement," which term
shall include any additional registration statements or amendments thereto filed
in connection with the Notes as provided in the introductory paragraph of the
Distribution Agreement) with respect to the Notes has been filed with the
Securities and Exchange Commission (the "Commission").
<PAGE> 2
The most recent base Prospectus included in the Registration Statement, as
supplemented with respect to the Notes, is herein referred to as the
"Prospectus." The most recent supplement to the Prospectus setting forth the
purchase price, interest rate or formula, maturity date and other terms of the
Notes (as applicable) is herein referred to as the "Pricing Supplement."
The Notes will be issued in book-entry form and represented by one or
more global certificates in fully registered form without coupons (each, a
"Book-Entry Note") delivered to the Issuing Agent, as agent for The Depository
Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC.
General procedures relating to the issuance of the Notes are set forth
in Part I hereof. Part II hereof sets forth procedures for the issuance of Notes
in book-entry form. Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the applicable Indenture or the
Notes, as the case may be.
2
<PAGE> 3
PART I: GENERAL PROCEDURES
Date of Issuance/
Authentication: Each Note will be dated as of the date
of its authentication by the Issuing
Agent. Each Note shall also bear an
original issue date (each, an "Original
Issue Date"). The Original Issue Date
shall remain the same for all Notes
subsequently issued upon transfer,
exchange or substitution of an original
Note regardless of their dates of
authentication.
Maturities: Each Note will mature on a date selected
by the investor or other purchaser and
agreed to by the Corporation which is
not less than nine months from its
Original Issue Date (the "Stated
Maturity"); provided, however, that
Notes bearing interest at rates
determined by reference to selected
indices ("Floating Rate Notes") will
mature on an Interest Payment Date.
Registration: Unless otherwise provided in the
applicable Pricing Supplement, Notes
will be issued only in fully registered
form.
Denominations: Unless otherwise provided in the
applicable Pricing Supplement, Notes
will be issued in denominations of
$1,000 or any integral multiple of
$1,000 in excess thereof.
Interest Base Rates
applicable to
Floating Rate
Notes: Unless otherwise provided in the
applicable Pricing Supplement, Floating
Rate Notes (except for certain Discount
Notes) will be issued as described
below. The applicable Pricing Supplement
will specify the "Interest Rate Basis"
or "Interest Rate Bases" by reference to
which interest will be determined which
may be one or more of the CD Rate ("CD
Rate Notes"), the CMT Rate ("CMT Rate
Notes"), the Commercial Paper Rate
("Commercial Paper Rate Notes"), the
11th District Cost of Funds Rate ("11th
District Cost of Funds Rate Notes") the
Federal Funds Rate ("Federal Funds Rate
Notes"), LIBOR ("LIBOR Notes"), the
Prime Rate ("Prime Rate Notes"), the
Treasury Rate ("Treasury Rate Notes") or
any other interest rate basis or formula
specified in the applicable Pricing
Supplement, or by reference to two or
more such rates, as adjusted by the
Spread and/or Spread Multiplier, if any,
applicable to such Floating Rate Notes.
3
<PAGE> 4
Repayment/Redemption: The Notes will be subject to repayment
at the option of the Holders thereof in
accordance with the terms of the Notes
on their respective Optional Repayment
Dates, if any. Optional Repayment Dates,
if any, will be fixed at the time of
sale and set forth in the applicable
Pricing Supplement and in the applicable
Note. If no Optional Repayment Dates are
indicated with respect to a Note, such
Note will not be repayable at the option
of the Holder prior to its Stated
Maturity.
The Notes will be subject to redemption
by the Corporation on and after their
respective Redemption Dates, if any.
Redemption Dates, if any, will be fixed
at the time of sale and set forth in the
applicable Pricing Supplement and in the
applicable Note. If no Redemption Dates
are indicated with respect to a Note,
such Note will not be redeemable prior
to its Stated Maturity.
Calculation of
Interest: In case of Fixed Rate Notes, interest
(including payments for partial periods)
will be calculated and paid on the basis
of a 360-day year of twelve 30-day
months.
The interest rate on each Floating Rate
Note will be calculated by reference to
the specified Interest Rate Basis or
specified Interest Rate Bases plus or
minus the applicable Spread, if any,
and/or multiplied by the applicable
Spread Multiplier, if any.
Unless otherwise provided in the
applicable Pricing Supplement, accrued
interest on each Floating Rate Note will
be calculated by multiplying its
principal amount by an accrued interest
factor. Such accrued interest factor is
computed by adding the interest factor
calculated for each day in the period
for which accrued interest is being
calculated. Unless otherwise specified
in the applicable Pricing Supplement,
the interest factor for each such day is
computed by dividing the interest rate
applicable to such day by 360 in the
case of CD Rate Notes, Commercial Paper
Rate Notes, 11th District Cost of Funds
Rate Notes, Federal Funds Rate Notes,
LIBOR Notes or Prime Rate Notes, or by
the actual number of days in the year in
the case of CMT Rate Notes or Treasury
Rate Notes. Unless otherwise specified
in the applicable Pricing Supplement,
the interest factor for Notes for which
the interest rate is calculated with
reference to two or more Interest Rate
Bases will be calculated in each period
in the same manner
4
<PAGE> 5
as if only the lowest, highest or
average of the applicable Interest Rate
Bases is applied.
Interest: General. Each Note will bear interest in
accordance with its terms. Unless
otherwise provided in the applicable
Pricing Supplement, each payment of
interest on the Notes will include
interest accrued from and including the
immediately preceding Interest Payment
Date in respect of which interest has
been paid (or from and including the
Original Issue Date, if no interest has
been paid with respect to the applicable
Note) to but excluding the related
Interest Payment Date, the Stated
Maturity, any Redemption Date or any
Optional Repayment Date (each Stated
Maturity, Redemption Date or Optional
Repayment Date is referred to herein as
"Maturity"). Interest payable at
Maturity will be payable to the Person
to whom the principal of such Note is
payable.
If an Interest Payment Date or the date
of Maturity with respect to any Fixed
Rate Note falls on a day that is not a
Business Day (as defined below), the
payment of interest required to be made
on such Interest Payment Date will be
made on the next succeeding Business Day
with the same force and effect as if
made on such Interest Payment Date and
no interest will accrue on such payment
for the period from and after such
Interest Payment Date to the next
succeeding Business Day. If an Interest
Payment Date (other than at Maturity)
with respect to any Floating Rate Note
would otherwise fall on a day that is
not a Business Day, such Interest
Payment Date will be postponed to the
next succeeding day that is a Business
Day, except that in the case of a LIBOR
Note (or a Note for which LIBOR is an
applicable Interest Rate Basis), if such
Business Day falls in the next
succeeding calendar month, such Interest
Payment Date will be the immediately
preceding Business Day. If the date of
Maturity of a Floating Rate Note falls
on a day that is not a Business Day, the
payment of principal, premium, if any,
and interest will be made on the next
succeeding Business Day with the same
force and effect as if made on such date
of maturity and no interest on such
payment will accrue for the period from
and after such Maturity to the next
succeeding Business Day. For additional
special provisions relating to Floating
Rate Notes, see the Prospectus and the
applicable Pricing Supplement.
5
<PAGE> 6
Regular Record Dates. Unless otherwise
provided in the applicable Pricing
Supplement, the "Regular Record Date"
with respect to any Interest Payment
Date for a Note shall be the date 15
calendar days (whether or not a Business
Day) immediately preceding such Interest
Payment Date.
Interest Payment Dates. Interest
payments will be made on each Interest
Payment Date commencing with the first
Interest Payment Date following the
Original Issue Date and on the Maturity
Date; provided, however, the first
payment of interest on any Note
originally issued between a Regular
Record Date and the related Interest
Payment Date or on an Interest Payment
Date will occur on the Interest Payment
Date immediately following the next
succeeding Regular Record Date.
Fixed Rate Notes. Unless otherwise
provided in an applicable Fixed Rate
Note, interest payments on Fixed Rate
Notes will be made semiannually on and ,
of each year and at Maturity.
Floating Rate Notes. Interest payments
on Floating Rate Notes will be made as
specified in the related Floating Rate
Note and Pricing Supplement.
Acceptance and
Rejection of Offers
from Solicitation
as Agents: If agreed upon by the Corporation and
any Agent, such Agent, acting solely as
agent for the Corporation and not as
principal, will solicit purchases of the
Notes. Each Agent will communicate to
the Corporation, orally or in writing,
each offer to purchase Notes solicited
by such Agent on an agency basis, other
than those offers rejected by such
Agent. Each Agent has the right, in its
discretion reasonably exercised, to
reject any proposed purchase of Notes,
as a whole or in part, and any such
rejection is not deemed a breach of such
Agent's agreement contained in the
Distribution Agreement. The Corporation
may accept or reject any proposed
purchase of the Notes, in whole or in
part, any such rejection is not deemed a
breach of the Corporation's agreements
contained in the Distribution Agreement.
Preparation of
Pricing Supplement: If any offer to purchase a Note is
accepted by the Corporation, the
Corporation will promptly prepare a
6
<PAGE> 7
Pricing Supplement reflecting the terms
of such Note and file such Pricing
Supplement with the Commission in
accordance with Rule 424 under the
Securities Act of 1933 and Rule 901 of
Regulation S-T. Information to be
included in the Pricing Supplement shall
include:
1. the name of the Corporation;
2. the title of the securities,
including series designation, if
any;
3. the date of the Pricing Supplement
and the dates of the Prospectus and
Prospectus Supplement to which the
Pricing Supplement relates;
4. the name of the Offering Agent (as
hereinafter defined);
5. whether such Notes are being sold to
the Offering Agent as principal or
to an investor or other purchaser
through the Offering Agent acting as
agent for the Corporation;
6. with respect to Notes sold to the
Offering Agent as principal, whether
such Notes will be resold by the
Offering Agent to investors and other
purchasers at (i) a fixed public
offering price of a specified
percentage of their principal amount,
(ii) varying prices related to
prevailing market prices at the time
of resale to be determined by the
Offering Agent or (iii) 100% of
their principal amount;
7. with respect to Notes sold to an
investor or other purchaser through
the Offering Agent acting as agent
for the Corporation, whether such
Notes will be sold at (i) 100% of
their principal amount or (ii)
another specified percentage of
their principal amount;
8. the Offering Agent's commission or
underwriting discount;
9. net proceeds to the Corporation;
10. Principal Amount, Specified
Currency, Original Issue Date,
Stated Maturity Date, Authorized
Denomination, Interest Payment
Date(s), Redemption Date, if any,
Initial Redemption Percentage, if
any, Annual Redemption Percentage
Reduction, if any,
7
<PAGE> 8
and Optional Repayment Date or Dates, if
any, Exchange Rate Agent, if any,
Default Rate, if any, Option to Elect
Payment in Specified Currency, Day Count
Convention, whether such Note is a
Discount Note (and, if so, the Issue
Price), and, in the case of Fixed Rate
Notes, Interest Rate, Regular Record
Date or Dates (if other than and of
each year), and, in the case of Floating
Rate Notes, Interest Category, Interest
Rate Basis or Bases, LIBOR Rueters or
LIBOR Telerate, if applicable,
Designated LIBOR Currency, if
applicable, Designated CMT Telerate
Page, if applicable, Designated CMT
Maturity Index, if applicable, Index
Maturity, if applicable, Initial
Interest Rate, Maximum Interest Rate, if
any, Minimum Interest Rate, if any,
Initial Interest Reset Date, Interest
Reset Date or Dates, Interest Reset
Period, Spread and/or Spread Multiplier,
if any, Calculation Agent; and Interest
Payment Period;
11. the information with respect to the
terms of the Notes set forth below under
"Procedures for Notes Issued in
Book-Entry Form - Settlement
Procedures," items 1, 2, 6, 7, 8 and 9;
and
12. any other provisions of the Notes
material to investors or other
purchasers of the Notes not otherwise
specified in the Prospectus or Pricing
Supplement.
