<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ENHANCE FINANCIAL SERVICES GROUP INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NEW YORK 13-3333448
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
335 MADISON AVENUE
NEW YORK, NEW YORK 10017
(212) 983-3100
(Address, including zip code, and telephone number,
including area code of registrant's principal executive offices)
SAMUEL BERGMAN, ESQ
EXECUTIVE VICE PRESIDENT
ENHANCE FINANCIAL SERVICES GROUP INC.
335 MADISON AVENUE
NEW YORK, NEW YORK 10017
(212) 983-3100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
HENRY O. SMITH III, ESQ.
PROSKAUER ROSE LLP
1585 BROADWAY
NEW YORK, NEW YORK 10036
(212) 969-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: FROM TIME TO
TIME AFTER THIS REGISTRATION STATEMENT HAS BEEN DECLARED EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest investment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1) UNIT (1)(2) PRICE (1)(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities (3)......................... $100,000,000 (3) 100% $100,000,000 $29,500
Common Stock, par value $.10 per share -- -- -- --
(4).......................................
</TABLE>
(1) Not specified as to each class of securities to be registered pursuant to
General Instruction II.D of Form S-3. In no event will the aggregate initial
offering price of the Debt Securities and Common Stock, par value $.10 per
share ("Common Stock"), issued under this registration statement exceed
$100,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies, including European currency units. Debt Securities and
Common Stock registered hereby may be sold separately or together.
(2) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(o). The proposed maximum offering price per unit will be
determined from time to time by the Registrant in connection with the
issuance by the Registrant of the securities registered hereunder.
(3) If any Debt Securities are issued at an original issue discount, then such
greater amount as may result in the initial offering prices for Debt
Securities.
(4) In addition to any Common Stock that may be issued directly under this
registration statement, there are being registered hereunder an
indeterminate number of shares of Common Stock as may be issued upon
conversion, either at the option of the holder or the Registrant, of Debt
Securities, for which no separate consideration will be received.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 13, 1998
PROSPECTUS
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
<PAGE>
ENHANCE FINANCIAL SERVICES GROUP INC.
DEBT SECURITIES
COMMON STOCK, PAR VALUE $.10 PER SHARE
------------------
Enhance Financial Services Group Inc. (the "Company") intends to issue from
time to time in one or more series up to $100,000,000 in aggregate initial
offering price of (i) debt securities, which may be either senior (the "Senior
Debt Securities") or subordinated (the "Subordinated Debt Securities"; and
collectively with the Senior Debt Securities, the "Debt Securities") and (ii)
shares of common stock, par value $.10 per share (the "Common Stock"). The Debt
Securities and Common Stock offered hereby (collectively, the "Securities") may
be offered, separately or together, in separate series in amounts, at prices and
on terms to be determined at the time of sale and to be set forth in a
supplement to this Prospectus (a "Prospectus Supplement").
------------------------
The Debt Securities of any series may be convertible into or exchangeable
for Common Stock. The Senior Debt Securities will rank equally with all other
unsubordinated and unsecured indebtedness of the Company. The Subordinated Debt
Securities will be subordinate to all existing and future Senior Indebtedness of
the Company (as defined herein). Unless otherwise indicated in the applicable
Prospectus Supplement, the maturity of the Subordinated Debt Securities will be
subject to acceleration only in the event of certain events of bankruptcy,
insolvency or reorganization of the Company. The specific terms of the
Securities in respect of which this Prospectus is being delivered, such as,
where applicable, (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, currency, denomination, maturity, priority, rate of
interest (which may be variable or fixed), time of payment of interest, terms
for optional redemption or repayment by the Company or any holder or for sinking
fund payments, terms for conversion or exchange into Common Stock, the initial
public offering price, any stock exchange listings, any special provisions
related to Debt Securities denominated in a foreign currency or issued as
medium-term notes, original issue discount securities or other special terms,
and the designation of the Trustee, Security Registrar and Paying Agent and (ii)
in the case of the Common Stock, the aggregate number of shares offered and the
initial public offering price. The Prospectus Supplement will also contain
information, where applicable, about certain United States federal income tax
considerations relating to the Securities covered by the Prospectus Supplement.
------------------------
The Securities may be sold to underwriters for public offering pursuant to
terms of offering established at the time of sale. In addition, the Securities
may be sold by the Company directly or through dealers or agents designated from
time to time. The Prospectus Supplement will also set forth with respect to the
sale of the Securities in respect of which this Prospectus is being delivered
the names of the underwriters, dealers or agents, if any, any applicable
commissions or discounts, the net proceeds to the Company from such sale and any
other terms of the offering. Any underwriters, dealers or agents participating
in the offering may be deemed "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act").
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
No dealer, salesperson or any other person has been authorized to give any
information or make any representations not contained in this Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer of any securities other than those to which it relates or an offer to
sell, or a solicitation of an offer to buy, to any person in any jurisdiction
where such an offer or solicitation would be unlawful. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstance,
create any implication that the information contained herein is correct as of
any time subsequent to the date hereof.
, 1998
<PAGE>
THE COMPANY
The Company is a holding company engaged, through its subsidiaries,
principally in the reinsurance of financial guaranties of municipal and
asset-backed debt obligations issued by monoline financial guaranty insurers. In
addition, the Company is engaged in other insurance, reinsurance, and
noninsurance businesses that utilize the Company's expertise in performing
sophisticated analysis of complex, credit-based risks. Since its inception, the
Company has conducted the major portion of its business through its wholly-owned
licensed, financial guaranty insurance subsidiaries, Enhance Reinsurance Company
("Enhance Re") and Asset Guaranty Insurance Company (together, the "Insurance
Subsidiaries"), and a smaller portion of its business through companies in which
it has equity investments. These include two non-insurance businesses conducted
by Singer Asset Finance Company, L.L.C., a subsidiary of the Company ("Singer"),
Credit-Based Asset Servicing and Securitization LLC, an affiliate of the Company
("C-BASS"), and a minority interest in a Brazilian surety company, Seguradores
Brazilieras de Fiancas.
The Company expects that a significant portion of its growth will come from
these non-financial guaranty businesses. The Company's business strategy is to
expand its financial guaranty business, both primary and reinsurance, while
maintaining its commitment to intensive and prudent credit underwriting and
conservative investment policies; to utilize its expertise in underwriting
credit risks to expand and develop its other insurance businesses; and to
continue to accelerate its diversification effort in areas that the Company
believes have profit and strong growth potential. To this end, the Company
expects to develop further the strategic relationship with Swiss Reinsurance
Company which it initiated in 1996.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (of which this Prospectus is a part) on
Form S-3 (the "Registration Statement") under the Securities Act with respect to
the securities offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
For further information with respect to the Company, reference is hereby made to
the Registration Statement, to the documents incorporated by reference therein,
and to the exhibits thereto.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Commission. Such
Registration Statement, reports, proxy statements and other information filed by
the Company can be inspected and copied at the public reference facilities of
the Commission at its principal office at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at the Commission's regional
offices at Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661,
and at 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
each such document may be obtained at prescribed rates from the Public Reference
Section of the Commission at its principal office at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549. The Commission also maintains a
Website (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. In addition, reports, proxy statements, and other
information concerning the Company can be inspected and copied at the offices of
the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street, New York, New
York 10005, on which the Common Stock is listed.
2
<PAGE>
INCORPORATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference:
(1) the Company's Annual Report on Form 10-K for the year ended December 31,
1996;
(2) the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997;
(3) the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997;
(4) the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997; and
(5) the description of the Common Stock contained in the Company's
registration statement, dated February 12, 1992, on Form 8-A.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be modified or superseded,
for purposes of this Prospectus, to the extent that a statement contained herein
or in any subsequently filed document which is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into such documents. Such requests should be directed
to Enhance Financial Services Group Inc., 335 Madison Avenue, New York, New York
10019, Attention: Corporate Secretary, telephone number (212) 983-3100.
3
<PAGE>
USE OF PROCEEDS
Except as otherwise described in the applicable Prospectus Supplement, the
net proceeds from the sale of any Securities will be used for general corporate
purposes. Pending such use, the proceeds may be invested temporarily in
short-term marketable securities. A more detailed description of the use of
proceeds of any specific offering of Securities will be set forth in the
Prospectus Supplement related to such offering.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratios of earnings to fixed
charges for the years and periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
Ratio of earnings to fixed charges (1)............................. 66.6x 10.6x 6.6x 12.3x 13.4x
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,
--------------------
<S> <C> <C>
1996 1997
--------- ---------
Ratio of earnings to fixed charges (1)............................. 13.9x 13.4x
</TABLE>
- ------------------------
(1) The ratio of earnings to fixed charges is calculated by dividing income
before income tax and extraordinary items plus fixed charges, by interest
expense on debt (whether capitalized, amortized or otherwise).
DESCRIPTION OF SENIOR DEBT SECURITIES
The Senior Debt Securities will be issued under an Indenture (as it may be
supplemented, the "Senior Indenture"), to be entered into between the Company
and The Chase Manhattan Bank, as trustee (referred to herein under the caption
"Description of Senior Debt Securities" as the "Trustee"), which is filed as an
exhibit to the Registration Statement. The Company believes that the following
summary of certain provisions of the Indenture is a complete discussion of all
material terms necessary to understand the Indenture. Capitalized terms not
otherwise defined under the heading "Description of Senior Debt Securities" have
the meaning given to them in the Senior Indenture. As used in this section
"Description of Senior Debt Securities," unless the context indicates otherwise,
the term "Company" means Enhance Financial Services Group Inc. and does not
include any of its subsidiaries.
GENERAL
The Senior Debt Securities will rank equally with all other unsecured and
unsubordinated indebtedness of the Company. As of September 30, 1997,
approximately $124.8 million aggregate principal amount of indebtedness for
borrowed money of the Company would rank PARI PASSU with the Senior Debt
Securities. The Company is currently a party to an amended and restated credit
agreement, amended and restated as of October 1, 1996 (the "Credit Agreement"),
among the Company and The Chase Manhattan Bank, as lender and administrative
agent, Fleet National Bank and Bank of Tokyo-Mitsubishi Trust Company, as
lenders. Pursuant to the terms of the Credit Agreement, the lenders thereunder
are entitled to a pledge of shares of stock of Enhance Re (with a formula value
equal to 166 2/3% of the outstanding indebtedness) as collateral to secure the
repayment of outstanding indebtedness. Accordingly, in the event of any
liquidation or reorganization of the Company, the rights of the holders of
Senior Debt Securities to participate in the assets of Enhance Re will be
subordinated to the rights of the Company's secured lenders, to the extent of
their interest in the pledged shares. To the extent that the value of the
pledged Enhance Re shares is not sufficient to satisfy the indebtedness
outstanding under the Credit Agreement, the secured holders would also be
entitled to share with the holders of the Senior Debt Securities, on a PARI
PASSU basis, in the remaining assets of the Company. As of December 31, 1997,
the shares pledged to
4
<PAGE>
secure the obligations under the Credit Agreement represented 20.3% of the
Enhance Re stock outstanding. The Senior Indenture does not limit the amount of
debt, either secured or unsecured, that may be issued by the Company under the
Senior Indenture or otherwise. The Senior Debt Securities may be issued in one
or more series with the same or various maturities and may be sold at par, a
premium or an original issue discount. Senior Debt Securities sold at an
original issue discount may bear no interest or interest at a rate that is below
market rates.
Because the Company is a holding company, the right of the Company, and
hence the rights of creditors and shareholders of the Company, to participate in
any distribution of assets of any subsidiary upon its liquidation or
reorganization or otherwise is accordingly subject to prior claims of creditors
of the subsidiary and (in the case of an insurance subsidiary) its
policyholders, except to the extent that claims of the Company itself as a
creditor of the subsidiary may be recognized. The subsidiaries are separate and
distinct legal entities and have no obligations, contingent or otherwise, to pay
any amounts due pursuant to the Senior Debt Securities or to make any funds
available therefor, whether by dividends, loans or other payments. The payment
of dividends or the making of loans and advances to the Company by its
subsidiaries may be subject to statutory restrictions, are contingent upon the
earnings of those subsidiaries and are subject to insurance regulations and
various business considerations.
Reference is made to the Prospectus Supplement for the following terms of
the offered Senior Debt Securities (to the extent such terms are applicable to
such Senior Debt Securities): (i) the title of such Senior Debt Securities or
the particular series thereof; (ii) any limit on the aggregate principal amount
of such Senior Debt Securities; (iii) whether such Senior Debt Securities are to
be issuable as Registered Securities or Bearer Securities or both, whether any
of such Senior Debt Securities are to be issuable initially in temporary global
form and whether any of such Senior Debt Securities are to be issuable in
permanent global form; (iv) the price or prices (generally expressed as a
percentage of the aggregate principal amount thereof) at which such Senior Debt
Securities will be issued; (v) the date or dates on which such Senior Debt
Securities will mature; (vi) the rate or rates per annum, or the formula by
which such rate or rates shall be determined, at which such Senior Debt
Securities will bear interest, if any, the dates from which any such interest
will accrue and the circumstances, if any, under which such interest rate or
interest rate formula may be reset at the option of the Company; (vii) the
Interest Payment Dates on which any such interest on such Senior Debt Securities
will be payable, the Regular Record Date for any interest payable on such Senior
Debt Securities that are Registered Securities on any Interest Payment Date, and
the extent to which, or the manner in which any interest payable on a Global
Security on an Interest Payment Date will be paid if other than in the manner
described below under "Global Securities;" (viii) the person to whom any
Registered Security of such series will be payable, if other than the person in
whose name such Senior Debt Security (or one or more predecessor Senior Debt
Securities) is registered at the close of business on the Regular Record Date
for such interest, and the manner in which, or the person to whom, any interest
on any Bearer Security of such series will be payable, if otherwise than upon
presentation and surrender of the coupons thereto; (ix) if other than the
principal amount of such Senior Debt Securities, the portion of the principal
amount of such Senior Debt Securities which shall be payable upon declaration of
acceleration of the maturity thereof or provable in bankruptcy; (x) any
mandatory or optional sinking fund or analogous provisions; (xi) each office or
agency where, subject to the terms of the Senior Indenture as described below
under "Payments and Paying Agents," the principal of and any interest on such
Senior Debt Securities will be payable and each office or agency where, subject
to the terms of the Senior Indenture as described below under "Denominations,
Registration and Transfer," such Senior Debt Securities may be presented for
registration of transfer or exchange; (xii) the date, if any, after which and
the price or prices at which such Senior Debt Securities may, pursuant to any
optional or mandatory redemption provisions, be redeemed, in whole or in part,
and the other detailed terms and provisions of any such optional or mandatory
redemption provisions; (xiii) the denominations in which such Senior Debt
Securities which are Registered Securities will be issuable, if other than
denominations of U.S. $1,000 and any integral multiple thereof, and the
denomination in which such Senior Debt Securities which are Bearer Securities
will be issuable, if other than denominations of U.S. $5,000; (xiv) the currency
5
<PAGE>
or currencies of payment of principal of and any premium and interest on such
Senior Debt Securities; (xv) any index used to determine the amount of payments
of principal of and any interest on such Senior Debt Securities; (xvi) the
application, if any, of any restrictive covenants or events of default that are
in addition to or different from those described herein; (xvii) the form of such
Senior Debt Security; and (xviii) any other terms and provisions of such Senior
Debt Securities not inconsistent with the terms and provisions of the Senior
Indenture. Any such Prospectus Supplement will also describe any special
provisions for the payment of additional amounts with respect to such Senior
Debt Securities. Senior Debt Securities of any series may be issued in one or
more tranches as described in the applicable Prospectus Supplement.
If the purchase price of any of the offered Senior Debt Securities is
denominated in a foreign currency or currencies or foreign currency unit or
units or if the principal of and any premium and interest on any series of
Senior Debt Securities is payable in a foreign currency or currencies or foreign
currency unit or units, the restrictions, elections, general tax considerations,
specific terms and other information with respect to such issue of Senior Debt
Securities and such foreign currency or currencies or foreign currency unit or
units will be set forth in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Senior Debt Securities will be issuable as Registered Securities, Bearer
Securities or both. Senior Debt Securities may be issuable in the form of one or
more Global Securities, as described below under "Global Securities." Unless
otherwise provided in the applicable Prospectus Supplement, Registered
Securities denominated in U.S. dollars will be issued only in denominations of
$1,000 or any integral multiple thereof and Bearer Securities denominated in
U.S. dollars will be issued only in denominations of $5,000 with coupons
attached. A Global Security will be issued in a denomination equal to the
aggregate principal amount of outstanding Senior Debt Securities represented by
such Global Security. The Prospectus Supplement relating to Senior Debt
Securities denominated in a foreign or composite currency will specify the
denominations thereof.
In connection with its original issuance, no Bearer Security will be mailed
or otherwise delivered to
any location in the United States (as defined below under "Limitations on
Issuance of Bearer Security"). A Bearer Security may be delivered in connection
with its original issuance only if the person entitled to receive such Bearer
Security furnishes written certification, in the form required by the Senior
Indenture, to the effect that such Bearer Security is not being acquired by or
on behalf of a United States person (as defined below under "Limitations on
Issuance of Bearer Securities"), or, if a beneficial interest in such Bearer
Security is being acquired by or on behalf of a United States person, that such
United States person is a financial institution (as defined in Treasury
Regulation Section 1.165-12(c)(1)(v)) that is purchasing for its own account or
for the account of a customer and which agrees to comply with the requirements
of Section 1650)(3)(A), (B) or (C) of the United States Internal Revenue Code of
1986, as amended (the "Code"), and the regulations thereunder. See "Global
Securities" and "Limitations on Issuance of Bearer Securities" below.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In addition, if Senior
Debt Securities of any series are issuable as both Registered Securities and as
Bearer Securities, at the option of the holder upon request confirmed in
writing, and subject to the terms of the Senior Indenture, Bearer Securities
(with all unmatured coupons, except as provided below, and all matured coupons
in default attached) of such series will be exchangeable for Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. Unless otherwise indicated in an
applicable Prospectus Supplement, any Bearer Security surrendered in exchange
for a Registered Security between a record date and the relevant date for
payment of interest will be surrendered without the coupon relating to such date
for payment of interest attached and interest will not be payable 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 terms
of the Senior Indenture.
6
<PAGE>
Except as provided in an applicable Prospectus Supplement, Bearer Securities
will not be issued in exchange for Registered Securities.
Senior Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer duly executed), at the
office of the security registrar designated by the Company or at the office of
any transfer agent designated by the Company for such purpose with respect to
any series of Senior Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Senior Indenture. Such transfer or
exchange will be effected upon the security registrar or such transfer agent, as
the case may be, being satisfied with the documents of title and identity of the
person making the request. The Company has initially appointed the Trustee as
the security registrar under the Senior Indenture. If a Prospectus Supplement
refers to any transfer agent (in addition to the security registrar) initially
designated by the Company with respect to any series of Senior Debt Securities,
the Company may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent acts,
except that, if Senior Debt Securities of a series are issuable only as
Registered Securities, the Company will be required to maintain a transfer agent
in each Place of Payment for such series and, if Senior Debt Securities of a
series are issuable as Bearer Securities, the Company will be required to
maintain (in addition to the security registrar) a transfer agent in a Place of
Payment for such series located outside the United States. The Company may at
any time designate additional transfer agents with respect to any series of
Senior Debt Securities.
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Senior Debt Securities of any
series during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Senior Debt Securities of that
series selected to be redeemed and ending at the close of business on (a) if
Senior Debt Securities of the series are issuable only as Registered Securities,
the day of mailing of the relevant notice of redemption, and (b) if Senior Debt
Securities of the series are issuable as Bearer Securities, the day of the first
publication of the relevant notice of redemption or, if Senior Debt Securities
of that series are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Registered Security, or portion thereof, called for
redemption, except the unredeemed portion of any Registered Security being
redeemed in part; or (iii) exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered Security of that series
and like tenor which is immediately surrendered for redemption.
PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any interest on Registered Securities (other than a Global
Security) will be made at the office of such Paying Agent or Paying Agents as
the Company may designate from time to time, except that, at the option of the
Company, payment of any interest may be made by check mailed to the address of
the payee entitled thereto as such address shall appear in the Security
Register. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of any installment of interest on Registered Securities will be made to
the person in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest payment.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Securities will be
payable (subject to applicable laws and regulations) at the offices of such
Paying Agent or Paying Agents outside the United States as the Company may
designate from time to time, except that, at the option of the Company, payment
of any interest may be made by check or by wire transfer to an account
maintained by the payee outside the United States. Unless otherwise indicated in
an applicable Prospectus Supplement, payment of interest on Bearer Securities on
any Interest Payment Date will be made only against surrender of the coupon
relating to such Interest
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Payment Date. No payment with respect to any Bearer Security will 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 wire transfer to an account maintained in the
United States. Payments will not be made in respect of Bearer Securities or
coupons appertaining thereto pursuant to presentation to the Company or its
Paying Agents within the United States. Notwithstanding the foregoing, payment
of principal of and any interest on Bearer Securities denominated and payable in
U.S. dollars will be made at the office of the Company's Paying Agent in the
United States if, and only if, payment of the full amount thereof in U.S.
dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions and the
Company has delivered to the Trustee an opinion of counsel to that effect.
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in The City of New York will be designated as
the Company's sole Paying Agent for payments with respect to Senior Debt
Securities which are issuable solely as Registered Securities. Any Paying Agent
outside the United States and any other Paying Agent in the United States
initially designated by the Company for the Senior Debt Securities will be named
in the applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that,
if Senior Debt Securities of a series are issuable only as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Senior Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in each Place of Payment for such series in the United States for
payments with respect to any Registered Securities of such series (and for
payments with respect to Bearer Securities of such series in the circumstances
described above, but not otherwise), (ii) a Paying Agent in each Place of
Payment located outside the United States where Senior Debt Securities of such
series and any coupons appertaining thereto may be presented and surrendered for
payment; provided that if the Senior Debt Securities of such series are listed
on The International Stock Exchange, London or 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 in London or
Luxembourg City or any other required city located outside the United States, as
the case may be, for Senior Debt Securities of such series, and (iii) a Paying
Agent in each Place of Payment located outside the United States where (subject
to applicable laws and regulations) Registered Securities of such series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company may be served.
All monies paid by the Company to a Paying Agent for the payment of
principal of and any interest on any Senior Debt Security that remains unclaimed
at the end of two years after such principal, premium or interest shall have
become due and payable will be repaid to the Company and thereafter the holder
of such Senior Debt Security or any coupon appertaining thereto will look only
to the Company for payment thereof.
GLOBAL SECURITIES
The Senior Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities that will be deposited with, or on
behalf of, a depository (the "Depository") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued only in
fully registered form and may be issued in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for the individual Senior
Debt Securities represented thereby, a Global Security may not be transferred
except as a whole by the Depository for such Global Security to a nominee of
such Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by the Depository or any nominee of such
Depository to a successor Depository or any nominee of such successor.
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The specific terms of the depository arrangement with respect to a series of
Senior Debt Securities will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
generally apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Senior Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Senior
Debt Securities or by the Company if such Senior Debt Securities are offered and
sold directly by the Company. Ownership of beneficial interests in a Global
Security will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global Security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the applicable Depository or its nominee (with
respect to interests of Participants) and records of Participants (with respect
to interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to own, pledge or transfer beneficial interest in a Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Senior Debt
Securities represented by such Global Security for all purposes under the Senior
Indenture. Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to have any of the individual Senior Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of any such
Senior Debt Securities of such series in definitive form and will not be
considered the owners or holders thereof under the Senior Indenture.
Payments of principal of and any premium and any interest on individual
Senior Debt Securities represented by a Global Security registered in the name
of a Depository or its nominee will be made to the Depository or its nominee, as
the case may be, as the registered owner of the Global Security representing
such Senior Debt Securities. None of the Company, the Trustee, any Paying Agent
or the Security Registrar for such Senior Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Security for such Senior Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company expects that the Depository for a series of Senior Debt
Securities or its nominee, upon receipt of any payment of principal, premium or
interest in respect of a permanent Global Security representing any of such
Senior Debt Securities, immediately will credit Participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security for such Senior Debt Securities as
shown on the records of such Depository or its nominee. The Company also expects
that payments by Participants to owners of beneficial interests in such Global
Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such Participants.
If a Depository for a series of Senior Debt Securities is at any time
unwilling, unable or ineligible to continue as depository and a successor
depository is not appointed by the Company within 90 days, the Company will
issue individual Senior Debt Securities of such series in exchange for the
Global Security representing such series of Senior Debt Securities. In addition,
the Company may, at any time and in its sole discretion, subject to any
limitations described in the Prospectus Supplement relating to such Senior Debt
Securities, determine not to have any Senior Debt Securities of such series
represented by one or more Global Securities and, in such event, will issue
individual Senior Debt Securities of such series in
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exchange for the Global Security or Securities representing such series of
Senior Debt Securities. Individual Senior Debt Securities of such series so
issued will be issued in denominations, unless otherwise specified by the
Company, of $1,000 and integral multiples thereof.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to United States persons (each
as defined below) other than to a Qualifying Branch of a United States Financial
Institution (as defined below), and any underwriters, agents and dealers
participating in the offering of Senior Debt Securities must agree that they
will not offer any Bearer Securities for sale or resale in the United States or
to United States persons (other than a Qualifying Branch of a United States
Financial Institution) nor deliver Bearer Securities within the United States.
In addition, any such underwriters, agents and dealers must agree to send
confirmations to each purchaser of a Bearer Security confirming that such
purchaser represents that it is not a United States person or is a Qualifying
Branch of a United States Financial Institution and, if such person is a dealer,
that it will send similar confirmations to purchasers from it. The term
"Qualifying Branch of a United States Financial Institution" means a branch
located outside the United States of a United States securities clearing
organization, bank or other financial institution listed under Treasury
Regulation Section 1.165-12(c)(1)(v) that agrees to comply with the requirements
of Section 1650(3)(A), (B) or (C) of the Code and the regulations thereunder.
Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 1650) and 1287(a) of the
Internal Revenue Code." Under Sections 1650) and 1287(a) of the Code, holders
that are United States persons, with certain exceptions, will not be entitled to
deduct any loss on Bearer Securities and must treat as ordinary income any gain
realized on the sale or other disposition (including the receipt of principal)
of Bearer Securities.
The term "United States 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 of any political subdivision thereof, an
estate or, for taxable years beginning before January 1, 1997, a trust the
income of which is subject to United States federal income taxation regardless
of its source or, for taxable years beginning after December 31, 1996, a trust
if a U.S. court is able to exercise primary supervision over the administration
of the trust and one or more U.S. fiduciaries have the authority to control all
substantial decisions of the trust, and the term "United States" means the
United States of America (including the states and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction
(including the Commonwealth of Puerto Rico).
DEFEASANCE
The Senior Indenture provides that the Company will be discharged from any
and all obligations in respect of the Senior Debt Securities of any series
(except for certain obligations to register the transfer or exchange of Senior
Debt Securities of such series, to replace stolen, lost or mutilated Senior Debt
Securities of such series, to maintain paying agencies and to hold monies for
payment in trust) upon the deposit with the Trustee for such series of Senior
Debt Securities in trust of money and/or 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 money in an amount sufficient to pay
the principal of and each installment of interest, if any, on the Senior Debt
Securities of such series on the maturity of such payments in accordance with
the terms of the Senior Indenture and the Senior Debt Securities of such series.
Such a trust may be established only if, among other things, the Company has
delivered to such Trustee an Opinion of Counsel (who may be counsel for the
Company) to the effect that (i) holders of the Senior Debt Securities of such
series will not recognize income, gain or loss for federal income tax
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purposes as a result of such deposit, defeasance and discharge and will be
subject to federal income tax on the same amounts and in the same manner and at
the same times, as would have been the case if such deposit, defeasance and
discharge had not occurred, and (ii) the Senior Debt Securities of such series,
if then listed on The New York Stock Exchange, will not be delisted as a result
of such deposit, defeasance and discharge.
The Senior Indenture provides that, if applicable, the Company may omit to
comply with any additional restrictive covenants imposed on the Company in
connection with the establishment of any series of Senior Debt Securities and
that clause (d) under "Events of Default" with respect to such restrictive
covenants and clause (e) under "Events of Default" shall not be deemed to be an
Event of Default under the Senior Indenture and the Senior Debt Securities of
any series, upon the deposit with the Trustee under the Senior Indenture, in
trust of money and/or U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of, and each
installment of interest, if any, on the Senior Debt Securities of such series on
the maturity of such payments in accordance with the terms of the Senior
Indenture and the Senior Debt Securities of such series. The obligations of the
Company under the Senior Indenture and Senior Debt Securities of such series
other than with respect to the covenants referred to above and the Events of
Default other than the Events of Default referred to above shall remain in full
force and effect. Such a trust may only be established if, among other things,
the Company has delivered to the Trustee an Opinion of Counsel (who may be
counsel for the Company) to the effect that (i) the holders of the Senior Debt
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
covenants and Events of Default and will be subject to federal income tax on the
same amounts and in the same manner and at the same times, as would have been
the case if such deposit and defeasance had not occurred, and (ii) the Senior
Debt Securities of such series, if then listed on The New York Stock Exchange,
will not be delisted as a result of such deposit and defeasance.
In the event the Company exercises its option to omit compliance with
certain covenants of the Senior Indenture with respect to the Senior Debt
Securities of any series as described above and the Senior Debt Securities of
such series are declared due and payable because of the occurrence of any Event
of Default other than an Event of Default described in clauses (d) or (e) under
"Events of Default," the amount of money and U.S. Government Obligations on
deposit with the Trustee will be sufficient to pay amounts due on the Senior
Debt Securities of such series at the time of their stated maturity but may not
be sufficient to pay amounts due on the Senior Debt Securities of such series at
the time of the acceleration resulting from such Event of Default. However, the
Company will remain liable for such payments.
The term "U.S. Government Obligation" means direct noncallable obligations
of, or noncallable obligations guaranteed by, the United States or an agency
thereof for the payment of which guarantee or obligation, the full faith and
credit of the United States is pledged.
MODIFICATION OF THE SENIOR INDENTURE
The Senior Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority of the principal amount
of the Senior Debt Securities of each series then outstanding, to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the Senior Indenture or modifying the rights of the holders
of the Senior Debt Securities of such series, except that no such supplemental
indenture may, among other things, (i) extend the final maturity of any Senior
Debt Securities, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount thereof, impair the right to institute
suit for payment thereof or reduce any amount payable upon any redemption
thereof without the consent of the holder of the Senior Debt Security so
affected, or (ii) reduce the aforesaid percentage of Senior Debt Securities, the
consent of the holders of which is required for any such supplemental indenture,
without the consent of the holders of all outstanding Senior Debt Securities.
The Board of Directors of the Company does not have
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the power to waive any of the covenants of the Senior Indenture including those
relating to consolidation, merger or sale of assets.
EVENTS OF DEFAULT
An Event of Default with respect to any series of Senior Debt Securities is
defined in the Senior Indenture as being: (a) default by the Company for 30 days
in the payment of any installment of interest on the Senior Debt Securities of
such series; (b) default by the Company in the payment of any principal on the
Senior Debt Securities of such series; (c) default by the Company in the payment
of any sinking fund installment with respect to such series of Senior Debt
Securities; (d) default by the Company in the performance of any of the
agreements in the Senior Indenture contained therein for the benefit of the
Senior Debt Securities of such series which shall not have been remedied within
a period of 60 days after receipt of written notice by the Company from the
Trustee for such series of Senior Debt Securities or by the Company and such
Trustee from the holders of not less than 25% in principal amount of the Senior
Debt Securities of such series then outstanding; (e) with respect to any series
of Senior Debt Securities (unless otherwise specified in the accompanying
Prospectus Supplement), the acceleration, or failure to pay at maturity, of any
indebtedness for money borrowed of the Company exceeding $20,000,000 in
principal amount, which acceleration is not rescinded or annulled or
indebtedness paid within 15 days after the date on which written notice thereof
shall have first been given to the Company as provided in the Senior Indenture;
(f) certain events of bankruptcy, insolvency or reorganization of the Company;
or (g) any other Event of Default established in accordance with the Senior
Indenture with respect to any series of Senior Debt Securities. No Event of
Default (other than an Event of Default under clause (f)) described above with
respect to a particular series of Senior Debt Securities necessarily constitutes
an Event of Default with respect to any other series of Senior Debt Securities.
The Senior Indenture provides that if an Event of Default with respect to
any series of Senior Debt Securities shall have occurred and be continuing,
either the Trustee with respect to the Senior Debt Securities of that series or
the holders of at least 25% in aggregate principal amount of Senior Debt
Securities of that series then outstanding may declare the principal amount (or,
if the Senior Debt Securities of that series were sold at an original issue
discount, such portion of the principal amount as may be specified in the terms
of that series) of all the Senior Debt Securities of that series and interest,
if any, accrued thereon to be due and payable immediately, but upon certain
conditions such declaration may be annulled and past defaults (except, unless
theretofore cured, a default in payment of principal of or interest on Senior
Debt Securities of that series) may be waived by the holders of a majority in
principal amount of the Senior Debt Securities of that series then outstanding.
The Senior Indenture contains a provision entitling the Trustee with respect
to any series of Senior Debt Securities, subject to the duty of the Trustee
during default to act with the required standard of care, to be indemnified by
the holders of Senior Debt Securities of such series before proceeding to
exercise any right or power under the Senior Indenture at the request of the
holders of such Senior Debt Securities. The Senior Indenture also provides that
the holders of a majority in principal amount of the outstanding Senior Debt
Securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee for such series of Senior
Debt Securities, or exercising any trust or power conferred on such Trustee,
with respect to the Senior Debt Securities of such series. The Senior Indenture
contains a covenant that the Company will file annually with the Trustee a
certificate as to the absence of any default or specifying any default that
exists.
No holder of any Senior Debt Security of any series will have any right to
institute any proceeding with respect to the Senior Indenture or for any remedy
thereunder, unless such holder shall have previously given the Trustee for such
series of Senior Debt Securities written notice of an Event of Default with
respect to Senior Debt Securities of that series and unless also the holders of
at least 25% in aggregate principal amount of the outstanding Senior Debt
Securities of that series shall have made written request, and offered
reasonable indemnity, to such Trustee to institute such proceeding as trustee,
and such Trustee
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shall not have received from the holders of a majority in aggregate principal
amount of the outstanding Senior Debt Securities of that series a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, any right of a holder of any Senior Debt
Security to receive payment of the principal of and any interest on such Senior
Debt Security on or after the due dates expressed in such Senior Debt Security
and to institute suit for the enforcement of any such payment on or after such
dates shall not be impaired or affected without the consent of such holder.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless (i) either the Company shall be the continuing corporation, or
the successor corporation or the Person which acquires by sale or conveyance
substantially all of the assets of the Company (if other than the Company) shall
be a corporation organized under the laws of the United States or any state
thereof and shall expressly assume the due and punctual payment of the principal
of and interest on all the Senior Debt Securities, according to their tenor, and
the due and punctual performance and observance of all of the covenants and
conditions of the Senior Indenture to be performed or observed by the Company,
by supplemental indenture satisfactory to the Trustee, executed and delivered to
the Trustee by such corporation, and (ii) the Company or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale or conveyance, be in default in the performance of
any such covenants or condition.
Other than the covenants described above, or as set forth in any
accompanying Prospectus Supplement, the Senior Indenture and the Senior Debt
Securities do not contain any covenants or other provisions designed to afford
holders of the Senior Debt Securities protection in the event of a takeover,
recapitalization or highly leveraged transaction involving the Company.
NO PERSONAL LIABILITY
No past, present or future director, officer, employee or shareholder, as
such, of the Company or any successor thereof shall have any liability for any
obligations of the Company under the Senior Debt Securities or the Senior
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of Debt Securities by accepting such
Senior Debt Security waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Senior Debt
Securities.
THE TRUSTEE
The Trustee in its individual or any other capacity may become the owner or
pledgee of Senior Debt Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not the Trustee
provided it complies with the terms of the Senior Indenture.
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DESCRIPTION OF SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will be issued under an Indenture (as it
may be supplemented, the "Subordinated Indenture"), to be entered into between
the Company and The Chase Manhattan Bank, as trustee (referred to herein under
"Description of Subordinated Debt Securities" as the "Trustee"), which is filed
as an exhibit to the Registration Statement. The Company believes that the
following summary of certain provisions of the Subordinated Indenture is a
complete discussion of all material terms necessary to understand the
Subordinated Indenture. Capitalized terms not otherwise defined under the
heading "Description of Subordinated Debt Securities" have the meaning given to
them in the Subordinated Indenture. As used in this section "Description of
Subordinated Debt Securities," unless the context indicates otherwise, the term
"Company" means Enhance Financial Services Group Inc. and does not include any
of its subsidiaries.
GENERAL
The Subordinated Debt Securities will rank equally with all other unsecured
and subordinated indebtedness for borrowed money of the Company. As of September
30, 1997, approximately $124.8 million aggregate principal amount of
indebtedness for borrowed money of the Company would rank senior to the
Subordinated Debt Securities. As of September 30, 1997, the Company had no
existing indebtedness for borrowed money that would rank PARI PASSU with the
Subordinated Debt Securities. The Subordinated Indenture does not limit the
amount of debt, either secured or unsecured, that may be issued by the Company
which would be senior to the Subordinated Debt Securities or that may be issued
under the Subordinated Indenture or otherwise. The Subordinated Debt Securities
may be issued in one or more series with the same or various maturities and may
be sold at par, a premium or an original issue discount. Subordinated Debt
Securities sold at an original issue discount may bear no interest or interest
at a rate that is below market rates.
Because the Company is a holding company, the right of the Company, and
hence the rights of creditors and shareholders of the Company, to participate in
any distribution of assets of any subsidiary upon its liquidation or
reorganization or otherwise is accordingly subject to prior claims of creditors
of the subsidiary and (in the case of an insurance subsidiary) its
policyholders, except to the extent that claims of the Company itself as a
creditor of the subsidiary may be recognized. The subsidiaries are separate and
distinct legal entities and have no obligation, contingent or otherwise, to pay
any amounts due pursuant to the Subordinated Debt Securities or to make any
funds available therefor, whether by dividends, loans or other payments. The
payment of dividends or the making of loans and advances to the Company by its
subsidiaries may be subject to statutory or regulatory restrictions, are
contingent upon the earnings of those subsidiaries and are subject to insurance
regulation and various business considerations.
Reference is made to the Prospectus Supplement for the following terms of
the offered Subordinated Debt Securities (to the extent such terms are
applicable to such Subordinated Debt Securities): (i) the title of such
Subordinated Debt Securities or the particular series thereof; (ii) any limit on
the aggregate principal amount of such Subordinated Debt Securities; (iii)
whether such Subordinated Debt Securities are to be issuable as Registered
Securities or Bearer Securities or both, whether any of such Subordinated Debt
Securities are to be issuable initially in temporary global form and whether any
of such Subordinated Debt Securities are to be issuable in permanent global
form; (iv) the price or prices (generally expressed as a percentage of the
aggregate principal amount thereof) at which such Subordinated Debt Securities
will be issued; (v) the date or dates on which such Subordinated Debt Securities
will mature; (vi) the rate or rates per annum, or the formula by which such rate
or rates shall be determined, at which such Subordinated Debt Securities will
bear interest, if any, the date from which any such interest will accrue and the
circumstances, if any, under which such interest rate or interest rate formula
may be reset at the option of the Company; (vii) the Interest Payment Dates on
which any such interest on such Subordinated Debt Securities will be payable,
the Regular Record Date for any interest payable on such Subordinated Debt
Securities that are Registered Securities on any Interest Payment Date, and the
extent to which, or
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the manner in which any interest payable on a Global Security on an Interest
Payment Date will be paid if other than in the manner described below under
"Global Securities;" (viii) the person to whom any Registered Security of such
series will be payable, if other than the person in whose name such Subordinated
Debt Security (or one or more predecessor Subordinated Debt Securities) is
registered at the close of business on the Regular Record Date of such interest,
and the manner in which, or the person to whom, any interest on any Bearer
Security of such series will be payable, if otherwise than upon presentation and
surrender of the coupons thereto; (ix) if other than the principal amount of
such Subordinated Debt Securities, the portion of the principal amount of such
Subordinated Debt Securities which shall be payable upon declaration of
acceleration of the maturity thereof or provable in bankruptcy; (x) any
mandatory or optional sinking fund or analogous provisions; (xi) each office or
agency where, subject to the terms of the Subordinated Indenture as described
below under "Payments and Paying Agents," the principal of and any interest on
such Subordinated Debt Securities will be payable and each office or agency
where, subject to the terms of the Subordinated Indenture as described below
under "Denominations, Registration and Transfer," such Subordinated Debt
Securities may be presented for registration of transfer or exchange; (xii) the
date, if any, after which and the price or prices at which such Subordinated
Debt Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed, in whole or in part, and the other detailed terms and
provisions of any such optional or mandatory redemption provisions; (xiii) the
denominations in which such Subordinated Debt Securities which are Registered
Securities will be issuable, if other than denominations of U.S. $1,000 and any
integral multiple thereof, and the denomination in which such Subordinated Debt
Securities which are Bearer Securities will be issuable, if other than
denominations of U.S. $5,000; (xiv) the currency or currencies of payment of
principal of and any premium and interest on such Subordinated Debt Securities;
(xv) any index used to determine the amount of payments of principal of and any
interest on such Subordinated Debt Securities; (xvi) the application, if any, of
any restrictive covenants or events of default that are in addition to or
different from those described herein; (xvii) the form of such Subordinated Debt
Security; and (xviii) any other terms and provisions of such Subordinated Debt
Securities not inconsistent with the terms and provisions of the Subordinated
Indenture. Any such Prospectus Supplement will also describe any special
provisions for the payment of additional amounts with respect to such
Subordinated Debt Securities. Subordinated Debt Securities of any series may be
issued in one or more tranches as described in the applicable Prospectus
Supplement.