One copy of such filed document will be
sent by telecopy or overnight express
(for delivery by the close of business
on the applicable trade date, but in no
event later than 11:00 a.m., New York
City time, on the Business Day following
the applicable trade date) to the Agent
which made or presented the offer to
purchase the applicable Note (such Agent
in such capacity, the "Offering Agent"),
the Trustee, Issuing Agent and the
Paying Agent at the following applicable
address:
8
<PAGE> 9
if to Merrill Lynch & Co., to:
Merrill Lynch & Co.--Tritech Services
44-B Colonial Drive
Piscataway, New Jersey 08854
Attention: Nachman Kimerling/Final Prospectus Unit
telephone (732) 885-2768
telecopier: (732) 858-2774/5/6
with a copy to:
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
10th Floor
New York, New York 10281-1310
Attention: Product Management
telecopier: (212) 449-2234
if to Bears, Stearns & Co. Inc., to:
Bears, Stearns & Co. Inc.
245 Park Avenue
4th Floor
New York, New York 10167
Attention: Medium-Term Note Desk
telephone: (212) 272-5371
telecopier: (212) 272-6227
if to the Trustee (in such capacity or as Issuing Agent or
Paying Agent), to:
Attention:
telecopier:
For record keeping purposes, one copy of each Pricing
Supplement, as so filed, shall also be mailed or
telecopied to Brown & Wood LLP at One World Trade Center,
New York, New York 10048, Attention: Daniel M. Rossner.
In each instance that a Pricing Supplement is prepared,
the Offering Agent will provide a copy of such Pricing
Supplement to each investor or purchaser of the relevant
Notes or its agent. Outdated Pricing Supplements, and the
supplemented Prospectuses to which they are attached
(other than those retained for files) will be destroyed.
9
<PAGE> 10
Settlement: The receipt of immediately available
funds by the Corporation in payment for
a Note and the authentication and
delivery of such Note shall, with
respect to such Note, constitute
"settlement." Offers accepted by the
Corporation will be settled in three
Business Days, or at a time as the
purchaser, the applicable Agent and the
Corporation shall agree, pursuant to the
timetable for settlement set forth in
Part II hereof under "Settlement
Procedures" with respect to Book-Entry
Notes (each such date fixed for
settlement is hereinafter referred to as
a "Settlement Date"). If procedures A
and B of the applicable Settlement
Procedures with respect to a particular
offer are not completed on or before the
time set forth under the applicable
"Settlement Procedures Timetable," such
offer shall not be settled until the
Business Day following the completion of
settlement procedures A and B or such
later date as the purchaser and the
Corporation shall agree.
The foregoing settlement procedures may
be modified, with respect to any
purchase of Notes by an Agent as
principal, if so agreed by the
Corporation and such Agent.
10
<PAGE> 11
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to
change the interest rate or any other
variable term on any Notes being sold by
the Corporation, the Corporation will
promptly advise the Agents and the
Issuing Agent by facsimile transmission
and the Agents will forthwith suspend
solicitation of offers to purchase such
Notes. The Agents will telephone the
Corporation with recommendations as to
the changed interest rates or other
variable terms. At such time as the
Corporation advises the Agents and the
Issuing Agent by facsimile transmission
of the new interest rates or other
variable terms, the Agents may resume
solicitation of offers to purchase such
Notes. Until such time only "indications
of interest" may be recorded.
Immediately after acceptance by the
Corporation of an offer to purchase
Notes at a new interest rate or new
variable term, the Corporation, the
Offering Agent and the Issuing Agent
shall follow the procedures set forth
under the applicable "Settlement
Procedures."
Suspension of
Solicitation;
Amendment or
Supplement: The Corporation may instruct the Agents
to suspend solicitation of offers to
purchase Notes at any time. Upon receipt
of such instructions, the Agents will
forthwith suspend solicitation of offers
to purchase from the Corporation until
such time as the Corporation has advised
them that solicitation of offers to
purchase may be resumed. If the
Corporation decides to amend or
supplement the Registration Statement or
the Prospectus (other than to establish
or change interest rates or formulas,
maturities, prices or other similar
variable terms with respect to the Notes
or as provided by the Distribution
Agreement), it will promptly advise the
Agents and will furnish the Agents and
their counsel with copies of the
proposed amendment or supplement at the
following applicable address:
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
10th Floor
New York, New York 10281-1310
11
<PAGE> 12
Attention: MTN Product Management
telecopier: (212) 449-2234
Bears, Stearns & Co. Inc.
245 Park Avenue
4th Floor
New York, New York 10167
Attention: Medium-Term Note Desk
telephone: (212) 272-5371
telecopier: (212) 272-6227
For record keeping purposes, one copy of
each Pricing Supplement, as so filed,
shall also be mailed or telecopied to
Brown & Wood LLP at One World Trade
Center, New York, New York 10048,
Attention: Daniel M.
Rossner.
In the event that at the time the
solicitation of offers to purchase from
the Corporation is suspended (other than
to establish or change interest rates or
formulas, maturities, prices or other
similar variable terms with respect to
the Notes) there shall be any offers to
purchase Notes that have been accepted
by the Corporation which have not been
settled, the Corporation will promptly
advise the Offering Agent and the
Issuing Agent whether such offers may be
settled and whether copies of the
Prospectus as theretofore amended and/or
supplemented as in effect at the time of
the suspension may be delivered in
connection with the settlement of such
offers. The Corporation will have the
sole responsibility for such decision
and for any arrangements which may be
made in the event that the Corporation
determines that such offers may not be
settled or that copies of such
Prospectus may not be so delivered.
Delivery of Prospectus
and applicable
Pricing Supplement: A copy of the most recent Prospectus and
the applicable Pricing Supplement must
accompany or precede the earlier of (a)
the written confirmation of a sale sent
to an investor or other purchaser or its
agent and (b) the delivery of Notes to
an investor or other purchaser or its
agent.
12
<PAGE> 13
Authenticity of
Signatures: The Agents will have no obligation or
liability to the Corporation, the
Trustee, the Issuing Agent or the Paying
Agent in respect of the authenticity of
the signature of any officer, employee
or agent of the Corporation, the
Trustee, the Issuing Agent or the Paying
Agent on any Note.
Documents Incorporated
by Reference: At the Agent's request the Corporation
shall supply the Agents with an adequate
supply of all documents incorporated by
reference in the Registration Statement
and the Prospectus.
Business Day: Unless otherwise provided in the Notes,
"Business Day" means, with respect to
any Note, any day, other than a Saturday
or Sunday, that is neither a legal
holiday nor a day on which commercial
banks are authorized or required by law,
regulation or executive order to close
in The City of New York; provided,
however, that with respect to Foreign
Currency Notes the payment of which is
to be made in a Specified Currency other
than U.S. dollars, such day is also a
day on which commercial banks are
authorized or required by law,
regulation or executive order to close
in the Principal Financial Center (as
defined below) of the country issuing
such Specified Currency unless the
Specified Currency is Euro, in which
case such day is also a day on which the
Trans-European Automated Real-Time Gross
Settlement Express Target (TARGET)
System is open; provided, further, that,
with respect to Notes for which LIBOR is
an applicable Interest Rate Basis, such
day is also a London Business Day.
"London Business Day" means any day on
which commercial banks are open for
business, including dealings in the
Designated LIBOR Currency, in London. It
being understood that if no such
currency or composite currency is
specified in the applicable Pricing
Supplement, the Index Currency shall be
U.S. dollars. "Principal Financial
Center" means (i) the capital city of
the country issuing the Specified
Currency or (ii) the capital city of the
country to which the Designated LIBOR
Currency relates, as applicable, except,
in the case of (i) or (ii) above, that
with respect to U.S. dollars, Australian
dollars, Canadian dollars, Deutsche
marks, Dutch guilders, Portuguese
escudos, South African rand and Swiss
francs, the Principal Financial Center
shall be The City of New York, Sydney
and (solely in the case of the Specified
Currency) Melbourne, Toronto, Frankfurt,
13
<PAGE> 14
Amsterdam, London (solely in the case of
the Designated LIBOR Currency),
Johannesburg and Zurich, respectively.
14
<PAGE> 15
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in book-entry form
for eligibility in the book-entry system maintained by DTC, the Issuing Agent
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a
Bring-Down Letter of Representation from the Corporation and the Issuing Agent
to DTC, dated , 1999, and a Certificate of Deposit Agreement, dated
_____________, between the Issuing Agent and DTC, as amended (the "Certificate
Agreement"), and its obligations as a participant in DTC, including DTC's
Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in
book-entry form having the same Original
Issue Date, Specified Currency, Interest
Rate, Default Rate, Interest Payment
Dates, Day Count Convention, Redemption
and/or Repayment terms, if any, and
Stated Maturity Date (collectively, the
"Fixed Rate Terms") will be represented
initially by a single Book-Entry Note;
and all Floating Rate Notes issued in
book-entry form having the same Original
Issue Date, Specified Currency, Interest
Category, formula for the calculation of
interest, and specifying the Interest
Rate Basis or Bases, which may be the CD
Rate, the CMT Rate, the Commercial Paper
Rate, the 11th District Cost of Funds
Rate, the Federal Funds Rate, LIBOR, the
Prime Rate or the Treasury Rate or any
other interest rate basis or formula,
Initial Interest Rate, Default Rate,
Index Maturity, Spread and/or Spread
Multiplier, if any, Day Count
Convention, Minimum Interest Rate, if
any, Maximum Interest Rate, if any,
redemption and/or repayment terms, if
any, Interest Payment Dates, Initial
Interest Reset Date, Interest Reset
Dates and Stated Maturity (collectively,
"Floating Rate Terms") will be
represented initially by a single
Book-Entry Note.
Each Book-Entry Note will be dated and
issued as of the date of its
authentication by the Issuing Agent. The
date from which interest will begin to
accrue with respect to each Book-Entry
Note will be (a) with respect to an
original Book-Entry Note (or any portion
thereof), its Original Issue Date and
(b) with respect to any Book-Entry Note
(or portion thereof) issued subsequently
upon exchange of a Book-Entry Note or in
lieu of a destroyed, lost or stolen
Book-Entry Note, the most recent
Interest Payment Date to which interest
has been paid or duly provided for on
the predecessor Book-Entry Note or Notes
15
<PAGE> 16
(or if no such payment or provision has
been made, the Original Issue Date of
the predecessor Book-Entry Note or
Notes), regardless of the date of
authentication of such subsequently
issued Book-Entry Note. No Book-Entry
Note shall represent any Note issued in
certificated form.
For other variable terms with respect to
the Fixed Rate Notes and Floating Rate
Notes, see the Prospectus and the
applicable Pricing Supplement.
Except as provided in the applicable
Indenture, no owner of a beneficial
interest in a Book-Entry Note shall be
entitled to receive any Note issued in
certificated form.
Identification: The Corporation has arranged with the
CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of two
series of CUSIP numbers, each of which
consists of approximately 900 CUSIP
numbers which have been reserved for and
relate to Book-Entry Notes and the
Corporation has delivered to each of the
Trustee, the Issuing Agent and DTC a
list of such CUSIP numbers. The
Corporation will assign CUSIP numbers to
Book-Entry Notes as described below
under Settlement Procedure B. DTC will
notify the CUSIP Service Bureau
periodically of the CUSIP numbers that
the Corporation has assigned to
Book-Entry Notes. The Trustee or the
Issuing Agent, as the case may be, will
notify the Corporation at any time when
fewer than 100 of the reserved CUSIP
numbers of either series remain
unassigned to Book-Entry Notes, and, if
it deems necessary, the Corporation will
reserve and obtain additional CUSIP
numbers for assignment to Book-Entry
Notes. Upon obtaining such additional
CUSIP numbers, the Corporation will
deliver a list of such additional
numbers to the Trustee, the Issuing
Agent and DTC. An issue of Notes having
an aggregate principal amount in excess
of $200,000,000 (or the equivalent
thereof in one or more foreign or
composite currencies) and otherwise
required to be represented by the same
Book-Entry Note will instead be
represented by two or more Book-Entry
Notes which shall all be assigned the
same CUSIP number.
Registration: Unless otherwise specified by DTC, all
Book-Entry Notes will be registered in
the name of Cede & Co., as nominee for
DTC, on the register maintained by the
Issuing Agent under the Indenture. The
beneficial owner of a Note issued in
book-entry form (i.e., an owner of a
beneficial interest in
16
<PAGE> 17
a Book-Entry Note) (or one or more
indirect participants in DTC designated
by such owner) will designate one or
more participants in DTC (with respect
to such Note issued in book-entry form,
the "Participants") to act as agent for
such beneficial owner in connection with
the book-entry system maintained by DTC,
and DTC will record in book-entry form,
in accordance with instructions provided
by such Participants, a credit balance
with respect to such Note issued in
book-entry form in the account of such
Participants. The ownership interest of
such beneficial owner in such Note
issued in book-entry form will be
recorded through the records of such
Participants or through the separate
records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of beneficial ownership
interests in a Book-Entry Note will be
accomplished by book entries made by DTC
and, in turn, by Participants (and, in
certain cases, one or more indirect
participants in DTC) acting on behalf of
beneficial transferors and transferees
of such Book-Entry Note.
Exchanges: The Issuing Agent may deliver to DTC and
the CUSIP Service Bureau at any time a
written notice specifying (a) the CUSIP
numbers of two or more Book-Entry Notes
outstanding on such date that represent
Notes having the same Fixed Rate Terms
or Floating Rate Terms, as the case may
be (other than Original Issue Dates),
and for which interest has been paid to
the same date; (b) a date, occurring at
least 30 days after such written notice
is delivered and at least 30 days before
the next Interest Payment Date for the
related Notes issued in book-entry form,
on which such Book-Entry Notes shall be
exchanged for a single replacement
Book-Entry Note; and (c) a new CUSIP
number, obtained from the Corporation,
to be assigned to such replacement
Book-Entry Note. Upon receipt of such a
notice, DTC will send to its
Participants (including the Issuing
Agent) a written reorganization notice
to the effect that such exchange will
occur on such date. Prior to the
specified exchange date, the Issuing
Agent will deliver to the CUSIP Service
Bureau written notice setting forth such
exchange date and the new CUSIP number
and stating that, as of such exchange
date, the CUSIP numbers of the
Book-Entry Notes to be exchanged will no
longer be valid. On the specified
exchange date, the Issuing Agent will
exchange such Book-Entry Notes for a
single Book-Entry Note bearing the new
CUSIP number and the CUSIP
17
<PAGE> 18
numbers of the exchanged Book-Entry
Notes will, in accordance with CUSIP
Service Bureau procedures, be canceled
and not immediately reassigned.
Notwithstanding the foregoing, if the
Book-Entry Notes to be exchanged exceed
$200,000,000 (or the equivalent thereof
in one or more foreign or composite
currencies) in aggregate principal
amount, one replacement Book-Entry Note
will be authenticated and issued to
represent each $200,000,000 (or the
equivalent thereof in one or more
foreign or composite currencies) of
principal amount of the exchanged
Book-Entry Notes and an additional
Book-Entry Note or Notes will be
authenticated and issued to represent
any remaining principal amount of such
Book-Entry Notes (See "Denominations"
below).
Denominations: Unless otherwise provided in the
applicable Pricing Supplement, Notes
issued in book-entry form will be issued
in denominations of $1,000 and integral
multiples of $1,000 in excess thereof.
Book-Entry Notes will be denominated in
principal amounts not in excess of
$200,000,000 (or the equivalent thereof
in one or more foreign or composite
currencies). If one or more Notes issued
in book-entry form having an aggregate
principal amount in excess of
$200,000,000 (or the equivalent thereof
in one or more foreign or composite
currencies) would, but for the preceding
sentence, be represented by a single
Book-Entry Note, then one Book-Entry
Note will be issued to represent each
$200,000,000 (or the equivalent thereof
in one or more foreign or composite
currencies) principal amount of such
Note or Notes issued in book-entry form
and an additional Book-Entry Note or
Notes will be issued to represent any
remaining principal amount of such Note
or Notes issued in book-entry form. In
such a case, each of the Book-Entry
Notes shall all be assigned the same
CUSIP number.
Payments of Principal
and Interest: Payments of Interest Only. Promptly
after each Regular Record Date, the
Issuing Agent will deliver to the
Corporation and DTC a written notice
specifying by CUSIP number the amount of
interest to be paid on each Book-Entry
Note on the following Interest Payment
Date (other than an Interest Payment
Date coinciding with Maturity) and the
total of such amounts. DTC will confirm
the amount payable on each Book-Entry
Note on such Interest Payment Date by
reference to the daily bond reports
published by Standard & Poor's
Corporation. On
18
<PAGE> 19
such Interest Payment Date, the
Corporation will pay to the Issuing
Agent in immediately available funds an
amount sufficient to pay the interest
then due and owing, and upon receipt of
such funds from the Corporation, the
Issuing Agent in turn will pay to DTC,
such total amount of interest due on
such Book-Entry Notes (other than at
Maturity) which is payable in U.S.
dollars, at the times and in the manner
set forth below under "Manner of
Payment." The Issuing Agent shall make
payment of that amount of interest due
and owing on any Book-Entry Notes that
Participants have elected to receive in
foreign or composite currencies directly
to such Participants.
Notice of Interest Rates and Regular
Record Dates. Promptly after each
Interest Determination Date, or
Calculation Date, as the case may be,
for Floating Rate Notes issued in
book-entry form, the Issuing Agent will
notify each of Moody's Investors
Service, Inc. and Standard & Poor's
Corporation of the interest rates
determined on such Interest
Determination Date.
Payments at Maturity. On or about the
first Business Day of each month, the
Issuing Agent will deliver to the
Corporation and DTC a written list of
principal, premium, if any, and interest
to be paid on each Book-Entry Note
maturing either at Stated Maturity, on a
Redemption Date in, or for which an
Option to Elect Repayment has been
received with respect to, such month.
The Issuing Agent, the Corporation and
DTC will confirm the amounts of such
principal, premium, if any, and interest
payments with respect to a Book-Entry
Note on or about the fifth Business Day
preceding the Maturity of such
Book-Entry Note. At such Maturity, the
Corporation will pay to the Issuing
Agent in immediately available funds an
amount sufficient to make such Maturity
payment, and upon receipt of such funds
the Issuing Agent in turn will pay to
DTC, the principal amount of such Note,
together with interest and premium, if
any, due at such Maturity, which are
payable in U.S. dollars, at the times
and in the manner set forth below under
"Manner of Payment." The Issuing Agent
shall make the payment of the principal,
premium, if any, and interest to be paid
at the Maturity of each Book-Entry Note
that Participants have elected to
receive in foreign or composite
currencies directly to such
Participants. Promptly after (i) payment
to DTC of the principal, premium, if
any, and interest due at the Maturity of
such Book-Entry Note which are payable
in U.S. dollars and (ii)
19
<PAGE> 20
payment of principal, premium, if any,
and interest due at the Maturity of such
Book-Entry Note to those Participants
who have elected to receive such
payments in foreign or composite
currencies, the Issuing Agent will
cancel such Book-Entry Note and deliver
it to the Corporation with an
appropriate debit advice. On the first
Business Day of each month, the Issuing
Agent will deliver to the Corporation a
written statement indicating the total
principal amount of outstanding
Book-Entry Notes as of the close of
business on the immediately preceding
Business Day.
Manner of Payment. The total amount of
any principal, premium, if any, and
interest due on Book-Entry Notes on any
Interest Payment Date or at Maturity, as
the case may be, which is payable in
U.S. dollars shall be paid by the
Corporation to the Issuing Agent in
funds available for use by the Issuing
Agent no later than 10:00 a.m., New York
City time, on such date. The Corporation
will make such payment on such
Book-Entry Notes to an account specified
by the Issuing Agent. Upon receipt of
such funds, the Issuing Agent will pay
by separate wire transfer (using Fedwire
message entry instructions in a form
previously specified by DTC) to an
account at the Federal Reserve Bank of
New York previously specified by DTC, in
funds available for immediate use by
DTC, each payment in U.S. dollars of
principal, premium, if any, and
interest, due on a Book-Entry Note on
such date. Thereafter on such date, DTC
will pay, in accordance with its SDFS
operating procedures then in effect,
such amounts in funds available for
immediate use to the respective
Participants in whose names the
beneficial interests in such Notes are
recorded in the book-entry system
maintained by DTC. Neither the
Corporation, the Issuing Agent nor the
Trustee shall have any responsibility or
liability for the payment in U.S.
dollars by DTC of the principal of,
premium, if any, or interest on, the
Book-Entry Notes to such Participants.
The Issuing Agent shall make all
payments of principal, premium, if any,
and interest on each Book-Entry Note
that Participants have elected to
receive in foreign or composite
currencies directly to such
Participants.
Withholding Taxes. The amount of any
taxes required under applicable law to
be withheld from any interest payment on
a Note will be determined and withheld
by the Participant, indirect participant
in DTC or other Person responsible for
forwarding payments and materials
directly to the beneficial owner of such
Note.
20
<PAGE> 21
Settlement
Procedures: Settlement Procedures with regard to each Note
in book-entry form purchased by an Agent, as
principal, or sold through an Agent, as agent
of the Corporation, will be as follows:
A. The Offering Agent will advise
the Corporation by telephone,
confirmed by facsimile, of the
following Settlement information:
1. Principal Amount, Authorized
Denomination, Specified Currency
and Original Issue Date of the
Note.
2. Exchange Rate Agent, if any.
3. Whether such Notes are Senior
Notes or Subordinated Notes.
4. (a) Fixed Rate Notes:
(i) Interest Rate
(ii) Interest Payment Dates
(b) Floating Rate Notes:
(i) Interest Category
(ii) Interest Rate Basis or
Bases
(iii) Initial Interest Rate
(iv) Spread and/or Spread
Multiplier, if any
(v) Initial Interest Reset
Date
(vi) Interest Rate Reset
Period
(vii) Interest Reset Date or
Dates
(viii) Interest Payment Dates
(ix) Interest Payment
Period
(x) Regular Record Dates
(xi) Index Maturity, if any
21
<PAGE> 22
(xii) Maximum and/or Minimum Interest
Rates, if any
(xiii) Day Count Convention
(xiv) Calculation Agent
(xv) If LIBOR, indicate LIBOR Reuters or
LIBOR Telerate
(xvi) If CMT Rate, indicate Designated
CMT Telerate Page and Designated
CMT Maturity Index
5. Price to public, if any, of the Note (or
whether the Note is being offered at varying
prices relating to prevailing market prices
at time of resale as determined by the
Offering Agent).
6. Trade Date.
7. Settlement Date (Original Issue Date).
8. Stated Maturity.
9. Redemption provisions, if any, including:
Initial Redemption Date, Initial Redemption
Percentage and Annual Redemption Percentage
Reduction.