If the purchase price of any of the offered Subordinated Debt Securities is
denominated in a foreign currency or currencies or foreign currency unit or
units or if the principal of and any premium and interest on any series of
Subordinated Debt Securities is payable in a foreign currency or currencies or
foreign currency unit or units, the restrictions, elections, general tax
considerations, specific terms and other information with respect to such issue
of Subordinated Debt Securities and such foreign currency or currencies or
foreign currency unit or units will be set forth in the applicable Prospectus
Supplement.
SUBORDINATION
Indebtedness evidenced by the Subordinated Debt Securities will be
subordinated in right of payment, as set forth in the Subordinated Indenture, to
the prior payment in full of all existing and future Senior Indebtedness of the
Company. Senior Indebtedness is defined in the Subordinated Indenture as the
principal of and interest on (including any interest that accrues after or would
have accrued but for the filing of a petition initiating any proceeding pursuant
to any Bankruptcy Law, regardless of whether such interest is allowed or
permitted to the holder of such Debt against the bankruptcy or any other
insolvency estate of the Company in such proceeding) and other amounts due on or
in connection with any Debt incurred, assumed or guaranteed by the Company,
whether outstanding on the date of the Subordinated Indenture or thereafter
incurred, assumed or guaranteed, and all renewals, extensions and refundings of
any such Debt. Amounts outstanding under any Senior Debt Securities will be
included in Senior Indebtedness. Excluded from the definition of Senior
Indebtedness are the following: (a) any Debt which expressly provides (i) that
such Debt shall not be senior in right of payment to the Subordinated Debt
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Securities, or (ii) that such Debt shall be subordinated to any other Debt of
the Company, unless such Debt expressly provides that such Debt shall be senior
in right of payment to the Subordinated Debt Securities; and (b) any Debt of the
Company in respect of the Subordinated Debt Securities.
By reason of such subordination, in the event of dissolution, insolvency,
bankruptcy or other similar proceedings, upon any distribution of assets, (i)
the holders of Subordinated Debt Securities will be required to pay over their
share of such distribution to the holders of Senior Indebtedness until such
Senior Indebtedness is paid in full; and (ii) creditors of the Company who are
not holders of Subordinated Debt Securities or holders of Senior Indebtedness
may recover less, ratably, than holders of Senior Indebtedness and may recover
more, ratably, than the holders of Subordinated Debt Securities.
In the event that the Subordinated Debt Securities are declared due and
payable prior to their Stated Maturity by reason of the occurrence of an Event
of Default, then the Company is obligated to notify promptly holders of Senior
Indebtedness of such acceleration. The Company may not pay the Subordinated Debt
Securities until 179 days have passed after such acceleration occurs and may
thereafter pay the Subordinated Debt Securities if the terms of the Subordinated
Indenture otherwise permit payment at that time.
No payment of the principal, issue price plus accrued original issue
discount (if any), redemption price, interest, if any, or any other amount
payable with respect to any Subordinated Debt Security may be made, nor may the
Company acquire any Subordinated Debt Securities except as set forth in the
Subordinated Indenture, if any default with respect to Senior Indebtedness
occurs and is continuing that permits the acceleration of the maturity thereof
and either such default is the subject of judicial proceedings or the Company
receives notice of the default, unless (a) 179 days pass after notice of the
default is given and such default is not then the subject of judicial
proceedings or the default with respect to the Senior Indebtedness is cured or
waived and (b) the terms of the Subordinated Indenture otherwise permit the
payment or acquisition of the Subordinated Debt Securities at that time.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Subordinated Debt Securities will be issuable as Registered Securities,
Bearer Securities or both. Subordinated Debt Securities may be issuable in the
form of one or more Global Securities, as described below under "Global
Securities." Unless otherwise provided in the applicable Prospectus Supplement,
Registered Securities denominated in U.S. dollars will be issued only in
denominations of $1,000 or any integral multiple thereof and Bearer Securities
denominated in U.S. dollars will be issued only in denominations of $5,000 with
coupons attached. A Global Security will be issued in a denomination equal to
the aggregate principal amount of outstanding Subordinated Debt Securities
represented by such Global Security. The Prospectus Supplement relating to
Subordinated Debt Securities denominated in a foreign or composite currency will
specify the denominations thereof.
In connection with its original issuance, no Bearer Security shall be mailed
or otherwise delivered to any location in the United States (as defined below
under "Limitations on Issuance of Bearer Securities") and a Bearer Security may
be delivered in connection with its original issuance only if the person
entitled to receive such Bearer Security furnishes written certification, in the
form required by the Subordinated Indenture, to the effect that such Bearer
Security is not being acquired by or on behalf of a United States person (as
defined below under "Limitations on Issuance of Bearer Securities"), or, if a
beneficial interest in such Bearer Security is being acquired by or on behalf of
a United States person, that such United States person is a financial
institution (as defined in Treasury Regulation Section 1.165-12(c)(1)(v)) that
is purchasing for its own account or for the account of a customer and which
agrees to comply with the requirements of Section 1650(3)(A), (B) or (C) of the
Code, and the regulations thereunder. See "Global Securities" and "Limitations
on Issuance of Bearer Securities" below.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In
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addition, if Subordinated Debt Securities of any series are issuable as both
Registered Securities and as Bearer Securities, at the option of the holder upon
request confirmed in writing, and subject to the terms of the Subordinated
Indenture, Bearer Securities (with all unmatured coupons, except as provided
below, and all matured coupons in default attached) of such series will be
exchangeable for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Unless
otherwise indicated in an applicable Prospectus Supplement, any Bearer Security
surrendered in exchange for a Registered Security between a record date and the
relevant date for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest attached and interest will not be
payable 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 terms of the Subordinated Indenture. Except as provided in
an applicable Prospectus Supplement, Bearer Securities will not be issued in
exchange for Registered Securities.
Subordinated Debt Securities may be presented for exchange as provided
above, and Registered Securities (other than a Global Security) may be presented
for registration of transfer (with the form of transfer duly executed), at the
office of the security registrar designated by the Company or at the office of
any transfer agent designated by the Company for such purpose with respect to
any series of Subordinated Debt Securities and referred to in an applicable
Prospectus Supplement, without service charge and upon payment of any taxes and
other governmental charges as described in the Subordinated Indenture. Such
transfer or exchange will be effected upon the security registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. The Company has initially
appointed the Trustee as the security registrar under the Subordinated
Indenture. If a Prospectus Supplement refers to any transfer agent (in addition
to the security registrar) initially designated by the Company with respect to
any series of Subordinated Debt Securities, the Company may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that, if Subordinated Debt
Securities of a series are issuable only as Registered Securities, the Company
will be required to maintain a transfer agent in each Place of Payment for such
series and, if Subordinated Debt Securities of a series are issuable as Bearer
Securities, the Company will be required to maintain (in addition to the
security registrar) a transfer agent in a Place of Payment for such series
located outside the United States. The Company may at any time designate
additional transfer agents with respect to any series of Subordinated Debt
Securities.
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Subordinated Debt Securities of
any series during a period beginning at the opening of business 15 days before
the day of the mailing of a notice of redemption of Subordinated Debt Securities
of that series selected to be redeemed and ending at the close of business on
(a) if Subordinated Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption,
and (b) if Subordinated Debt Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if Subordinated Debt Securities of that series are also issuable
as Registered Securities and there is no publication, the mailing of the
relevant notice of redemption; (ii) register the transfer of or exchange any
Registered Security, or portion thereof, called for redemption, except the
unredeemed portion of any Registered Security being redeemed in part; or (iii)
exchange any Bearer Security called for redemption, except to exchange such
Bearer Security for a Registered Security of that series and like tenor which is
immediately surrendered for redemption.
PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any interest on Registered Securities (other than a Global
Security) will be made at the office of such Paying Agent or Paying Agents as
the Company may designate from time to time, except that, at the option of the
Company, payment of any interest may be made by check mailed to the address of
the payee entitled
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thereto as such address shall appear in the Security Register. Unless otherwise
indicated in an applicable Prospectus Supplement, payment of any installment of
interest on Registered Securities will be made to the person in whose name such
Registered Security is registered at the close of business on the Record Date
for such interest payment.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Securities will be
payable (subject to applicable laws and regulations) at the offices of such
Paying Agent or Paying Agents outside the United States as the Company may
designate from time to time, except that, at the option of the Company, payment
of any interest may be made by check or by wire transfer to an account
maintained by the payee outside the United States. Unless otherwise indicated in
an applicable Prospectus Supplement, payment of interest on Bearer Securities on
any Interest Payment Date will be made only against surrender of the coupon
relating to such Interest Payment Date. No payment with respect to any Bearer
Security will 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 wire
transfer to an account maintained in the United States. Payments will not be
made in respect of Bearer Securities or coupons appertaining thereto pursuant to
presentation to the Company or its Paying Agents within the United States.
Notwithstanding the foregoing, payment of principal of and any interest on
Bearer Securities denominated and payable in U.S. dollars will be made at the
office of the Company's Paying Agent in the United States if, and only if,
payment of the full amount thereof in U.S. dollars at all offices or agencies
outside the United States is illegal or effectively precluded by exchange
controls or other similar restrictions and the Company has delivered to the
Trustee and opinion of counsel to that effect.
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in The City of New York will be designated as
the Company's sole Paying Agent for payments with respect to Subordinated Debt
Securities which are issuable solely as Registered Securities. Any Paying Agent
outside the United States and any other Paying Agent in the United States
initially designated by the Company for the Subordinated Debt Securities will be
named in the applicable Prospectus Supplement. The Company may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that, if Subordinated Debt Securities of a series are issuable only as
Registered Securities, the Company will be required to maintain a Paying Agent
in each Place of Payment for such series and, if Subordinated Debt Securities of
a series are issuable as Bearer Securities, the Company will be required to
maintain (i) a Paying Agent in each Place of Payment for such series in the
United States for payments with respect to any Registered Securities of such
series (and for payments with respect to Bearer Securities of such series in the
circumstances described above, but not otherwise), (ii) a Paying Agent in each
Place of Payment located outside the United States where Subordinated Debt
Securities of such series and any coupons appertaining thereto may be presented
and surrendered for payment; provided that if the Subordinated Debt Securities
of such series are listed on The International Stock Exchange, London or 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 in London or Luxembourg City or any other required city located
outside the United States, as the case may be, for Subordinated Debt Securities
of such series, and (iii) a Paying Agent in each Place of Payment located
outside the United States where (subject to applicable laws and regulations)
Registered Securities of such series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company may be
served.
All monies paid by the Company to a Paying Agent for the payment of
principal of and any interest on any Subordinated Debt Security that remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company and thereafter
the holder of such Subordinated Debt Security or any coupon appertaining thereto
will look only to the Company for payment thereof.
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GLOBAL SECURITIES
The Subordinated Debt Securities of a series may be issued in whole or in
part in the form of one or more Global Securities that will be deposited with,
or on behalf of, a depository (the "Depository") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued only in
fully registered form and may be issued in either temporary or permanent form.
Unless and until it is exchanged in whole or in part for the individual
Subordinated Debt Securities represented thereby, a Global Security may not be
transferred except as a whole by the Depository for such Global Security to a
nominee of such Depository or by a nominee of such Depository to such Depository
or another nominee of such Depository or by the Depository or any nominee of
such Depository to a successor Depository or any nominee of such successor.
The specific terms of the depository arrangement with respect to a series of
Subordinated Debt Securities will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following provisions
will generally apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Subordinated Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such
Subordinated Debt Securities or by the Company if such Subordinated Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in a Global Security will be limited to Participants or persons that
may hold interest through Participants. Ownership of beneficial interests in
such Global Security will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the applicable Depository or its
nominee (with respect to interests of Participants) and records of Participants
(with respect to interests of person who hold through Participants). The laws of
some states require that certain purchasers of securities take physical delivery
of such securities in definitive form. Such limits and such laws may impair the
ability to own, pledge or transfer beneficial interest in a Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Subordinated
Debt Securities represented by such Global Security for all purposes under the
Subordinated Indenture. Except as provided below, owners of beneficial interests
in a Global Security will not be entitled to have any of the individual
Subordinated Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Subordinated Debt Securities of such series in definitive
form and will not be considered the owners or holders thereof under the
Subordinated Indenture.
Payments of principal of and any premium and any interest on individual
Subordinated Debt Securities represented by a Global Security registered in the
name of a Depository or its nominee will be made to the Depository or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Subordinated Debt Securities. None of the Company, the
Trustee, any Paying Agent or the Security Registrar for such Subordinated Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership interest
in Global Security for such Subordinated Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depository for a series of Subordinated Debt
Securities or its nominee, upon receipt of any payment of principal, premium or
interest in respect of a permanent Global Security representing any of such
Subordinated Debt Securities, immediately will credit Participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of such Global Security for such Subordinated Debt
Securities as shown on the records of such Depository or its nominee. The
Company also expects that payments by Participants to owners of beneficial
interests in such
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Global Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such Participants.
If a Depository for a series of Subordinated Debt Securities is at any time
unwilling, unable or ineligible to continue as depository and a successor
depository is not appointed by the Company within 90 days, the Company will
issue individual Subordinated Debt Securities of such series in exchange for the
Global Security representing such series of Subordinated Debt Securities. In
addition, the Company may, at any time and in its sole discretion, subject to
any limitations described in the Prospectus Supplement relating to such
Subordinated Debt Securities, determine not to have any Subordinated Debt
Securities of such series represented by one or more Global Securities and, in
such event, will issue individual Subordinated Debt Securities of such series in
exchange for the Global Security or Securities representing such series of
Subordinated Debt Securities. Individual Subordinated Debt Securities of such
series so issued will be issued in denominations, unless otherwise specified by
the Company, of $1,000 and integral multiples thereof.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to United States persons (each
as defined below) other than to a Qualifying Branch of a United States Financial
Institution (as defined below), and any underwriters, agents and dealers
participating in the offering of Subordinated Debt Securities must agree that
they will not offer any Bearer Securities for sale or resale in the United
States or to United States persons (other than a Qualifying Branch of a United
States Financial Institution) nor deliver Bearer Securities within the United
States. In addition, any such underwriters, agents and dealers must agree to
send confirmations to each purchaser of a Bearer Security confirming that such
purchaser represents that it is not a United States person or is a Qualifying
Branch of a United States Financial Institution and, if such person is a dealer,
that it will send similar confirmations to purchasers from it. The term
"Qualifying Branch of a United States Financial Institution" means a branch
located outside the United States of a United States securities clearing
organization, bank or other financial institution listed under Treasury
Regulation Section 1.165-12(c)(1)(v) that agrees to comply with the requirements
of Section 1650(3)(A), (B) or (C) of the Code and the regulations thereunder.
Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect:'Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 1650) and 1287(a) of the
Internal Revenue Code." Under Sections 1650) and 1287(a) of the Code, holders
that are United States persons, with certain exceptions, will not be entitled to
deduct any loss on Bearer Securities and must treat as ordinary income any gain
realized on the sale or other disposition (including the receipt of principal)
of Bearer Securities.
The term "United States 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 of any political subdivision thereof, an
estate or, for taxable years beginning before January 1, 1997, a trust the
income of which is subject to United States federal income taxation regardless
of its source or, for taxable years beginning after December 31, 1996, a trust
if a U.S. court is able to exercise primary supervision over the administration
of the trust and one or more U.S. fiduciaries have the authority to control all
substantial decisions of the trust, and the term "United States" means the
United States of America (including the states and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction
(including the Commonwealth of Puerto Rico).
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DEFEASANCE
The Subordinated Indenture provides that the Company will be discharged from
any and all obligations in respect of the Subordinated Debt Securities of any
series (except for certain obligations to register the transfer or exchange of
Subordinated Debt Securities of such series, to replace stolen, lost or
mutilated Subordinated Debt Securities of such series, to maintain paying
agencies and to hold monies for payment in trust) upon the deposit with the
Trustee for such series of Subordinated Debt Securities in trust of money and/or
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 money in an amount sufficient to pay the principal of and each
installment of interest, if any, on the Subordinated Debt Securities of such
series on the maturity of such payments in accordance with the terms of the
Subordinated Indenture and the Subordinated Debt Securities of such series. Such
a trust may only be established if, among other things, the Company has
delivered to such Trustee an Opinion of Counsel (who may be counsel for the
Company) of the effect that (i) holders of the Subordinated Debt Securities of
such series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to federal income tax on the same amounts and in the same manner and at
the same times, as would has been the case if such deposit, defeasance and
discharge had not occurred, and (ii) the Subordinated Debt Securities of such
series, if then listed on The New York Stock Exchange, will not be delisted as a
result of such deposit, defeasance and discharge.
The Subordinated Indenture provides that, if applicable, the Company may
omit to comply with any additional restrictive covenants imposed on the Company
in connection with the establishment of any series of Subordinated Debt
Securities and that clause (d) under "Events of Default" with respect to such
restrictive covenants and clause (e) under "Events of Default" shall not be
deemed to be an Event of Default under the Subordinated Indenture and the
Subordinated Debt Securities of any series, upon the deposit with the Trustee
under the Subordinated Indenture, in trust of money and/or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of, and each installment of interest, if any, on
the Subordinated Debt Securities of such series on the maturity of such payments
in accordance with the terms of the Subordinated Indenture and the Subordinated
Debt Securities of such series. The obligations of the Company under the
Subordinated Indenture and the Subordinated Debt Securities of such series other
than with respect to the covenants referred to above and the Events of Default
other than the Events of Default referred to above shall remain in full force
and effect. Such a trust may only be established if, among other things, the
Company has delivered to the Trustee an Opinion of Counsel (who may be counsel
for the Company) to the effect that (i) the holders of the Subordinated Debt
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
covenants and Events of Default and will be subject to federal income tax on the
same amounts and in the same manner and at the same times, as would have been
the case if such deposit and defeasance had not occurred, and (ii) the
Subordinated Debt Securities of such series, if then listed on The New York
Stock Exchange, will not be delisted as a result of such deposit and defeasance.
In the event the Company exercises its option to omit compliance with
certain covenants of the Subordinated Indenture with respect to the Subordinated
Debt Securities of any series as described above and the Subordinated Debt
Securities of such series are declared due and payable because of the occurrence
of any Event of Default other than an Event of Default described in clauses (d)
or (e) under "Events of Default," the amount of money and U.S. Government
Obligations on deposit with the Trustee will be sufficient to pay amounts due on
the Subordinated Debt Securities of such series at the time of their stated
maturity but may not be sufficient to pay amounts due on the Subordinated Debt
Securities of such series at the time of the acceleration resulting from such
Event of Default. However, the Company will remain liable for such payments.
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The term "U.S. Government Obligation" means direct noncallable obligations
of, or noncallable obligations guaranteed by, the United States or an agency
thereof for the payment of which guarantee or obligation, the full faith and
credit of the United States is pledged.
MODIFICATION OF THE SUBORDINATED INDENTURE
The Subordinated Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of a majority of the principal
amount of the Subordinated Debt Securities of each series then outstanding, to
execute supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of the Subordinated Indenture or modifying the
rights of the holders of the Subordinated Debt Securities of such series, except
that no such supplemental indenture may, among other things, (i) extend the
final maturity of any Subordinated Debt Securities, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount thereof,
impair the right to institute suit for payment thereof or reduce any amount
payable upon any redemption thereof without the consent of the holder of the
Subordinated Debt Security so affected, or (ii) reduce the aforesaid percentage
of Subordinated Debt Securities, the consent of the holders of which is required
for any such supplemental indenture, without the consent of the holders of all
outstanding Subordinated Debt Securities. The Board of Directors of the Company
does not have the power to waive any of the covenants of the Subordinated
Indenture including those relating to consolidation, merger or sale of assets.
EVENTS OF DEFAULT
An Event of Default with respect to any series of Subordinated Debt
Securities is defined in the Subordinated Indenture as being: (a) default by the
Company for 30 days in the payment of any installment of interest on the
Subordinated Debt Securities of such series; (b) default by the Company in the
payment of any principal on the Subordinated Debt Securities of such series; (c)
default by the Company in the payment of any sinking fund installment with
respect to such series of Subordinated Debt Securities; (d) default by the
Company in the performance of any of the agreements in the Subordinated
Indenture contained therein for the benefit of the Subordinated Debt Securities
of such series which shall not have been remedied within a period of 60 days
after receipt of written notice by the Company from the Trustee for such series
of Subordinated Debt Securities or by the Company and such Trustee from the
holders of not less than 25% in principal amount of the Subordinated Debt
Securities of such series then outstanding; (e) with respect to any series of
Subordinated Debt Securities (unless otherwise specified in the accompanying
Prospectus Supplement), the acceleration, or failure to pay at maturity, of any
indebtedness for money borrowed of the Company exceeding $20,000,000 in
principal amount, which acceleration is not rescinded or annulled or
indebtedness paid within 15 days after the date on which written notice thereof
shall have first been given to the Company as provided in the Subordinated
Indenture; (f) certain events of bankruptcy, insolvency or reorganization of the
Company; or (g) any other Event of Default established in accordance with the
Subordinated Indenture with respect to any series of Subordinated Debt
Securities. No Event of Default (other than an Event of Default under clause
(f)) described above with respect to a particular series of Subordinated Debt
Securities necessarily constitutes an Event of Default with respect to any other
series of Subordinated Debt Securities.
The Subordinated Indenture provides that if an Event of Default with respect
to any series of Subordinated Debt Securities shall have occurred and be
continuing, either the Trustee with respect to the Subordinated Debt Securities
of that series or the holders of at least 25% in aggregate principal amount of
Subordinated Debt Securities of that series then outstanding may declare the
principal amount (or, if the Subordinated Debt Securities of that series were
sold at an original issue discount, such portion of the principal amount as may
be specified in the terms of that series) of all the Subordinated Debt
Securities of that series and interest, if any, accrued thereon to be due and
payable immediately, but upon certain conditions such declaration may be
annulled and past defaults (except, unless theretofore cured, a default in
payment of principal of or interest on Subordinated Debt Securities of that
series) may be waived by the
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holders of a majority in principal amount of the Subordinated Debt Securities of
that series then outstanding.
The Subordinated Indenture contains a provision entitling the Trustee with
respect to any series of Subordinated Debt Securities, subject to the duty of
the Trustee during default to act with the required standard of care, to be
indemnified by the holders of Subordinated Debt Securities of such series before
proceeding to exercise any right or power under the Subordinated Indenture at
the request of the holders of such Subordinated Debt Securities. The
Subordinated Indenture also provides that the holders of a majority in principal
amount of the outstanding Subordinated Debt Securities of any series may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee for such series of Subordinated Debt Securities, or exercising
any trust or power conferred on such Trustee, with respect to the Subordinated
Debt Securities of such series. The Subordinated Indenture contains a covenant
that the Company will file annually with the Trustee a certificate as to the
absence of any default or specifying any default that exists.
No holder of any Subordinated Debt Security of any series will have any
right to institute any proceeding with respect to the Subordinated Indenture or
for any remedy thereunder, unless such holder shall have previously given the
Trustee for such series of Subordinated Debt Securities written notice of an
Event of Default with respect to Subordinated Debt Securities of that series and
unless also the holders of at least 25% in aggregate principal amount of the
outstanding Subordinated Debt Securities of that series shall have made written
request, and offered reasonable indemnity, to such Trustee to institute such
proceeding as trustee, and such Trustee shall not have received from the holders
of a majority in aggregate principal amount of the outstanding Subordinated Debt
Securities of that series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. However, any right of a
holder of any Subordinated Debt Security to receive payment of the principal of
and any interest on such Subordinated Debt Security on or after the due dates
expressed in such Subordinated Debt Security and to institute suit for the
enforcement of any such payment on or after such dates shall not be impaired or
affected without the consent of such holder.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless (i) either the Company shall be the continuing corporation, or
the successor corporation or the Person which acquires by sale or conveyance
substantially all of the assets of the Company (if other than the Company) shall
be a corporation organized under the laws of the United States or any state
thereof and shall expressly assume the due and punctual payment of the principal
of and interest on all the Subordinated Debt Securities, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of the Subordinated Indenture to be performed or
observed by the Company, by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation, and (ii) the Company
or such successor corporation, as the case may be, shall not, immediately after
such merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenants or condition.
Other than the covenants described above, or as set forth in any
accompanying Prospectus Supplement, the Subordinated Indenture and the
Subordinated Debt Securities do not contain any covenants or other provisions
designed to afford holders of the Subordinated Debt Securities protection in the
event of a takeover, recapitalization or highly leveraged transaction involving
the Company.
NO PERSONAL LIABILITY
No past, present or future director, officer, employee or shareholder, as
such, of the Company or any successor thereof shall have any liability for any
obligations of the Company under the Subordinated Debt
23
<PAGE>
Securities or the Subordinated Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each holder of Debt
Securities by accepting such Subordinated Debt Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Debt Securities.
THE TRUSTEE
The Trustee in its individual or any other capacity may become the owner or
pledgee of Subordinated Debt Securities and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not the Trustee
provided it complies with the terms of the Subordinated Indenture.
24
<PAGE>
DESCRIPTION OF COMMON STOCK
COMMON STOCK
The Company is authorized to issue 30,000,000 shares of Common Stock, par
value $.10 per share. The following description, to the extent it summarizes
certain provisions of the Company's Certificate of Incorporation, does not
purport to be complete and is qualified by reference thereto.
The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of shareholders, including the
election of directors. The holders of shares of Common Stock are entitled to
receive dividends when, as and if declared by the Company's board of directors
out of funds legally available therefor and to share ratably in the assets, if
any, legally available for distribution to shareholders in the event of a
liquidation, dissolution or winding up of the Company. The Common Stock has no
preemptive right and no subscription or redemption privileges. The Common Stock
does not have cumulative voting rights, which means the holder or holders of
more than half of the shares voting for the election of directions can elect all
the directors then being elected. All the outstanding shares of Common Stock
are, and the shares to be sold pursuant to this offering when issued and paid
for will be, fully paid and not liable for further call or assessment.
The transfer agent and registrar of the Common Stock is ChaseMellon
Shareholder Services, LLC, New York, New York.
SECTION 912 OF THE NEW YORK BUSINESS CORPORATION LAW
Generally, Section 912 of the New York Business Corporation Law prohibits a
resident domestic corporation, such as the Company, from engaging in a "business
combination" with an interested shareholder for a period of five years after the
date of the transactions in which the person became an interested shareholder,
unless, (a) prior to the date on which the person became an interested
shareholder the transaction is approved by the board of directors of the
corporation, (b) no earlier than five years after the date of the transaction in
which the person became an interested shareholder the transaction was approved
by the affirmative vote of a majority of the outstanding voting stock not owned
by such interested shareholder or its affiliates or (c) the business transaction
meets certain criteria as to amount of consideration and other conditions. A
"business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the shareholder. An "interested shareholder"
includes a person who, together with affiliates and associates, owns (or within
the preceding five years owned) 20% or more of the corporation's voting stock.
By restricting the ability of the Company to engage in business combinations
with an interested person, the application of Section 912 to the Company may
provide a barrier to hostile or unwanted takeovers.
ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER
PROPOSALS AND DIRECTOR NOMINATIONS
The by-laws of the Company establish an advance notice procedure for the
nomination, other than by or at the direction of the board of directors or a
committee thereof, of candidates for election as director as well as for other
shareholder proposals to be considered at shareholders' meetings.
The by-laws include a provision requiring that notice of shareholder
proposals and director nominations, other than by or at the direction of the
board of directors or a committee thereof, must br timely given in writing to
the Secretary of the Company prior to the meeting at which the matters are to be
acted upon or the directors are to be elected. To be timely, notice must be
received at the principal executive offices of the Company (a) in the case of an
annual meeting, not less than 60 nor more than 90 days prior to the anniversary
of the immediately preceding annual meeting of shareholders; provided, however,
that if the annual meeting is called for a date that is not within 30 days
before or after such anniversary date, notice by the shareholder in order to be
timely must be so received not later than the close of business on
25
<PAGE>
the tenth day following the day on which such notice of the date of the annual
meeting was mailed or public disclosure of the date of the annual meeting was
made, whichever first occurs and (b) in the case of a special meeting of
shareholders called for the purpose of electing directors, not later than the
close of business on the tenth day following the day on which notice of the date
of the special meeting was mailed or public disclosure of the date of the
special meeting was made, whichever first occurs.
A shareholder's notice to the Secretary (a) with respect to a shareholder
proposal, must set forth as to each matter the shareholder proposes to bring
before the meeting (i) a brief description of the business desired to be brought
before the meeting, (ii) the reasons for conducting such business at the
meeting, (iii) the name and record address of the shareholder proposing such
business, (iv) the class or series and number of shares of the Company which are
owned beneficially or of record by such shareholder, (v) a description of all
arrangements or understandings between such shareholder and any other person or
persons (including their names) in connection with the proposal of such business
by such shareholder and any material interest of such shareholder in such
business and (vi) a representation that such shareholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting; and (b) with respect to a director nomination, must set forth (i) such
information about the nominee as would be required to be disclosed in a proxy
statement pursuant to the proxy rules under the Exchange Act, (ii) the consent
of the nominee to serve as a director if elected, (iii) the name and record
address of the nominating shareholder, (iv) the class or series and number of
shares of the Company which are beneficially owned by such shareholder, (v) a
description of all arrangements or understandings between such shareholder and
each proposed nominee and any other person pursuant to which the nominations are
to be made and (vi) a representation that such shareholder intends to appear in
person or by proxy at the meeting to nominate the persons named.
The purpose of requiring advance notice is to afford the Board of Directors
an opportunity to consider the qualifications of the proposed nominees or the
merits of other shareholder proposals and to the extent deemed necessary or
desirable by the board of directors, to inform shareholders about those matters.
PLAN OF DISTRIBUTION
The Company may sell Securities to one or more underwriters for public
offering and sale by them or may sell Securities to investors directly or
through agents (which agents may be affiliates of the Company) that solicit or
receive offers on behalf of the Company or through dealers or through a
combination of any such method of sale. Any such underwriter, dealer or agent
involved in the offer and sale of the Securities is named in the Prospectus
Supplement.
The Securities may be distributed in one or more transactions from time to
time at a fixed price or prices, which may be changed, from time to time at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Company also may, from
time to time, authorize agents of the Company acting on a best efforts or other
basis to solicit or receive offers to purchase the Securities upon the terms and
conditions as are set forth in the Prospectus Supplement. In connection with the
sale of Securities, underwriters may be deemed to have received compensation
from the Company in the form of underwriting discounts or commissions and may
also receive commissions from purchasers of Securities for whom they may act as
agent. Underwriters may sell Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Securities (including agents only
soliciting or receiving offers to
26
<PAGE>
purchase Securities on behalf of the Company) may be deemed to be underwriters,
and any discounts and commissions received by them and any profit realized by
them on resale of the Securities may be deemed to be underwriting discounts and
commissions, under the Securities Act. Underwriters, dealers and agents may be
entitled, under agreements entered into with the Company, to indemnification
against and contribution toward certain civil liabilities, including liabilities
under the Securities Act.
Any shares of Common Stock sold pursuant to a Prospectus Supplement will be
listed on the NYSE, subject to official notice of issuance.
Certain of the underwriters, dealers and agents and their respective
associates may be customers of, engage in transactions with and perform services
for the Company or its subsidiaries or affiliates in the ordinary course of
business.
LEGAL OPINION
The validity of the securities offered hereby will be passed upon for the
Company by Samuel Bergman, Esq., Executive Vice President of the Company. As of
February 28, 1998, Mr. Bergman, together with members of his immediate family,
owned an aggregate of 3,850 shares of Common Stock and held options to purchase
110,600 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference from the Company's Annual Report on Form 10-K have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
27
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE FACTS. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company............................................................... 2
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 3
Use of Proceeds........................................................... 4
Ratio of Earnings to Fixed Charges........................................ 4
Description of Senior Debt Securities..................................... 4
Description of Subordinated Debt Securities............................... 14
Description of Common Stock............................................... 25
Plan of Distribution...................................................... 26
Legal Opinion............................................................. 27
Experts................................................................... 27
Glossary of Insurance Terms............................................... 52
</TABLE>
$100,000,000
ENHANCE FINANCIAL
SERVICES
GROUP INC.
DEBT SECURITIES
COMMON STOCK
($.10 PAR VALUE)
[LOGO]
PROSPECTUS
DATED , 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
An estimate of the fees and expenses of issuance and distribution (other
than discounts and commissions) of the Debt Securities and Common Stock offered
hereby (all of which will be paid by the Company) is as follows:
<TABLE>
<S> <C>
SEC registration fee.............................................. $ 29,500
Printing expenses................................................. 20,000
Legal fees and expenses........................................... 35,000
Accounting fees and expenses...................................... 5,000
Trustees' fees and expenses....................................... 9,000
Miscellaneous expenses............................................ 1,500
---------
Total....................................................... $ 100,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 722 of the New York Business Corporation Law (the
"BCL"), the amended and restated certificate of incorporation of the Company
eliminates the personal liability of members of its board of directors to the
Company or its shareholders for monetary damages for violations of their
fiduciary duty of care. Such a provision has no effect on the availability of
equitable remedies, such as an injunction or rescission, for breach of fiduciary
duty. In addition, such provision may not and does not eliminate or limit the
liability of a director for breaching his or her duty of loyalty, failing to act
in good faith, engaging in intentional misconduct or knowingly violating the
law, paying an unlawful dividend or approving an illegal stock repurchase, or
obtaining an improper personal benefit.
Section 6.5 of the Company's by-laws provides that, except as prohibited by
the BCL, directors and certain other personnel of the Company are to be
indemnified against expenses and certain other liabilities arising out of legal
actions brought or threatened against them for their conduct on behalf of the
Company, subject to certain qualifications and provided that each such person
acted in good faith and in a manner that he or she reasonably believed was in
the Company's best interest and did not derive any improper financial profit or
other advantage.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT
EXHIBIT NO. DESCRIPTION
- ------------- ---------------
<C> <C> <S>
4.1 -- Senior Indenture, dated as of , 1998
4.2 -- Subordinated Indenture, dated as of , 1998
5 -- Opinion of Samuel Bergman, Esq., Executive Vice President and General Counsel of the
Company, regarding legality of securities
12 -- Calculation of ratio of earnings to fixed charges
23.1 -- Consent of Deloitte & Touche LLP
23.2 -- Consent of Samuel Bergman, Esq. (included in the opinion filed as Exhibit 5)
24 -- Powers of Attorney (included on page II-4)
25.1 -- Statement on Form T-1 of Eligibility of Trustee under the Senior Indenture
25.2 -- Statement on Form T-1 of Eligibility of Trustee under the Subordinated Indenture
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the provisions described 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
Securities 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 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 Securities
Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (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.
II-2
<PAGE>
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 caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on March 13, 1998.
<TABLE>
<S> <C> <C>
ENHANCE FINANCIAL SERVICES GROUP INC.
BY /S/ DANIEL GROSS
-----------------------------------------
Daniel Gross
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
</TABLE>
SIGNATURES AND POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below hereby constitutes and appoints Daniel Gross and Samuel Bergman, or either
of them, as his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, to sign on his or her behalf individually and in any and all
capacities, any and all amendments (including post-effective amendments) to this
Registration Statement on Form S-3, and to file the same with all exhibits
thereto and other documents in connection therewith with the Securities and
Exchange Commission, granting to such attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite, necessary or desirable to be done, and to execute all such other
documents as they or either of them may deem necessary or desirable in
connection with the foregoing, as fully as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, their substitute or substitutes may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated above.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------ --------------------------- -------------------
<C> <S> <C>
President, Chief Executive
/s/ DANIEL GROSS Officer and Director
- ------------------------------ (principal executive March 13, 1998
Daniel Gross officer)
Executive Vice President
/s/ ARTHUR DUBROFF (principal financial
- ------------------------------ officer and principal March 13, 1998
Arthur Dubroff accounting officer)
/s/ BRENTON W. HARRIES Director
- ------------------------------ March 13, 1998
Brenton W. Harries
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------ --------------------------- -------------------
<C> <S> <C>
/s/ DAVID R. MARKIN Director
- ------------------------------ March 13, 1998
David R. Markin
/s/ WALLACE O. SELLERS Director
- ------------------------------ March 13, 1998
Wallace O. Sellers
/s/ RICHARD J. SHIMA Director
- ------------------------------ March 13, 1998
Richard J. Shima
/s/ ROBERT P. SALTZMAN Director
- ------------------------------ March 13, 1998
Robert P. Saltzman
/s/ SPENCER R. STUART Director
- ------------------------------ March 13, 1998
Spencer R. Stuart
/s/ ALLAN R. TESSLER Director
- ------------------------------ March 13, 1998
Allan R. Tessler
/s/ FRIEDA K. WALLISON Director
- ------------------------------ March 13, 1998
Frieda K. Wallison
/s/ JERRY WIND Director
- ------------------------------ March 13, 1998
Jerry Wind
</TABLE>
The foregoing persons constitute a majority of the members of the Board of
Directors.
II-4
<PAGE>
EXHIBIT 4.1
================================================================================
ENHANCE FINANCIAL SERVICES GROUP INC.
AND
The Chase Manhattan Bank, Trustee
------------------------------------
INDENTURE
Dated as of ____________, __, 19__
------------------------------------
Senior Debt Securities
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS............................................................1
SECTION 1.1 Certain Terms Defined....................................1
ARTICLE 2
SECURITIES.............................................................7
SECTION 2.1 Forms Generally..........................................7
SECTION 2.2 Form of Trustee's Certificate of
Authentication...........................................8
SECTION 2.3 Amount Unlimited; Issuable in Series.....................8
SECTION 2.4 Authentication and Delivery of Securities...............12
SECTION 2.5 Execution of Securities.................................13
SECTION 2.6 Certificate of Authentication..........................14
SECTION 2.7 Denomination and Date of Securities;
Payments of Interest....................................14
SECTION 2.8 Registration, Transfer and Exchange.....................17
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and
Stolen Securities.......................................21
SECTION 2.10 Cancellation of Securities, Destruction
Thereof.................................................22
SECTION 2.11 Temporary Securities....................................23
SECTION 2.12 Compliance with Certain Laws and
Regulations.............................................25
SECTION 2.13 Appointment of Agents with Respect
to Certain Calculations.................................25
SECTION 2.14 Securities Issuable in the Form
of a Global Security....................................26
ARTICLE 3
COVENANTS OF THE COMPANY..............................................28
SECTION 3.1 Payment of Principal and Interest.......................28
SECTION 3.2 Offices for Payment, etc................................29
SECTION 3.3 Appointment to Fill a Vacancy in
Office of Trustee.......................................30
SECTION 3.4 Paying Agents...........................................31
SECTION 3.5 Written Statement to Trustee............................32
SECTION 3.6 Corporate Existence.....................................32
SECTION 3.7 Additional Amounts......................................32
SECTION 3.8 Defeasance of Certain Obligations
and Certain Events of Default...........................33
i
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ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE...............................................35
SECTION 4.1 Company to Furnish Trustee Information
as to Names and Addresses of
Securityholders.........................................35
SECTION 4.2 Preservation and Disclosure of
Securityholders' Lists..................................36
SECTION 4.3 Reports by the Company..................................37
SECTION 4.4 Reports by the Trustee..................................38
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT...................................................40
SECTION 5.1 Event of Default Defined;
Acceleration of Maturity; Waiver
of Default..............................................40
SECTION 5.2 Collection of Indebtedness by
Trustee; Trustee May Prove Debt.........................44
SECTION 5.3 Application of Proceeds.................................46
SECTION 5.4 Suits for Enforcement...................................48
SECTION 5.5 Restoration of Rights on Abandonment
of Proceedings..........................................49
SECTION 5.6 Limitations on Suits by Securityholders. ...............49
SECTION 5.7 Unconditional Rights of Securityholders
to Institute Certain Suits..............................50
SECTION 5.8 Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default.......................50
SECTION 5.9 Control by Securityholders..............................50
SECTION 5.10 Waiver of Past Defaults.................................51
SECTION 5.11 Trustee to Give Notice of Default,
But May Withhold in Certain
Circumstances...........................................51
SECTION 5.12 Right of Court to Require Filing of
Undertaking to Pay Costs................................52
ARTICLE 6
CONCERNING THE TRUSTEE................................................52
SECTION 6.1 Duties and Responsibilities of
the Trustee; Prior to Default;
During Default..........................................52
SECTION 6.2 Certain Rights of the Trustee...........................54
ii
<PAGE>
Page
----
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or
Application of Proceeds Thereof.........................55
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc........................................55
SECTION 6.5 Moneys Held by Trustee..................................56
SECTION 6.6 Compensation and Indemnification
of Trustee and Its Prior Claim..........................56
SECTION 6.7 Right of Trustee to Rely on Officer's
Certificate, etc........................................57
SECTION 6.8 Qualification of Trustee; Conflicting
Interests...............................................57
SECTION 6.9 Persons Eligible for Appointment
as Trustee..............................................63
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee.......................................64
SECTION 6.11 Acceptance of Appointment by Successor
Trustee.................................................66
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee.......................67
SECTION 6.13 Preferential Collection of Claims
Against the Company.....................................67
SECTION 6.14 Appointment of Authenticating Agent.....................72
SECTION 6.15 Trustee Acting in Other Capacities......................74
ARTICLE 7
CONCERNING THE SECURITYHOLDERS........................................74
SECTION 7.1 Evidence of Action Taken by
Securityholders.........................................74
SECTION 7.2 Proof of Execution of Instruments.......................75
SECTION 7.3 Holders to Be Treated as Owners.........................75
SECTION 7.4 Securities Owned by Company Deemed Not
Outstanding......................................75
SECTION 7.5 Right of Revocation of Action Taken.....................76
ARTICLE 8
SUPPLEMENTAL INDENTURES...............................................77
SECTION 8.1 Supplemental Indentures Without
Consent of Securityholders..............................77
SECTION 8.2 Supplemental Indentures With
Consent of Securityholders..............................78
SECTION 8.3 Effect of Supplemental Indenture........................79
SECTION 8.4 Documents to Be Given to Trustee........................80
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures.................................80
iii
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----
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.............................80
SECTION 9.1 Company May Consolidate, etc.,
on Certain Terms........................................80
SECTION 9.2 Successor Corporation Substituted.......................81
SECTION 9.3 Opinion of Counsel to Trustee...........................81
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS......................................................82
SECTION 10.1 Satisfaction and Discharge of
Indenture...............................................82
SECTION 10.2 Application by Trustee of Funds
Deposited for Payment of Securities.....................85
SECTION 10.3 Repayment of Moneys Held by Paying
Agent...................................................85
SECTION 10.4 Return of Unclaimed Moneys Held by
Trustee and Paying Agent................................85
SECTION 10.5 Reinstatement of Company's Obligations..................86
ARTICLE 11
SECTION 11.1 Incorporators, Stockholders,
Officers and Directors of Company
Exempt from Individual Liability........................86
SECTION 11.2 Provisions of Indenture for the Sole
Benefit of Parties and Securityholders..................86
SECTION 11.3 Successors and Assigns of Company
Bound by Indenture......................................87
SECTION 11.4 Notices and Demands on Company,
Trustee and Securityholders.............................87
SECTION 11.5 Officer's Certificates and Opinions of
Counsel; Statements to Be Contained
Therein.................................................88
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays................................................89
SECTION 11.7 Conflict of Any Provision of Indenture
with Trust Indenture Act of 1939........................89
SECTION 11.8 New York Law to Govern..................................90
SECTION 11.9 Counterparts............................................90
SECTION 11.10 Effect of Headings......................................90
SECTION 11.11 Determination of Principal Amount.......................90
iv
<PAGE>
Page
----
ARTICLE 12
REDEMPTION OF SECURITIES AND SINKING FUNDS............................90
SECTION 12.1 Applicability of Article................................90
SECTION 12.2 Notice of Redemption; Partial Redemptions...............90
SECTION 12.3 Payment of Securities Called for Redemption.............92
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for
Redemption..............................................93
SECTION 12.5 Mandatory and Optional Sinking Funds....................93
v
<PAGE>
THIS INDENTURE, dated as of _____________, __, 1998 between ENHANCE
FINANCIAL SERVICES GROUP INC., a New York corporation (the "Company"), and The
Chase Manhattan Bank, a New York banking corporation, as Trustee (the
"Trustee"),
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issue from time to time
of its unsecured debentures, notes or other evidences of indebtedness to be
issued in one or more Series (the "Securities") up to such principal amount or
amounts as may from time to time be authorized in accordance with the terms of
this Indenture and to provide, among other things, for the authentication,
delivery and administration thereof, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the holders thereof, the Company and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective holders from time to
time of the Securities as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act of 1933 are referred to in the
Trust Indenture Act of 1939, including terms defined therein by reference to the
Securities Act of 1933 (except as herein otherwise expressly provided or unless
the context otherwise clearly requires), shall have the meanings assigned to
such terms in said Trust Indenture Act and
<PAGE>
in said Securities Act as in force at the date of this Indenture. All accounting
terms used herein and not expressly defined shall have the meanings assigned to
such terms in accordance with generally accepted accounting principles, and the
term "generally accepted accounting principles" means such accounting principles
as are generally accepted in the United States at the time of any computation.
The words "herein," "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole, as supplemented and amended from time to
time, and not to any particular Article, Section or other subdivision. The terms
defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more Series.
"Board of Directors" means either the Board of Directors of the
Company or the Executive Committee or other committee of such Board duly
authorized to act hereunder.
"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" means, except as may otherwise be provided in the
form of Securities of any particular Series, with respect to any Place of
Payment, any day, other than a Saturday or Sunday, that is not a legal holiday,
or a day on which banking institutions are authorized or required by law or
regulation to close in The City of New York or in that Place of Payment, or with
respect to Securities denominated in a Foreign Currency, the capital city of the
country of such Foreign Currency, or with respect to Securities denominated in
ECU, Brussels, Belgium.
"CEDEL S.A." means Central de Liaison de Valeurs Mobilieres S.A.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act of 1939, then the body performing such duties on such
date.
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"Company" means Enhance Financial Services Group Inc., a New York
corporation, and, subject to Article Nine, its successors and assigns.
"Company Notice" means the confirmation of the Company, transmitted
by telex, telecopy or in writing to the Trustee of the terms of the issuance of
any Securities issuable in Tranches.
"Company Order" or "Company Request" means a written order or
request of the Company, signed in its name by its President and Chief Financial
Officer or Treasurer.
"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 450 West 33rd Street, New York, New York
10001-2697. Attention: Global Trust Services.
"Coupon" means any interest coupon appertaining to any Security.
"Coupon Security" means any Security authenticated and delivered
with one or more Coupons appertaining thereto.
"Depository" means, unless otherwise specified by the Company
pursuant to Section 2.3, with respect to Securities of any series issuable or
issued as a Global Security, The Depository Trust Company, New York, New York,
or any successor thereto registered as a clearing agency pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation.
"Dollar" means the coin or currency of the United States which as of
the time of payment is legal tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.
"Euro-clear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euro-clear System.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Foreign Currency" means a currency issued by the government of any
country other than the United States.
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"Global Security," when used with respect to any series of
Securities issued hereunder, means a Security which is executed by the Company
and authenticated and delivered by the Trustee to the Depository pursuant to the
Depository's instruction, all in accordance with this Indenture and an indenture
supplemental hereto, if any, or Board Resolution and pursuant to a Company
Order, which Global Security shall be registered in the name of the Depository
or its nominee and which shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, all of the Outstanding Securities of
such series or any portion thereof, in either case having the same terms,
including, without limitation, the same original issue date, date or dates on
which principal is due, and interest rate or method of determining interest.
"Holder," "Holder of Securities," "Securityholder" or other similar
terms mean the bearer of an Unregistered Security or a Registered Holder of a
Registered Security and, when used with respect to any Coupon, means the bearer
thereof.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular Series
of Securities established as contemplated hereunder.
"Officer's Certificate" means a certificate signed by the President
and the Chief Financial Officer or the Treasurer of the Company and delivered to
the Trustee. Each such certificate shall include the statements provided for in
Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Company. Each such opinion
shall include the statements provided for in Section 11.5 and shall be
reasonably satisfactory to the Trustee.
"Original Issue Date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security which provides
for an amount less than the stated principal amount thereof to be due and
payable upon declaration of acceleration of the maturity thereof pursuant to
Section 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when
used with reference to Securities, shall, subject to
4
<PAGE>
the provisions of Section 7.4, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any Paying Agent (other than
the Company) or shall have been set aside, segregated and held in trust by
the Company for the holders of such Securities (if the Company shall act
as its own Paying Agent), provided that if such Securities, or portions
thereof, are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
and
(c) Securities in substitution for which other Securities
shall have been authenticated and delivered, or which shall have been
paid, pursuant to the terms of Section 2.9 (except with respect to any
such Security as to which proof satisfactory to the Trustee is presented
that such Security is held by a person in whose hands such Security is a
legal, valid and binding obligation of the Company).
"Paying Agent" means any Person (which may include the Company)
authorized by the Company to pay the principal of or interest, if any, on any
Security on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" when used with respect to the Securities of any
Series, means the place or places where the principal of and interest, if any,
on the Securities of that Series are payable as specified pursuant to Section
3.2.
"principal" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any."
"Redemption Price" or "redemption price" means the price at which
the Securities of any Series shall or may be redeemed in accordance with the
terms of such Securities, as
5
<PAGE>
provided in the Board Resolution or in any indenture supplemental hereto
establishing such Series as contemplated by Section 2.3.
"Registered Holder" when used with respect to a Registered Security
means the person in whose name such Security is registered in the Security
register.
"Registered Security" means any Security registered in the Security
register.
"Responsible Officer" when used with respect to the Trustee shall
mean any officer in the Corporate Trust Office of the Trustee including any
treasurer, vice president, assistant vice president, assistant vice treasurer,
assistant secretary, or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred at the Corporate Trust Office because of his or her knowledge
of and familiarity with the particular subject.
"Security" or "Securities" (except as otherwise provided in Section
6.8) has the meaning stated in the first recital of this Indenture, or, as the
case may be, Securities that have been authenticated and delivered under this
Indenture.
"Series" or "Series of Securities" means a series of Securities.
Except in Sections 1.1 - "Outstanding," 2.3 and 7.4 and Articles Five and Six,
the terms "Series" or "Series of Securities" shall also mean a Tranche in the
event that the applicable Series may be issued in separate Tranches.
"Stated Maturity," when used with respect to any Security of any
Series, means the date specified in such Security as the fixed date on which an
amount equal to the principal amount at maturity of such Security is due and
payable, as provided in the Board Resolution or in any indenture supplemental
hereto establishing such Series as contemplated by Section 2.3.
"Subsidiary" means any corporation, of which at least a majority of
the Voting Stock is at the time owned directly or indirectly by the Company or
by the Company and its other Subsidiaries.
"Tranche" means all Securities of the same Series which have the
same issue date, maturity date and other terms.
6
<PAGE>
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, any successor
trustee.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939 as in force at the
date as of which this Indenture was originally executed.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States
Federal income tax purposes, is a foreign corporation, a non-resident alien
individual, a non-resident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more of the members of which is, for United States
Federal income tax purposes, a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate or trust.
"Unregistered Security" means any Security not registered as to
principal.
"vice president" when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title of "vice president."
"Voting Stock" means outstanding shares of stock having voting power
for the election of directors, whether at all times or only so long as no senior
class of stock has such voting power because of default in dividends or some
other default.
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated by the Company in accordance with accepted financial practice.
ARTICLE 2
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each Series
(including any temporary or permanent global Securities) and the Coupons, if
any, shall be substantially in such form (not
7
<PAGE>
inconsistent with this Indenture) as shall be established by or pursuant to a
Board Resolution (or, to the extent established pursuant to, rather than set
forth in, such Board Resolution, in an Officer's Certificate) or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture (the provisions of which shall be appropriate to reflect the
terms of each Series of Securities, including the currency or denomination,
which may be Dollars, Foreign Currency or ECU) and may have imprinted or
otherwise reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or with
any rules or regulations pursuant thereto, or with any rules of any securities
exchange or to conform to general usage, all as may be determined by the
officers executing such Securities and Coupons, if any, as evidenced by their
execution of the Securities and Coupons, if any.
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
"This is one of the Securities of the Series designated herein and
referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee
By ________________________________
Authorized Officer"
SECTION 2.3 Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more Series. There shall be
established in or pursuant to a Board Resolution, or to the extent established
pursuant to, rather than set forth in, such resolution, established in an
Officer's Certificate, or
8
<PAGE>
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any Series:
(1) the title of the Securities of the Series (which title shall
distinguish the Securities of the Series from all other Securities issued
by the Company);
(2) any limit upon the aggregate principal amount of the Securities
of the Series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
Series pursuant to Section 2.8, 2.9, 2.11 or 12.3);
(3) whether Securities of the Series are to be issuable as
Registered Securities, Unregistered Securities or both, whether the
securities of such Series are to be uncertificated and whether any
Securities of the Series are to be issuable initially in temporary global
form and whether any Securities of the Series are to be issuable in
permanent global form with or without coupons and, if so, (i) whether
beneficial owners of interest in any such permanent global Security may
exchange such interest for Securities of such Series and of like tenor of
any authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in Section
2.8 and (ii) the name of the depositary with respect to any global
Security;
(4) the Person to whom any interest in any Registered Security of
the Series shall be payable, if other than the Person in whose name the
Security (or one or more predecessor Securities) is registered at the
close of business on the record date for such interest, the manner in
which, or the Person to whom, any interest on any Unregistered Security of
the Series shall be payable, if otherwise than upon presentation and
surrender of the Coupons appertaining thereto as they severally mature,
and the extent to which, or the manner in which, any interest payable on a
temporary global Security on an interest payment date will be paid if
other than in the manner provided in Section 2.11;
(5) the date or dates on which the principal of the Securities of
the Series is payable;
(6) the rate or rates (or formula for determining such rates) at
which the Securities of the Series shall bear interest, if any, the date
or dates from which such interest
9
<PAGE>
shall accrue, the interest payment dates on which such interest shall be
payable and the record dates for the determination of Holders to whom
interest is payable;
(7) whether the interest rate or interest rate formula, as the case
may be, for Securities of the Series may be reset at the option of the
Company and, if so, the date or dates on which such interest rate or
interest rate formula, as the case may be, may be reset;
(8) the place or places where the principal and interest on
Securities of the Series shall be payable (if other than as provided in
Section 3.2), any Registered Securities of the Series may be surrendered
for registration of transfer, Securities of the Series may be surrendered
for exchange and notices and demands to or upon the Company in respect of
the Securities of the Series and this Indenture may be served;
(9) the price or prices at which, the period or periods within which
and the terms and conditions upon which Securities of the Series may be
redeemed or repurchased, in whole or in part, at the option of the Company
or repaid at the option of the Holders;
(10) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the Series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the price or prices at
which and the period or periods within which and the terms and conditions
upon which Securities of the Series shall be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligation;
(11) the denominations in which any Registered Securities of the
Series may be issued, if other than denominations of $1,000 and any
integral multiple thereof, and the denomination or denominations in which
any Unregistered Securities of the Series may be issued, if other than the
denomination of $5,000;
(12) the form of the Securities (or forms thereof if Unregistered
and Registered Securities shall be issuable in such Series), including
such legends as required by law or as the Company deems necessary or
appropriate, the form of any Coupons or temporary global Security which
may be issued and the forms of any certificates which may be required
hereunder or which the Company may require in connection
10
<PAGE>
with the offering, sale, delivery or exchange of Unregistered Securities;
(13) the currencies or currencies, including composite currencies,
in which payments of interest or principal are payable with respect to the
Securities of the Series if other than the currency of the United States;
(14) if the amount of payments of principal of or interest on the
Securities of any Series may be determined with reference to the
differences in the price of or rate of exchange between any indexes,
currencies or commodities, the manner in which such amounts shall be
determined;
(15) if other than the principal amount thereof, the portion of the
principal amount of Securities of the Series which shall be payable upon
acceleration of the maturity thereof pursuant to Section 5.1 or provable
in bankruptcy pursuant to Section 5.2;
(16) whether Securities of the Series are issuable in Tranches;
(17) any additional events of default or restrictive covenants with
respect to the Securities of such Series which are not set forth herein,
and whether any such additional events of default or restrictive covenants
are subject to defeasance in accordance with Section 3.8;
(18) any other terms or conditions upon which the Securities of the
Series are to be issued (which terms shall not be inconsistent with the
provisions of this Indenture); and
(19) any trustees, authenticating or paying agents, transfer agents
or registrars or any other agents with respect to the Securities of such
Series.
All Securities of any one Series shall be substantially identical
except as to denomination, except as provided in the immediately succeeding
paragraph, and except as may otherwise be provided in or pursuant to such Board
Resolution or Officer's Certificate or in any such indenture supplemental
hereto. All Securities of any one Series need not be issued at the same time,
and unless otherwise provided, a Series may be reopened for issuances of
additional Securities of such Series.
Each Series may be issued in one or more Tranches. Except as
provided in the foregoing paragraph, all Securities of
11
<PAGE>
a Tranche shall have the same terms, including issue date, except that
Securities of the same Tranche may be issued in different denominations of the
same currency or composite currency.
SECTION 2.4 Authentication and Delivery of Securities. At any time
and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any Series having attached thereto appropriate
Coupons, if any, executed by the Company to the Trustee for authentication,
together with a Company Order for the authentication and delivery of such
Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities; provided, however, that in connection
with its original issuance, no Unregistered Security shall be mailed or
otherwise delivered to any location in the United States; and provided, further,
that an Unregistered Security may be delivered in connection with its original
issuance only if the Person entitled to receive such Unregistered Security shall
have furnished a certificate in the form of Exhibit A-1 hereto dated no earlier
than 15 days prior to the earlier of the date on which such Unregistered
Security is delivered and the date on which any temporary Security first becomes
exchangeable for such Unregistered Security in accordance with the terms of such
temporary Security and this Indenture. If any Security shall be represented by a
permanent global Unregistered Security, then, for purposes of this Section and
Section 2.11, the notation of a beneficial owner's interest therein upon
original issuance of such Security or upon exchange of a portion of a temporary
global Security shall be deemed to be delivered in connection with its original
issuance of such beneficial owner's interest in such permanent global
Unregistered Security. In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive and (subject to Section 6.1) shall be
fully protected in relying upon:
(1) a Company Order requesting such authentication and setting forth
delivery instructions if the Securities are not to be delivered to the
Company;
(2) any Board Resolution, Officer's Certificate or supplemental
indenture referred to in Sections 2.1 and 2.3 by or pursuant to which the
forms of the Securities of any such Series were established;
(3) an Officer's Certificate setting forth the form and terms of the
Securities stating that the form and terms of the Securities have been
established pursuant to Sections
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<PAGE>
2.1 and 2.3 and comply with this Indenture, and covering such other
matters as the Trustee may reasonably request;
(4) an Opinion of Counsel to the effect that:
(a) the form or forms and terms of such Securities have been
established pursuant to Sections 2.1 and 2.3 and comply with this
Indenture;
(b) the authentication and delivery of such Securities by the
Trustee are authorized under the provisions of this Indenture;
(c) such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute
valid and binding obligations of the Company;
(d) all laws and requirements in respect of the execution and
delivery by the Company have been complied with; and
(e) covering such other matters as the Trustee may reasonably
request;
provided, however, that in the case of any Series issuable in Tranches, if the
Trustee has previously received the documents referred to in Section 2.4(l)-(4)
with respect to any Tranche of such Series, the Trustee shall authenticate and
deliver Securities of such Series executed and delivered bv the Company for
original issuance upon receipt by the Trustee of the applicable Company Notice.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Company or
if the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under this Indenture in a manner not
reasonably acceptable to the Trustee.
SECTION 2.5 Execution of Securities. The Securities shall be signed
on behalf of the Company by the Chairman of its Board of Directors or its
president or any vice president or its treasurer or any assistant treasurer,
under its corporate seal which may, but need not, be attested. Such signatures
may be the manual or facsimile signatures of the present or any future such
officers. The seal of the Company may be in the form of a
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<PAGE>
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects in
any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee. Any Coupons attached to any Unregistered Security
shall be executed on behalf of the Company by the manual or facsimile signature
of any such officer of the Company.
In case any officer of the Company who shall have signed any of the
Securities or Coupons shall cease to be such officer before the Security or
Coupon so signed shall be authenticated and delivered by the Trustee or disposed
of by the Company, such Security or Coupon nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security or Coupon
had not ceased to be such officer of the Company; and any Security or Coupon may
be signed on behalf of the Company by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the
Company, although at the date of the execution and delivery of this Indenture
any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities and
Coupons appertaining thereto as shall bear thereon a certificate of
authentication substantially in the form hereinbefore recited, executed by the
Trustee by the manual signature of one of its Responsible Officers, shall be
entitled to the benefits of this Indenture or be valid or obligatory for any
purpose. Such certificate by the Trustee upon any Security executed by the
Company shall be conclusive evidence that the Security so authenticated has been
duly authenticated and delivered hereunder and that the Holder is entitled to
the benefits of this Indenture.
The Trustee shall not authenticate or deliver any Unregistered
Security until any matured Coupons appertaining thereto have been detached and
canceled, except as otherwise provided or permitted by this Indenture.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities shall be issuable in denominations as shall be
specified as contemplated by Section 2.3. In the absence of any such
specification with respect to the Securities of any Series, Registered
Securities of such Series shall be issuable in denominations of $1,000 and any
multiple thereof, and Unregistered Securities of such Series shall be issuable
in denominations of $5,000, and interest shall be
14
<PAGE>
computed on the basis of a 360-day year of twelve 30-day months. The Securities
shall be numbered, lettered or otherwise distinguished in such manner or in
accordance with such plan as the officers of the Company executing the same may
determine with the approval of the Trustee as evidenced by the execution and
authentication thereof.
Each Registered Security shall be dated the date of its
authentication, shall bear interest from the date and shall be payable on the
dates, in each case, which shall be specified as contemplated by Section 2.3.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any interest payment date shall be paid, in the case of
Registered Securities, to the person in whose name that Security (or one or more
predecessor Securities) is registered at the close of business on the regular
record date for the payment of such interest and, in the case of Unregistered
Securities, upon surrender of the Coupon appertaining thereto in respect of the
interest due on such interest payment date. At the option of the Company,
payment of interest on any Registered Security may be made, subject to Section
3.2, by check mailed to the Registered Holder's address as shown on the Security
register.
The term "record date" as used with respect to any interest payment
date (except for a date for payment of defaulted interest) shall mean the date
specified as such in the terms of the Securities of any particular Series, or,
if no such date is so specified, if such interest payment date is the first day
of a calendar month, the close of business on the fifteenth day of the next
preceding calendar month or, if such interest payment date is the fifteenth day
of a calendar month, the close of business on the first day of such calendar
month, whether or not such record date is a Business Day.
Any interest on any Security of any Series which is payable, but is
not punctually paid or duly provided for, on any interest payment date (called
"defaulted interest" for the purpose of this Section) shall forthwith cease to
be payable to the Registered Holder on the relevant regular record date by
virtue of his having been such Holder; and such defaulted interest may be paid
by the Company, at its election in each case, as provided in clause (1) or
clause (2) below:
(1) The Company may elect to make payment of any defaulted interest
to the persons in whose names any such
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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. At least 20 days prior to the date of a proposed payment of
defaulted interest, the Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Security of such
Series and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such defaulted interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the persons entitled to such defaulted
interest as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such defaulted interest in respect
of Registered Securities of such Series which shall be not more than 15
nor less than 10 days prior to the date of the proposed payment and not
less than 10 days after 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 thereof to be mailed, first class postage prepaid,
to each Registered Holder at his address as it appears in the Security
register, not less than 10 days prior to such special record date. Notice
of the proposed payment of such defaulted interest and the special record
date therefor having been mailed as aforesaid, such defaulted interest in
respect of Registered Securities of such Series shall be paid to the
person in whose names such Securities (or their respective predecessor
Securities) are registered on such special record date and such defaulted
interest shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any defaulted interest on the
Securities of any Series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of
that Series may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee if the
proposed payment pursuant to this clause, such payment shall be deemed
practicable by the Trustee.
Any defaulted interest payable in respect of any Security of any
Series which is not a Registered Security shall
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be payable pursuant to such procedures as may be satisfactory to the Trustee in
such manner that there is no discrimination as between the Holders of Registered
Securities and other Securities of the same 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 specified in Section 11.4.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 2.8 Registration, Transfer and Exchange. The Company will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each Series of Securities a register or registers in which,
subject to such reasonable regulations as it may prescribe, it will register,
and will register the transfer of, Registered Securities as in this Article
provided. Such register shall be in written form in the English language or in
any other form capable of being converted into such form within a reasonable
time. At all reasonable times such register or registers shall be open for
inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any Series at any such office or agency to be maintained for these
purpose as provided in Section 3.2, the Company shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Registered Security or Registered Securities of the same Series in
authorized denominations for a like aggregate principal amount.
At the option of the Holder, Registered Securities of any Series may
be exchanged for other Registered Securities of the same Series of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive. Except as otherwise
specified as contemplated by Section 2.3, Unregistered Securities may not be
issued in exchange for Registered Securities.
At the option of the Holder, Unregistered Securities of any Series
may be exchanged or Registered Securities of the same Series of any authorized
denominations and of a like aggregate
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principal amount and tenor, upon surrender of the Unregistered Securities to be
exchanged at any such office or agency, with all unmatured coupons, if any, and
all matured coupons, if any, in default thereto appertaining. If the Holder of
an Unregistered Security is unable to produce any such unmatured coupons and all
matured coupon or coupons or matured coupon or coupons in default, such exchange
may be effected if the Unregistered 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 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 3.2,
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 an Unregistered Security of any
Series is surrendered at any such office or agency in exchange for a Registered
Security of the same Series and like tenor after the close of business at such
office or agency on any record date and before the opening of business at such
office or agency on the relevant interest payment date, such Unregistered
Security shall be surrendered without the coupon relating to such interest
payment date and interest will not be payable on such interest payment date in
respect of the Registered Security issued in exchange for such Unregistered
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 2.3, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the beneficial owners of interests in a
permanent global Security are entitled to exchange such interests for Securities
of such Series and of like tenor and principal amount of another authorized form
and denomination, as specified as contemplated by Section 2.3, then without
unnecessary delay but in any event not later than the earliest date on which
such interests may be so exchanged, the Company shall deliver to the Trustee
definitive Securities of that Series in aggregate principal amount equal to the
principal amount of such permanent global Security, executed by the Company. On
or after the earliest date on which such interests may be so exchanged, such
permanent global Securities shall be surrendered from time to
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time by the depositary holding such global Security and in accordance with
instructions given to the Trustee and such depositary (which instructions shall
be in writing but need not comply with Section 11.5 or be accompanied by an
Opinion of Counsel), as shall be specified in the Company Order with respect to
the Trustee, as the Company's agent for such purpose, to be exchanged, in whole
or in part, for definitive Securities of the same Series without charge. The
Trustee shall authenticate and make available for delivery, in exchange for each
portion of such surrendered permanent global Security, a like aggregate
principal amount of definitive Securities of the same Series of authorized
denominations and of like tenor as the portion of such permanent global Security
to be exchanged which (unless the Securities of the Series are not issuable both
as Unregistered Securities and as Registered Securities, in which case the
definitive Securities exchanged for the permanent global Security shall be
issuable only in the form in which the Securities are issuable, as specified as
contemplated by Section 2.3) shall be in the form of Unregistered Securities or
Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof; provided, however, that no such exchanges may occur
during a period beginning at the opening of business 15 days before any
selection of Securities of that Series to be redeemed and ending on the relevant
Redemption Date; and provided, further, that no Unregistered Security delivered
in exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. Promptly following any
such exchange in part, such permanent global Security shall be returned by the
Trustee to the depositary or such other depositary referred to above in
accordance with the instructions of the Company referred to above. If a
Registered Security is issued in exchange for any portion of a permanent global
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and before the opening of business at such office or agency on the
related proposed date for payment of interest or defaulted interest, as the case
may be, will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such Registered Security, but will be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, only to the Person to whom interest in respect of such portion of such
permanent global Security is payable in accordance with the provisions of this
Indenture.
Upon presentation for registration of any Unregistered Securities of
any Series which by its terms is registrable as to
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principal, at the office or agency of the Company to be maintained as provided
in Section 3.2, such Security shall be registered as to principal in the name of
the Holder thereof and such registration shall be noted on such Security. Any
Security so registered shall be transferable on the registry books of the
Company upon presentation of such Security at such office or agency for similar
notation thereon, but such Security may be discharged from registration by being
in a like manner transferred to bearer, whereupon transferability by delivery
shall be restored. Unregistered Securities shall continue to be subject to
successive registrations and discharges from registration at the option of the
Holders thereof.
Unregistered Securities shall be transferable by delivery, except
while registered as to principal. Registration of any Coupon Security shall not
affect the transferability by delivery of the Coupons appertaining thereto which
shall continue to be payable to bearer and transferable by delivery.
All Securities and Coupons issued upon any transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
and Coupons surrendered upon such transfer or exchange.
Every Security presented or surrendered for registration of 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.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities, other than exchanges pursuant to
Section 2.11, 8.5 or 12.3 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any Series during a period beginning at
the opening of 15 Business Days before any selection of Securities of that
Series to be redeemed and ending at the close of business on (A) if Securities
of the Series are issuable only as Registered Securities, the day of the mailing
of the relevant notice of redemption and (B) if Securities of the Series are
issuable as Unregistered Securities, the day of the first publication of the
relevant notice of redemption or, if Securities of the Series are also issuable
as
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Registered Securities and there is no publication, the mailing of the relevant
notice of redemption, or (ii) to register the transfer of or exchange any
Registered Security so selected for redemption, in whole or in part, except the
unredeemed portion of any Security being redeemed in part, or (iii) to exchange
any Unregistered Security so selected for redemption except that such an
Unregistered Security may be exchanged for a Registered Security of that Series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
None of the Trustee, any agent of the Trustee, any Paying Agent or
the Company will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security or Coupon shall become
mutilated, defaced or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon the written request of any officer of the
Company, the Trustee shall authenticate and deliver, a new Security of the same
Series or Coupon, bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Security or Coupon, or in
lieu of and substitution for the Security or Coupon so destroyed, lost or
stolen. In every case the applicant for a substitute Security or Coupon shall
furnish to the Company and to the Trustee and to any agent of the Company or the
Trustee such security or indemnity as may be required by them to indemnify and
defend and to save each of them harmless and, in every case of destruction, loss
or theft, evidence to their satisfaction of the destruction, loss or theft of
such Security or Coupon and of the ownership thereof.
Upon the issuance of any substitute Security or Coupon, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
In case any Security or Coupon which has matured or is about to mature or has
been called for redemption in full shall become mutilated or
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defaced or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Security or Coupon, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated or defaced Security or
Coupon), if the applicant for such payment shall furnish to the Company and to
the Trustee and any agent of the Company or the Trustee such security or
indemnity as any of them may require to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee and any agent of the Company or the Trustee evidence
to their satisfaction of the destruction, loss or theft of such Security or
Coupon and of the ownership thereof.
Every substitute Security of any Series or Coupon issued pursuant to
the provisions of this Section by virtue of the fact that any such Security or
Coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
or Coupon shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and all other
Securities of such Series or Coupons duly authenticated and delivered hereunder.
All Securities or Coupons shall be held and owned upon the express condition
that, to the extent permitted by the law, the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, defaced, destroyed,
lost or stolen Securities or Coupons and shall preclude any and all other rights
or remedies notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.10 Cancellation of Securities, Destruction Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or analogous
fund and all Coupons surrendered for payment or exchange, shall, if surrendered
to the Company or any agent of the Company or the Trustee, be delivered to the
Trustee for cancellation or, if surrendered to the Trustee, shall be cancelled
by it; and no Securities or Coupons shall be issued in lieu thereof, except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall destroy cancelled Securities and Coupons held by it and deliver a
certificate of destruction to the Company. If the Company shall acquire any of
the Securities and Coupons, such acquisition shall not operate as a redemption
or satisfaction of the indebtedness represented by such Securities and Coupons
unless and until the same are delivered to the Trustee for cancellation.
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SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities of any Series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form or, if authorized, in
bearer form with one or more coupons or without coupons, and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing may determine, as evidenced by their execution of such
Securities. In the case of any Series issuable as Unregistered Securities, such
temporary Securities may be in global form.
Except in the case of temporary Securities in global form (which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Securities of any Series are issued, the Company will
cause definitive Securities of that Series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such Series, the
temporary Securities of such Series shall be exchangeable for definitive
Securities of such Series upon surrender of the temporary Securities of such
Series at the office or agency of the Company maintained pursuant to Section 3.2
for the purpose of exchanges of Securities of such Series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities
of any Series (accompanied by any unmatured coupons appertaining thereto) the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like aggregate principal amount of definitive Securities of the same
Series and of like tenor of authorized denominations; provided, however, that no
definitive Unregistered Security shall be delivered in exchange for a temporary
Registered Security; and provided, further, that a definitive Unregistered
Security shall be delivered in exchange for a temporary Unregistered Security
only in compliance with the conditions set forth in Section 2.4.
If temporary Securities of any Series are issued in global form, any
such temporary global Security shall, unless otherwise provided therein, be
delivered to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euro-clear and CEDEL S.A., for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the
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Company shall deliver to the Trustee definitive Securities, in aggregate
principal amount equal to the principal amount of such temporary global
Security, or, if so specified as contemplated by Section 2.3, a permanent global
Security, in either case, executed by the Company. On or after the Exchange
Date, such temporary global Security shall be surrendered by the Common
Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of the same Series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 2.3, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
however, that, unless otherwise specified in such temporary global Security,
upon such presentation by the Common Depositary, such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euro-clear as to the portion of such temporary global Security held
for its account then to be exchanged and a certificate dated the Exchange Date
or a subsequent date and signed by CEDEL S.A. as to the portion of such
temporary global Security held for its account then to be exchanged, each in the
form set forth in Exhibit A-2 to this Indenture; and provided, further, that
definitive Unregistered Securities shall be delivered in exchange for a portion
of a temporary global Security only in compliance with the requirements of
Section 2.4.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a Series in a temporary global
Security shall be exchanged for definitive Securities of the same Series and of
like tenor following the Exchange Date when the account holder instructs
Euro-clear or CEDEL S.A., as the case may be, to request such exchange on his
behalf and delivers to Euro-clear or CEDEL, S.A., as the case may be, a
certificate in the form set forth in Exhibit A-1 to this Indenture, dated no
earlier than 15 days prior to the Exchange Date. Unless otherwise specified in
such temporary global Security, any such exchange shall be made free of charge
to the beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take delivery
of such
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definitive Securities in person at the offices of Euro-clear or CEDEL S.A.
Definitive Securities in bearer form to be delivered on exchange for any portion
of a temporary global Security shall be delivered only outside the United
States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any Series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same Series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 2.3, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such Series occurring
prior to the applicable Exchange Date shall be payable to Euro-clear and CEDEL
S.A. on such Interest Payment Date upon delivery by Euro-clear and CEDEL S.A. to
the Trustee of a certificate or certificates in the form set forth in Exhibit
A-3 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 Security on such Interest Payment
Date and who have each delivered to Euro-clear and CEDEL S.A., as the case may
be, a certificate in the form set forth in Exhibit A-4 to this Indenture. Any
interest so received by Euro-clear and CEDEL S.A. and not paid as herein
provided shall be returned to the Trustee and then to the Company in accordance
with Section 10.4.
SECTION 2.12 Compliance with Certain Laws and Regulations. If any
Unregistered Securities are to be issued in any Series of Securities, the
Company will use reasonable efforts to provide for arrangements and procedures
designed pursuant to then applicable laws and regulations, if any, to ensure
that Unregistered Securities are sold or resold, exchanged, transferred and paid
only in compliance with such laws and regulations and without adverse
consequences to the Company.
SECTION 2.13 Appointment of Agents with Respect to Certain
Calculations. The Company may appoint an Agent or Agents with respect to one or
more Series of Securities which Agent or Agents shall be authorized to determine
the rate or rates of interest applicable to the Securities of any Series from
time to time in effect, the amount of principal or premium, if any payable on
the Securities of any Series and the rates of exchange applicable to the
Securities of any Series denominated in a currency other than United States
dollars from time to time in effect, all in accordance with the terms of the
Securities of such Series. Wherever reference is made in this Indenture to any
such calculation by the Trustee, it shall be deemed to refer to the calculation
by such agent or agents. Such agent, upon calculating the amounts so to be
calculated pursuant to the terms
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of the Securities of any Series shall communicate promptly in writing the
amounts so calculated to the Company and the Trustee. Absent manifest error, all
amounts so calculated shall be binding on the Company, the Trustee and the
Holders of the Securities of such Series.
Any such agent may resign at any time by giving written notice
thereof to the Company and to the Trustee. The Company may at any time terminate
the agency of any such agent by giving written notice thereof to such agent and
to the Trustee. Upon receiving such a notice of resignation or upon such a
termination, the Company may appoint a successor agent and shall give notice of
such appointment to all Holders of Securities in the manner provided in Section
11.4.
SECTION 2.14 Securities Issuable in the Form of a Global Security.
(a) If the Company shall establish pursuant to Sections 2.1 and 2.3 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or its agent shall, in accordance with Section 2.4 and the Company Order
delivered to the Trustee or its agent thereunder, authenticate and deliver such
Global Security or Global Securities, which (i) shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, the
Outstanding Securities of such series to be represented by such Global Security
or Global Securities, or such portion thereof as the Company shall specify in a
Company Order, (ii) shall be registered in the name of the Depository for such
Global Security or Global Securities or its nominee, (iii) shall be delivered by
the Trustee or its agent to the Depository or pursuant to the Depository's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized representative of the
Depository to the Company or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of the nominee
of the Depository or in such other name as is requested by an authorized
representative of the Depository (and any payment is made to the nominee of the
Depository or to such other entity as is requested by an authorized
representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, the nominee of the Depository, has an interest herein."
(b) Notwithstanding any other provision of this Section 2.14 or of
Section 2.8, and subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be exchanged
in whole or
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in part for individual certificates representing Securities, a Global Security
may be transferred, in whole but not in part and in the manner provided in
Section 2.8, only to a nominee of the Depository for such Global Security, or to
the Depository, or a successor Depository for such Global Security selected or
approved by the Company, or to a nominee of such successor Depository.
(c) (i) If at any time the Depository for a Global Security notifies
the Company that it is unwilling or unable to continue as Depository for such
Global Security or if at any time the Depository for the Global Securities for
such series shall no longer be eligible or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation, the
Company shall appoint a successor Depository with respect to such Global
Security. If a successor Depository for such Global Security is not appointed by
the Company within 90 days after the Company receives notice or becomes aware of
such ineligibility, the Company will execute, and the Trustee or its agent, upon
receipt of a Company Request for the authentication and delivery of certificates
representing Securities of such series in exchange for such Global Security,
will authenticate and deliver, certificates representing Securities of such
Series of like tenor and terms in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global Security.