10. Repayment provisions, if any.
11. Default Rate, if any.
12. Optional Repayment Date(s).
13. Net proceeds to the Corporation.
14. The Offering Agent's commission or
underwriting discount.
15. Whether such Notes are being sold to the
Offering Agent as principal or to an
investor or other purchaser through the
Offering Agent acting as agent for the
Corporation.
16. Whether such Note is a Discount Note and the
terms thereof.
22
<PAGE> 23
17. Such other information specified with
respect to the Notes (whether by Addendum or
otherwise).
B. The Corporation will assign a CUSIP number to the
Book-Entry Note representing such Note and then
advise the Issuing Agent by facsimile transmission or
other electronic transmission of the above settlement
information received from the Offering Agent, such
CUSIP number and the name of the Offering Agent. The
Corporation will also advise the Offering Agent of
the CUSIP number assigned to the Book-Entry Note.
C. The Issuing Agent will communicate to DTC and the
Offering Agent through DTC's Participant Terminal
System, a pending deposit message specifying the
following settlement information:
1. The information set forth in the Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of the
Issuing Agent and the Offering Agent.
3. Identification of the Book-Entry Note as a
Fixed Rate Book-Entry Note or Floating Rate
Book-Entry Note.
4. Initial Interest Payment Date for such Note,
number of days by which such date succeeds
the related record date for DTC purposes
(or, in the case of Floating Rate Notes
which reset daily or weekly, the date five
calendar days preceding the Interest Payment
Date) and, if then calculable, the amount of
interest payable on such Interest Payment
Date (which amount shall have been confirmed
by the Issuing Agent).
5. CUSIP number of the Book-Entry Note
representing such Note.
6. Whether such Book-Entry Note represents any
other Notes issued or to be issued in
book-entry form.
DTC will arrange for each pending deposit message
described above to be transmitted to Standard &
23
<PAGE> 24
Poor's Corporation, which will use the information in
the message to include certain terms of the related
Book-Entry Note in the appropriate daily bond report
published by Standard & Poor's Corporation.
D. The Issuing Agent will complete and authenticate the
Book-Entry Note representing such Note.
E. DTC will credit such Note to the participant account
of the Issuing Agent maintained by DTC.
F. The Issuing Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing
DTC (i) to debit such Note to the Issuing Agent's
participant account and credit such Note to the
participant account of the Offering Agent maintained
by DTC and (ii) to debit the settlement account of
the Offering Agent and credit the settlement account
of the Issuing Agent maintained by DTC, in an amount
equal to the price of such Note less such Offering
Agent's discount or underwriting commission, as
applicable. Any entry of such a deliver order shall
be deemed to constitute a representation and warranty
by the Issuing Agent to DTC that (i) the Book-Entry
Note representing such Note has been issued and
authenticated and (ii) the Issuing Agent is holding
such Book-Entry Note pursuant to the Certificate
Agreement.
G. In the case of Book-Entry Notes sold through the
Offering Agent, as agent, the Offering Agent will
enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such
Note to the Offering Agent's participant account and
credit such Note to the participant account of the
Participants maintained by DTC and (ii) to debit the
settlement accounts of such Participants and credit
the settlement account of the Offering Agent
maintained by DTC in an amount equal to the initial
public offering price of such Note.
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures F and G
will be settled in accordance with SDFS operating
procedures in effect on the Settlement Date.
24
<PAGE> 25
I. Upon receipt, the Issuing Agent will pay the
Corporation, by wire transfer of immediately
available funds to an account specified by the
Corporation to the Issuing Agent from time to time,
in the amount transferred to the Issuing Agent in
accordance with Settlement Procedure F.
J. The Issuing Agent will send a copy of the Book-Entry
Note by first class mail to the Corporation together
with a statement setting forth the principal amount
of Notes outstanding as of the related Settlement
Date after giving effect to such transaction and all
other offers to purchase Notes of which the
Corporation has advised the Issuing Agent but which
have not yet been settled.
K. If the Note was sold through the Offering Agent, as
agent, the Offering Agent will confirm the purchase
of such Note to the investor or other purchaser
either by transmitting to the Participant with
respect to such Note a confirmation order through
DTC's Participant Terminal System or by mailing a
written confirmation to such investor or other
purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the
Corporation, Settlement Procedures "A" through "K"
set forth above shall be completed as soon as
possible following the trade but not later than the
respective times (New York City time) set forth
below:
<TABLE>
<CAPTION>
SETTLEMENT
PROCEDURE TIME
---------- ----
<S> <C>
A 11:00 a.m. on the trade date or within one hour
following the trade
B 12:00 noon on the trade date or within one
hour following the trade
C No later than the close of business on the
trade date
D 9:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
</TABLE>
25
<PAGE> 26
<TABLE>
<S> <C>
F-G No later than 2:00 p.m. on Settlement Date
H 4:00 p.m. on Settlement Date
I-K 5:00 p.m. on Settlement Date
</TABLE>
If a sale is to be settled more than one Business Day
after the trade date, Settlement Procedures A, B, and
C may, if necessary, be completed at any time prior
to the specified times on the first Business Day
after such trade date.
Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on the Settlement
Date.
If settlement of a Note issued in book-entry form is
rescheduled or canceled, the Issuing Agent will
deliver to DTC, through DTC's Participant Terminal
System, a cancellation message to such effect by no
later than 5:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled
Settlement Date.
Failure to Settle: If the Issuing Agent fails to enter an SDFS deliver
order with respect to a Book-Entry Note issued in
book-entry form pursuant to Settlement Procedure F,
the Issuing Agent may deliver to DTC, through DTC's
Participant Terminal System, as soon as practicable a
withdrawal message instructing DTC to debit such Note
to the participant account of the Issuing Agent
maintained at DTC. DTC will process the withdrawal
message, provided that such participant account
contains a principal amount of the Book-Entry Note
representing such Note that is at least equal to the
principal amount to be debited. If withdrawal
messages are processed with respect to all the Notes
represented by a Book-Entry Note, the Issuing Agent
will mark such Book-Entry Note "canceled," make
appropriate entries in its records and send
certification of destruction of such canceled
Book-Entry Note to the Corporation. The CUSIP number
assigned to such Book-Entry Note shall, in accordance
with CUSIP Service Bureau procedures, be canceled and
not immediately reassigned. If withdrawal messages
are processed with respect to a portion of the Notes
represented by a Book-Entry Note, the Issuing Agent
will exchange such Book-Entry Note for two Book-Entry
Notes, one of which shall represent the Book-Entry
Notes
26
<PAGE> 27
for which withdrawal messages are processed and shall
be canceled immediately after issuance, and the other
of which shall represent the other Notes previously
represented by the surrendered Book-Entry Note and
shall bear the CUSIP number of the surrendered
Book-Entry Note.
In the case of any Note in book-entry form sold
through the Offering Agent, as agent, if the purchase
price for any Book-Entry Note is not timely paid to
the Participants with respect to such Note by the
beneficial investor or other purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such investor or other
purchaser), such Participants and, in turn, the
related Offering Agent may enter SDFS deliver orders
through DTC's Participant Terminal System reversing
the orders entered pursuant to Settlement Procedures
F and G, respectively. Thereafter, the Issuing Agent
will deliver the withdrawal message and take the
related actions described in the preceding paragraph.
If such failure shall have occurred for any reason
other than default by the applicable Offering Agent
to perform its obligations hereunder or under the
Distribution Agreement, the Corporation will
reimburse such Offering Agent on an equitable basis
for its reasonable loss of the use of funds during
the period when the funds were credited to the
account of the Corporation.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event of
a failure to settle with respect to a Note that was
to have been represented by a Book-Entry Note also
representing other Notes, the Issuing Agent will
provide, in accordance with Settlement Procedure D,
for the authentication and issuance of a Book-Entry
Note representing such remaining Notes and will make
appropriate entries in its records.
27
<PAGE> 1
EXHIBIT 25.1
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT
TO SECTION 305(b)(2)
--------------------
----------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
---------------------------------
DORAL FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
SAN JUAN 66-0312162
(State or other jurisdiction of (I.R.S. employer identification no.)
Incorporation or organization)
1159 FRANKLIN D. ROOSEVELT AVENUE
SAN JUAN, PUERTO RICO
00920 (787) 771-3901
(Address, including zip code, and telephone
number of principal executive offices)
SENIOR DEBT SECURITIES
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising authority to
which it is subject.
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
ITEM 3.-15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of Bankers Trust Company
dated August 7, 1990, Certificate of Amendment of the
Organization Certificate of Bankers Trust Company dated June
21, 1995 - Incorporated herein by reference to Exhibit 1 filed
with Form T-1 Statement, Registration No. 33-65171,
Certificate of Amendment of the Organization Certificate of
Bankers Trust Company dated March 20, 1996, incorporate by
referenced to Exhibit 1 filed with Form T-1 Statement,
Registration No. 333-25843 and Certificate of Amendment of the
Organization Certificate of Bankers Trust Company dated June
19, 1997, copy attached.
EXHIBIT 2 - Certificate of Authority to commence business - Incorporated
herein by reference to Exhibit 2 filed with Form T-1
Statement, Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise corporate trust
powers - Incorporated herein by reference to Exhibit 2 filed
with Form T-1 Statement, Registration No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, as amended on
November 18, 1997. Copy attached.
-2-
<PAGE> 3
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company required by Section
321(b) of the Act. - Incorporated herein by reference to
Exhibit 4 filed with Form T-1 Statement, Registration No.
22-18864.
EXHIBIT 7 - The latest report of condition of Bankers Trust Company
dated as of December 31, 1998. Copy attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 27th day
of April, 1999.
BANKERS TRUST COMPANY
By: /s/Susan Johnson
---------------------------
Susan Johnson
Assistant Vice President
-4-
<PAGE> 5
State of New York,
Banking Department
I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION
8005 OF THE BANKING LAW," dated June 19, 1997, providing for an increase in
authorized capital stock from $1,601,666,670 consisting of 100,166,667 shares
with a par value of $10 each designated as Common Stock and 600 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$2,001,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 1,000 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at the City of New
York, this 27TH day of June in the Year of our Lord one thousand nine hundred
and NINETY-SEVEN.
Manuel Kursky
-----------------------------
Deputy Superintendent of Banks
<PAGE> 6
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-----------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of march, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Six Hundred and One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided into
One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred
Sixty-Seven (100,166,667) shares with a par value of $10 each
designated as Common Stock and 600 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six
Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred
Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 1000 shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred Stock."
<PAGE> 7
5. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this
19th day of June, 1997.
James T. Byrne, Jr.
-------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
-------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows the
contents thereof, and that the statements herein contained are true.
Lea Lahtinen
------------
Lea Lahtinen
Sworn to before me this 19th day of June, 1997.
Sandra L. West
--------------
Notary Public
SANDRA L. WEST
Notary Public State of New York
No. 31-4942101
Qualified in New York County
Commission Expires September 19, 1998
<PAGE> 8
BY-LAWS
NOVEMBER 18, 1997
BANKERS TRUST COMPANY
NEW YORK
<PAGE> 9
BY-LAWS
OF
BANKERS TRUST COMPANY
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this Company shall be held
at the office of the Company in the Borough of Manhattan, City of New York, on
the third Tuesday in January of each year, for the election of directors and
such other business as may properly come before said meeting.
SECTION 2. Special meetings of stockholders other than those regulated by
statute may be called at any time by a majority of the directors. It shall be
the duty of the Chairman of the Board, the Chief Executive Officer or the
President to call such meetings whenever requested in writing to do so by
stockholders owning a majority of the capital stock.