(ii) The Company may at any time and in its sole discretion
determine that the Securities of any series or portion thereof issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Global Securities. In such event the
Company will execute, and the Trustee, upon receipt of a Company Request for the
authentication and delivery of certificates representing Securities of such
series in exchange in whole or in part for such Global Security, will
authenticate and deliver certificates representing Securities of such series of
like tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of such Global Security or Global Securities
representing such series or portion thereof in exchange for such Global Security
or Global Securities.
(iii) If specified by the Company pursuant to Sections 2.1 and
2.3 with respect to Securities issued or issuable in the form of a Global
Security, the Depository for such Global Security may surrender such Global
Security in exchange in whole or in part for certificates representing
Securities of such series of like tenor and terms in definitive form on such
terms as are acceptable to the Company and such
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Depository. Thereupon the Company shall execute, and the Trustee or its agent
shall authenticate and deliver, without a service charge, (1) to each Holder
specified by the Security Registrar or the Depository a certificate or
certificates representing Securities of the same series of like tenor and terms
and of any authorized denomination as requested by such person in an aggregate
principal amount equal to and in exchange for such Holder's beneficial interest
as specified by the Security Registrar or the Depository in the Global Security;
and (2) to such Depository a new Global Security of like tenor and terms and in
an authorized denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the aggregate principal
amount of certificates representing Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding
three paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver certificates representing Securities in definitive
registered form in authorized denominations for Securities of the same series or
any integral multiple thereof. Upon the exchange of the entire principal amount
of a Global Security for certificates representing Securities, such Global
Security shall be cancelled by the Trustee or its agent. Except as provided in
the preceding paragraph, certificates representing Securities issued in exchange
for a Global Security pursuant to this Section shall be registered in such names
and in such authorized denominations for Securities of that Series or any
integral multiple thereof, as the Security Registrar or Depository shall
instruct the Trustee or its agent in writing. The Trustee or the Security
Registrar shall deliver at its Corporate Trust Office such certificates
representing Securities to the Holders in whose names such Securities are so
registered.
ARTICLE 3
COVENANTS OF THE COMPANY
SECTION 3.1 Payment of Principal and Interest. The Company covenants
and agrees for the benefit of each Series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such Series in accordance with the terms of the Securities of
such Series, any Coupons appertaining thereto and this Indenture.
The interest on Unregistered Securities shall be payable only upon
presentation and surrender of the Coupons for such interest installments as are
evidenced thereby as they
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mature. The interest on any temporary Unregistered Security shall be paid, as to
any installment of interest evidenced by a Coupon attached thereto, if any, only
upon presentation and surrender of such Coupon, and, as to the other
installments of interest, if any, only upon presentation of such Securities for
notation thereon of the payment of such interest.
SECTION 3.2 Offices for Payment, etc. If Securities of a Series are
issuable only as Registered Securities, the Company will maintain an office or
agency where Securities of that Series may be presented or surrendered for
payment, where Securities of that Series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that Series and this Indenture may be served.
Except as otherwise specified as contemplated by Section 2.3, if Securities of a
Series are issuable as Registered Securities and/or Unregistered Securities, the
Company will maintain (A) in the Borough of Manhattan, The City of New York, an
office or agency where any Registered Securities of that Series may be
surrendered for registration of transfer, where Securities of that Series may be
surrendered for exchange, where notices and demands to or upon the Company in
respect of the Securities of that Series and this Indenture may be served and
where Unregistered 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, outside the United States, an office or agency where
Securities of that Series and related coupons may be presented and surrendered
for payment (including payment of any additional amounts payable on Securities
of that Series pursuant to Section 3.7); provided, however, that if the
Securities of that Series are listed on The International Stock Exchange, the
London Stock Exchange, 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 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 Securities of that Series are listed on such
exchange, and (C) subject to any laws or regulations applicable thereto, outside
the United States, an office or agency where any Registered Securities of that
Series may be surrendered for registration of transfer, where Securities of that
Series may be surrendered for exchange and where notices and demands to or upon
the Company in respect of the Securities of that Series and this Indenture may
be served. The Company will give prompt written notice to the Trustee and the
Holders of the location, and any change in the location, of any such office or
agency. If at any time the Company shall fail to maintain any
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such required office or agency in respect of any Series of Securities or shall
fail to furnish the Trustee with the address thereof, such presentations and
surrenders of Securities of that Series may be made and notices and demands may
be made or served at the Corporate Trust Office of the Trustee, except that
Unregistered Securities of that Series and the related coupons may be presented
and surrendered for payment (including payment of any additional amounts payable
on Unregistered Securities of that Series pursuant to Section 3.7) at an office
maintained by the Trustee in London, and the Company hereby appoints the same as
its agent to receive such respective presentations, surrenders, notices and
demands.
Except as otherwise specified as contemplated by Section 2.3, no
payment of principal or interest on Unregistered 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 Securities of a
Series are denominated and payable in Dollars, payment of principal of and any
premium, if any, and interest on any Unregistered Security (including any
additional amounts payable on Securities of such Series pursuant to Section 3.7)
shall be made at the office of the Company's Paying Agent in the Borough of
Manhattan, The City 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 effective
precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more Series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any Series for such purposes. The Company will give prompt written notice to the
Trustee and the Holders of any such designation or rescission and of any change
in the location of any such other office or agency.
Unless otherwise specified pursuant to Section 2.3, the Trustee is
appointed Paying Agent and Registrar.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee. The
Company, whenever necessary to avoid or fill a
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vacancy in the office of Trustee, will appoint, in the manner provided in
Section 6.10, a Trustee, so that there shall at all times be a Trustee with
respect to each Series of Securities hereunder.
SECTION 3.4 Paying Agents. Whenever the Company shall appoint a
Paying Agent other than the Trustee with respect to the Securities of any
Series, it will cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Agent shall agree with the Trustee, subject to the
provisions of this Section,
(a) that it will hold all sums received by it as such Agent for the
payment of the principal of or interest on the Securities of such Series
or Coupons (whether such sums have been paid to it by the Company or by
any other obligor on the Securities of such Series or Coupons) in trust
for the benefit of the Holders of the Securities of such Series or of the
Trustee, and upon the occurrence of an Event of Default pay over all such
sums received by it to the Trustee,
(b) that it will give the Trustee written notice of any failure by
the Company (or by any other obligor on the Securities of such Series) to
make any payment of the principle of or interest on the Securities of such
Series or Coupons when the same shall be due and payable, and
(c) that it will give the Trustee written notice of any change of
address of any Holder of which it is aware.
The Company will, on or prior to each due date of the principal of
or interest on the Securities of such Series or Coupons, deposit with the Paying
Agent a sum sufficient to pay such principal or interest so becoming due, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee in writing of any failure to take such action.
If the Company shall act as its own Paying Agent with respect to the
Securities of any Series or Coupons, it will, on or before each due date of the
principal of or interest on the Securities of such Series or Coupons, set aside,
segregate and hold in trust for the benefit of the Holders of the Securities of
such Series or Holders of such Coupons a sum sufficient to pay such principal or
interest so becoming due. The Company will promptly notify the Trustee in
writing of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the
Company may at any time, for the purpose of
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obtaining a satisfaction and discharge with respect to one or more or all Series
of Securities or Coupons hereunder, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust for any such Series by the Company or
any Paying Agent hereunder, as required by this Section, such sums to be held by
the Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.5 Written Statement to Trustee. The Company will deliver
to the Trustee on or before May 1 in each year in which there are Securities
Outstanding hereunder an Officer's Certificate, stating that in the course of
the performance of their duties as officers of the Company they would normally
have knowledge of any default by the Company in the performance or fulfillment
of any covenant, agreement or condition contained in this Indenture, stating
whether or not they have knowledge of any such default and, if so, specifying
each such default of which the signers have knowledge and the nature thereof.
SECTION 3.6 Corporate Existence. So long as any Securities shall be
Outstanding, subject to Article Nine, 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 Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 3.7 Additional Amounts. If the Securities of a Series
provide for the payment of additional amounts, the Company will pay to the
Holder of any Security of such Series or any Coupon appertaining thereto
additional amounts as provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal or premium, if any, of
or interest on, or in respect of, any security of a Series or payment of any
related Coupon or the net proceeds received on the sale or exchange of any
Security of any Series, such mention shall be deemed to include mention of the
payment of additional amounts provided for in this Section to the extent that,
in such context, additional amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section and express mention of the
payment of additional amounts (if
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applicable) in any provisions hereof shall not be construed as excluding
additional amounts in those provisions hereof where such express mention is not
made.
If the Securities of a Series provide for the payment of additional
amounts, at least 10 days prior to the first interest payment date with respect
to that Series of Securities (or if the Securities of that Series will not bear
interest prior to maturity, the first day on which a payment of principal is
made), and at least 10 days prior to each date of payment of principal, premium,
if any, or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officer's Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee , with an Officer's Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of or interest
on the Securities of that Series shall be made to Holders of Securities of that
Series or any related Coupons who are United States Aliens without withholding
for or on account of any tax, assessment or other governmental charge described
in the Securities of that Series. If any such withholding shall be required,
then such Officer's Certificate shall specify by country the amount, if any,
required to be withheld on such payments to such Holders of Securities or
Coupons and the Company will pay to the Trustee or such Paying Agent the
additional amounts required by this Section. The Company, notwithstanding any
other provision in this Indenture, covenants to indemnify the Trustee and any
Paying Agent and their officers, directors, employees and agents for, and to
hold them harmless against, any loss, liability or expense (including counsel's
fees, expenses and disbursements) reasonably incurred without negligence or bad
faith on their part arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officer's Certificate furnished
pursuant to this Section.
SECTION 3.8 Defeasance of Certain Obligations and Certain Events of
Default. Unless otherwise provided in the Board Resolutions, Officer's
Certificate or an indenture supplemental hereto establishing a series of
Securities subject to additional restrictive covenants or events of default as
contemplated by Section 2.3, the Company may omit to comply with any term,
provision or condition set forth in any such additional restrictive covenant,
and Section 5.1(d) (with respect to any such additional restrictive covenant),
Section 5.1(e) and any such additional event of default shall be deemed not to
be an Event of Default, in each case with respect to the Securities of any
Series, if the Company has irrevocably deposited or caused to be deposited with
the Trustee, under the terms of an irrevocable trust agreement in form
satisfactory to the Trustee, as trust funds in trust (subject to Sections 10.2,
10.3,
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10.4 and 10.5 hereof) solely for the benefit of the Securityholders of such
Series for that purpose, (i) cash or (ii) direct noncallable obligations of, or
noncallable obligations guaranteed by, the United States of America or an agency
thereof for the payment of which guarantee or obligation the full faith and
credit of the United States of America is pledged ("U.S. Government
Obligations"), or a combination thereof, maturing as to principal and interest
in such amounts and at such times as are sufficient, without consideration of
any reinvestment of such principal or interest, to pay the principal of and
interest on the outstanding Securities of such Series and Coupons to maturity or
redemption, as the case may be, provided that the Trustee shall have been
irrevocably instructed in writing to apply such money or the proceeds of such
U.S. Government Obligations to the payment of said principal of and interest on
the Outstanding Securities and Coupons of such Series; provided that:
(a) such deposit shall not cause the Trustee with respect to the
Securities of that Series to have a conflicting interest as defined in
Section 6.8 and for purposes of the Trust Indenture Act with respect to
the Securities of any Series;
(b) 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; and
(c) no Event of Default under Section 5.1(a), 5.1(b) or 5.1(c), or
event which with the lapse of time would become an Event of Default with
respect to the Securities of that Series shall have occurred and be
continuing on the date of such deposit, and no Event of Default under
Section 5.1(f) or Section 5.1(g) or event which with the giving of notice
or lapse of time, or both, would become an Event of Default under Section
5.1(f) or Section 5.1(g) shall have occurred and be continuing on the 91st
day after such date of deposit.
Such irrevocable trust agreement shall include, among other things,
provision for (1) payment of the principal of and interest on the Securities of
such Series and Coupons when due (by redemption, sinking fund payments or
otherwise), (2) the payment of the expenses of the Trustee (including counsel's
fees, expenses and disbursements) incurred or to be incurred in connection with
carrying out such trust provisions, (3) rights of registration, transfer,
substitution and exchange of Securities of such Series and Coupons in accordance
with the terms stated in this Indenture and (4) continuation of the rights
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and obligations and immunities of the Trustee as against the Securityholders of
such Series as stated in this Indenture.
After any such irrevocable deposit, accompanied by an Officer's
Certificate and Opinion of Counsel which shall state that the provisions of the
first two paragraphs of this Section 3.8 have been complied with, and upon
delivery by the Company to the Trustee of an Opinion of Counsel to the effect
that Securityholders of such Series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and discharge and will
be subject to Federal income tax on the same amount and in the same manner and
at the same time as would have been the case if such deposit and discharge had
not occurred, then the Company shall be discharged of its obligations under the
Securities of such Series and this Indenture with respect to such Series except
for those surviving obligations specified above, and the Trustee upon written
request shall acknowledge in writing such discharge. In addition, if the
Securities of that Series are then listed on the New York Stock Exchange, Inc.,
the Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that such deposit, defeasence and discharge will not cause such
Securities to be delisted. Prior to the delivery of such acknowledgment, the
Trustee may require the Company to deliver to it an Officer's Certificate and
Opinion of Counsel, each stating that all conditions precedent provided for
herein relating to the deposit and discharge contemplated by this provision have
been complied with, and the Trustee may also require that the Opinion of Counsel
shall also state that such deposit does not violate applicable law.
ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.1 Company to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the Holders of the
Registered Securities of each Series:
(a) semiannually and not more than 10 days after each record date
for the payment of interest on such Securities, as hereinabove specified,
as of such record date and on dates to be determined pursuant to Section
2.3 for non-interest bearing securities in each year, and
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(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Company of any such request as of a
date not more than 15 days prior to the time such information is
furnished;
provided that if and so long as the Trustee shall be the Security registrar for
such Series, such list shall not be required to be furnished but in any event
the Company shall be required to furnish such information concerning the Holders
of Unregistered Securities which is known to it; provided, further, that the
Company shall have no obligation to investigate any matter relating to any
Holder of an Unregistered Security or any Holder of a Coupon.
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each Series of Securities contained in the most recent list furnished to it as
provided in Section 4.1 or maintained by the Trustee in its capacity as Security
registrar for such Series, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 4.1 upon receipt of a new list so
furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned 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 Securities of a particular Series (in which case the applicants must all hold
Securities of such Series) or with Holders of all Securities with respect to
their rights under this Indenture or under such Securities and such application
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 to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection
(a) of this Section, or
(ii) inform such applicants as to the approximate number of Holders
of Securities of such Series or all Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a)
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of this Section, as to the approximate cost of mailing to such
Securityholders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford to such applicants access
to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such Series or all Securities, as the
case may be, whose name and address appear in the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of this
Section, 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.
(c) Each and every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any agent of the Company or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders of Securities in accordance with provisions of
subsection (b) of this Section, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under such subsection
(b).
SECTION 4.3 Reports by the Company. The Company covenants:
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(a) to 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 Commissioner 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, and if the Company is not required to
file information, documents, or reports pursuant to either of such
Sections, then to file with the Trustee and the Commission, in accordance
with 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, or in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(b) to 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 provided for in this
Indenture as may be required from time to time by such rules and
regulations; and
(c) to transmit by mail to the Holders of Securities in the manner
and to the extent required by Sections 4.4(c) and 11.4, 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 subsection (a)and(b)of this Section as may be required to be
transmitted to such Holders by rules and regulations prescribed from time
to time by the Commission.
SECTION 4.4 Reports by the Trustee. (a) On or before July 14 in
each year following the date hereof, so long as any Securities are outstanding
hereunder, the Trustee shall transmit by mail as provided below to the
Securityholders of each Series, as hereinafter in this Section provided, a brief
report dated as of May 15 with respect to any of the following events which
may have occurred within the previous 12 months (but if no such event has
occurred within such period, no report need be transmitted):
(i) any change in its eligibility under Section 6.9 and its
qualification under Section 6.8, or in lieu thereof, if to the best of its
knowledge it has continued to be eligible and qualified under such
Sections, a written statement to such effect;
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(ii) 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 Securities of any 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 l% of the
principal amount of the Securities of any Series Outstanding on the date
of such report;
(iii) the amount, interest rate, and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity on the date of such
report, with a brief description of any property held as collateral
security therefor, except any indebtedness based upon a creditor
relationship arising in any manner described in Section 6.13(b)(2),(3),(4)
or (6);
(iv) any change to the property and funds, if any, physically
in the possession of the Trustee (as such) on the date of such report;
(v) any additional issue of Securities which the Trustee has
not previously reported; and
(vi) any action taken by the Trustee in the performance of its
duties under this Indenture which it has not previously reported and which
in its opinion materially affects the Securities, except action in respect
of a default, notice of which has been or is to be withheld by it in
accordance with the provisions of Section 5.11.
(b) The Trustee shall transmit to the Securityholders of each
Series, as provided in subsection (c) of this Section, 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 the
provisions of subsection (a) of this Section (or if such report has yet been so
transmitted, since the date of this Indenture) for the reimbursement of which it
claims or may claim a lien or charge prior to that of the 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 (b), except that the Trustee
shall not be required
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(but may elect) to report such advances if such advances remaining unpaid at any
time aggregate 10% or less of the principal amount of 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 shall be transmitted by mail to
all registered Holders of Securities, as the names and addresses of such Holders
appear upon the registry book of the Company and to such Holders of Unregistered
Securities as have, within the two years preceding such notice, filed their
names and addresses with the Trustee for that purpose, and, except in the case
of reports pursuant to subsection (b) of this Section 4.4, to all Holders whose
names and addresses appear in the information preserved at the time of such
notice by the Trustee in accordance with the provisions of Section 4.2(a).
(d) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Company and be filed by the
Trustee with each stock exchange upon which the Securities of any applicable
Series are listed and also with the Commission. The Company agrees to notify the
Trustee with respect to any Series when and as the Securities of such Series
become admitted to trading on any national securities exchange.
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default" as used herein with respect to Securities
of any Series whatever means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest upon any
of the Securities of such Series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal on
any of the Securities of such Series as and
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when the same shall become due and payable either at maturity, upon
redemption, by declaration or otherwise; or
(c) default in the payment of any sinking fund installment as and
when the same shall become due and payable by the terms of the Securities
of such Series; or
(d) default in the performance, or breach, of any agreement of the
Company in respect of the Securities of such Series (other than an
agreement in respect of the Securities of such Series a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 60
days after receipt by the Company from the Trustee or the Holders of at
least 25% in principal amount of the Outstanding Securities of such Series
affected thereby, of 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
(e) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (including a default with
respect to Securities of any Series other than that Series) or under any
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money
borrowed by the Company (including this Indenture), whether such
indebtedness now exists or shall hereafter be created, which default shall
constitute a failure to pay such indebtedness in a principal amount in
excess of $20,000,000 when due and payable after the expiration of any
applicable grace period with respect thereto or shall have resulted in
such indebtedness in a principal amount in excess of $20,000,000 becoming
or being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness having
been discharged, or such acceleration having been rescinded or annulled,
within a period of 15 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 at east 25% in principal amount
of the Outstanding Securities of that Series a written notice specifying
such default and requiring the Company to cause such indebtedness to be
discharged or cause such acceleration to be rescinded or annulled and
stating that such notice is a "Notice of Default" hereunder; or
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(f) the Company pursuant to or under or within the meaning of any
Bankruptcy Law: (i) commences a voluntary case or proceeding; (ii)
consents to the entry of an order for relief against it in an involuntary
case or proceeding or the commencement of any case against it; (iii)
consents to the appointment of a Custodian of it or any substantial part
of its property; (iv) makes a general assignment for the benefit of its
creditors; (v) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or (vi) consents to the filing of such petition
or the appointment of or taking possession by a Custodian; or
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Company in an
involuntary case or proceeding, or adjudicates the Company insolvent or
bankrupt; (ii) appoints a Custodian of the Company or for any substantial
part of its property; or (iii) orders the winding up or liquidation of the
Company; and the order or decree remains unstayed and in effect for 60
days; or
(h) there has occurred any other Event of Default provided in the
indenture supplemental hereto or Board Resolution under which such Series
of Securities is issued or in the form of Security for such Series.
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors. "Custodian" means any receiver,
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
If an Event of Default (other than an Event of Default under clauses
(f) and (g)) with respect to Securities of any Series at the time Outstanding
occurs and is continuing, then in every such case the Trustee or the Holders of
not less than 25% in principal amount of the Outstanding Securities of that
Series may declare the principal amount (or, if the Securities of that Series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of that Series) of all of the Securities of that
Series and the interest, if any, accrued thereon to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee given by
Holders), and upon any such declaration such principal amount (or specified
amount) and interest shall become immediately due and payable. If an Event of
Default described in clause (f) or (g) occurs and is continuing, the entire
principal amount (or, if the Securities of that Series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that Series) of all the Securities then Outstanding and
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interest accrued thereon shall become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Securityholders.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any Series shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of such Series and the
principal of any and all Securities of such Series which shall have become due
otherwise than by acceleration (with interest upon such principal and, to the
extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest, at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities) specified
in the Securities of such Series, to the date of such payment or deposit) and
such amount as shall be sufficient to cover reasonable compensation and
reimbursement for the expenses and disbursements to the Trustee, its agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee except as a result of negligence or bad faith, and
if any and all Events of Default under the Indenture, other than the nonpayment
of the principal of Securities which shall have become due by acceleration,
shall have been cured, waived or otherwise remedied as provided herein - then
and in every such case the Holders of a majority in aggregate principal amount
of all the Securities of such Series then Outstanding, by written notice to the
Company and to the Trustee, may waive all defaults with respect to such Series
and rescind and annul such declaration and its consequences, but no such waiver
or rescission and annulment shall extend to or shall affect any subsequent
default or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the revisions hereof, then, from and after
such declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all
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other amounts owing thereunder, shall constitute payment in full of such
Original Issue Discount Securities.
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Company covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities of any Series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in
the payment of all or any principal of any of the Securities of any Series when
the same shall have become due and payable, whether upon maturity of the
Securities of such Series or upon any redemption or by declaration or otherwise
- - then upon demand of the Trustee, the Company will pay to the Trustee for the
benefit of the Holders of the Securities of such Series and the Holders of any
Coupons appertaining thereto the whole amount that then shall have become due
and payable on all Securities of such Series or such Coupons for principal of or
interest, as the case may be (with interest to the date of such payment upon the
overdue principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of Original
Issue Discount Securities) specified in the Securities of such Series); and in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including reasonable compensation to and
reimbursement for the expenses and disbursements of the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and any
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Company may pay the
principal of and interest on the Securities of any Series to the persons
entitled thereto, whether or not the principal of and interest on the Securities
of such Series are overdue.
In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or
in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Company or other obligor upon such
Securities and collect in the manner provided by law out of the property of the
Company or other obligor upon such Securities, wherever situated, the moneys
adjudged or decreed to be payable.
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In case there shall be pending proceedings relative to the Company
or any other obligor upon the Securities under any Bankruptcy Law, or in case a
Custodian shall have been appointed for or taken possession of the Company or
its property or such other obligor, or in case of any other comparable judicial
proceedings relative to the Company or other obligor under the Securities of any
Series, or to the creditors or property of the Company or such other obligor,
the Trustee, irrespective of whether the principal of any Securities shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered (but shall have no
obligation to), by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Securities of
any Series, and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for reasonable compensation and reimbursement for expenses and
disbursements to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee, except as a result of negligence or bad
faith) and of the Securityholders and the Holders of any Coupons
appertaining thereto allowed in any judicial proceedings relative to the
Company or other obligor upon all Securities of any Series, or to the
creditors or property of the Company or such other obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Securities of any Series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation
or other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders and of the Trustee on
their behalf; and any Custodian or other similar official is hereby
authorized by each of the Holders to make payments to the Trustee, and, in
the event that the Trustee shall consent to the making of payments
directly to the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation and reimbursement for
expenses and disbursements to the Trustee, each predecessor Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities
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incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith and all other
amounts due to the Trustee or any predecessor Trustee pursuant to Section
6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any Series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture,
or under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof at any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the securities and Holders of any Coupons in respect
of which such action was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Securities and Coupons appertaining thereto in respect to which
such action was taken, and it shall not be necessary to make any Holders of such
Securities and Coupons appertaining thereto parties to any such proceedings.
SECTION 5.3 Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of the Securities of any Series
shall be applied in the following order at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal
or interest, upon presentation of the several Securities and any Coupons
appertaining thereto in respect of which moneys have been collected and stamping
(or otherwise noting) thereon the payment, or issuing Securities of such Series
in reduced principal amounts in exchange for the presented Securities of like
Series if only partially paid, or upon surrender thereof if fully paid:
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FIRST: To the payment of costs and expenses applicable to such
Series in respect of which moneys have been collected, including
reasonable compensation to the Trustee and each predecessor Trustee and
their respective agents and attorneys and of all fees, expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith, and all
other amounts due to the Trustee or any predecessor Trustee pursuant to
Section 6.6;
SECOND: In case the principal of the Securities of such Series in
respect of which moneys have been collected shall not have become and be
then due and payable, to the payment of interest on the Securities of such
Series in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in such Securities, such
payments to be made ratably to the persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Securities of such Series in
respect of which moneys have been collected shall have become and shall be
then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities such Series for principal and interest,
with interest upon the overdue principal, and (to the extent that payment
of such interest is permissible by law and that such interest has been
collected by the Trustee) upon overdue installments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in the Securities of such
Series; and in case such moneys shall be insufficient to pay in full the
whole amount so due and unpaid upon the Securities of such Series, then to
the payment of such principal and interest or Yield to Maturity, without
preference or priority of principal over interest or Yield to Maturity or
of interest or Yield to Maturity over principal, or of any installment of
interest over any other installment of interest, or of any Security of
such Series over any other Security of such Series, ratably to the
aggregate of such principal and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Company or
any other person lawfully entitled thereto.
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SECTION 5.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effective to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
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SECTION 5.5 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Company and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
SECTION 5.6 Limitations on Suits by Securityholders. No Holder of
any Security of any Series or Holder of any Coupon shall have any right by
virtue or by availing of any provision of this Indenture to institute any action
or proceeding at law or in equity or in bankruptcy or otherwise upon or under or
with respect to this Indenture, or for the appointment of a Custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
not less than 25% in aggregate principal amount of the Securities of such Series
then Outstanding shall have made written request upon the Trustee to institute
such action or proceedings in its own name as trustee hereunder and shall have
offered to the Trustee such indemnity reasonably satisfactory to it, as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such action or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 5.9; it being understood and
intended, and being expressly covenanted by the taker and Holder of every
Security and by a Holder of each Coupon appertaining thereto and the Trustee,
that no one or more Holders of Securities of any Series or one or more
Securities of any Series or one or more Holders of any Coupons appertaining
thereto shall have any right in any manner whatever, by virtue or by availing of
any provisions of this Indenture to affect, disturb or prejudice the rights of
any other such Holder of Securities or any other Holders of such Coupons, or to
obtain or seek to obtain priority over or preference to any other such Holder or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of Securities of
the applicable Series and all the Holders of Coupons appertaining thereto. For
the protection and enforcement of the provisions of this Section, each any every
Securityholder and the Trustee shall
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be entitled to such relief as can be given either at law or in equity.
SECTION 5.7 Unconditional Rights of Securityholders to Institute
Certain Suits. Notwithstanding any provision in this Indenture and any provision
of any Security or Coupon, the right of any Holder of any Security and the right
of any Holder of any Coupon appertaining thereto to receive payment of the
principal of and interest on such Security on or after the respective due dates
expressed in such Security, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 5.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Securityholders 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.
No delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and, subject to Section 5.6, every power and remedy given by this
Indenture or by law to the Trustee, to the Securityholders or to the Holder of
any Coupon appertaining thereto may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee, the Securityholders or Holders of
any Coupon.
SECTION 5.9 Control by Securityholders. The Holders of a majority in
aggregate principal amount of the Securities of each Series affected (with each
Series treated as a separate class) at the time Outstanding shall have the right
to direct in writing the time, method, and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to the Securities of such Series by this
Indenture; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided further
that (subject to the provisions of Section 6.1) the Trustee shall have the right
to decline to follow any such direction if the Trustee, being
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advised by counsel, shall determine that the action or proceeding so directed
may not lawfully be taken or if the Trustee in good faith by its board of
directors, the executive committee, or a trust committee of directors or
Responsible Officers of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability or if
the Trustee in good faith shall so determine that the actions or forebearances
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities of all Series or of the Holders of any
Coupons appertaining thereto so affected not joining in the giving of said
direction, it being understood that (subject to Section 6.1) the Trustee shall
have no duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in
its discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such written direction or directions by Securityholders.
SECTION 5.10 Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Securities of any Series as provided in
Section 5.1, the Holders of a majority in aggregate principal amount of the
Securities of such Series then Outstanding may waive any such default or Event
of Default and its consequences except a default in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Security affected. In the case of any such waiver, the Company,
the Trustee, the Holders of the Securities of such Series and the Holder of any
Coupon appertaining thereto shall be restored to their former positions and
rights hereunder, respectively.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of 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 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall transmit to the Securityholders of any
Series notice in the manner and to the extent provided in Section 11.4, of all
defaults which have occurred with respect to such Series, such notice to be
transmitted within 90 days after the occurrence thereof, unless such defaults
shall have been cured before the giving of such notice (the term "default" or
"defaults" for the
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purposes of this Section being hereby defined to mean any event or condition
which is, or with notice or lapse of time or both would become, an Event of
Default); provided that, except in the case of default in the payment of the
principal of or interest on any of the Securities of such Series or any default
in the payment of any sinking fund installment or analogous obligation in
respect of any of the 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 or trustees or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Securityholders of such
Series.
SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Security and
each Holder of any Coupon, by his acceptance thereof, shall be deemed to have
agreed, that a court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Securityholder or
group of Securityholders of any Series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such Series, or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security.
ARTICLE 6
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; Prior to
Default; During Default. With respect to the Holders of any Series of Securities
issued hereunder, the Trustee, prior to the occurrence of an Event of Default
with respect to the Securities of a particular Series and after the curing or
waiving of all Events of Default which may have occurred with respect to such
Series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. No implied covenants or obligations
shall be read into this Indenture against the Trustee. In case an Event of
Default with respect to the Securities of a Series has occurred (which has not
been cured or
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waived) of which a Responsible Officer has actual knowledge, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
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 wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any Series and after the curing or waiving of all such
Events of Default with respect to such Series which may have occurred:
(i) the duties and obligations of the Trustee with respect to
the Securities of an Series shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the written
direction of the Holders pursuant to Section 5.9 relating to the time,
method and place of conducting any proceeding for any remedy available to
the
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Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, officer's
Certificate or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, note, coupon,
security or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officer's Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee
by a copy thereof certified by the secretary or any assistant secretary of
the Company;
(c) the Trustee may consult with counsel and any advice or action
taken by the Trustee in reasonable reliance on the advice of counsel or
an Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to
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be authorized or within rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of any Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall
not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper or document unless requested in
writing to do so by the Holders of not less than a majority in aggregate
principal amount of the Securities of all Series affected then
Outstanding; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require indemnity reasonably
satisfactory to it against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation shall be
paid by the Company or, if paid by the Trustee or any predecessor Trustee,
shall be repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
custodians, nominees or attorneys not regularly in its employ and the
Trustee shall not be responsible for any negligent action, negligent
failure to act or wilful misconduct on the part of any such agent,
custodian, nominee or attorney.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein and
in the Securities, except the Trustee's certificate of authentication, shall be
taken as the statements of the Company and the Trustee assumes no responsibility
for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or of the Securities. The Trustee
shall not be accountable for the use or application by the Company of any of the
Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
etc. The Trustee, any Paying Agent, Security registrar, or any agent of the
Company or the Trustee, in its individual or any other capacity, may become the
owner or pledgee of Securities or Coupons with the same rights it would have if
it were not the Trustee or such agent and, subject to Sections 6.8
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and 6.13, if operative, may otherwise deal with the Company and receive,
collect, hold and retain collections from the Company with the same rights it
would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Company or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Company covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust) and the Company covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee
and each predecessor Trustee and the officers, directors, agents and employee
for, and to hold it and them harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Indenture or the
trusts hereunder and its duties hereunder, including the costs and expenses
of defending itself against or investigating any claim of liability in the
premises. The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture or the earlier resignation
or termination of the Trustee. Such additional indebtedness shall be a prior
lien to that of the Securities upon all property and funds held or collected
by the Trustee as such, except funds held in trust for the benefit of the
Holders of particular Securities or the Holders of particular Coupons, and
the Securities are hereby subordinated to such senior claim. When the Trustee
incurs expenses or renders services in connection with an Event of Default
specified in Section 5.1 or in connection with Article Five hereof, the
expenses (including
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the reasonable fees and expenses of its counsel) and the compensation for the
service in connection therewith are intended to constitute expenses of
administration under any bankruptcy law.
SECTION 6.7 Right of Trustee to Rely on Officer's Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, it may request and such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officer's Certificate and/or Opinion of Counsel, as the case
may be, delivered to the Trustee, and such certificate or Opinion of Counsel,
shall be full warrant to the Trustee for any action taken, suffered or omitted
by it or under the provisions of this Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. (a) If
the Trustee has or shall acquire any conflicting interest, as defined in this
Section, it shall, within 90 days after ascertaining that it has such
conflicting interest, either eliminate such conflicting interest or resign in
the manner and with the effect specified in this Indenture.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section, the Trustee shall, within 10 days
after the expiration of such 90 day period, transmit by mail notice of such
failure to the Securityholders in the manner and to the extent provided in
Section 4.4(c) and 11.4.
(c) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest with respect to Securities of any Series if
(i) the Trustee is trustee under this Indenture with respect
to the Outstanding Securities of any other Series or is a trustee under
another indenture under which any other securities, or certificates of
interest or participation in any other securities, of an Issuer are
outstanding, unless such other indenture is a collateral trust indenture
under which the only collateral consists of Securities issued under this
Indenture; provided that there shall be excluded from the operation of
this paragraph this Indenture with respect to the Securities of any Series
other than such Series or any other indenture or indentures under
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which other securities, or certificates of interest or participation in
other securities, of an Issuer are outstanding if (i) this Indenture is
and such other indenture or indentures are wholly unsecured, and such
other indenture or indentures are hereafter qualified under the Trust
Indenture Act of 1939, unless the Commission shall have found and declared
by order pursuant to Section 305(b) or Section 307(c) of such Trust
Indenture Act of 1939 that differences exist between the provisions of
this Indenture with respect to Securities of such Series and one or more
other Series, or the provisions of this Indenture and 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 Securities of such
Series and such other Series, or under this Indenture or such other
indenture or indentures, or (ii) the Issuer 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
Securities of such Series and such other Series, or under this Indenture
and such other indenture or indentures is not so likely to involve a
material conflict of interest as to make it necessary in the public
interest or for the protection of investors to disqualify the Trustee from
acting as such under this Indenture with respect to Securities of such
Series and such other Series, or under this Indenture and such other
indentures;
(ii) the Trustee or any of its directors or executive officers
is an obligor upon the Securities of any Series issued under this
Indenture or any underwriter for an Issuer;
(iii) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect common
control with an Issuer or an underwriter for an Issuer;
(iv) the Trustee or any of its directors or executive officers
is a director, officer, partner, employee, appointee, or representative of
an Issuer, or of an underwriter (other than the Trustee itself) for an
Issuer who is currently engaged in the business of underwriting, except
that (x) 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
an Issuer, but may not be at the same time an executive officer of both
the Trustee
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and an Issuer;(y) 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 an
Issuer; and (z) the Trustee may be designated by an Issuer or by any
underwriter for an Issuer 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 Subsection (c) (i) of this Section, to act as trustee,
whether under an indenture or otherwise;
(v) 10% or more of the voting securities of the Trustee is
beneficially owned either by an Issuer 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 an Issuer or by any director, partner, or
executive officer thereof, or is beneficially owned, collectively, by any
two or more such persons;
(vi) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, (x) 5% or more
of the voting securities or 10% or more of any other class of security of
an Issuer, not including the Securities issued under this Indenture and
securities issued under any other indenture under which the Trustee is
also trustee, or (y) 10% or more of any class of security of an
underwriter for an Issuer;
(vii) 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, an Issuer;
(viii) 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 an Issuer; or
(ix) the Trustee owns on May 15 in any calendar year, in the
capacity of executor, administrator, testamentary or inter vivos trustee,
guardian, committee or
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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 Section 6.8(c)(vi), (vii) or
(viii). 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 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 securities. Promptly
after May 15 in each calendar year the Trustee shall make a check of its
holdings of such securities in any of the above-mentioned capacities as of
such May 15. If an Issuer fails to make payment in full of principal of or
interest on any of the Securities when and as the same becomes due and
payable, and such failure continues for 30 days thereafter, the Trustee
shall make a prompt check of its holdings of such securities in any of the
above-mentioned capacities as of the date of the expiration of such 30-day
period, and after such date, notwithstanding the foregoing provisions of
this paragraph, all such securities so held by the Trustee, with sole or
joint control over such securities vested in it, shall, but only so long
as such failure shall continue, be considered as though beneficially owned
by the Trustee for the purposes of subsections (c)(vi), (vii) and (viii)
of this Section.
The specification of percentages in subsections (c)(v) to (ix),
inclusive, of this Section 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 subsection (c)(iii) or (vii) of this Section.
For the purposes of subsections (c)(vi), (vii), (viii) and (ix) of
this Section, 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;
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(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 (x) 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 (y) any security which it holds as collateral
security under this Indenture, irrespective of any default hereunder, or
(z) any security which it holds as agent for collection, or as custodian,
escrow agent, or depository, or in any similar representative capacity.
Except as provided above, the word "security" or "securities" as
used in this Section shall mean any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral trust certificate, reorganization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas or other mineral rights, or, in general, any interest or
instrument commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.
(d) For purposes of this Section:
(i) the term "underwriter" when used with reference to an
Issuer shall mean every person who, within three years prior to the time
as of which the determination is made, has purchased from the Issuer with
a view to, or has offered or sold for the Issuer in connection with, the
distribution of any security of the Issuer outstanding at such time, or
has participated or has had a direct or indirect participation in an 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
distributor's or seller's commission;
(ii) the term "director" shall mean any director of a
corporation or any individual performing similar
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functions with respect to any organization whether incorporated or
unincorporated;
(iii) the term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock company, a
trust, an unincorporated organization, or a government or political
subdivision thereof; as used in this paragraph, the term "trust" shall
include only a trust where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security;
(iv) the term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote on the direction
or management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security are
presently entitled to vote on the direction or management of the affairs
of a person;
(v) the term "Issuer" shall mean any obligor upon the
Securities; and
(vi) the term "executive officer" shall mean 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:
(i) a specified percentage of the voting securities of the
Trustee, an Issuer or any other person referred to in this Section (each
of whom is referred to as "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;
(ii) a specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of the
class outstanding;
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(iii) the term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness, the
number of shares if relating to capital shares, and the number of units if
relating to any other kind of security;
(iv) 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:
(A) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(B) 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;
(C) 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
(D) securities held in escrow if placed in escrow by the
issuer thereof;
provided 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; and
(v) 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, that in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various Series thereof shall not be deemed sufficient to
constitute such Series different classes, and provided, further, that, in
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
SECTION 6.9 Persons Eligible for Appointment as Trustee. The Trustee
for each Series of Securities hereunder
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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 District of Columbia
having a combined capital and surplus of at least $50,000,000, and which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by Federal, State or District of Columbia authority.
Such corporation shall have its principal place of business in the United States
of America, if there be such a corporation in such location willing to act upon
reasonable and customary terms and conditions. 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. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign with respect to one or more or all Series of Securities by
giving written notice of resignation to the Company and by mailing notice
thereof to the Holders in the manner and to the extent provided in Section 11.4.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees with respect to the applicable Series by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee or trustees. If no successor trustee shall have
been so appointed with respect to any Series and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable Series for at least six months may,
subject to the provisions of Section 5.12, on behalf of himself and all others
similarly situated, petition any such court for the appointment of, a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 6.8 with respect to any Series of
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Securities after written request therefor by the Company or by any
Securityholder who has been a bona fide Holder of a Security or Securities
of such Series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.9 and shall fail to resign after written
request therefor by the Company or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with
respect to any Series of the Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator 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, the Company may remove the Trustee with respect to the
applicable Series of Securities and appoint a successor trustee for such Series
by written instrument, in duplicate, executed by order of the Board of Directors
of the Company, one copy of which instrument shall be delivered to the Trustee
so removed and one copy to the successor trustee, or, subject to the provisions
of Section 5.12, any Securityholder who has been a bona fide Holder of a
Security or Securities of such Series for at least six months may on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee with respect to such Series. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each Series at the time Outstanding may at any time remove the
Trustee with respect to Securities of such Series and appoint a successor
trustee with respect to the Securities of such Series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Company the
evidence provided for in Section 7.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
Series and any appointment of a successor trustee with respect to such Series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon the payment of any fees, expenses and/or disbursements owed to the
Trustee (including the fees, expenses and/or disbursements of its agents not
regularly in its employ and counsel) and acceptance of appointment by the
successor trustee as provided in Section 6.11.
(e) No Trustee shall be liable for any action or omission of any
predecessor and/or successor Trustee.
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SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Company and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee with respect to all or any applicable Series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such Series of its predecessor hereunder, with like effect as if
originally named as trustee for such Series hereunder; but, nevertheless, on the
written request of the Company or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.
If a successor trustee is appointed with respect to the Securities
of one or more (but not all) Series, the Company, the predecessor Trustee and
each successor trustee with respect to the Securities of an applicable Series
shall execute and deliver an indenture supplemental hereto which shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the predecessor Trustee with respect to
the Securities of any Series as to which the predecessor Trustee is not retiring
shall continue to be vested in the predecessor Trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such trustees co-trustees of the same trust and that
each such trustee shall be trustee of a trust or trusts under separate
indentures.
No successor trustee with respect to any Series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.
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Upon acceptance of appointment by any successor trustee as provided
in this Section 6.11, the Company shall give notice in the manner and to the
extent provided in Section 11.4 to the Holders of Securities of any Series for
which such successor trustee is acting as trustee at their last addresses as
they shall appear in the Security register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
6.10. If the Company fails to mail such notice within ten days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. 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 an corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 6.8 and eligible
under the provisions of Section 6.9, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities of any Series shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any Series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
Trustee hereunder or in the name of the successor Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the
Securities of such Series or in this Indenture provided that the certificate of
the Trustee shall have; provided, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of any
Series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Company.
(a) Subject to the provisions of this Section, if the Trustee shall be or shall
become a creditor, directly or
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indirectly, secured or unsecured, of an Issuer within four months prior to a
default, as defined in subsection (c) of this Section, or subsequent to such a
default, then, unless and until such default shall be cured, the Trustee shall
set apart and hold in a special account for the benefit of the Trustee
individually, the Holders of the Securities, the Holders of Coupons and the
holders of other indenture securities (as defined in 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 four month period and valid as
against such Issuer and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
subsection (a)(2) of this Section, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against such Issuer 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 four month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of such Issuer 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 such Issuer) who is liable
thereon, (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 such
Issuer in bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable state law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four 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
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created after the beginning of such four 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 four 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 such 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 four month period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders, the Holders of Coupons and the holders
of other indenture securities in such manner that the Trustee, such
Securityholders 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 an Issuer in bankruptcy or receivership or in proceedings for
reorganization pursuant to Title 11 of the United States Code or applicable
State law, the same percentage of their respective claims, figured before
crediting to the claim of the Trustee anything on account of the receipt by it
from such Issuer of the funds and property in such special account and before
crediting to the respective claims of the Trustee, such Securityholders and the
holders of other indenture securities, dividends on claims filed against such
Issuer in bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable State law, but
after crediting thereon receipts on account of the indebtedness represented by
their respective claims from all sources other than from such dividends and from
the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such
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claim, in bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable State law, whether
such distribution is made in cash, securities or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion between the
Trustee, such Securityholders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and the property
held in such special account and the 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, such Securityholders and the holders of other indenture securities
with respect to their respective claims, in which event it shall not be
necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such four month period shall be subject to the provisions of this subsection (a)
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four month period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had
continued as trustee, occurred after the beginning of such four
month period; and
(ii) such receipt of property or reduction of claim occurred
within four months after such resignation or removal.
(b) There shall be excluded from the operation 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 advance and of the circumstances surrounding the making thereof is given to
the Securityholders 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)(3) below;
(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 such
Issuer; or
(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)(4) of this
Section.
(c) As used in this Section:
(1) the term "default" shall mean any failure to make payment
in full of the principal of or interest upon any of the Securities or upon the
other indenture securities when and as such principal or interest becomes due
and payable;
(2) the term "other indenture securities" shall mean
securities upon which an Issuer is an obligor (as defined in the Trust Indenture
Act of 1939) outstanding under any other indenture (i) under which the Trustee
is also trustee, (ii) which contains provisions substantially similar to the
provisions of subsection (a) of this Section, and (iii) under which a default
exists at the time of the apportionment of the funds and property held in said
special account;
(3) the term "cash transaction" shall mean any transaction in
which full payment for goods or securities sold is made within seven days after
delivery of the goods or securities
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in currency or in checks or other orders drawn upon banks or bankers and payable
upon demand;
(4) the term "self-liquidating paper" shall mean 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,
manufacture, 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
(a) the term "Issuer" shall mean any obligor upon the
Securities.
SECTION 6.14 Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect to one or more Series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such Series issued upon original issue or upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 2.9, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication or any other action in connection
therewith, such reference shall be deemed to include authentication and delivery
on behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent and
other action taken on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities in the manner provided
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in Section 11.4. Any successor Authentication Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with the effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless acceptable to the Company.
The Trustee agrees to pay to each Authentication Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.6.
If an appointment with respect to one or more Series of Securities
is made pursuant to this Section, the Securities of such Series may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
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"This is one of the Securities of the Series designated herein and
referred to in the within-mentioned Indenture.
The Chase Manhattan Bank,as Trustee
By:________________________________
As Authenticating Agent
By:________________________________
Authorized Officer"
SECTION 6.15 Trustee Acting in Other Capacities. In the event
that the Trustee is also acting as Paying Agent, Authenticating Agent or
Registrar hereunder, the rights and protections afforded to the Trustee
pursuant to this Article 6 shall also be afforded to such Paying Agent,
Authenticating Agent or Registrar.
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified percentage
in principal amount of the Securityholders of any or all Series may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such specified percentage of Securityholders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Article.
(b) The ownership of Registered Securities shall be proved by the
Security register. With respect to any Series of Registered Securities, the
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the identity of Registered Holders entitled to receive any notice or
to consent to any supplement to this Indenture or to any amendment or waiver of
any provision hereof. If a record date is fixed, only those persons who were
Registered Holders at such record date (or their duly designated proxies) shall
be entitled to receive such notice or to consent to such supplement, amendment
or waiver or to revoke any such consent previously given, whether or not such
persons continue to be Holders after such record date. Any such record date
shall not be more than 60 days prior to the first solicitation of such consent
or the date of the most recent list of Securityholders furnished to the Trustee
pursuant to Section 4.1.
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(c) The amount of Unregistered Securities held by any Person
executing any instrument or writing as a Securityholder, the numbers of such
Unregistered Securities, and the date of his holding the same may be proved by
the production of such Securities or by a certificate executed by any trust
company, bank, broker or member of a national securities exchange (wherever
situated), as depositary, if such certificate is in form satisfactory to the
Trustee, showing that at the date therein mentioned such Person had on deposit
with such depositary, or exhibited to it, the Unregistered Securities therein
described; or such facts may be proved by the certificate or affidavit of the
Person executing such instrument or writing as a Securityholder, if such
certificate or affidavit is in form satisfactory to the Trustee. The Trustee and
the Company may assume that such ownership of any Unregistered Security
continues until (i) another certificate or affidavit bearing a later date issued
in respect of the same Unregistered Security is produced, or (ii) such
Unregistered Security is produced by some other person, or (iii) such
Unregistered Security is surrendered in exchange for a Registered Security, or
(iv) such Unregistered Security has been canceled in accordance with Section
2.10.
SECTION 7.2 Proof of Execution of Instruments. Subject to Sections
6.1 and 6.2, the execution of any instrument by a Securityholder or his agent or
proxy may be proved in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee.
SECTION 7.3 Holders to Be Treated as Owners. The Company, the
Trustee and any Agent of the Company or the Trustee may deem and treat the
person in whose name any Security shall be registered upon the Security register
for such Series as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on account of the
principal of and interest on such Security and for all other purposes; and
neither the Company nor the Trustee nor any Agent of the Company or the Trustee
shall be affected by any notice to the contrary. All such payments so made to
any such person, or upon his order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Security.
SECTION 7.4 Securities Owned by Company Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all Series have concurred in any direction,
consent or waiver
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under this Indenture, Securities which are owned by the Company or any other
obligor on the Securities with respect to which such determination is being made
or by any person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any other obligor on the
Securities with respect to which such determination is being made shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver only
Securities which a Responsible Officer of the Trustee actually knows are so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any other obligor on
the Securities. In case of a dispute as to such right, the advice of counsel
shall be full protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officer's Certificate listing and identifying
all Securities, if any, known by the Company to be owned or held by or for the
account of any of the above-described persons; and, subject to Sections 6.1 and
6.2, the Trustee shall be entitled to accept such Officer's Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all Series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon any such Security. Any action taken by the Holders of the
percentage in aggregate
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principal amount of the Securities of any or all Series, as the case may be,
specified in this Indenture in connection with such action shall be conclusively
binding upon the Company, the Trustee and the Holders of all the Securities
affected by such action.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as in force at the date of the execution thereof)
for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities of one or more Series any property or assets;
(b) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company pursuant
to Article Nine;
(c) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as its Board of Directors and the Trustee
shall consider to be for the protection of the Holders of Securities, and to
make the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies provided in
this Indenture as herein set forth; provided, that in respect of any such
additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Event of Default or may
limit the remedies available to the Trustee upon such an Event of Default or may
limit the right of the Holders of a majority in aggregate principal amount of
the Securities of such Series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture
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which may be defective or inconsistent with any other provision contained herein
or in any supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Board of Directors may deem necessary or desirable and which
shall not materially and adversely affect the interests of the Holders of the
Securities or the Holders of any Coupons;
(e) to establish the form or terms of Securities of any Series as
permitted by Sections 2.1 and 2.3; or
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or more
Series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than the one trustee, pursuant to the requirements of Section
6.11.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Article Seven) of the Holders of a
majority of the aggregate principal amount of the Securities at the time
Outstanding of all Series affected by such supplemental indenture (treated as
one class), the Company, when authorized by a Board Resolution, and the Trustee
may, from time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of each such
Series; provided, that no such supplemental indenture shall (a) extend the final
maturity of any Security, or reduce the principal amount thereof, or reduce the
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rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof, or reduce the amount of principal of an Original
Issue Discount Security that would be due and payable upon an acceleration of
the maturity thereof pursuant to Section 5.1 or the amount provable in
bankruptcy pursuant to Section 5.2, or impair or affect the right of any
Securityholder to institute suit for payment thereof or, if the Securities
provide therefor, any right of repayment at the option of the Securityholder
without the consent of the Holder of the Security so affected, or (b) reduce the
aforesaid percentage of Securities of any Series, the consent of the Holders of
which is required for any such supplemental indenture, without the consent of
the Holder of the Security so affected.
Upon the request of the Company, accompanied by a copy of a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
as aforesaid and other documents, if any, required by Section 7.1, the Trustee
shall join with the Company in the execution of such supplemental indenture
unless such supplements indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall give notice in the manner and to the extent provided in Section 11.4 to
the Holders of Securities of each Series affected thereby at their addresses as
they shall appear on the registry books of the Company, setting forth in general
terms the substance of such supplemental indenture. Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the Holders of Securities
of each Series and Holders of Coupons affected
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thereby shall thereafter be determined, exercised and enforced hereunder subject
in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee is
entitled to receive and conclusively rely on an Officer's Certificate and an
Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article Eight complies with the applicable provisions
of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any Series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear, upon the written direction of the Company, a notation in form
satisfactory to the Trustee for such Series as to any matter provided for by
such supplemental indenture or as to any action taken at any such meeting. If
the Company or the Trustee shall so determine, new Securities of any Series so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Securities of such Series then
outstanding.
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Company May Consolidate, etc., on Certain Terms. The
Company covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless (i) either the Company shall be the continuing corporation, or
the successor corporation or the Person which acquires by sale or conveyance
substantially all the assets of the Company (if other than the Company) shall be
a corporation organized under the laws of the United States of America or any
State thereof and shall expressly assume the due and punctual payment of the
principal of and interest on all the Securities, according to their tenor, and
the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed or observed by the Company, by
supplemental indenture satisfactory to the Trustee, executed and delivered to
the Trustee by such corporation, and (ii) the Company or such successor
corporation,
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as the case may be, shall not, immediately after such merger or consolidation,
or such sale or conveyance, be in default in the performance of any such
covenant or condition.
SECTION 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named
herein. Such successor corporation may cause to be signed, and may issue either
in its own name or in the name of the Company prior to such succession any or
all of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All of
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Company or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.
SECTION 9.3 Opinion of Counsel to Trustee. The Trustee is entitled
to receive and conclusively rely on an Opinion of Counsel, prepared in
accordance with Section 11.5, as conclusive evidence that any such
consolidation, merger, sale or conveyance, and any such assumption, and any such
liquidation or dissolution, complies with the applicable provisions of this
Indenture.
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ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at any
time (a) the Company shall have paid or caused to be paid the principal of and
interest on all the Securities of any Series and Coupons, if any, appertaining
thereto Outstanding hereunder (other than Securities and Coupons which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.9) as and when the same shall have become due and payable, or (b) the
Company shall have delivered to the Trustee for cancellation all Securities of
any Series and Coupons theretofore authenticated (other than any Securities of
such Series and Coupons which have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.9) or (c)(i) all the
Securities of such Series and Coupons not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and (ii) the Company shall have irrevocably deposited or caused
to be deposited with the Trustee as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any Paying Agent to the Company in
accordance with Section 10.4) or U.S. Government Obligations, as defined below,
maturing as to principal and interest in such amounts and at such times as will
ensure the availability of cash sufficient to pay at maturity or upon redemption
all Securities of such Series and Coupons (other than any Securities of such
Series and Coupons which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.9) not theretofore
delivered to the Trustee for cancellation, including principal and interest due
or to become due to such date of maturity as the case may be, and if, in any
such case, the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company with respect to Securities of such Series and Coupons,
then this Indenture shall cease to be of further effect with respect to
Securities of such Series and Coupons (except as to (i) rights of registration
of transfer and exchange, and the Company's right of optional redemption, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Securities and
Coupons, (iii) rights of Holders to receive payments of principal thereof and
interest thereon upon the original stated due dates therefor (but not upon
acceleration) and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) the rights, obligations and immunities of the
Trustee hereunder and (v) the
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rights of the Securityholders of such Series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any
of them), and the Trustee, on demand of the Company accompanied by an
Officer's Certificate and an Opinion of Counsel and at the cost and expense
of the Company, shall execute proper instruments acknowledging such
satisfaction of and discharging this Indenture with respect to such Series;
provided, that the rights of Holders of the Securities and Holders of Coupons
to receive amounts in respect of principal of and interest on the Securities
and Coupons held by them shall not be delayed longer than required by then
applicable mandatory rules or policies of any securities exchange upon which
the Securities are listed. The Company agrees to reimburse the Trustee for
any costs, disbursements or expenses thereafter reasonably and properly
incurred and to compensate the Trustee for any services thereafter reasonably
and properly rendered by the Trustee in connection with this Indenture, the
Securities of such Series and Coupons.
(B) In addition to the provisions of Section 10.1(A), the Company
may terminate its obligations under the Securities of any Series and this
Indenture with respect to such Series, except those obligations referred to in
the penultimate paragraph of this Section 10.1, if the Company has irrevocably
deposited or caused to be deposited with the Trustee, under the terms of an
irrevocable trust agreement in form satisfactory to the Trustee,
as trust funds in trust solely for the benefit of the Securityholders of such
Series for that purpose, (i) cash or (ii) direct noncallable obligations of, or
noncallable obligations guaranteed by, the United States or an agency thereof
for the payment of which guarantee or obligation the full faith and credit of
the United States is pledged ("U.S. Government Obligations"), or a combination
thereof, maturing as to principal and interest in such amounts and at such times
as are sufficient, without consideration of any reinvestment of such principal
or interest, to pay the principal of and interest on the outstanding Securities
of such Series and Coupons to maturity or redemption, as the case may be,
provided that the Trustee shall have been irrevocably instructed to apply such
money or the proceeds of such U.S. Government Obligations to the payment of said
principal of and interest on the Outstanding Securities and Coupons of such
Series; provided that:
(a) such deposit shall not cause the Trustee with respect to the
Securities of that Series to have a conflicting interest as defined in Section
6.8 and for purposes of the Trust Indenture Act with respect to the Securities
of any Series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or
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any other agreement or instrument to which the Company is a party or by which it
is bound; and
(c) no Event of Default under Section 5.1(a), 5.1(b) or 5.1(c), or
event which with the lapse of time would become an Event of Default with respect
to the Securities of that Series shall have occurred and be continuing on the
date of such deposit, and no Event of Default under Section 5.1(f) or Section
5.1(g) or event which with the giving of notice or lapse of time, or both, would
become an Event of Default under Section 5.1(f) or Section 5.1(g) shall have
occurred and be continuing on the 91st day after such date of deposit.
Such irrevocable trust agreement shall include, among other things,
provision for (1) payment of the principal of and interest on the Securities of
such Series and Coupons when due (by redemption, sinking fund payments or
otherwise), (2) the payment of the expenses, fees and disbursements of the
Trustee incurred or to be incurred in connection with carrying out such trust
provisions, (3) rights of registration, transfer, substitution and exchange of
Securities of such Series and Coupons in accordance with the terms stated in
this Indenture and (4) continuation of the rights and obligations and immunities
of the Trustee as against the Securityholders of such Series as stated in this
Indenture.
Notwithstanding the first paragraph of this Section 10.1(B), the
Company's obligations in Sections 2.8, 2.9, 3.1, 3.2, 5.1, 6.6, 6.10, 10.4 and
10.5 shall survive until the Securities of such Series and Coupons, if any, are
no longer Outstanding; provided, however, that the Company's obligations in
Section 5.1 shall survive only with respect to Events of Default as defined in
Sections 5.1(a), 5.1(b), and 5.1(c). Thereafter, the Company's obligations in
Sections 6.6, 10.4 and 10.5 shall survive.
After any such irrevocable deposit, accompanied by an Officer's
Certificate which shall state that the provisions of the first two paragraphs of
this Section 10.1(B) have been complied with, and upon delivery by the Company
to the Trustee of an Opinion of Counsel to the effect that Securityholders of
such Series will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and discharge and will be subject to
Federal income tax on the same amount and in the same manner and at the same
time as would have been the case if such deposit and discharge had not occurred,
then the Company shall be discharged of its obligations under the Securities of
such Series and this Indenture with respect to such Series except for those
surviving obligations specified above, and the Trustee upon request shall
acknowledge in writing such discharge. In
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addition, if the Securities of that Series are then listed on the New York Stock
Exchange, Inc., the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit, deficience and discharge will not cause
such Securities to be delisted. Prior to the delivery of such acknowledgment,
the Trustee may require the Company to deliver to it an Officer's Certificate
and Opinion of Counsel, each stating that all conditions precedent provided for
herein relating to the deposit and discharge contemplated by this provision have
been complied with, and the Trustee may also require that the Opinion of Counsel
shall also state that such deposit does not violate applicable law.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys deposited with the Trustee
pursuant to Section 3.8 or 10.1 shall be held in trust and applied by it to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), to the Holders of the particular Securities of
such Series and any Coupons appertaining thereto for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such money need not be
segregated from other funds except to the extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to Securities
of any Series or Coupons, all moneys then held by any Paying Agent under the
provisions of this Indenture with respect to such Series of Securities or
Coupons shall, upon demand of the Company, be repaid to it or paid to the
Trustee and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 10.4 Return of Unclaimed Moneys Held by Trustee and Paying
Agent. Any moneys deposited with or paid to the Trustee or any Paying Agent for
the payment of the principal of or interest on any Security of any Series or
Coupons and not applied but remaining unclaimed for two years after the date
upon which such principal or interest shall have become due and payable, shall,
upon the written request of the Company and unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law, be repaid to the Company by the Trustee for such Series or such Paying
Agent, and the Holder of the Security of such Series or Holders of Coupons
appertaining thereto shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Company for any payment which such Holder may be entitled to collect, and
all
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liability of the Trustee or any Paying Agent with respect to such moneys shall
thereupon cease.
SECTION 10.5 Reinstatement of Company's Obligations. If the Trustee
is unable to apply any funds or U.S. Government Obligations in accordance with
Section 3.8 or 10.1 by reason of any legal proceeding, or by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities of any Series for which such application is
prohibited shall be revived and reinstated as if no deposit had occurred
pursuant to Section 3.8 or 10.1 until such time as the Trustee is permitted to
apply all such funds or U.S. Government Obligations in accordance with Section
3.8 or 10.1; provided, however, that if the Company has made any payment of
interest on or principal of any of such Securities or Coupons because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Securityholders of such Securities to receive such payment from the funds
or U.S. Government Obligations held by the Trustee.
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, in any Security
or Coupon appertaining thereto, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such, or against any past,
present or future stockholder, officer or director, as such of the Company or of
any successor, either directly or through the Company or any successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders thereof and as part of the consideration for the issue
of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholders. Nothing in this Indenture or in the Securities, expressed
or implied, shall give or be construed to give to any Person, firm or
corporation, other than the parties hereto, any Paying Agent and their
successors hereunder and the Holders of the Securities and Coupons, if any, any
legal or equitable right, remedy or claim under this Indenture or under any
covenant or provision herein contained,
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all such covenants and provisions being for the sole benefit of the parties
hereto and their successors and of the Holders of the Securities.
SECTION 11.3 Successors and Assigns of Company Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Company shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Company, Trustee and
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee, by the Holders of
Securities, or by the Holders of Coupons to or on the Company shall be in
writing and may be given or served by being deposited postage prepaid, first
class mail (except as otherwise specifically provided herein) addressed (until
another address of the Company is filed by the Company with the Trustee) to
Enhance Financial Services Group Inc., 335 Madison Avenue, New York, NY 10017,
Attention: General Counsel, except that any notices required or permitted to be
given under Section 5.1 hereof shall be given or served by registered or
certified mail only. Any notice, direction, request or demand by the Company or
any Securityholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if in writing and given or made at
the Trustee's Corporate Trust Office.
Where this Indenture provides for notice to Holders of any event,
(1) if any of the Securities affected by such event are Registered Securities,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed by first-class mail, postage prepaid to such
Registered Holders as their names and addresses appear in the Security register
within the time prescribed and (2) if any of the Securities affected by such
event are Unregistered Securities, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if published once in a newspaper,
in an official language of the country of publication or in English, customarily
published on each Business Day, and of general circulation in New York, New York
and London, England and in such other city or cities as may be specified in such
Securities within the time prescribed. Where successive notices are required in
respect of Unregistered Securities, such notices may be made in the same or in
different newspapers, each meeting the foregoing requirements in the same city
on successive Business Days. 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.
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Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver. In 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 case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Company and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
SECTION 11.5 Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
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Any certificate, statement 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 that the
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters, information with respect to which is in the
possession of the Company, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
Any certificate, statement or opinion of an officer of the Company
or of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of interest on or principal or premium, if any, of the
Securities of any Series or Coupons appertaining thereto or the date fixed for
redemption or repayment of any such Security or Coupon shall not be a Business
Day, then payment of interest, principal or premium if any, need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for
redemption, and no interest shall accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
which is required to be included herein by any of Sections 310 to 317,
inclusive, of
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the Trust Indenture Act of 1939, such required provision shall control.
SECTION 11.8 New York Law to Govern. THIS INDENTURE AND EACH
SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW
YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SUCH STATE.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 11.11 Determination of Principal Amount. In determining
whether the Holders of the requisite principal amount of outstanding Securities
of any Series have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, or whether sufficient funds are available for
redemption or for any other purpose, the principal amount of an Original Issue
Discount Security that shall be deemed to be outstanding for such purposes 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 5.1 and the principal amount of any Securities
denominated in a Foreign Currency or ECU that shall be deemed to be outstanding
for such purposes shall be determined by converting the Foreign Currency or the
specified amount of each Component Currency into Dollars at the Market Exchange
Rate as of the date of such determination.
ARTICLE 12
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions
of this Article shall be applicable to the Securities of any Series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a Series except as otherwise specified as contemplated by Section
2.3 for Securities of such Series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any Series to be redeemed as a whole
or in part at the option
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of the Company shall be given by giving notice of such redemption as provided in
Section 11.4, at least 30 days and not more than 60 days prior to the date fixed
for redemption to such Holders of Securities of such Series. Failure to give
notice by mail, or any defect in the notice to the Holder of any Security of a
Series designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Security of such
Series.
The notice of redemption to each such Holder shall specify the date
fixed for redemption, the redemption price, the place or places of payment, that
payment will be made upon presentation and surrender of such Securities, and
that, unless otherwise specified in such notice, Coupon Securities, if any,
surrendered for payment must be accompanied by all Coupons maturing subsequent
to the redemption date, failing which the amount of any such missing Coupon or
Coupons will be deducted from the sum due for payment, that such redemption is
pursuant to the mandatory or optional sinking fund, or both, if such be the
case, that interest accrued to the date fixed for redemption will be paid as
specified in such notice and that on and after said date interest thereon or on
the portions thereof to be redeemed will cease to accrue and that, if less than
all of the Outstanding Securities of a Series are to be redeemed, the
identification and principal amount of the Securities to be redeemed. In case
any Security of a Series is to be redeemed in part, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities of such Series in principal amount equal
to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any Series to be redeemed
at the option of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name and at the expense of the Company.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section, the Company will deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
3.4) an amount of money sufficient to redeem on the redemption date all the
Securities of such Series so called for redemption at the appropriate redemption
price, together with accrued interest to the date fixed for redemption. If less
than all the Outstanding Securities of a Series are to be redeemed, the Company
will deliver to the Trustee at least 60 days prior to the date fixed
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for redemption an Officer's Certificate stating the aggregate principal amount
of Securities to be redeemed.
If less than all the Securities of a Series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such Series to be redeemed in whole in part. Securities may be
redeemed in part in multiples equal to the minimum authorized denomination for
Securities of such Series or any multiple thereof. The Trustee shall promptly
notify the Company in writing of the Securities of such Series selected for
redemption and, in the case of any Securities of such Series selected for
partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities of any Series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Company shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue and, except as provided in Sections 6.5 and 10.4, such Securities shall
cease from and after the date fixed for redemption to be entitled to any benefit
or security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
said Securities or the specified portions thereof shall be paid and redeemed by
the Company at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that any semiannual payment
of interest on Registered Securities becoming due on the date fixed for
redemption shall be payable to the Holders of such Securities registered as such
on the relevant record date subject to the terms and provisions of Section 2.7
hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date
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fixed or redemption at the rate of interest borne by the Security.
Upon presentation of any Security redeemed in part only and the
Coupons appertaining thereto, the Company shall execute and the Trustee shall
authenticate and deliver to or on the order of the Holder thereof, at the
expense of the Company, a new Security or Securities and the Coupons
appertaining thereto, of authorized denominations, in principal amount equal to
the unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Company and
delivered to the Trustee at least 60 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by, either (a) the Company or (b) an entity specifically
identified in such written statement directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of Securities of
any Series is herein referred to as a "mandatory sinking fund payment," and any
payment in excess of such minimum amount provided for by the terms of Securities
of any Series is herein referred to as an "optional sinking fund payment." The
date on which a sinking fund payment is to be made is herein referred to as the
"sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any Series of Securities in cash, the Company may at its
option (a) deliver to the Trustee Securities of such Series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Company or receive credit for Securities of such
Series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Company and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such Series (not previously so credited)
redeemed by the Company through any optional redemption provision contained in
the terms of such Series. Securities so delivered or credited shall be received
or credited by the
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Trustee at the sinking fund redemption price specified in such Securities.
On or before the sixtieth day next preceding each sinking fund
payment date for any Series, the Company will deliver to the Trustee an
Officer's Certificate (a) specifying the portion of the mandatory sinking fund
payment to be satisfied by payment of cash and the portion to be satisfied by
credit of Securities of such Series, (b) stating that none of the Securities of
such Series has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respect to such Series have
occurred (which have not been waived or cured) and are continuing, (d) stating
whether or not the Company intends to exercise its right to make an optional
sinking fund payment with respect to such Series and, if so, specifying the
amount of such optional sinking fund payment which the Company intends to pay on
or before the next succeeding sinking fund payment date and (e) specifying such
sinking fund payment date. Any Securities of such Series to be credited and
required to be delivered to the Trustee in order for the Company to be entitled
to credit therefor as aforesaid which have not theretofore been delivered to the
Trustee shall be delivered for cancellation pursuant to Section 2.10 to the
Trustee with such written statement (or reasonably promptly thereafter if
acceptable to the Trustee). Such written statement shall be irrevocable and upon
its receipt by the Trustee the Company shall become unconditionally obligated to
make all the cash payments or payments therein referred to, if any, on or before
the next succeeding sinking fund payment date. Failure of the Company, on or
before any such sixtieth day to deliver such written statement and Securities
specified in this paragraph, if any, shall not constitute a default but shall
constitute, on and as of such date, the irrevocable election of the Company (i)
that the mandatory sinking fund payment for such Series due on the next
succeeding sinking fund payment date shall be paid entirely in cash without the
option to deliver or credit Securities of such Series in respect thereof and
(ii) that the Company will make no optional sinking fund payment with respect to
such Series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 (or a lesser sum if the Company shall so request) with respect to
the Securities of any particular Series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
Series at the sinking fund redemption price together with accrued interest to
the date fixed
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for redemption. If such amount shall be $50,000 or less and the Company makes no
such request then it shall be carried over until a sum in excess of $50,000 is
available. The Trustee shall select, in the manner provided in Section 12.2, for
redemption on such sinking fund payment date a sufficient principal amount of
Securities of such Series to absorb said cash, as nearly as may be possible, and
shall (if requested in writing by the Company) inform the Company of the serial
numbers of the Securities of such Series (or portions thereof) so selected.
Securities of any Series which are identified by registration and certificate
number in an Officer's Certificate at least 60 days prior to the sinking fund
payment date as being beneficially owned by, and not pledged or hypothecated by,
the Company or an entity directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company shall be excluded from
Securities of such Series eligible for selection for redemption. The Trustee, in
the name and at the expense of the Company (or the Company, if it shall so
notify the Trustee in writing) shall cause notice of redemption of the
Securities of such Series to be given in substantially the manner provided in
Section 12.2 (and with the effect provided in Section 12.3) for the redemption
of Securities of such Series in part at the option of the Company. The amount of
any sinking fund payments not so applied or allocated to the redemption of
Securities of such Series shall be added to the next cash sinking fund payment
for such Series and, together with such payment, shall be applied in accordance
with the provisions of this Section. Any and all sinking fund moneys held on the
stated maturity date of the Securities of any particular Series (or earlier, if
such maturity is accelerated), which are not held for the payment or redemption
of particular Securities of such Series shall be applied, together with other
moneys, if necessary, sufficient for the purpose, to the payment of the
principal of, and interest on, the Securities of such Series at maturity.
On or before each sinking fund payment date, the Company shall pay to the
Trustee in cash or shall otherwise provide for the payment of all interest
accrued to the date fixed for redemption on Securities to be redeemed on such
sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities
of a Series with sinking fund moneys or mail or publish any notice of redemption
of Securities for such Series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default except that, where the mailing or publication of notice of
redemption of any Securities shall theretofore have been made, the Trustee shall
redeem or cause to be redeemed such Securities,
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provided that it shall have received from the Company a sum sufficient for such
redemption. 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 the sinking fund, shall, during the continuance of
such default or Event of Default, be deemed to have been collected under Article
Five and held for the payment of all such Securities. In case such Event of
Default shall have been waived as provided in Section 5.10 or the default cured
on or before the sixtieth day preceding the sinking fund payment date in any
year, such moneys shall thereafter be applied on the next succeeding sinking
fund payment date in accordance with this Section to the redemption of such
Securities.
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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 hereto affixed and
attested, all as of the day and year first above written.
ATTEST ENHANCE FINANCIAL SERVICES
GROUP INC.
By: _________________________
Name: By: ___________________________
Title: Name:
Title:
[CORPORATE SEAL]
ATTEST:
The Chase Manhattan Bank,
as Trustee
By: __________________________
Name:
Title: By: ___________________________
Name:
[CORPORATE SEAL] Title:
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STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __th day of 1998, before me personally came ____________, to me
personally known, who, being by me duly sworn, did depose and say that he
resides at ___________, _______________; that he is the _________ of Enhance
Financial Services Group Inc., one of the corporations described in and which
executed the above instrument; that he knows the corporate 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.
[NOTARIAL SEAL]
----------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __th day of __________ 1998 , before me personally came ___________, to
me personally known, who, being by me duly sworn, did depose and say that he
resides at ______________; that he is a _____________ of ________________, one
of the corporations described in and which executed the above instrument; that
he knows the corporate 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.
[NOTARIAL SEAL]
----------------------------
Notary Public
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Exhibit A-1
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY]
CERTIFICATE
ENHANCE FINANCIAL SERVICES GROUP INC.
[Description of Securities to be delivered]
This is to certify that the above-captioned Securities are not being
acquired by or on behalf of a United States Person or by persons who have
purchase such Securities for offer to resell or resale to any U.S. Persons or
any person in the United States or, if a beneficial interest in the Securities
is being acquired by or on behalf of a United States Person, that such person is
a financial institution within the meaning of Section 1.1.65-12(c)(1)(v) of the
United States Treasury regulations which agrees to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder and which is not purchasing for offer to
resell or resale inside the United States. If the undersigned is a dealer, the
undersigned agrees to obtain a similar certificate from each person entitled to
delivery of any of the above-captioned Securities in bearer form purchased from
it; provided, however, that if the undersigned has actual knowledge that the
information contained in such a certificate is false, the undersigned will not
deliver a Security in temporary or definitive bearer form to the person who
signed such certificate notwithstanding the delivery of such certificate to the
undersigned.
As used herein, "United States Person" means any citizen or resident
of the United States of America (including the States an the District of
Columbia) and its territories, its possessions and all areas subject to its
jurisdiction ("United States"), including any corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof and any estate or trust which is subject to United
States federal income taxation regardless of the source of its income.
We undertake to advise you by telex if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Securities in bearer form as to all of such Securities.
A-1-1
<PAGE>
We understand that this certificate is required in connection with
United States securities and tax laws. We irrevocably authorize you to produce
this certificate or a copy hereof to any interested party in any administrative
or legal proceedings or official inquiry with respect to the matters covered by
this certificate.
Dated: _________________, 19__
[To be dated on or after
____________, 19__ (the date
determined pursuant to the
Indenture)]
[Name of person entitled to
receive Security]
By:
-------------------------------
A-1-2
<PAGE>
Exhibit A-2
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE
OF A PORTION OF A TEMPORARY GLOBAL SECURITY]
CERTIFICATE
ENHANCE FINANCIAL SERVICES GROUP INC.
[Description of Securities to be delivered]
This is to certify with respect to $_____________ principal amount of the
above-captioned Securities (i) that we have received from each of the persons
appearing in our records as persons being entitled to a portion of such
principal amount (our "Qualified Account Holders") a certificate with respect to
such portion substantially in the form attached hereto and (ii) that we are not
submitting herewith for exchange any portion of the temporary global Security
representing the above-captioned Securities excepted in such certificate or
certificates.
We further certify that as of the date hereof we have not received any
notification from any of our Qualified Account Holders to the effect that the
statements made by such Qualified Account Holders with respect to any portion of
the part of the Global Security submitted herewith for exchange are no longer
true and cannot be relied upon as of the date hereof.
Dated: 19__
(To be dated no earlier than
the Exchange Date)
[MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, Brussels Office, as
Operator of the Euro-clear System]
[CEDEL S.A.]
By:
----------------------------------
<PAGE>
Exhibit A-3
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL S.A. TO OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
ENHANCE FINANCIAL SERVICES GROUP INC.
[Description of Securities on which interest is to be paid]
This is to certify with respect to the above-captioned Securities or, with
respect to payments on any global security representing Securities, the
principal amount of any global security listed below that we have received from
each of the persons appearing in our records as persons being entitled to
receive payments with respect thereto (our "Qualified Account Holders") a
certificate with respect to such Qualified Account Holders substantially in the
form attached hereto.
We further certify that as of the date hereof we have not received any
notification from any of our Qualified Account Holders to the effect that the
statements made by such Qualified Account Holders with respect to any Security
or interest in any global security listed above are no longer true and cannot be
relied upon as of the date hereof.
Dated: ______________, 19__
(To be dated no earlier than the
relevant Interest Payment Date)
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
Brussels Office, as Operator of the
Euro-clear System]
[CEDEL S.A.]
By:
--------------------------------------
<PAGE>
Exhibit A-4
CERTIFICATE
[FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS
TO OBTAIN INTEREST PRIOR TO ANY EXCHANGE DATE)
ENHANCE FINANCIAL SERVICES GROUP INC.
[Description of Securities on which interest is to be paid]
This is to certify that as of the Interest Payment Date on (Insert Date)and
except as provided in the second paragraph hereof, none of the above-captioned
Securities held by you for our account or any interest in any global security
representing the such Securities was beneficially owned by a United States
Person (as defined below) or by persons who have purchased such Securities for
offer to resell or resale to any United States Persons or any person in the
United States or, if any of such Securities held by you for our account were
beneficially owned by a United States Person, such United States Person either
provided an Internal Revenue Service Form W-9 with respect to such interest
payment or certified with respect to such interest payment that it was an exempt
recipient as defined in Section 1.6049-4(c)(1)(ii) of the United States Treasury
regulations.
This certificate excepts and does not relate to $______ principal amount of the
above-captioned Securities or an interest in a global security representing the
Securities appearing in your books as being held for our account as to which we
are not yet able so to certify and as to which we understand that we cannot
receive any payments with respect thereto until we are able so to certify.
We understand that this certificate is required in connection with United States
tax laws. We irrevocably authorize you to produce this certificate or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered by this certificate.
As used herein, "United States Person" means any citizen or resident of the
United States of America (including the States and the District of Columbia),
its territories and possessions an all areas subject to its jurisdiction
("United States"), including any corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof and any estate or trust which is subject to United States
federal income taxation regardless of the source of its income.
A-4-1
<PAGE>
(Name of person entitled to
receive interest)
By:
---------------------------------
Dated: _____________, 19__
(To be dated on or after the
15th day before the relevant
Interest Payment Date)
A-4-2
<PAGE>
EXHIBIT 4.2
================================================================================
ENHANCE FINANCIAL SERVICES GROUP INC.