SECTION 3. At all meetings of stockholders, there shall be present, either in
person or by proxy, stockholders owning a majority of the capital stock of the
Company, in order to constitute a quorum, except at special elections of
directors, as provided by law, but less than a quorum shall have power to
adjourn any meeting.
SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive
Officer or, in his absence, the President or, in their absence, the senior
officer present, shall preside at meetings of the stockholders and shall direct
the proceedings and the order of business. The Secretary shall act as secretary
of such meetings and record the proceedings.
ARTICLE II
DIRECTORS
SECTION 1. The affairs of the Company shall be managed and its corporate powers
exercised by a Board of Directors consisting of such number of directors, but
not less than ten nor more than twenty-five, as may from time to time be fixed
by resolution adopted by a majority of the directors then in office, or by the
stockholders. In the event of any increase in the number of directors,
additional directors may be elected within the limitations so fixed, either by
the stockholders or within the limitations imposed by law, by a majority of
directors then in office. One-third of the number of directors, as fixed from
time to time, shall constitute a quorum. Any one or more members of the Board of
Directors or any Committee thereof may participate in a meeting of the Board of
Directors or Committee thereof by means of a conference telephone or similar
communications equipment which
<PAGE> 10
allows all persons participating in the meeting to hear each other at the same
time. Participation by such means shall constitute presence in person at such a
meeting.
All directors hereafter elected shall hold office until the next annual meeting
of the stockholders and until their successors are elected and have qualified.
No person who shall have attained age 72 shall be eligible to be elected or
re-elected a director. Such director may, however, remain a director of the
Company until the next annual meeting of the stockholders of Bankers Trust New
York Corporation (the Company's parent) so that such director's retirement will
coincide with the retirement date from Bankers Trust New York Corporation.
No Officer-Director who shall have attained age 65, or earlier relinquishes his
responsibilities and title, shall be eligible to serve as a director.
SECTION 2. Vacancies not exceeding one-third of the whole number of the Board of
Directors may be filled by the affirmative vote of a majority of the directors
then in office, and the directors so elected shall hold office for the balance
of the unexpired term.
SECTION 3. The Chairman of the Board shall preside at meetings of the Board of
Directors. In his absence, the Chief Executive Officer or, in his absence, such
other director as the Board of Directors from time to time may designate shall
preside at such meetings.
SECTION 4. The Board of Directors may adopt such Rules and Regulations for the
conduct of its meetings and the management of the affairs of the Company as it
may deem proper, not inconsistent with the laws of the State of New York, or
these By-Laws, and all officers and employees shall strictly adhere to, and be
bound by, such Rules and Regulations.
SECTION 5. Regular meetings of the Board of Directors shall be held from time to
time on the third Tuesday of the month. If the day appointed for holding such
regular meetings shall be a legal holiday, the regular meeting to be held on
such day shall be held on the next business day thereafter. Special meetings of
the Board of Directors may be called upon at least two day's notice whenever it
may be deemed proper by the Chairman of the Board or, the Chief Executive
Officer or, in their absence, by such other director as the Board of Directors
may have designated pursuant to Section 3 of this Article, and shall be called
upon like notice whenever any three of the directors so request in writing.
SECTION 6. The compensation of directors as such or as members of committees
shall be fixed from time to time by resolution of the Board of Directors.
<PAGE> 11
ARTICLE III
COMMITTEES
SECTION 1. There shall be an Executive Committee of the Board consisting of not
less than five directors who shall be appointed annually by the Board of
Directors. The Chairman of the Board shall preside at meetings of the Executive
Committee. In his absence, the Chief Executive Officer or, in his absence, such
other member of the Committee as the Committee from time to time may designate
shall preside at such meetings.
The Executive Committee shall possess and exercise to the extent permitted by
law all of the powers of the Board of Directors, except when the latter is in
session, and shall keep minutes of its proceedings, which shall be presented to
the Board of Directors at its next subsequent meeting. All acts done and powers
and authority conferred by the Executive Committee from time to time shall be
and be deemed to be, and may be certified as being, the act and under the
authority of the Board of Directors.
A majority of the Committee shall constitute a quorum, but the Committee may act
only by the concurrent vote of not less than one-third of its members, at least
one of whom must be a director other than an officer. Any one or more directors,
even though not members of the Executive Committee, may attend any meeting of
the Committee, and the member or members of the Committee present, even though
less than a quorum, may designate any one or more of such directors as a
substitute or substitutes for any absent member or members of the Committee, and
each such substitute or substitutes shall be counted for quorum, voting, and all
other purposes as a member or members of the Committee.
SECTION 2. There shall be an Audit Committee appointed annually by resolution
adopted by a majority of the entire Board of Directors which shall consist of
such number of directors, who are not also officers of the Company, as may from
time to time be fixed by resolution adopted by the Board of Directors. The
Chairman shall be designated by the Board of Directors, who shall also from time
to time fix a quorum for meetings of the Committee. Such Committee shall conduct
the annual directors' examinations of the Company as required by the New York
State Banking Law; shall review the reports of all examinations made of the
Company by public authorities and report thereon to the Board of Directors; and
shall report to the Board of Directors such other matters as it deems advisable
with respect to the Company, its various departments and the conduct of its
operations.
In the performance of its duties, the Audit Committee may employ or retain, from
time to time, expert assistants, independent of the officers or personnel of the
Company, to make studies of the Company's assets and liabilities as the
Committee may request and to make an examination of the accounting and auditing
methods of the Company and its system of internal protective controls to the
extent considered necessary or advisable in order to determine that the
operations of the Company, including its fiduciary departments, are being
audited by the General Auditor in such a manner as to provide prudent and
adequate protection. The Committee also may direct the General Auditor to make
such investigation as it
<PAGE> 12
deems necessary or advisable with respect to the Company, its various
departments and the conduct of its operations. The Committee shall hold regular
quarterly meetings and during the intervals thereof shall meet at other times on
call of the Chairman.
SECTION 3. The Board of Directors shall have the power to appoint any other
Committees as may seem necessary, and from time to time to suspend or continue
the powers and duties of such Committees. Each Committee appointed pursuant to
this Article shall serve at the pleasure of the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall elect from among their number a Chairman
of the Board and a Chief Executive Officer; and shall also elect a President,
and may also elect a Senior Vice Chairman, one or more Vice Chairmen, one or
more Executive Vice Presidents, one or more Senior Managing Directors, one or
more Managing Directors, one or more Senior Vice Presidents, one or more
Principals, one or more Vice Presidents, one or more General Managers, a
Secretary, a Controller, a Treasurer, a General Counsel, one or more Associate
General Counsels, a General Auditor, a General Credit Auditor, and one or more
Deputy Auditors, who need not be directors. The officers of the corporation may
also include such other officers or assistant officers as shall from time to
time be elected or appointed by the Board. The Chairman of the Board or the
Chief Executive Officer or, in their absence, the President, the Senior Vice
Chairman or any Vice Chairman, may from time to time appoint assistant officers.
All officers elected or appointed by the Board of Directors shall hold their
respective offices during the pleasure of the Board of Directors, and all
assistant officers shall hold office at the pleasure of the Board or the
Chairman of the Board or the Chief Executive Officer or, in their absence, the
President, the Senior Vice Chairman or any Vice Chairman. The Board of Directors
may require any and all officers and employees to give security for the faithful
performance of their duties.
SECTION 2. The Board of Directors shall designate the Chief Executive Officer of
the Company who may also hold the additional title of Chairman of the Board,
President, Senior Vice Chairman or Vice Chairman and such person shall have,
subject to the supervision and direction of the Board of Directors or the
Executive Committee, all of the powers vested in such Chief Executive Officer by
law or by these By-Laws, or which usually attach or pertain to such office. The
other officers shall have, subject to the supervision and direction of the Board
of Directors or the Executive Committee or the Chairman of the Board or, the
Chief Executive Officer, the powers vested by law or by these By-Laws in them as
holders of their respective offices and, in addition, shall perform such other
duties as shall be assigned to them by the Board of Directors or the Executive
Committee or the Chairman of the Board or the Chief Executive Officer.
The General Auditor shall be responsible, through the Audit Committee, to the
Board of Directors for the determination of the program of the internal audit
function and the evaluation of the adequacy of the system of internal controls.
Subject to the Board of Directors, the General Auditor shall have and may
exercise
<PAGE> 13
all the powers and shall perform all the duties usual to such office and shall
have such other powers as may be prescribed or assigned to him from time to time
by the Board of Directors or vested in him by law or by these By-Laws. He shall
perform such other duties and shall make such investigations, examinations and
reports as may be prescribed or required by the Audit Committee. The General
Auditor shall have unrestricted access to all records and premises of the
Company and shall delegate such authority to his subordinates. He shall have the
duty to report to the Audit Committee on all matters concerning the internal
audit program and the adequacy of the system of internal controls of the Company
which he deems advisable or which the Audit Committee may request. Additionally,
the General Auditor shall have the duty of reporting independently of all
officers of the Company to the Audit Committee at least quarterly on any matters
concerning the internal audit program and the adequacy of the system of internal
controls of the Company that should be brought to the attention of the directors
except those matters responsibility for which has been vested in the General
Credit Auditor. Should the General Auditor deem any matter to be of special
immediate importance, he shall report thereon forthwith to the Audit Committee.
The General Auditor shall report to the Chief Financial Officer only for
administrative purposes.
The General Credit Auditor shall be responsible to the Chief Executive Officer
and, through the Audit Committee, to the Board of Directors for the systems of
internal credit audit, shall perform such other duties as the Chief Executive
Officer may prescribe, and shall make such examinations and reports as may be
required by the Audit Committee. The General Credit Auditor shall have
unrestricted access to all records and may delegate such authority to
subordinates.
SECTION 3. The compensation of all officers shall be fixed under such plan or
plans of position evaluation and salary administration as shall be approved from
time to time by resolution of the Board of Directors.
SECTION 4. The Board of Directors, the Executive Committee, the Chairman of the
Board, the Chief Executive Officer or any person authorized for this purpose by
the Chief Executive Officer, shall appoint or engage all other employees and
agents and fix their compensation. The employment of all such employees and
agents shall continue during the pleasure of the Board of Directors or the
Executive Committee or the Chairman of the Board or the Chief Executive Officer
or any such authorized person; and the Board of Directors, the Executive
Committee, the Chairman of the Board, the Chief Executive Officer or any such
authorized person may discharge any such employees and agents at will.
<PAGE> 14
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 1. The Company shall, to the fullest extent permitted by Section 7018 of
the New York Banking Law, indemnify any person who is or was made, or threatened
to be made, a party to an action or proceeding, whether civil or criminal,
whether involving any actual or alleged breach of duty, neglect or error, any
accountability, or any actual or alleged misstatement, misleading statement or
other act or omission and whether brought or threatened in any court or
administrative or legislative body or agency, including an action by or in the
right of the Company to procure a judgment in its favor and an action by or in
the right of any other corporation of any type or kind, domestic or foreign, or
any partnership, joint venture, trust, employee benefit plan or other
enterprise, which any director or officer of the Company is servicing or served
in any capacity at the request of the Company by reason of the fact that he, his
testator or intestate, is or was a director or officer of the Company, or is
serving or served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, amounts paid in settlement, and costs, charges and expenses, including
attorneys' fees, or any appeal therein; provided, however, that no
indemnification shall be provided to any such person if a judgment or other
final adjudication adverse to the director or officer establishes that (i) his
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 2. The Company may indemnify any other person to whom the Company is
permitted to provide indemnification or the advancement of expenses by
applicable law, whether pursuant to rights granted pursuant to, or provided by,
the New York Banking Law or other rights created by (i) a resolution of
stockholders, (ii) a resolution of directors, or (iii) an agreement providing
for such indemnification, it being expressly intended that these By-Laws
authorize the creation of other rights in any such manner.
SECTION 3. The Company shall, from time to time, reimburse or advance to any
person referred to in Section 1 the funds necessary for payment of expenses,
including attorneys' fees, incurred in connection with any action or proceeding
referred to in Section 1, upon receipt of a written undertaking by or on behalf
of such person to repay such amount(s) if a judgment or other final adjudication
adverse to the director or officer establishes that (i) his acts were committed
in bad faith or were the result of active and deliberate dishonesty and, in
either case, were material to the cause of action so adjudicated, or (ii) he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled.
SECTION 4. Any director or officer of the Company serving (i) another
corporation, of which a majority of the shares entitled to vote in the election
of its directors is held by the Company, or (ii) any employee benefit plan of
the Company or any corporation referred to in clause (i) in any capacity shall
be deemed to be doing so
<PAGE> 15
at the request of the Company. In all other cases, the provisions of this
Article V will apply (i) only if the person serving another corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise so
served at the specific request of the Company, evidenced by a written
communication signed by the Chairman of the Board, the Chief Executive Officer
or the President, and (ii) only if and to the extent that, after making such
efforts as the Chairman of the Board, the Chief Executive Officer or the
President shall deem adequate in the circumstances, such person shall be unable
to obtain indemnification from such other enterprise or its insurer.
SECTION 5. Any person entitled to be indemnified or to the reimbursement or
advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect at
the time indemnification is sought.
SECTION 6. The right to be indemnified or to the reimbursement or advancement of
expense pursuant to this Article V (i) is a contract right pursuant to which the
person entitled thereto may bring suit as if the provisions hereof were set
forth in a separate written contract between the Company and the director or
officer, (ii) is intended to be retroactive and shall be available with respect
to events occurring prior to the adoption hereof, and (iii) shall continue to
exist after the rescission or restrictive modification hereof with respect to
events occurring prior thereto.
SECTION 7. If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the Company
within thirty days after a written claim has been received by the Company, the
claimant may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled also to be paid the expenses of prosecuting such
claim. Neither the failure of the Company (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of or
reimbursement or advancement of expenses to the claimant is proper in the
circumstance, nor an actual determination by the Company (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant is
not entitled to indemnification or to the reimbursement or advancement of
expenses, shall be a defense to the action or create a presumption that the
claimant is not so entitled.
SECTION 8. A person who has been successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding of the character described
in Section 1 shall be entitled to indemnification only as provided in Sections 1
and 3, notwithstanding any provision of the New York Banking Law to the
contrary.
<PAGE> 16
ARTICLE VI
SEAL
SECTION 1. The Board of Directors shall provide a seal for the Company, the
counterpart dies of which shall be in the charge of the Secretary of the Company
and such officers as the Chairman of the Board, the Chief Executive Officer or
the Secretary may from time to time direct in writing, to be affixed to
certificates of stock and other documents in accordance with the directions of
the Board of Directors or the Executive Committee.
SECTION 2. The Board of Directors may provide, in proper cases on a specified
occasion and for a specified transaction or transactions, for the use of a
printed or engraved facsimile seal of the Company.
ARTICLE VII
CAPITAL STOCK
SECTION 1. Registration of transfer of shares shall only be made upon the books
of the Company by the registered holder in person, or by power of attorney, duly
executed, witnessed and filed with the Secretary or other proper officer of the
Company, on the surrender of the certificate or certificates of such shares
properly assigned for transfer.
ARTICLE VIII
CONSTRUCTION
SECTION 1. The masculine gender, when appearing in these By-Laws, shall be
deemed to include the feminine gender.
ARTICLE IX
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or added to by the Board of
Directors at any meeting, or by the stockholders at any annual or special
meeting, provided notice thereof has been given.
<PAGE> 17
I, _____________________________________, Assistant Secretary of Bankers Trust
Company, New York, New York, hereby certify that the foregoing is a complete,
true and correct copy of the By-Laws of Bankers Trust Company, and that the same
are in full force and effect at this date.
-------------------------------------
ASSISTANT SECRETARY
DATED:
------------------------
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 12/31/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
------------
| C400 |
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
<S> <C> <C> <C>
ASSETS |/ / / / / / / / / / / / |
1. Cash and balances due from depository institutions (from Schedule RC-A): |/ / / / / / / / / / / / |
a. Noninterest-bearing balances and currency and coin (1) ............................ | 0081 2,772,000 |1.a.
b. Interest-bearing balances (2) ..................................................... | 0071 2,497,000 |1.b.
2. Securities: |/ / / / / / / / / / / / |
a. Held-to-maturity securities (from Schedule RC-B, column A) ........................ | 1754 0 |2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)....................... | 1773 8,907,000 |2.b.
3. Federal funds sold and securities purchased under agreements to resell................... | 1350 22,851,000 |3.
4. Loans and lease financing receivables: | / / / / / / / / / / / / |
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 21,882,000| / / / / / / / / / / / / |4.a.
b. LESS: Allowance for loan and lease losses........................RCFD 3123 620,000| / / / / / / / / / / / / |4.b.
c. LESS: Allocated transfer risk reserve ...........................RCFD 3128 0| / / / / / / / / / / / / |4.c.
d. Loans and leases, net of unearned income, | / / / / / / / / / / / / |
allowance, and reserve (item 4.a minus 4.b and 4.c) ............................... | 2125 21,262,000 |4.d.
5. Trading Assets (from schedule RC-D) .................................................... | 3545 39,983,000 |5.
6. Premises and fixed assets (including capitalized leases) ................................ | 2145 974,000 |6.
7. Other real estate owned (from Schedule RC-M) ............................................ | 2150 80,000 |7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) | 2130 97,000 |8.
9. Customers' liability to this bank on acceptances outstanding ............................ | 2155 232,000 |9.
10. Intangible assets (from Schedule RC-M) ................................................... | 2143 278,000 |10.
11. Other assets (from Schedule RC-F) ........................................................ | 2160 4,625,000 |11.
12. Total assets (sum of items 1 through 11) ................................................. | 2170 104,558,000 |12.
</TABLE>
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 19
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 12/31/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State Zip: New York, NY 10006 12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE RC--CONTINUED ----------------------------------------
Dollar Amounts in Thousands | / / / / / /Bil Mil Thou
- ------------------------------------------------------------------------------------------------- --------------------------------
<S> <C> <C> <C>
LIABILITIES | / / / / / / / / / / / / / / |
13. Deposits: |/ / / / / / / / / / / / / / /|
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) | RCON 2200 20,409,000 |13.a.
(1) Noninterest-bearing(1) ..............RCON 6631 3,124,000......... | / / / / / / / / / // / / / |13.a.(1)
(2) Interest-bearing ....................RCON 6636 17,285,000......... | / / / / / / / / / / / // / |13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs | / / / / / / / / / / / / / /|
(from Schedule RC-E part II) | RCFN 2200 20,167,000 |13.b.
(1) Noninterest-bearing ................RCFN 6631 1,781,000 | / / / / / / / / / / / / / /|13.b.(1)
(2) Interest-bearing ...................RCFN 6636 18,386,000 | / / / / / / / / / / / / / |
14. Federal funds purchased and securities sold under agreements to repurchase | RCFD 2800 13,919,000 |14.
15. a. Demand notes issued to the U.S. Treasury ...................................... | RCON 2840 0 |15.a.
b. Trading liabilities (from Schedule RC-D)....................................... | RCFD 3548 26,175,000 |15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases): | / / / / / / / / / / / / / /|
a. With a remaining maturity of one year or less ................................. | RCFD 2332 5,422,000 |16.a.
b. With a remaining maturity of more than one year through three years............ | A547 1,766,000 |16.b.
c. With a remaining maturity of more than three years............................. | A548 2,884,000 |16.c
17. Not Applicable. | / / / / / / / / / / / / / / |17.
18. Bank's liability on acceptances executed and outstanding ........................... | RCFD 2920 232,000 |18.
19. Subordinated notes and debentures (2)............................................... | RCFD 3200 984,000 |19.
20. Other liabilities (from Schedule RC-G) ............................................. | RCFD 2930 5,657,000 |20.
21. Total liabilities (sum of items 13 through 20) ..................................... | RCFD 2948 97,615,000 |21.
22. Not Applicable | / / / / / / / / / / / / / /|
EQUITY CAPITAL | / / / / / / / / / / / / / |
23. Perpetual preferred stock and related surplus ...................................... | RCFD 3838 1,500,000 |23.
24. Common stock ....................................................................... | RCFD 3230 2,127,000 |24.
25. Surplus (exclude all surplus related to preferred stock) ........................... | RCFD 3839 541,000 |25.
26. a. Undivided profits and capital reserves ........................................ | RCFD 3632 3,200,000 |26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ........ | RCFD 8434 (36,000) |26.b.
27. Cumulative foreign currency translation adjustments ................................ | RCFD 3284 (389,000) |27.
28. Total equity capital (sum of items 23 through 27) .................................. | RCFD 3210 6,943,000 |28.
29. Total liabilities and equity capital (sum of items 21 and 28)....................... | RCFD 3300 104,558,000 |29
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<S> <C> <C>
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed Number
for the bank by independent external auditors as of any date ---------
during 1998 .......................................................... | RCFD 6724 N/A | M.1
----------------------------------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed
with generally accepted auditing standards by a certified by other external auditors (may be required
public accounting firm which submits a report on the bank by state chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by
conducted in accordance with generally accepted auditing external auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial
submits a report on the consolidated holding company statements by external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax
3 = Directors' examination of the bank conducted in preparation work)
work accordance with generally accepted auditing standards by a 8 = No external audit
certified public accounting firm (may be required by state chartering
authority)
</TABLE>
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and
savings deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 1
EXHIBIT 25.2
- -----------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ___________
------------------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
---------------------------------
DORAL FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
SAN JUAN 66-0312162
(State or other jurisdiction of (I.R.S. employer identification no.)
Incorporation or organization)
1159 FRANKLIN D. ROOSEVELT AVENUE
SAN JUAN, PUERTO RICO 00920
(787) 771-3901
(Address, including zip code, and telephone
number of principal executive offices)
SUBORDINATED DEBT SECURITIES
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising
authority to which it is subject.
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
</TABLE>
(b) Whether it is authorized to exercise corporate trust
powers. Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
ITEM 3. -15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of Bankers
Trust Company dated August 7, 1990,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
June 21, 1995 - Incorporated herein by
reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
March 20, 1996, incorporate by referenced to
Exhibit 1 filed with Form T-1 Statement,
Registration No. 333-25843 and Certificate
of Amendment of the Organization Certificate
of Bankers Trust Company dated June 19,
1997, copy attached.
EXHIBIT 2 - Certificate of Authority to commence
business - Incorporated herein by reference
to Exhibit 2 filed with Form T-1 Statement,
Registration No.
33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise
corporate trust powers Incorporated herein
by reference to Exhibit 2 filed with Form
T-1 Statement, Registration No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust
Company, as amended on November 18, 1997.
Copy attached.
-2-
<PAGE> 3
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company
required by Section 321(b) of the Act.
Incorporated herein by reference to Exhibit
4 filed with Form T-1 Statement,
Registration No. 22-18864.
EXHIBIT 7 - The latest report of condition of
Bankers Trust Company dated as of December
31, 1998. Copy attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 27th day
of April, 1999.