AND
The Chase Manhattan Bank, Trustee
------------------------------------
INDENTURE
Dated as of _____________, __, 19__
------------------------------------
Subordinated Debt Securities
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS...........................................................1
SECTION 1.1 Certain Terms Defined...................................1
ARTICLE 2
SECURITIES............................................................8
SECTION 2.1 Forms Generally.........................................8
SECTION 2.2 Form of Trustee's Certificate of
Authentication..........................................8
SECTION 2.3 Amount Unlimited; Issuable in Series....................9
SECTION 2.4 Authentication and Delivery of
Securities.............................................12
SECTION 2.5 Execution of Securities................................14
SECTION 2.6 Certificate of Authentication..........................14
SECTION 2.7 Denomination and Date of Securities;
Payments of Interest...................................15
SECTION 2.8 Registration, Transfer and Exchange....................17
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and
Stolen Securities......................................21
SECTION 2.10 Cancellation of Securities, Destruction
Thereof................................................22
SECTION 2.11 Temporary Securities...................................23
SECTION 2.12 Compliance with Certain Laws and
Regulations............................................25
SECTION 2.13 Appointment of Agents with Respect
to Certain Calculations................................25
SECTION 2.14 Securities Issuable in the Form of
a Global Security......................................26
ARTICLE 3
COVENANTS OF THE COMPANY.............................................28
SECTION 3.1 Payment of Principal and Interest.......................28
SECTION 3.2 Offices for Payment, etc................................29
SECTION 3.3 Appointment to Fill a Vacancy in Office
of Trustee..............................................31
SECTION 3.4 Paying Agents...........................................31
SECTION 3.5 Written Statement to Trustee............................32
SECTION 3.6 Corporate Existence.....................................32
SECTION 3.7 Additional Amounts......................................32
SECTION 3.8 Defeasance of Certain Obligations and
Certain Events of Default...............................33
i
<PAGE>
Page
----
ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE...............................................35
SECTION 4.1 Company to Furnish Trustee
Information as to Names and Addresses
of Securityholders.......................................35
SECTION 4.2 Preservation and Disclosure of Security-
holders' Lists...........................................36
SECTION 4.3 Reports by the Company...................................37
SECTION 4.4 Reports by the Trustee...................................38
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT...................................................40
SECTION 5.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default..............................40
SECTION 5.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt...................................43
SECTION 5.3 Application of Proceeds..................................46
SECTION 5.4 Suits for Enforcement....................................47
SECTION 5.5 Restoration of Rights on Abandonment of
Proceedings..............................................48
SECTION 5.6 Limitations on Suits by Securityholders. ...............48
SECTION 5.7 Unconditional Rights of Securityholders to
Institute Certain Suits..................................49
SECTION 5.8 Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default........................49
SECTION 5.9 Control by Securityholders...............................49
SECTION 5.10 Waiver of Past Defaults. ...............................50
SECTION 5.11 Trustee to Give Notice of Default,
But May Withhold in Certain Circumstances................50
SECTION 5.12 Right of Court to Require Filing of
Undertaking to Pay Costs.................................51
ARTICLE 6
CONCERNING THE TRUSTEE................................................51
SECTION 6.1 Duties and Responsibilities of the Trustee;
Prior to Default; During Default.........................51
SECTION 6.2 Certain Rights of the Trustee............................53
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application
of Proceeds Thereof......................................54
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc.........................................54
SECTION 6.5 Moneys Held by Trustee...................................54
ii
<PAGE>
Page
----
SECTION 6.6 Compensation and Indemnification of
Trustee and Its Prior Claim..............................55
SECTION 6.7 Right of Trustee to Rely on Officer's
Certificate, etc.........................................55
SECTION 6.8 Qualification of Trustee; Conflicting
Interests................................................56
SECTION 6.9 Persons Eligible for Appointment as
Trustee..................................................62
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee. .....................................63
SECTION 6.11 Acceptance of Appointment by Successor
Trustee..................................................64
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee........................65
SECTION 6.13 Preferential Collection of Claims Against
the Company..............................................66
SECTION 6.14 Appointment of Authenticating Agent......................70
SECTION 6.15 Trustee Acting in Other Capacities.......................72
ARTICLE 7
CONCERNING THE SECURITYHOLDERS........................................72
SECTION 7.1 Evidence of Action Taken by Securityholders..............72
SECTION 7.2 Proof of Execution of Instruments........................73
SECTION 7.3 Holders to Be Treated as Owners..........................73
SECTION 7.4 Securities Owned by Company Deemed Not
Outstanding..............................................73
SECTION 7.5 Right of Revocation of Action Taken .....................74
ARTICLE 8
SUPPLEMENTAL INDENTURES...............................................75
SECTION 8.1 Supplemental Indentures Without Consent
of Securityholders.......................................75
SECTION 8.2 Supplemental Indentures With Consent of
Securityholders..........................................76
SECTION 8.3 Effect of Supplemental Indenture.........................77
SECTION 8.4 Documents to Be Given to Trustee.........................78
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures..................................78
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.............................78
SECTION 9.1 Company May Consolidate, etc., on Certain
Terms....................................................78
SECTION 9.2 Successor Corporation Substituted........................79
SECTION 9.3 Opinion of Counsel to Trustee............................79
iii
<PAGE>
Page
----
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS......................................................80
SECTION 10.1 Satisfaction and Discharge of Indenture.................80
SECTION 10.2 Application by Trustee of Funds Deposited
for Payment of Securities...............................83
SECTION 10.3 Repayment of Moneys Held by Paying Agent................83
SECTION 10.4 Return of Unclaimed Moneys Held by Trustee
and Paying Agent........................................83
SECTION 10.5 Reinstatement of Company's Obligations..................83
ARTICLE 11
SUBORDINATION.........................................................84
SECTION 11.1 Securities Subordinate to Senior
Indebtedness............................................84
SECTION 11.2 Payment Over of Proceeds upon Dissolution,
etc.....................................................85
SECTION 11.3 Acceleration of Securities..............................87
SECTION 11.4 Default on Senior Indebtedness..........................87
SECTION 11.5 Payment Permitted if No Default.........................88
SECTION 11.6 Subrogation to Rights of Holders of Senior
Indebtedness............................................88
SECTION 11.7 Provisions Solely to Define Relative
Rights..................................................89
SECTION 11.8 Trustee to Effectuate Subordination.....................90
SECTION 11.9 No Waiver of Subordination Provisions...................90
SECTION 11.10 Notice to Trustee.......................................90
SECTION 11.11 Reliance on Judicial Order or Certificate
of Liquidating Agent....................................91
SECTION 11.12 Trustee Not Fiduciary for Holders of
Senior Indebtedness.....................................92
SECTION 11.13 Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee's
Rights..................................................92
SECTION 11.14 Article Eleven Applicable to Paying
Agents..................................................92
ARTICLE 12
SECTION 12.1 Incorporators, Stockholders, Officers and
Directors of Company Exempt from
Individual Liability....................................93
SECTION 12.2 Provisions of Indenture for the Sole
Benefitof Parties and Securityholders...................93
SECTION 12.3 Successors and Assigns of Company Bound
by Indenture............................................93
iv
<PAGE>
Page
----
SECTION 12.4 Notices and Demands on Company, Trustee
and Securityholders.....................................93
SECTION 12.5 Officer's Certificates and Opinions of
Counsel; Statements to Be Contained
Therein.................................................95
SECTION 12.6 Payments Due on Saturdays, Sundays and
Holidays................................................96
SECTION 12.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939.............................96
SECTION 12.8 New York Law to Govern..................................96
SECTION 12.9 Counterparts............................................96
SECTION 12.10 Effect of Headings......................................96
SECTION 12.11 Determination of Principal Amount.......................96
ARTICLE 13
REDEMPTION OF SECURITIES AND SINKING FUNDS............................97
SECTION 13.1 Applicability of Article................................97
SECTION 13.2 Notice of Redemption; Partial Redemptions...............97
SECTION 13.3 Payment of Securities Called for
Redemption..............................................98
SECTION 13.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption................99
SECTION 13.5 Mandatory and Optional Sinking Funds...................100
v
<PAGE>
THIS INDENTURE, dated as of _________________, __, 1998 between
ENHANCE FINANCIAL SERVICES GROUP INC., a New York corporation (the "Company"),
and The Chase Manhattan Bank, a New York banking corporation, as Trustee (the
"Trustee"),
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issue from time to time
of its unsecured subordinated debentures, notes or other evidences of
subordinated indebtedness to be issued in one or more Series (the "Securities")
up to such principal amount or amounts as may from time to time be authorized in
accordance with the terms of this Indenture and to provide, among other things,
for the authentication, delivery and administration thereof, the Company has
duly authorized the execution and delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the holders thereof, the Company and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective holders from time to
time of the Securities as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act of 1933 are referred to in the
Trust Indenture Act of 1939, including terms defined therein by reference to the
Securities Act of 1933 (except as herein otherwise expressly provided or unless
the context otherwise clearly requires), shall have the meanings assigned to
such terms in said Trust Indenture Act and
<PAGE>
in said Securities Act as in force at the date of this Indenture. All accounting
terms used herein and not expressly defined shall have the meanings assigned to
such terms in accordance with generally accepted accounting principles, and the
term "generally accepted accounting principles" means such accounting principles
as are generally accepted in the United States at the time of any computation.
The words "herein," "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole, as supplemented and amended from time to
time, and not to any particular Article, Section or other subdivision. The terms
defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more Series.
"Board of Directors" means either the Board of Directors of the
Company or the Executive Committee or other committee of such Board duly
authorized to act hereunder.
"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" means, except as may otherwise be provided in the
form of Securities of any particular Series, with respect to any Place of
Payment, any day, other than a Saturday or Sunday, that is not a legal holiday,
or a day on which banking institutions are authorized or required by law or
regulation to close in The City of New York or in that Place of Payment, or with
respect to Securities denominated in a Foreign Currency, the capital city of the
country of such Foreign Currency, or with respect to Securities denominated in
ECU, Brussels, Belgium.
"CEDEL S.A." means Central de Liaison de Valeurs Mobilieres S.A.
"Capital Stock" for any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the
2
<PAGE>
Trust Indenture Act of 1939, then the body performing such duties on such date.
"Common Stock" means the shares of Common Stock, par value $.10 per
share, of the Company as it exists on the date of this Indenture or any other
shares of Capital Stock of the Company into which the Common Stock shall be
reclassified or changed.
"Company" means Enhance Financial Services Group Inc., a New York
corporation, and, subject to Article Nine, its successors and assigns.
"Company Notice" means the confirmation of the Company, transmitted
by telex, telecopy or in writing to the Trustee of the terms of the issuance of
any Securities issuable in Tranches.
"Company Order" or "Company Request" means a written order or
request of the Company, signed in its name by its President and Chief Financial
Officer or Treasurer.
"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 450 West 33rd Street, New York, New York
10001-2697. Attention: Global Trust Services.
"Coupon" means any interest coupon appertaining to any Security.
"Coupon Security" means any Security authenticated and delivered
with one or more Coupons appertaining thereto.
"Debt" means with respect to any person at any date, without
duplication, (i) all obligations of such person for borrowed money, (ii) all
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of the type described in clause (i)
or clause (ii) secured by a lien on any asset of such person, whether or not
such obligation is assumed by such person and (iv) all obligations of the type
described in clause (i) or clause (ii)for the payment of which such person is
responsible or liable as obligor or guarantor.
"Depository" means, unless otherwise specified by the Company
pursuant to Section 2.3, with respect to Securities of any series issuable or
issued as a Global Security, The Depository Trust Company, New York, New York,
or any successor thereto registered as a clearing agency pursuant to the
3
<PAGE>
provisions of Section 17A of the Securities Exchange Act of 1934, as amended or
other applicable statute or regulation.
"Dollar" means the coin or currency of the United States which as of
the time of payment is legal tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.
"Euro-clear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euro-clear System.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Foreign Currency" means a currency issued by the government of any
country other than the United States.
"Global Security," when used with respect to any series of
Securities issued hereunder, means a Security which is executed by the Company
and authenticated and delivered by the Trustee to the Depository pursuant to the
Depository's instruction, all in accordance with this Indenture and an indenture
supplemental hereto, if any, or Board Resolution and pursuant to a Company
Order, which Global Security shall be registered in the name of the Depository
or its nominee and which shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, all of the Outstanding Securities of
such series or any portion thereof, in either case having the same terms,
including, without limitation, the same original issue date, date or dates on
which principal is due, and interest rate or method of determining interest.
"Holder," "Holder of Securities," "Securityholder" or other similar
terms mean the bearer of an Unregistered Security or a Registered Holder of a
Registered Security and, when used with respect to any Coupon, means the bearer
thereof.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular Series
of Securities established as contemplated hereunder.
"Officer's Certificate" means a certificate signed by the President
and the Chief Financial Officer or the Treasurer of the Company and delivered to
the Trustee. Each such certificate shall include the statements provided for in
Section 12.5.
4
<PAGE>
"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Company. Each such opinion
shall include the statements provided for in Section 12.5 and shall be
reasonably satisfactory to the Trustee.
"Original Issue Date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security which provides
for an amount less than the stated principal amount thereof to be due and
payable upon declaration of acceleration of the maturity thereof pursuant to
Section 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when
used with reference to Securities, shall, subject to the provisions of Section
7.4, mean, as of any particular time, all Securities authenticated and delivered
by the Trustee under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any Paying Agent (other than
the Company) or shall have been set aside, segregated and held in trust by
the Company for the holders of such Securities (if the Company shall act
as its own Paying Agent), provided that if such Securities, or portions
thereof, are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
and
(c) Securities in substitution for which other Securities
shall have been authenticated and delivered, or which shall have been
paid, pursuant to the terms of Section 2.9 (except with respect to any
such Security as to which proof satisfactory to the Trustee is presented
that such Security is held by a person in whose hands such Security is a
legal, valid and binding obligation of the Company).
"Paying Agent" means any Person (which may include the Company)
authorized by the Company to pay the principal of or interest, if any, on any
Security on behalf of the Company.
5
<PAGE>
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" when used with respect to the Securities of any
Series, means the place or places where the principal of and interest, if any,
on the Securities of that Series are payable as specified pursuant to Section
3.2.
"principal" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any."
"Principal Amount at Maturity" of a Security means the Principal
Amount at Maturity as set forth on the face of the Security.
"Redemption Price" or "redemption price" means the price at which
the Securities of any Series shall or may be redeemed in accordance with the
terms of such Securities, as provided in the Board Resolution or in any
indenture supplemental hereto establishing such Series as contemplated by
Section 2.3.
"Registered Holder" when used with respect to a Registered Security
means the person in whose name such Security is registered in the Security
register.
"Registered Security" means any Security registered in the Security
register.
"Responsible Officer" when used with respect to the Trustee shall
mean any officer in the Corporate Trust Office of the Trustee including any
treasurer, vice president, assistant vice president, assistant vice treasurer,
assistant secretary, or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred at the Corporate Trust Office because of his or her knowledge
of and familiarity with the particular subject.
"Security" or "Securities" (except as otherwise provided in Section
6.8) has the meaning stated in the first recital of this Indenture, or, as the
case may be, Securities that have been authenticated and delivered under this
Indenture.
"Series" or "Series of Securities" means a series of Securities.
Except in Sections 1.1 - "Outstanding," 2.3 and 7.4 and Articles Five, Six and
Eleven, the terms "Series" or "Series
6
<PAGE>
of Securities" shall also mean a Tranche in the event that the applicable Series
may be issued in separate Tranches.
"Stated Maturity," when used with respect to any Security of any
Series, means the date specified in such Security as the fixed date on which an
amount equal to the Principal Amount at Maturity of such Security is due and
payable, as provided in the Board Resolution or in any indenture supplemental
hereto establishing such Series as contemplated by Section 2.3.
"Subsidiary" means any corporation, of which at least a majority of
the Voting Stock is at the time owned directly or indirectly by the Company or
by the Company and its other Subsidiaries.
"Tranche" means all Securities of the same Series which have the
same issue date, maturity date and other terms.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, any successor
trustee.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939 as in force at the
date as of which this Indenture was originally executed.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States
Federal income tax purposes, is a foreign corporation, a non-resident alien
individual, a non-resident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more of the members of which is, for United States
Federal income tax purposes, a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate or trust.
"Unregistered Security" means any Security not registered as to
principal.
"vice president" when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title of "vice president."
"Voting Stock" means outstanding shares of stock having voting power
for the election of directors, whether at all times
7
<PAGE>
or only so long as no senior class of stock has such voting power because of
default in dividends or some other default.
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated by the Company in accordance with accepted financial practice.
ARTICLE 2
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each Series
(including any temporary or permanent global Securities) and the Coupons, if
any, shall be substantially in such form (not inconsistent with this Indenture)
as shall be established by or pursuant to a Board Resolution (or, to the extent
established pursuant to, rather than set forth in, such Board Resolution, in an
Officer's Certificate) or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture (the provisions of
which shall be appropriate to reflect the terms of each Series of Securities,
including the currency or denomination, which may be Dollars, Foreign Currency
or ECU) and may have imprinted or otherwise reproduced thereon such legend or
legends, not inconsistent with the provisions of this Indenture, as may be
required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to general
usage, all as may be determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of the Securities and Coupons,
if any.
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
"This is one of the Securities of the Series designated herein and
referred to in the within-mentioned Indenture.
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The Chase Manhattan Bank, as Trustee
By ________________________________
Authorized Officer"
SECTION 2.3 Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more Series. There shall be
established in or pursuant to a Board Resolution, or to the extent established
pursuant to, rather than set forth in, such resolution, established in an
Officer's Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any Series:
(1) the title of the Securities of the Series (which title shall
distinguish the Securities of the Series from all other Securities issued
by the Company);
(2) any limit upon the aggregate principal amount of the Securities
of the Series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
Series pursuant to Section 2.8, 2.9, 2.11 or 13.3);
(3) whether Securities of the Series are to be issuable as
Registered Securities, Unregistered Securities or both, whether the
securities of such Series are to be uncertificated and whether any
Securities of the Series are to be issuable initially in temporary global
form and whether any Securities of the Series are to be issuable in
permanent global form with or without coupons and, if so, (i) whether
beneficial owners of interest in any such permanent global Security may
exchange such interest for Securities of such Series and of like tenor of
any authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in Section
2.8 and (ii) the name of the depositary with respect to any global
Security;
(4) the Person to whom any interest in any Registered Security of
the Series shall be payable, if other than the Person in whose name the
Security (or one or more predecessor Securities) is registered at the
close of business on the record date for such interest, the manner in
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which, or the Person to whom, any interest on any Unregistered Security of
the Series shall be payable, if otherwise than upon presentation and
surrender of the Coupons appertaining thereto as they severally mature,
and the extent to which, or the manner in which, any interest payable on a
temporary global Security on an interest payment date will be paid if
other than in the manner provided in Section 2.11;
(5) the date or dates on which the principal of the Securities of
the Series is payable;
(6) the rate or rates (or formula for determining such rates) at
which the Securities of the Series shall bear interest, if any, the date
or dates from which such interest shall accrue, the interest payment dates
on which such interest shall be payable and the record dates for the
determination of Holders to whom interest is payable;
(7) whether the interest rate or interest rate formula, as the case
may be, for Securities of the Series may be reset at the option of the
Company and, if so, the date or dates on which such interest rate or
interest rate formula, as the case may be, may be reset;
(8) the place or places where the principal and interest on
Securities of the Series shall be payable (if other than as provided in
Section 3.2), any Registered Securities of the Series may be surrendered
for registration of transfer, Securities of the Series may be surrendered
for exchange and notices and demands to or upon the Company in respect of
the Securities of the Series and this Indenture may be served;
(9) the price or prices at which, the period or periods within which
and the terms and conditions upon which Securities of the Series may be
redeemed or repurchased, in whole or in part, at the option of the Company
or repaid at the option of the Holders;
(10) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the Series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the price or prices at
which and the period or periods within which and the terms and conditions
upon which Securities of the Series shall be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligation;
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(11) the denominations in which any Registered Securities of the
Series may be issued, if other than denominations of $1,000 and any
integral multiple thereof, and the denomination or denominations in which
any Unregistered Securities of the Series may be issued, if other than the
denomination of $5,000;
(12) the form of the Securities (or forms thereof if Unregistered
and Registered Securities shall be issuable in such Series), including
such legends as required by law or as the Company deems necessary or
appropriate, the form of any Coupons or temporary global Security which
may be issued and the forms of any certificates which may be required
hereunder or which the Company may require in connection with the
offering, sale, delivery or exchange of Unregistered Securities;
(13) the currencies or currencies, including composite currencies,
in which payments of interest or principal are payable with respect to the
Securities of the Series if other than the currency of the United States;
(14) if the amount of payments of principal of or interest on the
Securities of any Series may be determined with reference to the
differences in the price of or rate of exchange between any indexes,
currencies or commodities, the manner in which such amounts shall be
determined;
(15) if other than the principal amount thereof, the portion of the
principal amount of Securities of the Series which shall be payable upon
acceleration of the maturity thereof pursuant to Section 5.1 or provable
in bankruptcy pursuant to Section 5.2;
(16) whether Securities of the Series are issuable in Tranches;
(17) any additional events of default or restrictive covenants with
respect to the Securities of such Series which are not set forth herein,
and whether any such additional events of default or restrictive covenants
are subject to defeasance in accordance with Section 3.8;
(18) any other terms or conditions upon which the Securities of the
Series are to be issued (which terms shall not be inconsistent with the
provisions of this Indenture); and
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(19) any trustees, authenticating or paying agents, transfer agents
or registrars or any other agents with respect to the Securities of such
Series.
All Securities of any one Series shall be substantially identical
except as to denomination, except as provided in the immediately succeeding
paragraph, and except as may otherwise be provided in or pursuant to such Board
Resolution or Officer's Certificate or in any such indenture supplemental
hereto. All Securities of any one Series need not be issued at the same time,
and unless otherwise provided, a Series may be reopened for issuances of
additional Securities of such Series.
Each Series may be issued in one or more Tranches. Except as
provided in the foregoing paragraph, all Securities of a Tranche shall have the
same terms, including issue date, except that Securities of the same Tranche may
be issued in different denominations of the same currency or composite currency.
SECTION 2.4 Authentication and Delivery of Securities. At any time
and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any Series having attached thereto appropriate
Coupons, if any, executed by the Company to the Trustee for authentication,
together with a Company Order for the authentication and delivery of such
Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities; provided, however, that in connection
with its original issuance, no Unregistered Security shall be mailed or
otherwise delivered to any location in the United States; and provided, further,
that an Unregistered Security may be delivered in connection with its original
issuance only if the Person entitled to receive such Unregistered Security shall
have furnished a certificate in the form of Exhibit A-1 hereto dated no earlier
than 15 days prior to the earlier of the date on which such Unregistered
Security is delivered and the date on which any temporary Security first becomes
exchangeable for such Unregistered Security in accordance with the terms of such
temporary Security and this Indenture. If any Security shall be represented by a
permanent global Unregistered Security, then, for purposes of this Section and
Section 2.11, the notation of a beneficial owner's interest therein upon
original issuance of such Security or upon exchange of a portion of a temporary
global Security shall be deemed to be delivered in connection with its original
issuance of such beneficial owner's interest in such permanent global
Unregistered Security. In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive and (subject to Section 6.1) shall be
fully protected in relying upon:
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(1) a Company Order requesting such authentication and setting forth
delivery instructions if the Securities are not to be delivered to the
Company;
(2) any Board Resolution, Officer's Certificate or supplemental
indenture referred to in Sections 2.1 and 2.3 by or pursuant to which the
forms of the Securities of any such Series were established;
(3) an Officer's Certificate setting forth the form and terms of the
Securities stating that the form and terms of the Securities have been
established pursuant to Sections 2.1 and 2.3 and comply with this
Indenture, and covering such other matters as the Trustee may reasonably
request;
(4) an Opinion of Counsel to the effect that:
(a) the form or forms and terms of such Securities have been
established pursuant to Sections 2.1 and 2.3 and comply with this
Indenture;
(b) the authentication and delivery of such Securities by the
Trustee are authorized under the provisions of this Indenture;
(c) such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute
valid and binding obligations of the Company;
(d) all laws and requirements in respect of the execution and
delivery by the Company have been complied with; and
(e) covering such other matters as the Trustee may reasonably
request;
provided, however, that in the case of any Series issuable in Tranches, if the
Trustee has previously received the documents referred to in Section 2.4(l)-(4)
with respect to any Tranche of such Series, the Trustee shall authenticate and
deliver Securities of such Series executed and delivered bv the Company for
original issuance upon receipt by the Trustee of the applicable Company Notice.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Company or
if the issue of such
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Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under this Indenture in a manner not reasonably acceptable
to the Trustee.
SECTION 2.5 Execution of Securities. The Securities shall be signed
on behalf of the Company by the Chairman of its Board of Directors or its
president or any vice president or its treasurer or any assistant treasurer,
under its corporate seal which may, but need not, be attested. Such signatures
may be the manual or facsimile signatures of the present or any future such
officers. The seal of the Company may be in the form of a facsimile thereof and
may be impressed, affixed, imprinted or otherwise reproduced on the Securities.
Typographical and other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or enforceability of
any Security that has been duly authenticated and delivered by the Trustee. Any
Coupons attached to any Unregistered Security shall be executed on behalf of the
Company by the manual or facsimile signature of any such officer of the Company.
In case any officer of the Company who shall have signed any of the
Securities or Coupons shall cease to be such officer before the Security or
Coupon so signed shall be authenticated and delivered by the Trustee or disposed
of by the Company, such Security or Coupon nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security or Coupon
had not ceased to be such officer of the Company; and any Security or Coupon may
be signed on behalf of the Company by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the
Company, although at the date of the execution and delivery of this Indenture
any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities and
Coupons appertaining thereto as shall bear thereon a certificate of
authentication substantially in the form hereinbefore recited, executed by the
Trustee by the manual signature of one of its Responsible Officers, shall be
entitled to the benefits of this Indenture or be valid or obligatory for any
purpose. Such certificate by the Trustee upon any Security executed by the
Company shall be conclusive evidence that the Security so authenticated has been
duly authenticated and delivered hereunder and that the Holder is entitled to
the benefits of this Indenture.
The Trustee shall not authenticate or deliver any Unregistered
Security until any matured Coupons appertaining
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thereto have been detached and canceled, except as otherwise provided or
permitted by this Indenture.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities shall be issuable in denominations as shall be
specified as contemplated by Section 2.3. In the absence of any such
specification with respect to the Securities of any Series, Registered
Securities of such Series shall be issuable in denominations of $1,000 and any
multiple thereof, and Unregistered Securities of such Series shall be issuable
in denominations of $5,000, and interest shall be computed on the basis of a
360-day year of twelve 30-day months. The Securities shall be numbered, lettered
or otherwise distinguished in such manner or in accordance with such plan as the
officers of the Company executing the same may determine with the approval of
the Trustee as evidenced by the execution and authentication thereof.
Each Registered Security shall be dated the date of its
authentication, shall bear interest from the date and shall be payable on the
dates, in each case, which shall be specified as contemplated by Section 2.3.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any interest payment date shall be paid, in the case of
Registered Securities, to the person in whose name that Security (or one or more
predecessor Securities) is registered at the close of business on the regular
record date for the payment of such interest and, in the case of Unregistered
Securities, upon surrender of the Coupon appertaining thereto in respect of the
interest due on such interest payment date. At the option of the Company,
payment of interest on any Registered Security may be made, subject to Section
3.2, by check mailed to the Registered Holder's address as shown on the Security
register.
The term "record date" as used with respect to any interest payment
date (except for a date for payment of defaulted interest) shall mean the date
specified as such in the terms of the Securities of any particular Series, or,
if no such date is so specified, if such interest payment date is the first day
of a calendar month, the close of business on the fifteenth day of the next
preceding calendar month or, if such interest payment date is the fifteenth day
of a calendar month, the close of business on the first day of such calendar
month, whether or not such record date is a Business Day.
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Any interest on any Security of any Series which is payable, but is
not punctually paid or duly provided for, on any interest payment date (called
"defaulted interest" for the purpose of this Section) shall forthwith cease to
be payable to the Registered Holder on the relevant regular record date by
virtue of his having been such Holder; and such defaulted interest may be paid
by the Company, at its election in each case, as provided in clause (1) or
clause (2) below:
(1) The Company may elect to make payment of any defaulted interest
to the persons in whose names any 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. At least 20 days prior to the date
of a proposed payment of defaulted interest, the Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid
on each Security of such Series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
defaulted interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the persons entitled
to such defaulted interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such defaulted
interest in respect of Registered Securities of such Series which shall be
not more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after 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 thereof to be mailed, first class
postage prepaid, to each Registered Holder at his address as it appears in
the Security register, not less than 10 days prior to such special record
date. Notice of the proposed payment of such defaulted interest and the
special record date therefor having been mailed as aforesaid, such
defaulted interest in respect of Registered Securities of such Series
shall be paid to the person in whose names such Securities (or their
respective predecessor Securities) are registered on such special record
date and such defaulted interest 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 the
Securities of any Series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of
that Series may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee if the
proposed payment pursuant to this clause, such payment shall be deemed
practicable by the Trustee.
Any defaulted interest payable in respect of any Security of any
Series which is not a Registered Security shall be payable pursuant to such
procedures as may be satisfactory to the Trustee in such manner that there is no
discrimination as between the Holders of Registered Securities and other
Securities of the same 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 specified in Section 12.4.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 2.8 Registration, Transfer and Exchange. The Company will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each Series of Securities a register or registers in which,
subject to such reasonable regulations as it may prescribe, it will register,
and will register the transfer of, Registered Securities as in this Article
provided. Such register shall be in written form in the English language or in
any other form capable of being converted into such form within a reasonable
time. At all reasonable times such register or registers shall be open for
inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any Series at any such office or agency to be maintained for these
purpose as provided in Section 3.2, the Company shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Registered Security or Registered Securities of the same Series in
authorized denominations for a like aggregate principal amount.
At the option of the Holder, Registered Securities of any Series may
be exchanged for other Registered Securities of the same Series of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at any such office or agency.
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Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive. Except as otherwise
specified as contemplated by Section 2.3, Unregistered Securities may not be
issued in exchange for Registered Securities.
At the option of the Holder, Unregistered Securities of any Series
may be exchanged or Registered Securities of the same Series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Unregistered Securities to be exchanged at any such office or agency,
with all unmatured coupons, if any, and all matured coupons, if any, in default
thereto appertaining. If the Holder of an Unregistered Security is unable to
produce any such unmatured coupons and all matured coupon or coupons or matured
coupon or coupons in default, such exchange may be effected if the Unregistered
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 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 3.2, 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 an Unregistered Security of any Series is surrendered at any
such office or agency in exchange for a Registered Security of the same Series
and like tenor after the close of business at such office or agency on any
record date and before the opening of business at such office or agency on the
relevant interest payment date, such Unregistered Security shall be surrendered
without the coupon relating to such interest payment date and interest will not
be payable on such interest payment date in respect of the Registered Security
issued in exchange for such Unregistered Security, but will be payable only to
the Holder of such coupon when due in accordance with the provisions of this
Indenture.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 2.3, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the beneficial owners of interests in a
permanent global Security are entitled to exchange such interests for Securities
of such Series and of like tenor and principal amount
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of another authorized form and denomination, as specified as contemplated by
Section 2.3, then without unnecessary delay but in any event not later than the
earliest date on which such interests may be so exchanged, the Company shall
deliver to the Trustee definitive Securities of that Series in aggregate
principal amount equal to the principal amount of such permanent global
Security, executed by the Company. On or after the earliest date on which such
interests may be so exchanged, such permanent global Securities shall be
surrendered from time to time by the depositary holding such global Security and
in accordance with instructions given to the Trustee and such depositary (which
instructions shall be in writing but need not comply with Section 12.5 or be
accompanied by an Opinion of Counsel), as shall be specified in the Company
Order with respect to the Trustee, as the Company's agent for such purpose, to
be exchanged, in whole or in part, for definitive Securities of the same Series
without charge. The Trustee shall authenticate and make available for delivery,
in exchange for each portion of such surrendered permanent global Security, a
like aggregate principal amount of definitive Securities of the same Series of
authorized denominations and of like tenor as the portion of such permanent
global Security to be exchanged which (unless the Securities of the Series are
not issuable both as Unregistered Securities and as Registered Securities, in
which case the definitive Securities exchanged for the permanent global Security
shall be issuable only in the form in which the Securities are issuable, as
specified as contemplated by Section 2.3) shall be in the form of Unregistered
Securities or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof; provided, however, that no such
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities of that Series to be redeemed and ending on
the relevant Redemption Date; and provided, further, that no Unregistered
Security delivered in exchange for a portion of a permanent global Security
shall be mailed or otherwise delivered to any location in the United States.
Promptly following any such exchange in part, such permanent global Security
shall be returned by the Trustee to the depositary or such other depositary
referred to above in accordance with the instructions of the Company referred to
above. If a Registered Security is issued in exchange for any portion of a
permanent global Security after the close of business at the office or agency
where such exchange occurs on (i) any Regular Record Date and before the opening
of business at such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and before the opening of business at such office
or agency on the related proposed date for payment of interest or defaulted
interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such Registered
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Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.
Upon presentation for registration of any Unregistered Securities of
any Series which by its terms is registrable as to principal, at the office or
agency of the Company to be maintained as provided in Section 3.2, such Security
shall be registered as to principal in the name of the Holder thereof and such
registration shall be noted on such Security. Any Security so registered shall
be transferable on the registry books of the Company upon presentation of such
Security at such office or agency for similar notation thereon, but such
Security may be discharged from registration by being in a like manner
transferred to bearer, whereupon transferability by delivery shall be restored.
Unregistered Securities shall continue to be subject to successive registrations
and discharges from registration at the option of the Holders thereof.
Unregistered Securities shall be transferable by delivery, except
while registered as to principal. Registration of any Coupon Security shall not
affect the transferability by delivery of the Coupons appertaining thereto which
shall continue to be payable to bearer and transferable by delivery.
All Securities and Coupons issued upon any transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
and Coupons surrendered upon such transfer or exchange.
Every Security presented or surrendered for registration of 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.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities, other than exchanges pursuant to
Section 2.11, 8.5 or 13.3 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any Series during a period beginning at
the opening of 15 Business Days
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before any selection of Securities of that Series to be redeemed and ending at
the close of business on (A) if Securities of the Series are issuable only as
Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if Securities of the Series are issuable as Unregistered
Securities, the day of the first publication of the relevant notice of
redemption or, if Securities of the Series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption, in whole or in part, except the unredeemed
portion of any Security being redeemed in part, or (iii) to exchange any
Unregistered Security so selected for redemption except that such an
Unregistered Security may be exchanged for a Registered Security of that Series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
None of the Trustee, any agent of the Trustee, any Paying Agent or
the Company will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security or Coupon shall become
mutilated, defaced or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon the written request of any officer of the
Company, the Trustee shall authenticate and deliver, a new Security of the same
Series or Coupon, bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Security or Coupon, or in
lieu of and substitution for the Security or Coupon so destroyed, lost or
stolen. In every case the applicant for a substitute Security or Coupon shall
furnish to the Company and to the Trustee and to any agent of the Company or the
Trustee such security or indemnity as may be required by them to indemnify and
defend and to save each of them harmless and, in every case of destruction, loss
or theft, evidence to their satisfaction of the destruction, loss or theft of
such Security or Coupon and of the ownership thereof.
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Upon the issuance of any substitute Security or Coupon, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
In case any Security or Coupon which has matured or is about to mature or has
been called for redemption in full shall become mutilated or defaced or be
destroyed, lost or stolen, the Company may, instead of issuing a substitute
Security or Coupon, pay or authorize the payment of the same (without surrender
thereof except in the case of a mutilated or defaced Security or Coupon), if the
applicant for such payment shall furnish to the Company and to the Trustee and
any agent of the Company or the Trustee such security or indemnity as any of
them may require to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee and any agent of the Company or the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Security or Coupon and of
the ownership thereof.
Every substitute Security of any Series or Coupon issued pursuant to
the provisions of this Section by virtue of the fact that any such Security or
Coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
or Coupon shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and all other
Securities of such Series or Coupons duly authenticated and delivered hereunder.
All Securities or Coupons shall be held and owned upon the express condition
that, to the extent permitted by the law, the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, defaced, destroyed,
lost or stolen Securities or Coupons and shall preclude any and all other rights
or remedies notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.10 Cancellation of Securities, Destruction Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or analogous
fund and all Coupons surrendered for payment or exchange, shall, if surrendered
to the Company or any agent of the Company or the Trustee, be delivered to the
Trustee for cancellation or, if surrendered to the Trustee, shall be cancelled
by it; and no Securities or Coupons shall be issued in lieu thereof, except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall
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destroy cancelled Securities and Coupons held by it and deliver a certificate of
destruction to the Company. If the Company shall acquire any of the Securities
and Coupons, such acquisition shall not operate as a redemption or satisfaction
of the indebtedness represented by such Securities and Coupons unless and until
the same are delivered to the Trustee for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities of any Series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form or, if authorized, in
bearer form with one or more coupons or without coupons, and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing may determine, as evidenced by their execution of such
Securities. In the case of any Series issuable as Unregistered Securities, such
temporary Securities may be in global form.
Except in the case of temporary Securities in global form (which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Securities of any Series are issued, the Company will
cause definitive Securities of that Series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such Series, the
temporary Securities of such Series shall be exchangeable for definitive
Securities of such Series upon surrender of the temporary Securities of such
Series at the office or agency of the Company maintained pursuant to Section 3.2
for the purpose of exchanges of Securities of such Series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities
of any Series (accompanied by any unmatured coupons appertaining thereto) the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like aggregate principal amount of definitive Securities of the same
Series and of like tenor of authorized denominations; provided, however, that no
definitive Unregistered Security shall be delivered in exchange for a temporary
Registered Security; and provided, further, that a definitive Unregistered
Security shall be delivered in exchange for a temporary Unregistered Security
only in compliance with the conditions set forth in Section 2.4.
If temporary Securities of any Series are issued in global form, any
such temporary global Security shall, unless otherwise provided therein, be
delivered to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euro-clear and CEDEL S.A., for credit to the
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respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, or, if so specified as contemplated by
Section 2.3, a permanent global Security, in either case, executed by the
Company. On or after the Exchange Date, such temporary global Security shall be
surrendered by the Common Depositary to the Trustee, as the Company's agent for
such purpose, to be exchanged, in whole or from time to time in part, for
definitive Securities without charge and the Trustee shall authenticate and
deliver, in exchange for each portion of such temporary global Security, an
equal aggregate principal amount of definitive Securities of the same Series of
authorized denominations and of like tenor as the portion of such temporary
global Security to be exchanged. The definitive Securities to be delivered in
exchange for any such temporary global Security shall be in bearer form,
registered form, permanent global bearer form or permanent global registered
form, or any combination thereof, as specified as contemplated by Section 2.3,
and, if any combination thereof is so specified, as requested by the beneficial
owner thereof; provided, however, that, unless otherwise specified in such
temporary global Security, upon such presentation by the Common Depositary, such
temporary global Security is accompanied by a certificate dated the Exchange
Date or a subsequent date and signed by Euro-clear as to the portion of such
temporary global Security held for its account then to be exchanged and a
certificate dated the Exchange Date or a subsequent date and signed by CEDEL
S.A. as to the portion of such temporary global Security held for its account
then to be exchanged, each in the form set forth in Exhibit A-2 to this
Indenture; and provided, further, that definitive Unregistered Securities shall
be delivered in exchange for a portion of a temporary global Security only in
compliance with the requirements of Section 2.4.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a Series in a temporary global
Security shall be exchanged for definitive Securities of the same Series and of
like tenor following the Exchange Date when the account holder instructs
Euro-clear or CEDEL S.A., as the case may be, to request such exchange on his
behalf and delivers to Euro-clear or CEDEL, S.A., as the case may be, a
certificate in the form set forth in Exhibit A-1 to this Indenture, dated no
earlier than 15 days prior to the Exchange Date. Unless otherwise specified in
such
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temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive 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 Securities in person at the offices of Euro-clear or CEDEL
S.A. Definitive Securities in bearer form to be delivered on exchange for any
portion of a temporary global Security shall be delivered only outside the
United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any Series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same Series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 2.3, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such Series occurring
prior to the applicable Exchange Date shall be payable to Euro-clear and CEDEL
S.A. on such Interest Payment Date upon delivery by Euro-clear and CEDEL S.A. to
the Trustee of a certificate or certificates in the form set forth in Exhibit
A-3 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 Security on such Interest Payment
Date and who have each delivered to Euro-clear and CEDEL S.A., as the case may
be, a certificate in the form set forth in Exhibit A-4 to this Indenture. Any
interest so received by Euro-clear and CEDEL S.A. and not paid as herein
provided shall be returned to the Trustee and then to the Company in accordance
with Section 10.4.
SECTION 2.12 Compliance with Certain Laws and Regulations. If any
Unregistered Securities are to be issued in any Series of Securities, the
Company will use reasonable efforts to provide for arrangements and procedures
designed pursuant to then applicable laws and regulations, if any, to ensure
that Unregistered Securities are sold or resold, exchanged, transferred and paid
only in compliance with such laws and regulations and without adverse
consequences to the Company.
SECTION 2.13 Appointment of Agents with Respect to Certain
Calculations. The Company may appoint an Agent or Agents with respect to one or
more Series of Securities which Agent or Agents shall be authorized to determine
the rate or rates of interest applicable to the Securities of any Series from
time to time in effect, the amount of principal or premium, if any payable on
the Securities of any Series and the rates of exchange applicable to the
Securities of any Series denominated in a currency other than United States
dollars from time to time in effect, all in accordance with the terms of the
Securities of
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such Series. Wherever reference is made in this Indenture to any such
calculation by the Trustee, it shall be deemed to refer to the calculation by
such agent or agents. Such agent, upon calculating the amounts so to be
calculated pursuant to the terms of the Securities of any Series shall
communicate promptly in writing the amounts so calculated to the Company and the
Trustee. Absent manifest error, all amounts so calculated shall be binding on
the Company, the Trustee and the Holders of the Securities of such Series.
Any such agent may resign at any time by giving written notice
thereof to the Company and to the Trustee. The Company may at any time terminate
the agency of any such agent by giving written notice thereof to such agent and
to the Trustee. Upon receiving such a notice of resignation or upon such a
termination, the Company may appoint a successor agent and shall give notice of
such appointment to all Holders of Securities in the manner provided in Section
12.4.
SECTION 2.14 Securities Issuable in the Form of a Global Security.
(a) If the Company shall establish pursuant to Sections 2.1 and 2.3 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or its agent shall, in accordance with Section 2.4 and the Company Order
delivered to the Trustee or its agent thereunder, authenticate and deliver such
Global Security or Global Securities, which (i) shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, the
Outstanding Securities of such series to be represented by such Global Security
or Global Securities, or such portion thereof as the Company shall specify in a
Company Order, (ii) shall be registered in the name of the Depository for such
Global Security or Global Securities or its nominee, (iii) shall be delivered by
the Trustee or its agent to the Depository or pursuant to the Depository's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized representative of the
Depository to the Company or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of the nominee
of the Depository or in such other name as is requested by an authorized
representative of the Depository (and any payment is made to the nominee of the
Depository or to such other entity as is requested by an authorized
representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, the nominee of the Depository, has an interest herein."
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(b) Notwithstanding any other provision of this Section 2.14 or of
Section 2.8, and subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be exchanged
in whole or in part for individual certificates representing Securities, a
Global Security may be transferred, in whole but not in part and in the manner
provided in Section 2.8, only to a nominee of the Depository for such Global
Security, or to the Depository, or a successor Depository for such Global
Security selected or approved by the Company, or to a nominee of such successor
Depository.
(c) (i) If at any time the Depository for a Global Security notifies
the Company that it is unwilling or unable to continue as Depository for such
Global Security or if at any time the Depository for the Global Securities for
such series shall no longer be eligible or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation, the
Company shall appoint a successor Depository with respect to such Global
Security. If a successor Depository for such Global Security is not appointed by
the Company within 90 days after the Company receives notice or becomes aware of
such ineligibility, the Company will execute, and the Trustee or its agent, upon
receipt of a Company Request for the authentication and delivery of certificates
representing Securities of such series in exchange for such Global Security,
will authenticate and deliver, certificates representing Securities of such
Series of like tenor and terms in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global Security.
(ii) The Company may at any time and in its sole discretion
determine that the Securities of any series or portion thereof issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Global Securities. In such event the
Company will execute, and the Trustee, upon receipt of a Company Request for the
authentication and delivery of certificates representing Securities of such
series in exchange in whole or in part for such Global Security, will
authenticate and deliver certificates representing Securities of such series of
like tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of such Global Security or Global Securities
representing such series or portion thereof in exchange for such Global Security
or Global Securities.
(iii) If specified by the Company pursuant to Sections 2.1 and
2.3 with respect to Securities issued or issuable in the form of a Global
Security, the Depository for such Global Security may surrender such Global
Security in
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exchange in whole or in part for certificates representing Securities of such
series of like tenor and terms in definitive form on such terms as are
acceptable to the Company and such Depository. Thereupon the Company shall
execute, and the Trustee or its agent shall authenticate and deliver, without a
service charge, (1) to each Holder specified by the Security Registrar or the
Depository a certificate or certificates representing Securities of the same
series of like tenor and terms and of any authorized denomination as requested
by such person in an aggregate principal amount equal to and in exchange for
such Holder's beneficial interest as specified by the Security Registrar or the
Depository in the Global Security; and (2) to such Depository a new Global
Security of like tenor and terms and in an authorized denomination equal to the
difference, if any, between the principal amount of the surrendered Global
Security and the aggregate principal amount of certificates representing
Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding
three paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver certificates representing Securities in definitive
registered form in authorized denominations for Securities of the same series or
any integral multiple thereof. Upon the exchange of the entire principal amount
of a Global Security for certificates representing Securities, such Global
Security shall be cancelled by the Trustee or its agent. Except as provided in
the preceding paragraph, certificates representing Securities issued in exchange
for a Global Security pursuant to this Section shall be registered in such names
and in such authorized denominations for Securities of that Series or any
integral multiple thereof, as the Security Registrar or Depository shall
instruct the Trustee or its agent in writing. The Trustee or the Security
Registrar shall deliver at its Corporate Trust Office such certificates
representing Securities to the Holders in whose names such Securities are so
registered.
ARTICLE 3
COVENANTS OF THE COMPANY
SECTION 3.1 Payment of Principal and Interest. The Company covenants
and agrees for the benefit of each Series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such Series in accordance with the terms of the Securities of
such Series, any Coupons appertaining thereto and this Indenture.
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The interest on Unregistered Securities shall be payable only upon
presentation and surrender of the Coupons for such interest installments as are
evidenced thereby as they mature. The interest on any temporary Unregistered
Security shall be paid, as to any installment of interest evidenced by a Coupon
attached thereto, if any, only upon presentation and surrender of such Coupon,
and, as to the other installments of interest, if any, only upon presentation of
such Securities for notation thereon of the payment of such interest.
SECTION 3.2 Offices for Payment, etc. If Securities of a Series are
issuable only as Registered Securities, the Company will maintain an office or
agency where Securities of that Series may be presented or surrendered for
payment, where Securities of that Series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that Series and this Indenture may be served.
Except as otherwise specified as contemplated by Section 2.3, if Securities of a
Series are issuable as Registered Securities and/or Unregistered Securities, the
Company will maintain (A) in the Borough of Manhattan, The City of New York, an
office or agency where any Registered Securities of that Series may be
surrendered for registration of transfer, where Securities of that Series may be
surrendered for exchange, where notices and demands to or upon the Company in
respect of the Securities of that Series and this Indenture may be served and
where Unregistered 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, outside the United States, an office or agency where
Securities of that Series and related coupons may be presented and surrendered
for payment (including payment of any additional amounts payable on Securities
of that Series pursuant to Section 3.7); provided, however, that if the
Securities of that Series are listed on The International Stock Exchange, the
London Stock Exchange, 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 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 Securities of that Series are listed on such
exchange, and (C) subject to any laws or regulations applicable thereto, outside
the United States, an office or agency where any Registered Securities of that
Series may be surrendered for registration of transfer, where Securities of that
Series may be surrendered for exchange and where notices and demands to or upon
the Company in respect of the Securities of that Series and this Indenture may
be served. The Company will give prompt written notice to the Trustee and the
Holders of the
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location, and any change in the location, of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
in respect of any Series of Securities or shall fail to furnish the Trustee with
the address thereof, such presentations and surrenders of Securities of that
Series may be made and notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Unregistered Securities of
that Series and the related coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Unregistered Securities
of that Series pursuant to Section 3.7) at an office maintained by the Trustee
in London, and the Company hereby appoints the same as its agent to receive such
respective presentations, surrenders, notices and demands.
Except as otherwise specified as contemplated by Section 2.3, no
payment of principal or interest on Unregistered 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 Securities of a
Series are denominated and payable in Dollars, payment of principal of and any
premium, if any, and interest on any Unregistered Security (including any
additional amounts payable on Securities of such Series pursuant to Section 3.7)
shall be made at the office of the Company's Paying Agent in the Borough of
Manhattan, The City 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 effective
precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more Series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any Series for such purposes. The Company will give prompt written notice to the
Trustee and the Holders of any such designation or rescission and of any change
in the location of any such other office or agency.
Unless otherwise specified pursuant to Section 2.3, the Trustee is
appointed Paying Agent and Registrar.
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SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each Series of Securities
hereunder.
SECTION 3.4 Paying Agents. Whenever the Company shall appoint a
Paying Agent other than the Trustee with respect to the Securities of any
Series, it will cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Agent shall agree with the Trustee, subject to the
provisions of this Section,
(a) that it will hold all sums received by it as such Agent for the
payment of the principal of or interest on the Securities of such Series
or Coupons (whether such sums have been paid to it by the Company or by
any other obligor on the Securities of such Series or Coupons) in trust
for the benefit of the Holders of the Securities of such Series or of the
Trustee, and upon the occurrence of an Event of Default pay over all such
sums received by it to the Trustee,
(b) that it will give the Trustee written notice of any failure by
the Company (or by any other obligor on the Securities of such Series) to
make any payment of the principle of or interest on the Securities of such
Series or Coupons when the same shall be due and payable, and
(c) that it will give the Trustee written notice of any change of
address of any Holder of which it is aware.
The Company will, on or prior to each due date of the principal of
or interest on the Securities of such Series or Coupons, deposit with the Paying
Agent a sum sufficient to pay such principal or interest so becoming due, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee in writing of any failure to take such action.
If the Company shall act as its own Paying Agent with respect to the
Securities of any Series or Coupons, it will, on or before each due date of the
principal of or interest on the Securities of such Series or Coupons, set aside,
segregate and hold in trust for the benefit of the Holders of the Securities of
such Series or Holders of such Coupons a sum sufficient to pay such principal or
interest so becoming due. The Company will promptly notify the Trustee in
writing of any failure to take such action.
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Anything in this Section to the contrary notwithstanding, the
Company may at any time, for the purpose of obtaining a satisfaction and
discharge with respect to one or more or all Series of Securities or Coupons
hereunder, or for any other reason, pay or cause to be paid to the Trustee all
sums held in trust for any such Series by the Company or any Paying Agent
hereunder, as required by this Section, such sums to be held by the Trustee upon
the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.5 Written Statement to Trustee. The Company will deliver
to the Trustee on or before May 1 in each year in which there are Securities
Outstanding hereunder an Officer's Certificate, stating that in the course of
the performance of their duties as officers of the Company they would normally
have knowledge of any default by the Company in the performance or fulfillment
of any covenant, agreement or condition contained in this Indenture, stating
whether or not they have knowledge of any such default and, if so, specifying
each such default of which the signers have knowledge and the nature thereof.
SECTION 3.6 Corporate Existence. So long as any Securities shall be
Outstanding, subject to Article Nine, 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 Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 3.7 Additional Amounts. If the Securities of a Series
provide for the payment of additional amounts, the Company will pay to the
Holder of any Security of such Series or any Coupon appertaining thereto
additional amounts as provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal or premium, if any, of
or interest on, or in respect of, any security of a Series or payment of any
related Coupon or the net proceeds received on the sale or exchange of any
Security of any Series, such mention shall be deemed to include mention of the
payment of additional amounts provided for in this Section to the extent that,
in such context, additional amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section and
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express mention of the payment of additional amounts (if applicable) in any
provisions hereof shall not be construed as excluding additional amounts in
those provisions hereof where such express mention is not made.
If the Securities of a Series provide for the payment of additional
amounts, at least 10 days prior to the first interest payment date with respect
to that Series of Securities (or if the Securities of that Series will not bear
interest prior to maturity, the first day on which a payment of principal is
made), and at least 10 days prior to each date of payment of principal, premium,
if any, or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officer's Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee , with an Officer's Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of or interest
on the Securities of that Series shall be made to Holders of Securities of that
Series or any related Coupons who are United States Aliens without withholding
for or on account of any tax, assessment or other governmental charge described
in the Securities of that Series. If any such withholding shall be required,
then such Officer's Certificate shall specify by country the amount, if any,
required to be withheld on such payments to such Holders of Securities or
Coupons and the Company will pay to the Trustee or such Paying Agent the
additional amounts required by this Section. The Company, notwithstanding any
other provision in this Indenture, covenants to indemnify the Trustee and any
Paying Agent and their officers, directors, employees and agents for, and to
hold them harmless against, any loss, liability or expense (including counsel's
fees, expenses and disbursements) reasonably incurred without negligence or bad
faith on their part arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officer's Certificate furnished
pursuant to this Section.
SECTION 3.8 Defeasance of Certain Obligations and Certain Events of
Default. Unless otherwise provided in the Board Resolutions, Officer's
Certificate or an indenture supplemental hereto establishing a series of
Securities subject to additional restrictive covenants or events of default as
contemplated by Section 2.3, the Company may omit to comply with any term,
provision or condition set forth in any such additional restrictive covenant,
and Section 5.1(d) (with respect to any such additional restrictive covenant),
Section 5.1(e) and any such additional event of default shall be deemed not to
be an Event of Default, in each case with respect to the Securities of any
Series, if the Company has irrevocably deposited or caused to be deposited with
the Trustee, under the terms of an irrevocable trust agreement in form
satisfactory to the Trustee, as trust funds in trust (subject to Sections 10.2,
10.3,
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10.4 and 10.5 hereof) solely for the benefit of the Securityholders of such
Series for that purpose, (i) cash or (ii) direct noncallable obligations of, or
noncallable obligations guaranteed by, the United States of America or an agency
thereof for the payment of which guarantee or obligation the full faith and
credit of the United States of America is pledged ("U.S. Government
Obligations"), or a combination thereof, maturing as to principal and interest
in such amounts and at such times as are sufficient, without consideration of
any reinvestment of such principal or interest, to pay the principal of and
interest on the outstanding Securities of such Series and Coupons to maturity or
redemption, as the case may be, provided that the Trustee shall have been
irrevocably instructed in writing to apply such money or the proceeds of such
U.S. Government Obligations to the payment of said principal of and interest on
the Outstanding Securities and Coupons of such Series; provided that:
(a) such deposit shall not cause the Trustee with respect to the
Securities of that Series to have a conflicting interest as defined in
Section 6.8 and for purposes of the Trust Indenture Act with respect to
the Securities of any Series;
(b) 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; and
(c) no Event of Default under Section 5.1(a), 5.1(b) or 5.1(c), or
event which with the lapse of time would become an Event of Default with
respect to the Securities of that Series shall have occurred and be
continuing on the date of such deposit, and no Event of Default under
Section 5.1(f) or Section 5.1(g) or event which with the giving of notice
or lapse of time, or both, would become an Event of Default under Section
5.1(f) or Section 5.1(g) shall have occurred and be continuing on the 91st
day after such date of deposit.
Such irrevocable trust agreement shall include, among other things,
provision for (1) payment of the principal of and interest on the Securities of
such Series and Coupons when due (by redemption, sinking fund payments or
otherwise), (2) the payment of the expenses of the Trustee (including counsel's
fees, expenses and disbursements) incurred or to be incurred in connection with
carrying out such trust provisions, (3) rights of registration, transfer,
substitution and exchange of Securities of such Series and Coupons in accordance
with the terms stated in this Indenture and (4) continuation of the rights and
obligations and immunities of the Trustee as against the Securityholders of such
Series as stated in this Indenture.
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After any such irrevocable deposit, accompanied by an Officer's
Certificate and Opinion of Counsel which shall state that the provisions of the
first two paragraphs of this Section 3.8 have been complied with, and upon
delivery by the Company to the Trustee of an Opinion of Counsel to the effect
that Securityholders of such Series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and discharge and will
be subject to Federal income tax on the same amount and in the same manner and
at the same time as would have been the case if such deposit and discharge had
not occurred, then the Company shall be discharged of its obligations under the
Securities of such Series and this Indenture with respect to such Series except
for those surviving obligations specified above, and the Trustee upon written
request shall acknowledge in writing such discharge. In addition, if the
Securities of that Series are then listed on the New York Stock Exchange, Inc.,
the Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that such deposit, defeasence and discharge will not cause such
Securities to be delisted. Prior to the delivery of such acknowledgment, the
Trustee may require the Company to deliver to it an Officer's Certificate and
Opinion of Counsel, each stating that all conditions precedent provided for
herein relating to the deposit and discharge contemplated by this provision have
been complied with, and the Trustee may also require that the Opinion of Counsel
shall also state that such deposit does not violate applicable law.
ARTICLE 4
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.1 Company to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the Holders of the
Registered Securities of each Series:
(a) semiannually and not more than 10 days after each record date
for the payment of interest on such Securities, as hereinabove specified,
as of such record date and on dates to be determined pursuant to Section
2.3 for non-interest bearing securities in each year, and
(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Company of any such request as of a
date not more than 15 days prior to the time such information is
furnished;
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provided that if and so long as the Trustee shall be the Security registrar for
such Series, such list shall not be required to be furnished but in any event
the Company shall be required to furnish such information concerning the Holders
of Unregistered Securities which is known to it; provided, further, that the
Company shall have no obligation to investigate any matter relating to any
Holder of an Unregistered Security or any Holder of a Coupon.
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each Series of Securities contained in the most recent list furnished to it as
provided in Section 4.1 or maintained by the Trustee in its capacity as Security
registrar for such Series, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 4.1 upon receipt of a new list so
furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned 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 Securities of a particular Series (in which case the applicants must all hold
Securities of such Series) or with Holders of all Securities with respect to
their rights under this Indenture or under such Securities and such application
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 to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection
(a) of this Section, or
(ii) inform such applicants as to the approximate number of Holders
of Securities of such Series or all Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a) of this
Section, as to the approximate cost of mailing to such Securityholders the
form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford to such applicants access
to such information, the Trustee shall, upon
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the written request of such applicants, mail to each Securityholder of such
Series or all Securities, as the case may be, whose name and address appear in
the information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section, 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.
(c) Each and every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any agent of the Company or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders of Securities in accordance with provisions of
subsection (b) of this Section, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under such subsection
(b).
SECTION 4.3 Reports by the Company. The Company covenants:
(a) to 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 Commissioner may from time to
time by rules and regulations prescribe) which the Company may be required
to file with the Commission pursuant to
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Section 13 or Section 15(d) of the Securities Exchange Act of 1934, and if
the Company is not required to file information, documents, or reports
pursuant to either of such Sections, then to file with the Trustee and the
Commission, in accordance with 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, or in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(b) to 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 provided for in this
Indenture as may be required from time to time by such rules and
regulations; and
(c) to transmit by mail to the Holders of Securities in the manner
and to the extent required by Sections 4.4(c) and 11.4, 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 subsection (a) and (b) of this Section as may be required to
be transmitted to such Holders by rules and regulations prescribed from
time to time by the Commission.
SECTION 4.4 Reports by the Trustee. (a) On or before July 14 in each
year following the date hereof, so long as any Securities are outstanding
hereunder, the Trustee shall transmit by mail as provided below to the
Securityholders of each Series, as hereinafter in this Section provided, a brief
report dated as of May 15 with respect to any of the following events which
may have occurred within the previous 12 months (but if no such event has
occurred within such period no report need be transmitted):
(i) any change in its eligibility under Section 6.9 and its
qualification under Section 6.8, or in lieu thereof, if to the best of its
knowledge it has continued to be eligible and qualified under such
Sections, a written statement to such effect;
(ii) 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 Securities of any Series, on any
property or funds held or collected by it as Trustee,
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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 l% of the principal amount of the Securities of any Series
Outstanding on the date of such report;
(iii) the amount, interest rate, and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity on the date of such
report, with a brief description of any property held as collateral
security therefor, except any indebtedness based upon a creditor
relationship arising in any manner described in Section 6.13(b)(2),(3),(4)
or (6);
(iv) any change to the property and funds, if any, physically
in the possession of the Trustee (as such) on the date of such report;
(v) any additional issue of Securities which the Trustee has
not previously reported; and
(vi) any action taken by the Trustee in the performance of its
duties under this Indenture which it has not previously reported and which
in its opinion materially affects the Securities, except action in respect
of a default, notice of which has been or is to be withheld by it in
accordance with the provisions of Section 5.11.
(b) The Trustee shall transmit to the Securityholders of each
Series, as provided in subsection (c) of this Section, 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 the
provisions of subsection (a) of this Section (or if such report has yet been so
transmitted, since the date of this Indenture) for the reimbursement of which it
claims or may claim a lien or charge prior to that of the 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 (b), except that the Trustee
shall not be required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal amount of
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 shall be transmitted by mail to
all registered Holders of Securities, as
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the names and addresses of such Holders appear upon the registry book of the
Company and to such Holders of Unregistered Securities as have, within the two
years preceding such notice, filed their names and addresses with the Trustee
for that purpose, and, except in the case of reports pursuant to subsection (b)
of this Section 4.4, to all Holders whose names and addresses appear in the
information preserved at the time of such notice by the Trustee in accordance
with the provisions of Section 4.2(a).
(d) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Company and be filed by the
Trustee with each stock exchange upon which the Securities of any applicable
Series are listed and also with the Commission. The Company agrees to notify the
Trustee with respect to any Series when and as the Securities of such Series
become admitted to trading on any national securities exchange.
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default" as used herein with respect to Securities
of any Series whatever means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest upon any
of the Securities of such Series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal on
any of the Securities of such Series as and when the same shall become due
and payable either at maturity, upon redemption, by declaration or
otherwise; or
(c) default in the payment of any sinking fund installment as and
when the same shall become due and payable by the terms of the Securities
of such Series; or
(d) default in the performance, or breach, of any agreement of the
Company in respect of the Securities of
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such Series (other than an agreement in respect of the Securities of such
Series a default in whose performance or whose breach is elsewhere in this
Section specifically dealt with), and continuance of such default or
breach for a period of 60 days after receipt by the Company from the
Trustee or the Holders of at least 25% in principal amount of the
Outstanding Securities of such Series affected thereby, of 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
(e) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (including a default with
respect to Securities of any Series other than that Series) or under any
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money
borrowed by the Company (including this Indenture), whether such
indebtedness now exists or shall hereafter be created, which default shall
constitute a failure to pay such indebtedness in a principal amount in
excess of $20,000,000 when due and payable after the expiration of any
applicable grace period with respect thereto or shall have resulted in
such indebtedness in a principal amount in excess of $20,000,000 becoming
or being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness having
been discharged, or such acceleration having been rescinded or annulled,
within a period of 15 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 at east 25% in principal amount
of the Outstanding Securities of that Series a written notice specifying
such default and requiring the Company to cause such indebtedness to be
discharged or cause such acceleration to be rescinded or annulled and
stating that such notice is a "Notice of Default" hereunder; or
(f) the Company pursuant to or under or within the meaning of any
Bankruptcy Law: (i) commences a voluntary case or proceeding; (ii)
consents to the entry of an order for relief against it in an involuntary
case or proceeding or the commencement of any case against it; (iii)
consents to the appointment of a Custodian of it or any substantial part
of its property; (iv) makes a general assignment for the benefit of its
creditors; (v) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or (vi) consents to the filing of such petition
or the appointment of or taking possession by a Custodian; or
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(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Company in an
involuntary case or proceeding, or adjudicates the Company insolvent or
bankrupt; (ii) appoints a Custodian of the Company or for any substantial
part of its property; or (iii) orders the winding up or liquidation of the
Company; and the order or decree remains unstayed and in effect for 60
days; or
(h) there has occurred any other Event of Default provided in the
indenture supplemental hereto or Board Resolution under which such Series
of Securities is issued or in the form of Security for such Series.
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors. "Custodian" means any receiver,
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
If an Event of Default (other than an Event of Default under clauses
(f) and (g)) with respect to Securities of any Series at the time Outstanding
occurs and is continuing, then in every such case the Trustee or the Holders of
not less than 25% in principal amount of the Outstanding Securities of that
Series may declare the principal amount (or, if the Securities of that Series
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of that Series) of all of the Securities of that
Series and the interest, if any, accrued thereon to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee given by
Holders), and upon any such declaration such principal amount (or specified
amount) and interest shall become immediately due and payable. If an Event of
Default described in clause (f) or (g) occurs and is continuing, the entire
principal amount (or, if the Securities of that Series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that Series) of all the Securities then Outstanding and interest
accrued thereon shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Securityholders.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any Series shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon
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all the Securities of such Series and the principal of any and all Securities of
such Series which shall have become due otherwise than by acceleration (with
interest upon such principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest, at the
same rate as the rate of interest or Yield to Maturity (in the case of Original
Issue Discount Securities) specified in the Securities of such Series, to the
date of such payment or deposit) and such amount as shall be sufficient to cover
reasonable compensation and reimbursement for the expenses and disbursements to
the Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result
of negligence or bad faith, and if any and all Events of Default under the
Indenture, other than the nonpayment of the principal of Securities which shall
have become due by acceleration, shall have been cured, waived or otherwise
remedied as provided herein - then and in every such case the Holders of a
majority in aggregate principal amount of all the Securities of such Series then
Outstanding, by written notice to the Company and to the Trustee, may waive all
defaults with respect to such Series and rescind and annul such declaration and
its consequences, but no such waiver or rescission and annulment shall extend to
or shall affect any subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the revisions hereof, then, from and after
such declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Original Issue
Discount Securities.
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Company covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities of any Series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in
the payment of all or any principal of any of the Securities of any Series when
the same shall have become due and payable, whether upon maturity of the
Securities of such Series or upon any redemption or by declaration or otherwise
- - then upon demand of the Trustee, the Company will pay
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to the Trustee for the benefit of the Holders of the Securities of such Series
and the Holders of any Coupons appertaining thereto the whole amount that then
shall have become due and payable on all Securities of such Series or such
Coupons for principal of or interest, as the case may be (with interest to the
date of such payment upon the overdue principal and, to the extent that payment
of such interest is enforceable under applicable law, on overdue installments of
interest at the same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in the Securities of such
Series); and in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including reasonable compensation to
and reimbursement for the expenses and disbursements of the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and any
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Company may pay the
principal of and interest on the Securities of any Series to the persons
entitled thereto, whether or not the principal of and interest on the Securities
of such Series are overdue.
In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or
in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Company or other obligor upon such
Securities and collect in the manner provided by law out of the property of the
Company or other obligor upon such Securities, wherever situated, the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Company
or any other obligor upon the Securities under any Bankruptcy Law, or in case a
Custodian shall have been appointed for or taken possession of the Company or
its property or such other obligor, or in case of any other comparable judicial
proceedings relative to the Company or other obligor under the Securities of any
Series, or to the creditors or property of the Company or such other obligor,
the Trustee, irrespective of whether the principal of any Securities shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered (but shall have no
obligation to), by intervention in such proceedings or otherwise:
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(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Securities of
any Series, and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for reasonable compensation and reimbursement for the expenses and
disbursements to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee, except as a result of negligence or bad
faith) and of the Securityholders and the Holders of any Coupons
appertaining thereto allowed in any judicial proceedings relative to the
Company or other obligor upon all Securities of any Series, or to the
creditors or property of the Company or such other obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Securities of any Series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation
or other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders and of the Trustee on
their behalf; and any Custodian or other similar official is hereby
authorized by each of the Holders to make payments to the Trustee, and, in
the event that the Trustee shall consent to the making of payments
directly to the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation and reimbursement
for the expenses and disbursements to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee except as a result of negligence or bad faith
and all other amounts due to the Trustee or any predecessor Trustee
pursuant to Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any Series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.
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All rights of action and of asserting claims under this Indenture,
or under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof at any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the securities and Holders of any Coupons in respect
of which such action was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Securities and Coupons appertaining thereto in respect to which
such action was taken, and it shall not be necessary to make any Holders of such
Securities and Coupons appertaining thereto parties to any such proceedings.
SECTION 5.3 Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of the Securities of any Series
shall be applied in the following order at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal
or interest, upon presentation of the several Securities and any Coupons
appertaining thereto in respect of which moneys have been collected and stamping
(or otherwise noting) thereon the payment, or issuing Securities of such Series
in reduced principal amounts in exchange for the presented Securities of like
Series if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such
Series in respect of which moneys have been collected, including
reasonable compensation to the Trustee and each predecessor Trustee and
their respective agents and attorneys and of all fees, expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith, and all
other amounts due to the Trustee or any predecessor Trustee pursuant to
Section 6.6;
SECOND: To the holders of Senior Indebtedness to the extent required
by Article Eleven;
THIRD: In case the principal of the Securities of such Series in
respect of which moneys have been collected shall not have become and be
then due and payable, to the payment
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of interest on the Securities of such Series in default in the order of
the maturity of the installments of such interest, with interest (to the
extent that such interest has been collected by the Trustee) upon the
overdue installments of interest at the same rate as the rate of interest
or Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made ratably to the
persons entitled thereto, without discrimination or preference;
FOURTH: In case the principal of the Securities of such Series in
respect of which moneys have been collected shall have become and shall be
then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities such Series for principal and interest,
with interest upon the overdue principal, and (to the extent that payment
of such interest is permissible by law and that such interest has been
collected by the Trustee) upon overdue installments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in the Securities of such
Series; and in case such moneys shall be insufficient to pay in full the
whole amount so due and unpaid upon the Securities of such Series, then to
the payment of such principal and interest or Yield to Maturity, without
preference or priority of principal over interest or Yield to Maturity or
of interest or Yield to Maturity over principal, or of any installment of
interest over any other installment of interest, or of any Security of
such Series over any other Security of such Series, ratably to the
aggregate of such principal and accrued and unpaid interest; and
FIFTH: To the payment of the remainder, if any, to the Company or
any other person lawfully entitled thereto.
SECTION 5.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effective to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
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SECTION 5.5 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Company and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
SECTION 5.6 Limitations on Suits by Securityholders. No Holder of
any Security of any Series or Holder of any Coupon shall have any right by
virtue or by availing of any provision of this Indenture to institute any action
or proceeding at law or in equity or in bankruptcy or otherwise upon or under or
with respect to this Indenture, or for the appointment of a Custodian or other
similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
not less than 25% in aggregate principal amount of the Securities of such Series
then Outstanding shall have made written request upon the Trustee to institute
such action or proceedings in its own name as trustee hereunder and shall have
offered to the Trustee such indemnity reasonably satisfactory to it, as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such action or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 5.9; it being understood and
intended, and being expressly covenanted by the taker and Holder of every
Security and by a Holder of each Coupon appertaining thereto and the Trustee,
that no one or more Holders of Securities of any Series or one or more
Securities of any Series or one or more Holders of any Coupons appertaining
thereto shall have any right in any manner whatever, by virtue or by availing of
any provisions of this Indenture to affect, disturb or prejudice the rights of
any other such Holder of Securities or any other Holders of such Coupons, or to
obtain or seek to obtain priority over or preference to any other such Holder or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of Securities of
the applicable Series and all the Holders of Coupons appertaining thereto. For
the protection and enforcement of the provisions of this Section, each any every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
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SECTION 5.7 Unconditional Rights of Securityholders to Institute
Certain Suits. Notwithstanding any provision in this Indenture and any provision
of any Security or Coupon, the right of any Holder of any Security and the right
of any Holder of any Coupon appertaining thereto to receive payment of the
principal of and interest on such Security on or after the respective due dates
expressed in such Security, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 5.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Securityholders 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.
No delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and, subject to Section 5.6, every power and remedy given by this
Indenture or by law to the Trustee, to the Securityholders or to the Holder of
any Coupon appertaining thereto may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee, the Securityholders or Holders of
any Coupon.
SECTION 5.9 Control by Securityholders. The Holders of a majority in
aggregate principal amount of the Securities of each Series affected (with each
Series treated as a separate class) at the time Outstanding shall have the right
to direct in writing the time, method, and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to the Securities of such Series by this
Indenture; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided further
that (subject to the provisions of Section 6.1) the Trustee shall have the right
to decline to follow any such direction if the Trustee, being advised by
counsel, shall determine that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of directors, the
executive committee, or a trust committee of directors or Responsible Officers
of the
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Trustee shall determine that the action or proceedings so directed would involve
the Trustee in personal liability or if the Trustee in good faith shall so
determine that the actions or forebearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities of all Series or of the Holders of any Coupons appertaining thereto
so affected not joining in the giving of said direction, it being understood
that (subject to Section 6.1) the Trustee shall have no duty to ascertain
whether or not such actions or forbearances are unduly prejudicial to such
Holders.
Nothing in this Indenture shall impair the right of the Trustee in
its discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such written direction or directions by Securityholders.
SECTION 5.10 Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Securities of any Series as provided in
Section 5.1, the Holders of a majority in aggregate principal amount of the
Securities of such Series then Outstanding may waive any such default or Event
of Default and its consequences except a default in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Security affected. In the case of any such waiver, the Company,
the Trustee, the Holders of the Securities of such Series and the Holder of any
Coupon appertaining thereto shall be restored to their former positions and
rights hereunder, respectively.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of 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 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall transmit to the Securityholders of any
Series notice in the manner and to the extent provided in Section 12.4, of all
defaults which have occurred with respect to such Series, such notice to be
transmitted within 90 days after the occurrence thereof, unless such defaults
shall have been cured before the giving of such notice (the term "default" or
"defaults" for the purposes of this Section being hereby defined to mean any
event or condition which is, or with notice or lapse of time or both would
become, an Event of Default); provided that, except in the case of default in
the payment of the principal of or interest on any of the Securities of such
Series or any default in the
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payment of any sinking fund installment or analogous obligation in respect of
any of the 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 or trustees or Responsible Officers
of the Trustee in good faith determines that the withholding of such notice is
in the interests of the Securityholders of such Series.
SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Security and
each Holder of any Coupon, by his acceptance thereof, shall be deemed to have
agreed, that a court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Securityholder or
group of Securityholders of any Series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such Series, or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security.
ARTICLE 6
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; Prior to
Default; During Default. With respect to the Holders of any Series of Securities
issued hereunder, the Trustee, prior to the occurrence of an Event of Default
with respect to the Securities of a particular Series and after the curing or
waiving of all Events of Default which may have occurred with respect to such
Series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. No implied covenants or obligations
shall be read into this Indenture against the Trustee. In case an Event of
Default with respect to the Securities of a Series has occurred (which has not
been cured or waived) of which a Responsible Officer has actual knowledge, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
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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 wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any Series and after the curing or waiving of all such
Events of Default with respect to such Series which may have occurred:
(i) the duties and obligations of the Trustee with respect to
the Securities of an Series shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the written
direction of the Holders pursuant to Section 5.9 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.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or
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powers, if there shall be reasonable ground for believing that the repayment of
such funds or adequate indemnity against such liability is not reasonably
assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, officer's
Certificate or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, note, coupon,
security or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officer's Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee
by a copy thereof certified by the secretary or any assistant secretary of
the Company;
(c) the Trustee may consult with counsel and any advice or action
taken by the Trustee in reasonable reliance on the advice of counsel or an
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion
of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within rights
or powers conferred upon it by this Indenture;
(f) prior to the occurrence of any Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall
not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion,
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report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless
requested in writing to do so by the Holders of not less than a majority
in aggregate principal amount of the Securities of all Series affected
then Outstanding; provided that, if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to
it by the terms of this Indenture, the Trustee may require indemnity
reasonably satisfactory to it against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Company or, if paid by the Trustee or
any predecessor Trustee, shall be repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
custodians, nominees or attorneys not regularly in its employ and the
Trustee shall not be responsible for any negligent action, negligent
failure to act or wilful misconduct on the part of any such agent,
custodian, nominee or attorney.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein and
in the Securities, except the Trustee's certificate of authentication, shall be
taken as the statements of the Company and the Trustee assumes no responsibility
for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or of the Securities. The Trustee
shall not be accountable for the use or application by the Company of any of the
Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
etc. The Trustee, any Paying Agent, Security registrar, or any agent of the
Company or the Trustee, in its individual or any other capacity, may become the
owner or pledgee of Securities or Coupons with the same rights it would have if
it were not the Trustee or such agent and, subject to Sections 6.8 and 6.13, if
operative, may otherwise deal with the Company and receive, collect, hold and
retain collections from the Company with the same rights it would have if it
were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need
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not be segregated from other funds except to the extent required by mandatory
provisions of law. Neither the Trustee nor any agent of the Company or the
Trustee shall be under any liability for interest on any moneys received by it
hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Company covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf
of it in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Company also covenants to indemnify the Trustee and each predecessor Trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The obligations
of the Company under this Section to compensate and indemnify the Trustee and
each predecessor Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. Such additional indebtedness shall be a senior
claim to that of the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the Holders
of particular Securities or the Holders of particular Coupons, and the
Securities are hereby subordinated to such senior claim. When the Trustee incurs
expenses or renders services in connection with an Event of Default specified in
Section 5.1 or in connection with Article Five hereof, the expenses (including
the reasonable fees and expenses of its counsel) and the compensation for the
service in connection therewith are intended to constitute expenses of
administration under any bankruptcy law.
SECTION 6.7 Right of Trustee to Rely on Officer's Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
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hereunder, it may request and such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officer's Certificate and/or Opinion of Counsel, as the case
may be, delivered to the Trustee, and such certificate or Opinion of Counsel,
shall be full warrant to the Trustee for any action taken, suffered or omitted
by it or under the provisions of this Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. (a) If
the Trustee has or shall acquire any conflicting interest, as defined in this
Section, it shall, within 90 days after ascertaining that it has such
conflicting interest, either eliminate such conflicting interest or resign in
the manner and with the effect specified in this Indenture.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section, the Trustee shall, within 10 days
after the expiration of such 90 day period, transmit by mail notice of such
failure to the Securityholders in the manner and to the extent provided in
Section 4.4(c) and 12.4.
(c) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest with respect to Securities of any Series if
(i) the Trustee is trustee under this Indenture with respect
to the Outstanding Securities of any other Series or is a trustee under
another indenture under which any other securities, or certificates of
interest or participation in any other securities, of an Issuer are
outstanding, unless such other indenture is a collateral trust indenture
under which the only collateral consists of Securities issued under this
Indenture; provided that there shall be excluded from the operation of
this paragraph this Indenture with respect to the Securities of any Series
other than such Series or any other indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of an Issuer are outstanding if (i) this Indenture is and such
other indenture or indentures are wholly unsecured, and such other
indenture or indentures are hereafter qualified under the Trust Indenture
Act of 1939, unless the Commission shall have found and declared by order
pursuant to Section 305(b) or Section 307(c) of such Trust Indenture Act
of 1939 that differences exist between the provisions of this Indenture
with respect to Securities of such Series and one or more other Series, or
the provisions of this Indenture and the
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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
Securities of such Series and such other Series, or under this Indenture
or such other indenture or indentures, or (ii) the Issuer 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 Securities of such Series and such other Series,
or under this Indenture and such other indenture or indentures is not so
likely to involve a material conflict of interest as to make it necessary
in the public interest or for the protection of investors to disqualify
the Trustee from acting as such under this Indenture with respect to
Securities of such Series and such other Series, or under this Indenture
and such other indentures;
(ii) the Trustee or any of its directors or executive officers
is an obligor upon the Securities of any Series issued under this
Indenture or any underwriter for an Issuer;
(iii) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect common
control with an Issuer or an underwriter for an Issuer;
(iv) the Trustee or any of its directors or executive officers
is a director, officer, partner, employee, appointee, or representative of
an Issuer, or of an underwriter (other than the Trustee itself) for an
Issuer who is currently engaged in the business of underwriting, except
that (x) 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
an Issuer, but may not be at the same time an executive officer of both
the Trustee and an Issuer;(y) 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 an Issuer; and (z) the Trustee may be designated by an Issuer or by any
underwriter for an Issuer 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 Subsection (c) (i) of this Section, to act as trustee,
whether under an indenture or otherwise;
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(v) 10% or more of the voting securities of the Trustee is
beneficially owned either by an Issuer 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 an Issuer or by any director, partner, or
executive officer thereof, or is beneficially owned, collectively, by any
two or more such persons;
(vi) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, (x) 5% or more
of the voting securities or 10% or more of any other class of security of
an Issuer, not including the Securities issued under this Indenture and
securities issued under any other indenture under which the Trustee is
also trustee, or (y) 10% or more of any class of security of an
underwriter for an Issuer;
(vii) 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, an Issuer;
(viii) 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 an Issuer; or
(ix) the Trustee owns on May 15 in any calendar year, 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
Section 6.8(c)(vi), (vii) or (viii). 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 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 securities. Promptly after May 15 in each
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calendar year the Trustee shall make a check of its holdings of such
securities in any of the above-mentioned capacities as of such May 15. If
an Issuer fails to make payment in full of principal of or interest on any
of the Securities when and as the same becomes due and payable, and such
failure continues for 30 days thereafter, the Trustee shall make a prompt
check of its holdings of such securities in any of the above-mentioned
capacities as of the date of the expiration of such 30-day period, and
after such date, notwithstanding the foregoing provisions of this
paragraph, all such securities so held by the Trustee, with sole or joint
control over such securities vested in it, shall, but only so long as such
failure shall continue, be considered as though beneficially owned by the
Trustee for the purposes of subsections (c)(vi), (vii) and (viii) of this
Section.