BANKERS TRUST COMPANY
By: /s/Susan Johnson
---------------------------
Susan Johnson
Assistant Vice President
-4-
<PAGE> 5
STATE OF NEW YORK,
BANKING DEPARTMENT
I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION
8005 OF THE BANKING LAW," dated June 19, 1997, providing for an increase in
authorized capital stock from $1,601,666,670 consisting of 100,166,667 shares
with a par value of $10 each designated as Common Stock and 600 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$2,001,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 1,000 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department
at the City of New York, this 27TH day of June in the Year of our Lord one
thousand nine hundred and NINETY-SEVEN.
Manuel Kursky
------------------------------
Deputy Superintendent of Banks
<PAGE> 6
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-----------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of March, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Six Hundred and One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided into
One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred
Sixty-Seven (100,166,667) shares with a par value of $10 each
designated as Common Stock and 600 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six
Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred
Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 1000 shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred Stock."
<PAGE> 7
5. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this
19th day of June, 1997.
James T. Byrne, Jr.
---------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
---------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows the
contents thereof, and that the statements herein contained are true.
Lea Lahtinen
---------------------
Lea Lahtinen
Sworn to before me this 19th day
of June, 1997.
Sandra L. West
- ----------------------------
Notary Public
SANDRA L. WEST
Notary Public State of New York
No. 31-4942101
Qualified in New York County
Commission Expires September 19, 1998
<PAGE> 8
BY-LAWS
NOVEMBER 18, 1997
BANKERS TRUST COMPANY
NEW YORK
<PAGE> 9
BY-LAWS
OF
BANKERS TRUST COMPANY
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this Company shall be held
at the office of the Company in the Borough of Manhattan, City of New York, on
the third Tuesday in January of each year, for the election of directors and
such other business as may properly come before said meeting.
SECTION 2. Special meetings of stockholders other than those regulated by
statute may be called at any time by a majority of the directors. It shall be
the duty of the Chairman of the Board, the Chief Executive Officer or the
President to call such meetings whenever requested in writing to do so by
stockholders owning a majority of the capital stock.
SECTION 3. At all meetings of stockholders, there shall be present, either in
person or by proxy, stockholders owning a majority of the capital stock of the
Company, in order to constitute a quorum, except at special elections of
directors, as provided by law, but less than a quorum shall have power to
adjourn any meeting.
SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive
Officer or, in his absence, the President or, in their absence, the senior
officer present, shall preside at meetings of the stockholders and shall direct
the proceedings and the order of business. The Secretary shall act as secretary
of such meetings and record the proceedings.
ARTICLE II
DIRECTORS
SECTION 1. The affairs of the Company shall be managed and its corporate powers
exercised by a Board of Directors consisting of such number of directors, but
not less than ten nor more than twenty-five, as may from time to time be fixed
by resolution adopted by a majority of the directors then in office, or by the
stockholders. In the event of any increase in the number of directors,
additional directors may be elected within the limitations so fixed, either by
the stockholders or within the limitations imposed by law, by a majority of
directors then in office. One-third of the number of directors, as fixed from
time to time, shall constitute a quorum. Any one or more members of the Board of
Directors or any Committee thereof may participate in a meeting of the Board of
Directors or Committee thereof by means of a conference telephone or similar
communications equipment which allows all persons participating in the meeting
to hear each other at the same time. Participation by such means shall
constitute presence in person at such a meeting.
<PAGE> 10
All directors hereafter elected shall hold office until the next annual meeting
of the stockholders and until their successors are elected and have qualified.
No person who shall have attained age 72 shall be eligible to be elected or
re-elected a director. Such director may, however, remain a director of the
Company until the next annual meeting of the stockholders of Bankers Trust New
York Corporation (the Company's parent) so that such director's retirement will
coincide with the retirement date from Bankers Trust New York Corporation.
No Officer-Director who shall have attained age 65, or earlier relinquishes his
responsibilities and title, shall be eligible to serve as a director.
SECTION 2. Vacancies not exceeding one-third of the whole number of the Board of
Directors may be filled by the affirmative vote of a majority of the directors
then in office, and the directors so elected shall hold office for the balance
of the unexpired term.
SECTION 3. The Chairman of the Board shall preside at meetings of the Board of
Directors. In his absence, the Chief Executive Officer or, in his absence, such
other director as the Board of Directors from time to time may designate shall
preside at such meetings.
SECTION 4. The Board of Directors may adopt such Rules and Regulations for the
conduct of its meetings and the management of the affairs of the Company as it
may deem proper, not inconsistent with the laws of the State of New York, or
these By-Laws, and all officers and employees shall strictly adhere to, and be
bound by, such Rules and Regulations.
SECTION 5. Regular meetings of the Board of Directors shall be held from time to
time on the third Tuesday of the month. If the day appointed for holding such
regular meetings shall be a legal holiday, the regular meeting to be held on
such day shall be held on the next business day thereafter. Special meetings of
the Board of Directors may be called upon at least two day's notice whenever it
may be deemed proper by the Chairman of the Board or, the Chief Executive
Officer or, in their absence, by such other director as the Board of Directors
may have designated pursuant to Section 3 of this Article, and shall be called
upon like notice whenever any three of the directors so request in writing.
SECTION 6. The compensation of directors as such or as members of committees
shall be fixed from time to time by resolution of the Board of Directors.
<PAGE> 11
ARTICLE III
COMMITTEES
SECTION 1. There shall be an Executive Committee of the Board consisting of not
less than five directors who shall be appointed annually by the Board of
Directors. The Chairman of the Board shall preside at meetings of the Executive
Committee. In his absence, the Chief Executive Officer or, in his absence, such
other member of the Committee as the Committee from time to time may designate
shall preside at such meetings.
The Executive Committee shall possess and exercise to the extent permitted by
law all of the powers of the Board of Directors, except when the latter is in
session, and shall keep minutes of its proceedings, which shall be presented to
the Board of Directors at its next subsequent meeting. All acts done and powers
and authority conferred by the Executive Committee from time to time shall be
and be deemed to be, and may be certified as being, the act and under the
authority of the Board of Directors.
A majority of the Committee shall constitute a quorum, but the Committee may act
only by the concurrent vote of not less than one-third of its members, at least
one of whom must be a director other than an officer. Any one or more directors,
even though not members of the Executive Committee, may attend any meeting of
the Committee, and the member or members of the Committee present, even though
less than a quorum, may designate any one or more of such directors as a
substitute or substitutes for any absent member or members of the Committee, and
each such substitute or substitutes shall be counted for quorum, voting, and all
other purposes as a member or members of the Committee.
SECTION 2. There shall be an Audit Committee appointed annually by resolution
adopted by a majority of the entire Board of Directors which shall consist of
such number of directors, who are not also officers of the Company, as may from
time to time be fixed by resolution adopted by the Board of Directors. The
Chairman shall be designated by the Board of Directors, who shall also from time
to time fix a quorum for meetings of the Committee. Such Committee shall conduct
the annual directors' examinations of the Company as required by the New York
State Banking Law; shall review the reports of all examinations made of the
Company by public authorities and report thereon to the Board of Directors; and
shall report to the Board of Directors such other matters as it deems advisable
with respect to the Company, its various departments and the conduct of its
operations.
In the performance of its duties, the Audit Committee may employ or retain, from
time to time, expert assistants, independent of the officers or personnel of the
Company, to make studies of the Company's assets and liabilities as the
Committee may request and to make an examination of the accounting and auditing
methods of the Company and its system of internal protective controls to the
extent considered necessary or advisable in order to determine that the
operations of the Company, including its fiduciary departments, are being
audited by the General Auditor in such a manner as to provide prudent and
adequate protection. The Committee also may direct the General Auditor to make
such investigation as it deems necessary or advisable with respect to the
Company, its various departments and the conduct of its operations. The
Committee shall hold regular quarterly meetings and during the intervals thereof
shall meet at other times on call of the Chairman.
<PAGE> 12
SECTION 3. The Board of Directors shall have the power to appoint any other
Committees as may seem necessary, and from time to time to suspend or continue
the powers and duties of such Committees. Each Committee appointed pursuant to
this Article shall serve at the pleasure of the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall elect from among their number a Chairman
of the Board and a Chief Executive Officer; and shall also elect a President,
and may also elect a Senior Vice Chairman, one or more Vice Chairmen, one or
more Executive Vice Presidents, one or more Senior Managing Directors, one or
more Managing Directors, one or more Senior Vice Presidents, one or more
Principals, one or more Vice Presidents, one or more General Managers, a
Secretary, a Controller, a Treasurer, a General Counsel, one or more Associate
General Counsels, a General Auditor, a General Credit Auditor, and one or more
Deputy Auditors, who need not be directors. The officers of the corporation may
also include such other officers or assistant officers as shall from time to
time be elected or appointed by the Board. The Chairman of the Board or the
Chief Executive Officer or, in their absence, the President, the Senior Vice
Chairman or any Vice Chairman, may from time to time appoint assistant officers.
All officers elected or appointed by the Board of Directors shall hold their
respective offices during the pleasure of the Board of Directors, and all
assistant officers shall hold office at the pleasure of the Board or the
Chairman of the Board or the Chief Executive Officer or, in their absence, the
President, the Senior Vice Chairman or any Vice Chairman. The Board of Directors
may require any and all officers and employees to give security for the faithful
performance of their duties.
SECTION 2. The Board of Directors shall designate the Chief Executive Officer of
the Company who may also hold the additional title of Chairman of the Board,
President, Senior Vice Chairman or Vice Chairman and such person shall have,
subject to the supervision and direction of the Board of Directors or the
Executive Committee, all of the powers vested in such Chief Executive Officer by
law or by these By-Laws, or which usually attach or pertain to such office. The
other officers shall have, subject to the supervision and direction of the Board
of Directors or the Executive Committee or the Chairman of the Board or, the
Chief Executive Officer, the powers vested by law or by these By-Laws in them as
holders of their respective offices and, in addition, shall perform such other
duties as shall be assigned to them by the Board of Directors or the Executive
Committee or the Chairman of the Board or the Chief Executive Officer.
The General Auditor shall be responsible, through the Audit Committee, to the
Board of Directors for the determination of the program of the internal audit
function and the evaluation of the adequacy of the system of internal controls.
Subject to the Board of Directors, the General Auditor shall have and may
exercise all the powers and shall perform all the duties usual to such office
and shall have such other powers as may be prescribed or assigned to him from
time to time by the Board of Directors or vested in him by law or by these
By-Laws. He shall perform such other duties and shall make such investigations,
examinations and reports as may be prescribed or required by the Audit
Committee. The General Auditor shall have unrestricted access to all records and
premises of the Company and shall delegate such authority to his subordinates.
He shall have the duty to report to the Audit Committee on all matters
concerning the internal audit program and the adequacy of the system of internal
controls of the Company which he deems advisable or which the Audit Committee
may request. Additionally, the General Auditor shall have the duty of reporting
independently of all officers of the Company to the Audit Committee at least
quarterly on any matters concerning the internal audit
<PAGE> 13
program and the adequacy of the system of internal controls of the Company that
should be brought to the attention of the directors except those matters
responsibility for which has been vested in the General Credit Auditor. Should
the General Auditor deem any matter to be of special immediate importance, he
shall report thereon forthwith to the Audit Committee. The General Auditor shall
report to the Chief Financial Officer only for administrative purposes.
The General Credit Auditor shall be responsible to the Chief Executive Officer
and, through the Audit Committee, to the Board of Directors for the systems of
internal credit audit, shall perform such other duties as the Chief Executive
Officer may prescribe, and shall make such examinations and reports as may be
required by the Audit Committee. The General Credit Auditor shall have
unrestricted access to all records and may delegate such authority to
subordinates.
SECTION 3. The compensation of all officers shall be fixed under such plan or
plans of position evaluation and salary administration as shall be approved from
time to time by resolution of the Board of Directors.
SECTION 4. The Board of Directors, the Executive Committee, the Chairman of the
Board, the Chief Executive Officer or any person authorized for this purpose by
the Chief Executive Officer, shall appoint or engage all other employees and
agents and fix their compensation. The employment of all such employees and
agents shall continue during the pleasure of the Board of Directors or the
Executive Committee or the Chairman of the Board or the Chief Executive Officer
or any such authorized person; and the Board of Directors, the Executive
Committee, the Chairman of the Board, the Chief Executive Officer or any such
authorized person may discharge any such employees and agents at will.
<PAGE> 14
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 1. The Company shall, to the fullest extent permitted by Section 7018 of
the New York Banking Law, indemnify any person who is or was made, or threatened
to be made, a party to an action or proceeding, whether civil or criminal,
whether involving any actual or alleged breach of duty, neglect or error, any
accountability, or any actual or alleged misstatement, misleading statement or
other act or omission and whether brought or threatened in any court or
administrative or legislative body or agency, including an action by or in the
right of the Company to procure a judgment in its favor and an action by or in
the right of any other corporation of any type or kind, domestic or foreign, or
any partnership, joint venture, trust, employee benefit plan or other
enterprise, which any director or officer of the Company is servicing or served
in any capacity at the request of the Company by reason of the fact that he, his
testator or intestate, is or was a director or officer of the Company, or is
serving or served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, amounts paid in settlement, and costs, charges and expenses, including
attorneys' fees, or any appeal therein; provided, however, that no
indemnification shall be provided to any such person if a judgment or other
final adjudication adverse to the director or officer establishes that (i) his
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 2. The Company may indemnify any other person to whom the Company is
permitted to provide indemnification or the advancement of expenses by
applicable law, whether pursuant to rights granted pursuant to, or provided by,
the New York Banking Law or other rights created by (i) a resolution of
stockholders, (ii) a resolution of directors, or (iii) an agreement providing
for such indemnification, it being expressly intended that these By-Laws
authorize the creation of other rights in any such manner.
SECTION 3. The Company shall, from time to time, reimburse or advance to any
person referred to in Section 1 the funds necessary for payment of expenses,
including attorneys' fees, incurred in connection with any action or proceeding
referred to in Section 1, upon receipt of a written undertaking by or on behalf
of such person to repay such amount(s) if a judgment or other final adjudication
adverse to the director or officer establishes that (i) his acts were committed
in bad faith or were the result of active and deliberate dishonesty and, in
either case, were material to the cause of action so adjudicated, or (ii) he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled.
SECTION 4. Any director or officer of the Company serving (i) another
corporation, of which a majority of the shares entitled to vote in the election
of its directors is held by the Company, or (ii) any employee benefit plan of
the Company or any corporation referred to in clause (i) in any capacity shall
be deemed to be doing so at the request of the Company. In all other cases, the
provisions of this Article V will apply (i) only if the person serving another
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise so served at the specific request of the Company, evidenced by
a written communication signed by the Chairman of the Board, the Chief Executive
Officer or the President, and (ii) only if and to the extent that, after making
such efforts as the Chairman of the Board, the Chief Executive Officer or the
<PAGE> 15
President shall deem adequate in the circumstances, such person shall be unable
to obtain indemnification from such other enterprise or its insurer.
SECTION 5. Any person entitled to be indemnified or to the reimbursement or
advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect at
the time indemnification is sought.
SECTION 6. The right to be indemnified or to the reimbursement or advancement of
expense pursuant to this Article V (i) is a contract right pursuant to which the
person entitled thereto may bring suit as if the provisions hereof were set
forth in a separate written contract between the Company and the director or
officer, (ii) is intended to be retroactive and shall be available with respect
to events occurring prior to the adoption hereof, and (iii) shall continue to
exist after the rescission or restrictive modification hereof with respect to
events occurring prior thereto.
SECTION 7. If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the Company
within thirty days after a written claim has been received by the Company, the
claimant may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled also to be paid the expenses of prosecuting such
claim. Neither the failure of the Company (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of or
reimbursement or advancement of expenses to the claimant is proper in the
circumstance, nor an actual determination by the Company (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant is
not entitled to indemnification or to the reimbursement or advancement of
expenses, shall be a defense to the action or create a presumption that the
claimant is not so entitled.
SECTION 8. A person who has been successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding of the character described
in Section 1 shall be entitled to indemnification only as provided in Sections 1
and 3, notwithstanding any provision of the New York Banking Law to the
contrary.
<PAGE> 16
ARTICLE VI
SEAL
SECTION 1. The Board of Directors shall provide a seal for the Company, the
counterpart dies of which shall be in the charge of the Secretary of the Company
and such officers as the Chairman of the Board, the Chief Executive Officer or
the Secretary may from time to time direct in writing, to be affixed to
certificates of stock and other documents in accordance with the directions of
the Board of Directors or the Executive Committee.
SECTION 2. The Board of Directors may provide, in proper cases on a specified
occasion and for a specified transaction or transactions, for the use of a
printed or engraved facsimile seal of the Company.
ARTICLE VII
CAPITAL STOCK
SECTION 1. Registration of transfer of shares shall only be made upon the books
of the Company by the registered holder in person, or by power of attorney, duly
executed, witnessed and filed with the Secretary or other proper officer of the
Company, on the surrender of the certificate or certificates of such shares
properly assigned for transfer.
ARTICLE VIII
CONSTRUCTION
SECTION 1. The masculine gender, when appearing in these By-Laws, shall be
deemed to include the feminine gender.
ARTICLE IX
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or added to by the Board of
Directors at any meeting, or by the stockholders at any annual or special
meeting, provided notice thereof has been given.
I, _____________________________________, Assistant Secretary of Bankers Trust
Company, New York, New York, hereby certify that the foregoing is a complete,
true and
<PAGE> 17
correct copy of the By-Laws of Bankers Trust Company, and that the same
are in full force and effect at this date.
-------------------------------------
ASSISTANT SECRETARY
DATED:
----------------
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 12/31/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
---------
| C400 |
Dollar Amounts in Thousands |RCFD Bil Mil Thou |
================================================================================================================================
<S> <C> <C> <C>
ASSETS |/ / / / / / / / / / / |
1. Cash and balances due from depository institutions (from Schedule RC-A): |/ / / / / / / / / / / |
a. Noninterest-bearing balances and currency and coin (1) ...................... | 0081 2,772,000 |1.a.
b. Interest-bearing balances (2) ............................................... | 0071 2,497,000 |1.b.
2. Securities: | / / / / / / / / |
a. Held-to-maturity securities (from Schedule RC-B, column A) .................. | 1754 0 |2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)................. | 1773 8,907,000|2.b.
3. Federal funds sold and securities purchased under agreements to resell............ | 1350 22,851,000|3.
4. Loans and lease financing receivables: | / / / / / / / / |
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 21,882,000 | / / / / / / / / |4.a.
b. LESS: Allowance for loan and lease losses........................RCFD 3123 620,000 | / / / / / / / / / |4.b.
c. LESS: Allocated transfer risk reserve ...........................RCFD 3128 0 | / / / / / / / / / |4.c.
d. Loans and leases, net of unearned income, | / / / / / / / / |
allowance, and reserve (item 4.a minus 4.b and 4.c) ........................ | 2125 21,262,000 |4.d.
5. Trading Assets (from schedule RC-D) ............................................. | 3545 39,983,000 |5.
6. Premises and fixed assets (including capitalized leases) ......................... | 2145 974,000 |6.
7. Other real estate owned (from Schedule RC-M) ..................................... | 2150 80,000 |7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) | 2130 97,000 |8.
9. Customers' liability to this bank on acceptances outstanding ..................... | 2155 232,000 |9.
10. Intangible assets (from Schedule RC-M) ........................................... | 2143 278,000 |10.
11. Other assets (from Schedule RC-F) ................................................ | 2160 4,625,000 |11.
12. Total assets (sum of items 1 through 11) ......................................... | 2170 104,558,000 |12.
</TABLE>
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 19
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 12/31/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State Zip: New York, NY 10006 12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE RC--CONTINUED ----------------------------------------
Dollar Amounts in Thousands | / / / / / /Bil Mil Thou
- ------------------------------------------------------------------------------------------------- --------------------------------
<S> <C> <C> <C>
LIABILITIES | / / / / / / / / / / / / / / |
13. Deposits: |/ / / / / / / / / / / / / / /|
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) | RCON 2200 20,409,000 |13.a.
(1) Noninterest-bearing(1) ..............RCON 6631 3,124,000......... | / / / / / / / / / // / / / |13.a.(1)
(2) Interest-bearing ....................RCON 6636 17,285,000......... | / / / / / / / / / / / // / |13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs | / / / / / / / / / / / / / /|
(from Schedule RC-E part II) | RCFN 2200 20,167,000 |13.b.
(1) Noninterest-bearing ................RCFN 6631 1,781,000 | / / / / / / / / / / / / / /|13.b.(1)
(2) Interest-bearing ...................RCFN 6636 18,386,000 | / / / / / / / / / / / / / |13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase | RCFD 2800 13,919,000 |14.
15. a. Demand notes issued to the U.S. Treasury ...................................... | RCON 2840 0 |15.a.
b. Trading liabilities (from Schedule RC-D)....................................... | RCFD 3548 26,175,000 |15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases): | / / / / / / / / / / / / / /|
a. With a remaining maturity of one year or less ................................. | RCFD 2332 5,422,000 |16.a.
b. With a remaining maturity of more than one year through three years............ | A547 1,766,000 |16.b.
c. With a remaining maturity of more than three years.............................. | A548 2,884,000 |16.c
17. Not Applicable. | / / / / / / / / / / / / / / |17.
18. Bank's liability on acceptances executed and outstanding ........................... | RCFD 2920 232,000 |18.
19. Subordinated notes and debentures (2)............................................... | RCFD 3200 984,000 |19.
20. Other liabilities (from Schedule RC-G) ............................................. | RCFD 2930 5,657,000 |20.
21. Total liabilities (sum of items 13 through 20) ..................................... | RCFD 2948 97,615,000 |21.
22. Not Applicable | / / / / / / / / / / / / / /|22.
EQUITY CAPITAL | / / / / / / / / / / / / / |
23. Perpetual preferred stock and related surplus ...................................... | RCFD 3838 1,500,000 |23.
24. Common stock ....................................................................... | RCFD 3230 2,127,000 |24.
25. Surplus (exclude all surplus related to preferred stock) ........................... | RCFD 3839 541,000 |25.
26. a. Undivided profits and capital reserves ........................................ | RCFD 3632 3,200,000 |26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ........ | RCFD 8434 ( 36,000) |26.b.
27. Cumulative foreign currency translation adjustments ................................ | RCFD 3284 (389,000) |27.
28. Total equity capital (sum of items 23 through 27) .................................. | RCFD 3210 6,943,000 |28.
29. Total liabilities and equity capital (sum of items 21 and 28)....................... | RCFD 3300 104,558,000 |29
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<S> <C> <C>
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed Number
for the bank by independent external auditors as of any date ---------
during 1998 .......................................................... | RCFD 6724 N/A | M.1
----------------------------------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed
with generally accepted auditing standards by a certified by other external auditors (may be required
public accounting firm which submits a report on the bank by state chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by
conducted in accordance with generally accepted auditing external auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial
submits a report on the consolidated holding company statements by external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax
3 = Directors' examination of the bank conducted in preparation work)
work accordance with generally accepted auditing standards by a 8 = No external audit
certified public accounting firm (may be required by state chartering
authority)
</TABLE>
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and
savings deposits.
(2) Includes limited-life preferred stock and related surplus.