The specification of percentages in subsections (c)(v) to (ix),
inclusive, of this Section 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 subsection (c)(iii) or (vii) of this Section.
For the purposes of subsections (c)(vi), (vii), (viii) and (ix) of
this Section, 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 (x) 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 (y) any security which it holds as collateral
security under this Indenture, irrespective of any default hereunder, or
(z) any security which it holds as agent for collection, or as custodian,
escrow agent, or depository, or in any similar representative capacity.
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Except as provided above, the word "security" or "securities" as
used in this Section shall mean any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral trust certificate, reorganization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas or other mineral rights, or, in general, any interest or
instrument commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.
(d) For purposes of this Section:
(i) the term "underwriter" when used with reference to an
Issuer shall mean every person who, within three years prior to the time
as of which the determination is made, has purchased from the Issuer with
a view to, or has offered or sold for the Issuer in connection with, the
distribution of any security of the Issuer outstanding at such time, or
has participated or has had a direct or indirect participation in an 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
distributor's or seller's commission;
(ii) the term "director" shall mean any director of a
corporation or any individual performing similar functions with respect to
any organization whether incorporated or unincorporated;
(iii) the term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock company, a
trust, an unincorporated organization, or a government or political
subdivision thereof; as used in this paragraph, the term "trust" shall
include only a trust where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security;
(iv) the term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote on the direction
or management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such
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security are presently entitled to vote on the direction or management of
the affairs of a person;
(v) the term "Issuer" shall mean any obligor upon the
Securities; and
(vi) the term "executive officer" shall mean 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:
(i) a specified percentage of the voting securities of the
Trustee, an Issuer or any other person referred to in this Section (each
of whom is referred to as "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;
(ii) a specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of the
class outstanding;
(iii) the term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness, the
number of shares if relating to capital shares, and the number of units if
relating to any other kind of security;
(iv) 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:
(A) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(B) securities of an issuer held in a sinking fund
relating to another class of securities of
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the issuer, if the obligation evidenced by such other class of
securities is not in default as to principal or interest or
otherwise;
(C) 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
(D) securities held in escrow if placed in escrow by the
issuer thereof;
provided 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; and
(v) 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, that in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various Series thereof shall not be deemed sufficient to
constitute such Series different classes, and provided, further, that, in
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
SECTION 6.9 Persons Eligible for Appointment as Trustee. The Trustee
for each Series of Securities hereunder 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 District of Columbia having a combined capital and surplus
of at least $50,000,000, and which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by Federal,
State or District of Columbia authority. Such corporation shall have its
principal place of business in the United States of America, if there be such a
corporation in such location willing to act upon reasonable and customary terms
and conditions. 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. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this
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Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 6.10.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign with respect to one or more or all Series of Securities by
giving written notice of resignation to the Company and by mailing notice
thereof to the Holders in the manner and to the extent provided in Section 12.4.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees with respect to the applicable Series by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee or trustees. If no successor trustee shall have
been so appointed with respect to any Series and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable Series for at least six months may,
subject to the provisions of Section 5.12, on behalf of himself and all others
similarly situated, petition any such court for the appointment of, a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 6.8 with respect to any Series of Securities after written request
therefor by the Company or by any Securityholder who has been a bona fide
Holder of a Security or Securities of such Series for at least six months;
or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.9 and shall fail to resign after written
request therefor by the Company or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with
respect to any Series of the Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
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then, in any such case, the Company may remove the Trustee with respect to the
applicable Series of Securities and appoint a successor trustee for such Series
by written instrument, in duplicate, executed by order of the Board of Directors
of the Company, one copy of which instrument shall be delivered to the Trustee
so removed and one copy to the successor trustee, or, subject to the provisions
of Section 5.12, any Securityholder who has been a bona fide Holder of a
Security or Securities of such Series for at least six months may on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee with respect to such Series. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each Series at the time Outstanding may at any time remove the
Trustee with respect to Securities of such Series and appoint a successor
trustee with respect to the Securities of such Series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Company the
evidence provided for in Section 7.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
Series and any appointment of a successor trustee with respect to such Series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon the payment of any fees, expenses and/or disbursements owed to the
Trustee (including the fees, expenses and/or disbursements of its agents not
regularly in its employ and counsel) and acceptance of appointment by the
successor trustee as provided in Section 6.11.
(e) No Trustee shall be liable for any action or omission of any
predecessor and/or successor Trustee.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Company and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee with respect to all or any applicable Series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such Series of its predecessor hereunder, with like effect as if
originally named as trustee for such Series hereunder; but, nevertheless, on the
written request of the Company or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
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writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.
If a successor trustee is appointed with respect to the Securities
of one or more (but not all) Series, the Company, the predecessor Trustee and
each successor trustee with respect to the Securities of an applicable Series
shall execute and deliver an indenture supplemental hereto which shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the predecessor Trustee with respect to
the Securities of any Series as to which the predecessor Trustee is not retiring
shall continue to be vested in the predecessor Trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such trustees co-trustees of the same trust and that
each such trustee shall be trustee of a trust or trusts under separate
indentures.
No successor trustee with respect to any Series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided
in this Section 6.11, the Company shall give notice in the manner and to the
extent provided in Section 12.4 to the Holders of Securities of any Series for
which such successor trustee is acting as trustee at their last addresses as
they shall appear in the Security register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
6.10. If the Company fails to mail such notice within ten days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. 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 an corporation succeeding to the corporate trust
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business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities of any Series shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any Series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
Trustee hereunder or in the name of the successor Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the
Securities of such Series or in this Indenture provided that the certificate of
the Trustee shall have; provided, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of any
Series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Company.
(a) Subject to the provisions of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of an Issuer
within four months prior to a default, as defined in subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities, the
Holders of Coupons and the holders of other indenture securities (as defined in
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 four month period and valid as
against such Issuer and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
subsection (a)(2) of this Section, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against such Issuer upon the date of such default;
and
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(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 four month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of such Issuer 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 such Issuer) who is liable
thereon, (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 such
Issuer in bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable state law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four 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 four
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 four 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 such 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 four 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
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the purpose of repaying or refunding any pre-existing claim of the Trustee as
such creditor, such claim shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders, the Holders of Coupons and the holders
of other indenture securities in such manner that the Trustee, such
Securityholders 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 an Issuer in bankruptcy or receivership or in proceedings for
reorganization pursuant to Title 11 of the United States Code or applicable
State law, the same percentage of their respective claims, figured before
crediting to the claim of the Trustee anything on account of the receipt by it
from such Issuer of the funds and property in such special account and before
crediting to the respective claims of the Trustee, such Securityholders and the
holders of other indenture securities, dividends on claims filed against such
Issuer in bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable State law, but
after crediting thereon receipts on account of the indebtedness represented by
their respective claims from all sources other than from such dividends and from
the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or in
proceedings for reorganization pursuant to Title 11 of the United States Code or
applicable State law, whether such distribution is made in cash, securities or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceeding for reorganization is pending shall have jurisdiction
(i) to apportion between the Trustee, such Securityholders and the holders of
other indenture securities, in accordance with the provisions of this paragraph,
the funds and the property held in such special account and the 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, such Securityholders and the
holders of other indenture securities with respect to their respective claims,
in which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.
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Any Trustee who has resigned or been removed after the beginning of
such four month period shall be subject to the provisions of this subsection (a)
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four month period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had
continued as trustee, occurred after the beginning of such four
month period; and
(ii) such receipt of property or reduction of claim occurred
within four months after such resignation or removal.
(b) There shall be excluded from the operation 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 advance and of the circumstances surrounding the making thereof is given to
the Securityholders 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)(3) below;
(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 such
Issuer; or
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(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)(4) of this
Section.
(c) As used in this Section:
(1) the term "default" shall mean any failure to make payment
in full of the principal of or interest upon any of the Securities or upon the
other indenture securities when and as such principal or interest becomes due
and payable;
(2) the term "other indenture securities" shall mean
securities upon which an Issuer is an obligor (as defined in the Trust Indenture
Act of 1939) outstanding under any other indenture (i) under which the Trustee
is also trustee, (ii) which contains provisions substantially similar to the
provisions of subsection (a) of this Section, and (iii) under which a default
exists at the time of the apportionment of the funds and property held in said
special account;
(3) the term "cash transaction" shall mean 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 or bankers and payable upon demand;
(4) the term "self-liquidating paper" shall mean 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,
manufacture, 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
(a) the term "Issuer" shall mean any obligor upon the
Securities.
SECTION 6.14 Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect to one or more Series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such Series issued upon original issue or upon
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exchange, registration of transfer or partial redemption thereof or pursuant to
Section 2.9, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication or any other action in connection
therewith, such reference shall be deemed to include authentication and delivery
on behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent and
other action taken on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities in the manner provided
in Section 12.4. Any successor Authentication Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with the effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless acceptable to the Company.
The Trustee agrees to pay to each Authentication Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.6.
If an appointment with respect to one or more Series of Securities
is made pursuant to this Section, the Securities of such Series may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
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"This is one of the Securities of the Series designated herein and
referred to in the within-mentioned Indenture.
The Chase Manhattan Bank,as Trustee
By:
--------------------------------
As Authenticating Agent
By:
--------------------------------
Authorized Officer"
SECTION 6.15 Trustee Acting in Other Capacities. In the event
that the Trustee is also acting as Paying Agent, Authenticating Agent or
Registrar hereunder, the rights and protections afforded to the Trustee
pursuant to this Article 6 shall also be afforded to such Paying Agent,
Authenticating Agent or Registrar.
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified percentage
in principal amount of the Securityholders of any or all Series may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such specified percentage of Securityholders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Article.
(b) The ownership of Registered Securities shall be proved by the
Security register. With respect to any Series of Registered Securities, the
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the identity of Registered Holders entitled to receive any notice or
to consent to any supplement to this Indenture or to any amendment or waiver of
any provision hereof. If a record date is fixed, only those persons who were
Registered Holders at such record date (or their duly designated proxies) shall
be entitled to receive such notice or to consent to such supplement, amendment
or waiver or to revoke any such consent previously given, whether or not such
persons continue to be Holders after such record date. Any such record date
shall not be more than 60 days prior to the first solicitation of such consent
or the date of the most recent list of Securityholders furnished to the Trustee
pursuant to Section 4.1.
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(c) The amount of Unregistered Securities held by any Person
executing any instrument or writing as a Securityholder, the numbers of such
Unregistered Securities, and the date of his holding the same may be proved by
the production of such Securities or by a certificate executed by any trust
company, bank, broker or member of a national securities exchange (wherever
situated), as depositary, if such certificate is in form satisfactory to the
Trustee, showing that at the date therein mentioned such Person had on deposit
with such depositary, or exhibited to it, the Unregistered Securities therein
described; or such facts may be proved by the certificate or affidavit of the
Person executing such instrument or writing as a Securityholder, if such
certificate or affidavit is in form satisfactory to the Trustee. The Trustee and
the Company may assume that such ownership of any Unregistered Security
continues until (i) another certificate or affidavit bearing a later date issued
in respect of the same Unregistered Security is produced, or (ii) such
Unregistered Security is produced by some other person, or (iii) such
Unregistered Security is surrendered in exchange for a Registered Security, or
(iv) such Unregistered Security has been canceled in accordance with Section
2.10.
SECTION 7.2 Proof of Execution of Instruments. Subject to Sections
6.1 and 6.2, the execution of any instrument by a Securityholder or his agent or
proxy may be proved in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee.
SECTION 7.3 Holders to Be Treated as Owners. The Company, the
Trustee and any Agent of the Company or the Trustee may deem and treat the
person in whose name any Security shall be registered upon the Security register
for such Series as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on account of the
principal of and interest on such Security and for all other purposes; and
neither the Company nor the Trustee nor any Agent of the Company or the Trustee
shall be affected by any notice to the contrary. All such payments so made to
any such person, or upon his order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Security.
SECTION 7.4 Securities Owned by Company Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all Series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Company
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or any other obligor on the Securities with respect to which such determination
is being made or by any person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company or any other
obligor on the Securities with respect to which such determination is being made
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver
only Securities which a Responsible Officer of the Trustee actually knows are so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any other obligor on
the Securities. In case of a dispute as to such right, the advice of counsel
shall be full protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officer's Certificate listing and identifying
all Securities, if any, known by the Company to be owned or held by or for the
account of any of the above-described persons; and, subject to Sections 6.1 and
6.2, the Trustee shall be entitled to accept such Officer's Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all Series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor, irrespective of whether or not any notation in regard
thereto is made upon any such Security. Any action taken by the Holders of the
percentage in aggregate principal amount of the Securities of any or all Series,
as the case may be, specified in this Indenture in connection with such
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action shall be conclusively binding upon the Company, the Trustee and the
Holders of all the Securities affected by such action.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as in force at the date of the execution thereof)
for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities of one or more Series any property or assets;
(b) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company pursuant
to Article Nine;
(c) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as its Board of Directors and the Trustee
shall consider to be for the protection of the Holders of Securities, and to
make the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies provided in
this Indenture as herein set forth; provided, that in respect of any such
additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Event of Default or may
limit the remedies available to the Trustee upon such an Event of Default or may
limit the right of the Holders of a majority in aggregate principal amount of
the Securities of such Series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture; or to make such other provisions in regard to matters or questions
arising
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under this Indenture or under any supplemental indenture as the Board of
Directors may deem necessary or desirable and which shall not materially and
adversely affect the interests of the Holders of the Securities or the Holders
of any Coupons;
(e) to establish the form or terms of Securities of any Series as
permitted by Sections 2.1 and 2.3; or
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or more
Series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than the one trustee, pursuant to the requirements of Section
6.11.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Article Seven) of the Holders of a
majority of the aggregate principal amount of the Securities at the time
Outstanding of all Series affected by such supplemental indenture (treated as
one class), the Company, when authorized by a Board Resolution, and the Trustee
may, from time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of each such
Series; provided, that no such supplemental indenture shall (a) extend the final
maturity of any Security, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof, or reduce the amount of principal of an Original
Issue Discount Security that would be due and payable upon an acceleration of
the maturity thereof
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pursuant to Section 5.1 or the amount provable in bankruptcy pursuant to Section
5.2, or impair or affect the right of any Securityholder to institute suit for
payment thereof or, if the Securities provide therefor, any right of repayment
at the option of the Securityholder without the consent of the Holder of the
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any Series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holder of the Security so
affected.
Upon the request of the Company, accompanied by a copy of a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
as aforesaid and other documents, if any, required by Section 7.1, the Trustee
shall join with the Company in the execution of such supplemental indenture
unless such supplements indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
An amendment under this Section 8.2 or Section 8.1 may not make any
change that adversely affects the rights under Article Eleven of any holder of
Senior Indebtedness then outstanding unless the requisite holders of such Senior
Indebtedness consent to such change pursuant to the terms of such Senior
Indebtedness.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall give notice in the manner and to the extent provided in Section 12.4 to
the Holders of Securities of each Series affected thereby at their addresses as
they shall appear on the registry books of the Company, setting forth in general
terms the substance of such supplemental indenture. Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
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under this Indenture of the Trustee, the Company and the Holders of Securities
of each Series and Holders of Coupons affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee is
entitled to receive and conclusively rely on an Officer's Certificate and an
Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article Eight complies with the applicable provisions
of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any Series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear, upon the written direction of the Company, a notation in form
satisfactory to the Trustee for such Series as to any matter provided for by
such supplemental indenture or as to any action taken at any such meeting. If
the Company or the Trustee shall so determine, new Securities of any Series so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Securities of such Series then
outstanding.
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Company May Consolidate, etc., on Certain Terms. The
Company covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless (i) either the Company shall be the continuing corporation, or
the successor corporation or the Person which acquires by sale or conveyance
substantially all the assets of the Company (if other than the Company) shall be
a corporation organized under the laws of the United States of America or any
State thereof and shall expressly assume the due and punctual payment of the
principal of and interest on all the Securities, according to their tenor, and
the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed or observed by the Company, by
supplemental indenture satisfactory to the Trustee, executed and delivered to
the Trustee by such
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corporation, and (ii) the Company or such successor corporation, as the case may
be, shall not, immediately after such merger or consolidation, or such sale or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named
herein. Such successor corporation may cause to be signed, and may issue either
in its own name or in the name of the Company prior to such succession any or
all of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All of
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Company or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.
SECTION 9.3 Opinion of Counsel to Trustee. The Trustee is entitled
to receive and conclusively rely on an Opinion of Counsel, prepared in
accordance with Section 12.5, as conclusive evidence that any such
consolidation, merger, sale or conveyance, and any such assumption, and any such
liquidation or dissolution, complies with the applicable provisions of this
Indenture.
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ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at any
time (a) the Company shall have paid or caused to be paid the principal of and
interest on all the Securities of any Series and Coupons, if any, appertaining
thereto Outstanding hereunder (other than Securities and Coupons which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.9) as and when the same shall have become due and payable, or (b) the
Company shall have delivered to the Trustee for cancellation all Securities of
any Series and Coupons theretofore authenticated (other than any Securities of
such Series and Coupons which have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.9) or (c)(i) all the
Securities of such Series and Coupons not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and (ii) the Company shall have irrevocably deposited or caused
to be deposited with the Trustee as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any Paying Agent to the Company in
accordance with Section 10.4) or U.S. Government Obligations, as defined below,
maturing as to principal and interest in such amounts and at such times as will
ensure the availability of cash sufficient to pay at maturity or upon redemption
all Securities of such Series and Coupons (other than any Securities of such
Series and Coupons which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.9) not theretofore
delivered to the Trustee for cancellation, including principal and interest due
or to become due to such date of maturity as the case may be, and if, in any
such case, the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company with respect to Securities of such Series and Coupons,
then this Indenture shall cease to be of further effect with respect to
Securities of such Series and Coupons (except as to (i) rights of registration
of transfer and exchange, and the Company's right of optional redemption, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Securities and
Coupons, (iii) rights of Holders to receive payments of principal thereof and
interest thereon upon the original stated due dates therefor (but not upon
acceleration) and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) the rights, obligations and immunities of the
Trustee hereunder and (v) the rights of the Securityholders of such Series as
beneficiaries
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hereof with respect to the property so deposited with the Trustee payable to all
or any of them), and the Trustee, on demand of the Company accompanied by an
Officer's Certificate and an Opinion of Counsel and at the cost and expense of
the Company, shall execute proper instruments acknowledging such satisfaction of
and discharging this Indenture with respect to such Series; provided, that the
rights of Holders of the Securities and Holders of Coupons to receive amounts in
respect of principal of and interest on the Securities and Coupons held by them
shall not be delayed longer than required by then applicable mandatory rules or
policies of any securities exchange upon which the Securities are listed. The
Company agrees to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture, the Securities of such Series and Coupons.
(B) In addition to the provisions of Section 10.1(A), the Company
may terminate its obligations under the Securities of any Series and this
Indenture with respect to such Series, except those obligations referred to in
the penultimate paragraph of this Section 10.1, if the Company has irrevocably
deposited or caused to be deposited with the Trustee, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the Trustee,
as trust funds in trust solely for the benefit of the Securityholders of such
Series for that purpose, (i) cash or (ii) direct noncallable obligations of, or
noncallable obligations guaranteed by, the United States or an agency thereof
for the payment of which guarantee or obligation the full faith and credit of
the United States is pledged ("U.S. Government Obligations"), or a combination
thereof, maturing as to principal and interest in such amounts and at such times
as are sufficient, without consideration of any reinvestment of such principal
or interest, to pay the principal of and interest on the outstanding Securities
of such Series and Coupons to maturity or redemption, as the case may be,
provided that the Trustee shall have been irrevocably instructed to apply such
money or the proceeds of such U.S. Government Obligations to the payment of said
principal of and interest on the Outstanding Securities and Coupons of such
Series; provided that:
(a) such deposit shall not cause the Trustee with respect to the
Securities of that Series to have a conflicting interest as defined in Section
6.8 and for purposes of the Trust Indenture Act with respect to the Securities
of any Series;
(b) 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; and
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(c) no Event of Default under Section 5.1(a), 5.1(b) or 5.1(c), or
event which with the lapse of time would become an Event of Default with respect
to the Securities of that Series shall have occurred and be continuing on the
date of such deposit, and no Event of Default under Section 5.1(f) or Section
5.1(g) or event which with the giving of notice or lapse of time, or both, would
become an Event of Default under Section 5.1(f) or Section 5.1(g) shall have
occurred and be continuing on the 91st day after such date of deposit.
Such irrevocable trust agreement shall include, among other things,
provision for (1) payment of the principal of and interest on the Securities of
such Series and Coupons when due (by redemption, sinking fund payments or
otherwise), (2) the payment of the expenses, fees and disbursements of the
Trustee incurred or to be incurred in connection with carrying out such trust
provisions, (3) rights of registration, transfer, substitution and exchange of
Securities of such Series and Coupons in accordance with the terms stated in
this Indenture and (4) continuation of the rights and obligations and immunities
of the Trustee as against the Securityholders of such Series as stated in this
Indenture.
Notwithstanding the first paragraph of this Section 10.1(B), the
Company's obligations in Sections 2.8, 2.9, 3.1, 3.2, 5.1, 6.6, 6.10, 10.4 and
10.5 shall survive until the Securities of such Series and Coupons, if any, are
no longer Outstanding; provided, however, that the Company's obligations in
Section 5.1 shall survive only with respect to Events of Default as defined in
Sections 5.1(a), 5.1(b), and 5.1(c). Thereafter, the Company's obligations in
Sections 6.6, 10.4 and 10.5 shall survive.
After any such irrevocable deposit, accompanied by an Officer's
Certificate which shall state that the provisions of the first two paragraphs of
this Section 10.1(B) have been complied with, and upon delivery by the Company
to the Trustee of an Opinion of Counsel to the effect that Securityholders of
such Series will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and discharge and will be subject to
Federal income tax on the same amount and in the same manner and at the same
time as would have been the case if such deposit and discharge had not occurred,
then the Company shall be discharged of its obligations under the Securities of
such Series and this Indenture with respect to such Series except for those
surviving obligations specified above, and the Trustee upon request shall
acknowledge in writing such discharge. In addition, if the Securities of that
Series are then listed on the New York Stock Exchange, Inc., the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that such
deposit, deficience and discharge will not cause such Securities
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to be delisted. Prior to the delivery of such acknowledgment, the Trustee may
require the Company to deliver to it an Officer's Certificate and Opinion of
Counsel, each stating that all conditions precedent provided for herein relating
to the deposit and discharge contemplated by this provision have been complied
with, and the Trustee may also require that the Opinion of Counsel shall also
state that such deposit does not violate applicable law.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys deposited with the Trustee
pursuant to Section 3.8 or 10.1 shall be held in trust and applied by it to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), to the Holders of the particular Securities of
such Series and any Coupons appertaining thereto for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such money need not be
segregated from other funds except to the extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to Securities
of any Series or Coupons, all moneys then held by any Paying Agent under the
provisions of this Indenture with respect to such Series of Securities or
Coupons shall, upon demand of the Company, be repaid to it or paid to the
Trustee and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 10.4 Return of Unclaimed Moneys Held by Trustee and Paying
Agent. Any moneys deposited with or paid to the Trustee or any Paying Agent for
the payment of the principal of or interest on any Security of any Series or
Coupons and not applied but remaining unclaimed for two years after the date
upon which such principal or interest shall have become due and payable, shall,
upon the written request of the Company and unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law, be repaid to the Company by the Trustee for such Series or such Paying
Agent, and the Holder of the Security of such Series or Holders of Coupons
appertaining thereto shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Company for any payment which such Holder may be entitled to collect, and
all liability of the Trustee or any Paying Agent with respect to such moneys
shall thereupon cease.
SECTION 10.5 Reinstatement of Company's Obligations. If the Trustee
is unable to apply any funds or U.S. Government
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Obligations in accordance with Section 3.8 or 10.1 by reason of any legal
proceeding, or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities of any Series for
which such application is prohibited shall be revived and reinstated as if no
deposit had occurred pursuant to Section 3.8 or 10.1 until such time as the
Trustee is permitted to apply all such funds or U.S. Government Obligations in
accordance with Section 3.8 or 10.1; provided, however, that if the Company has
made any payment of interest on or principal of any of such Securities or
Coupons because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Securityholders of such Securities to receive
such payment from the funds or U.S. Government Obligations held by the Trustee.
ARTICLE 11
SUBORDINATION
SECTION 11.1 Securities Subordinate to Senior Indebtedness. The
Company covenants and agrees, and each Holder of a Security by such Holder's
acceptance thereof likewise covenants and agrees, that, to the extent and in the
manner hereinafter set forth in this Article Eleven, the indebtedness
represented by the Securities and the payment of any principal amount,
Redemption Price, interest and/or Original Issue Discount, if any, and any other
amounts payable as contemplated by Section 2.3 in respect of each and all of the
Securities are hereby expressly made subordinate and subject in right of payment
to the prior payment in full of all Senior Indebtedness.
"Senior Indebtedness" means the principal of (and premium, if any)
and interest on (including any interest that accrues after or would have accrued
but for the filing of a petition initiating any proceeding pursuant to any
Bankruptcy Law, regardless of whether such interest is allowed or permitted to
the holder of such Debt against the bankruptcy or any other insolvency estate of
the Company in such proceeding) and other amounts (including fees and other
amounts payable to any agent or trustee for the holders of such Debt) due on or
in connection with any Debt incurred, assumed or guaranteed by the Company,
whether outstanding on the date of the Indenture or thereafter incurred, assumed
or guaranteed and all renewals, extensions and refunding of any such Debt;
provided, however, that the following will not constitute Senior Indebtedness:
(a) any Debt if the instrument creating the same or evidencing the same or
pursuant to which the same is outstanding expressly provides (i) that such Debt
shall not be senior in right of payment to the Securities, or (ii) that such
Debt shall be subordinated to any other Debt of
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the Company, unless such instrument expressly provides that such Debt shall be
senior in right of payment to the Securities; and (b) any Debt of the Company in
respect of the Securities.
SECTION 11.2 Payment Over of Proceeds upon Dissolution, etc. Upon
any distribution of assets of the Company in the event of:
(a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or
(b) any liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or
(c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company, then and in such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made for such payment in cash, before
the Holders of the Securities are entitled to receive any payment on account of
the principal, Redemption Price, interest, if any, or any other amounts payable
as contemplated by Section 2.3 in respect of the Securities; and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, by set-off or otherwise,
to which the Holders or the Trustee would be entitled but for the provisions of
this Article Eleven, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other Debt of the Company
being subordinated to the payment of the Securities, 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 an
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
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concurrent payment or distribution to the holders of such Senior Indebtedness.
In the event that, notwithstanding the foregoing provisions of this
Section 11.2, the Trustee or the Holder of any Security shall receive any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other Debt of the Company being subordinated to the payment of the Securities,
before all Senior Indebtedness is paid in full or payment thereof provided for,
and if such fact shall then have been made known to the Trustee in writing, or,
as the case may be, such Holder, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, Custodian, assignee, agent or other
person making payment or distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Article Eleven only, the words "cash, property
or securities" shall not be deemed to include shares of Capital Stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinated, at least to the extent provided in this Article Eleven
with respect to the Securities, to the payment of all Senior Indebtedness which
may at the time be outstanding; provided, however, that (i) Senior Indebtedness
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of the Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment.
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 of its properties and assets substantially
as an entirety to another person upon the terms and conditions set forth in
Article Nine shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of the Company for the purposes of this Section 11.2 if the
corporation formed by such consolidation or into which the Company is merged or
the person which acquires by conveyance or transfer the properties and assets of
the Company substantially as an entirety, as the case may be, shall, as a part
of such consolidation, merger,
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conveyance or transfer, comply with the conditions set forth in Article Nine.
SECTION 11.3 Acceleration of Securities. In the event that any
Securities are declared due and payable before their Stated Maturity pursuant to
Section 5.1, then and in such event the Company shall promptly notify holders of
Senior Indebtedness, if any, of such acceleration. If any Senior Indebtedness
shall be Outstanding, the Company may not pay the Securities until 179 days have
passed after such acceleration occurs and may thereafter pay the Securities if
this Article Eleven permits the payment at that time.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Securities prohibited by
the foregoing provisions of this Section 11.3, and if such facts then shall have
been known or thereafter shall have been made known to the Trustee in writing as
provided in Section 11.10 or such Holder, as the case may be, pursuant to the
terms of this Indenture, then and in such event such payment shall be paid over
and delivered forthwith to the Company by or on behalf of the person holding
such payment for the benefit of the holders of Senior Indebtedness.
The provisions of this Section 11.3 shall not apply to any payment
with respect to which Section 11.2 would be applicable.
SECTION 11.4 Default on Senior Indebtedness. The Company may not
make any payment of the principal, Redemption Price, interest, if any, or any
other amount payable as contemplated by Section 2.3 in respect of the Securities
and may not acquire any Securities for cash or property (other than for Capital
Stock or other securities of the Company, provided that any such securities
which evidence any indebtedness of the Company shall be subordinated to Senior
Indebtedness to at least the same extent as provided in this Article Eleven) if:
(1) a default on Senior Indebtedness occurs and is continuing that
permits holders of such Senior Indebtedness to accelerate its maturity; and
(2) the default is the subject of judicial proceedings or the
Company receives a notice of default thereof from any person who may give such
notice pursuant to the instrument evidencing or document governing such Senior
Indebtedness. If the Company receives any such notice, then a similar notice
received within nine months thereafter relating to the same default on the same
issue of Senior Indebtedness shall not be effective for purposes of this Section
11.4.
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The Company may resume payments on the Securities and may acquire
Securities if and when:
(A) the default is cured or waived; or
(B) 179 or more days pass after the receipt by the Company of the
notice described in clause (2) above and the default is not then the subject of
judicial proceedings; and
this Article Eleven otherwise permits the payment or acquisition at
that time.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section 11.4, and if such fact taken shall have
been known or thereafter shall have been made known to the Trustee in writing or
such Holder, as the case may be, pursuant to the terms of this Indenture, then
and in such event such payment shall be paid over and delivered forthwith to the
Company by or on behalf of the person holding such payment for the benefit of
the holders of the Senior Indebtedness.
The provisions of this Section 11.4 shall not apply to any payment
with respect to which Section 11.2 would be applicable.
SECTION 11.5 Payment Permitted if No Default. Nothing contained in
this Article Eleven or elsewhere in this Indenture or in any of the Securities
shall prevent (a) the Company, at any time except during the pendency of any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of the
Company referred to in Section 11.2 or under the conditions described in Section
11.3 or 11.4, from making payments at any time of the principal, Redemption
Price, interest, if any, or any other amounts payable, as the case may be, in
respect of the Securities or (b) the application by the Trustee or the retention
by any Holder of any money deposited with it hereunder to the payment of or on
account of the principal, Redemption Price, interest, if any, or any other
amounts payable, as the case may be, in respect of the Securities if the Trustee
did not have, at the time provided in the proviso to the first paragraph of
Section 11.10, notice that such payment would have been prohibited by the
provisions of this Article Eleven.
SECTION 11.6 Subrogation to Rights of Holders of Senior
Indebtedness. Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be
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subrogated to the extent of the payments or distributions made to the holders of
such Senior Indebtedness pursuant to the provisions of this Article Eleven to
the rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities applicable to the Senior
Indebtedness until the principal, Redemption Price, interest, if any, or other
amounts payable as contemplated by Section 2.3, as the case may be, in respect
of the Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article Eleven, and no
payments pursuant to the provisions of this Article Eleven to the Company or to
the holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
SECTION 11.7 Provisions Solely to Define Relative Rights. The
provisions of this Article Eleven are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on one hand, and
the holders of Senior Indebtedness, on the other hand. Nothing contained in this
Article Eleven or elsewhere in this Indenture or in the Securities is intended
to or shall:
(a) impair, as between the Company and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal, Redemption Price and
interest, if any, or any other amount payable as contemplated by Section 2.3, as
the case may be, in respect of the Securities as and when the same shall become
due and payable in accordance with the terms of the Securities and this
Indenture and which, subject to the rights under this Article Eleven of the
holders of Senior Indebtedness, is intended to rank equally with all other
general obligations of the Company; or
(b) affect the relative rights against the Company or the Holders of
the Securities and creditors of the Company other than holders of Senior
Indebtedness; or
(c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article Eleven of the
holders of Senior Indebtedness to receive cash, property or securities otherwise
payable or deliverable to the Trustee or such Holder.
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SECTION 11.8 Trustee to Effectuate Subordination. Each Holder of a
Security by such Holder's acceptance thereof authorizes and directs the Trustee
on such Holder's behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article Eleven and appoints the
Trustee such Holder's attorney-in-fact for any and all such purposes.
SECTION 11.9 No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of, or written notice to, the Trustee or the Holders
of the Securities, without incurring responsibility to the Holders of the
Securities and without impairing or releasing the subordination provided in this
Article Eleven or the obligations hereunder of the Holders of the Securities to
the holders of Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise dispose of any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any person liable in any manner for
the collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company or any other person.
SECTION 11.10 Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the
Securities or that would permit the resumption of any such payment. Failure to
give such notice shall not affect the subordination of the Securities to Senior
Indebtedness. Notwithstanding the provisions of this Article Eleven or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities or that would permit the resumption
of any such payment, unless and until the Trustee shall have received written
notice thereof from the Company or a
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holder of Senior Indebtedness or from any trustee or agent therefor; and, prior
to the receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; provided, however, that if a
Responsible Officer of the Trustee shall not have received, at least three
Business Days prior to the date upon which by the terms hereof any such money
may become payable for any purpose (including, without limitation, the payment
of the principal, Redemption Price, interest, if any, or any other amount
payable as contemplated by Section 2.3, as the case may be, in respect of any
Security), the notice with respect to such money provided for in this Section
11.10, then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within three
Business Days prior to such date.
The Trustee shall be entitled to conclusively 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 or agent on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a trustee or agent on behalf of any such holder). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article Eleven, the Trustee may request
such person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness 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 Eleven,
and if such evidence is not furnished, the Trustee may defer any payment which
it may be required to make for the benefit of such person pursuant to the terms
of this Indenture pending judicial determination as to the right of such person
to receive such payment.
SECTION 11.11 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Company
referred to in this Article Eleven, the Trustee and the Holders of the
Securities shall be entitled to conclusively rely and shall be fully
protected in acting or refraining from acting upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding
up or similar case or proceeding is pending, or a certificate of the trustee
in bankruptcy, liquidating trustee, Custodian, receiver, assignee for the
benefit of creditors, agent or other person making such
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payment or distribution, delivered to the Trustee or to the Holders of
Securities, 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, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Eleven.
SECTION 11.12 Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness shall not be liable to any such holders if
the Trustee shall in good faith mistakenly pay over or distribute to Holders
of Securities or to the Company or to any others person cash, property or
securities to which any holders of Senior Indebtedness shall be entitled by
virtue of this Article Eleven or otherwise. The Trustee shall not be charged
with knowledge of the existence of Senior Indebtedness or of any facts that
would prohibit any payment hereunder or that would permit the resumption of
any such payment unless a Responsible Officer of the Trustee shall have
received actual notice to that effect at the address of the Trustee's
Corporate Trust Office. With respect to the holders of Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article Eleven and no implied
covenants or obligations with respect to holders of Senior Indebtedness shall
be read into this Indenture against the Trustee.
SECTION 11.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article Eleven with respect to
any Senior Indebtedness which may at any time be held by it, to the same extent
as any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article Eleven shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 6.6.
SECTION 11.14 Article Eleven Applicable to Paying Agents. In case at
any time any Paying Agent other than the Trustee shall have been appointed by
the Company and be then acting hereunder, the term "Trustee" as used in this
Article Eleven shall in such case (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this
Article Eleven in addition to or in place of the Trustee; provided, however,
that Sections
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11.10 and 11.12 shall not apply to the Company or any affiliate of the Company
if it or such affiliate acts as Paying Agent.
ARTICLE 12
MISCELLANEOUS PROVISIONS
SECTION 12.1 Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, in any Security
or Coupon appertaining thereto, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such, or against any past,
present or future stockholder, officer or director, as such of the Company or of
any successor, either directly or through the Company or any successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders thereof and as part of the consideration for the issue
of the Securities.
SECTION 12.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholders. Nothing in this Indenture or in the Securities, expressed
or implied, shall give or be construed to give to any Person, firm or
corporation, other than the parties hereto, any Paying Agent and their
successors hereunder and the Holders of the Securities and Coupons, if any, any
legal or equitable right, remedy or claim under this Indenture or under any
covenant or provision herein contained, all such covenants and provisions being
for the sole benefit of the parties hereto and their successors and of the
Holders of the Securities.
SECTION 12.3 Successors and Assigns of Company Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Company shall bind its successors and assigns,
whether so expressed or not.
SECTION 12.4 Notices and Demands on Company, Trustee and
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee, by the Holders of
Securities, or by the Holders of Coupons to or on the Company shall be in
writing and may be given or served by being deposited postage prepaid, first
class mail (except as otherwise specifically provided herein) addressed (until
another address of the Company is filed by the Company with the Trustee) to
Enhance
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Financial Services Group Inc., 335 Madison Avenue, New York, NY 10017,
Attention: General Counsel, except that any notices required or permitted to be
given under Section 5.1 hereof shall be given or served by registered or
certified mail only. Any notice, direction, request or demand by the Company or
any Securityholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if in writing and given or made at
the Trustee's Corporate Trust Office.
Where this Indenture provides for notice to Holders of any event,
(1) if any of the Securities affected by such event are Registered Securities,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed by first-class mail, postage prepaid to such
Registered Holders as their names and addresses appear in the Security register
within the time prescribed and (2) if any of the Securities affected by such
event are Unregistered Securities, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if published once in a newspaper,
in an official language of the country of publication or in English, customarily
published on each Business Day, and of general circulation in New York, New York
and London, England and in such other city or cities as may be specified in such
Securities within the time prescribed. Where successive notices are required in
respect of Unregistered Securities, such notices may be made in the same or in
different newspapers, each meeting the foregoing requirements in the same city
on successive Business Days. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver. In 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 case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Company and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
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SECTION 12.5 Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement 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 that the
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters, information with respect to which is in the
possession of the Company, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
Any certificate, statement or opinion of an officer of the Company
or of counsel may be based, insofar as it relates to
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accounting matters, upon a certificate or opinion of or representations by an
accountant or firm of accountants in the employ of the Company, unless such
officer or counsel, as the case may be, knows that the certificate or opinion or
representations with respect to the accounting matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 12.6 Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of interest on or principal or premium, if any, of the
Securities of any Series or Coupons appertaining thereto or the date fixed for
redemption or repayment of any such Security or Coupon shall not be a Business
Day, then payment of interest, principal or premium if any, need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for
redemption, and no interest shall accrue for the period after such date.
SECTION 12.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
which is required to be included herein by any of Sections 310 to 317,
inclusive, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 12.8 New York Law to Govern. THIS INDENTURE AND EACH
SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW
YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SUCH STATE.
SECTION 12.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 12.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 12.11 Determination of Principal Amount. In determining
whether the Holders of the requisite principal amount of outstanding Securities
of any Series have given any request, demand, authorization, direction, notice,
consent or waiver
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hereunder, or whether sufficient funds are available for redemption or for any
other purpose, the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding for such purposes 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 5.1 and the principal amount of any Securities denominated
in a Foreign Currency or ECU that shall be deemed to be outstanding for such
purposes shall be determined by converting the Foreign Currency or the specified
amount of each Component Currency into Dollars at the Market Exchange Rate as of
the date of such determination.
ARTICLE 13
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 13.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any Series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a Series except as otherwise specified as contemplated by Section 2.3 for
Securities of such Series.
SECTION 13.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any Series to be redeemed as a whole
or in part at the option of the Company shall be given by giving notice of such
redemption as provided in Section 12.4, at least 30 days and not more than 60
days prior to the date fixed for redemption to such Holders of Securities of
such Series. Failure to give notice by mail, or any defect in the notice to the
Holder of any Security of a Series designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security of such Series.
The notice of redemption to each such Holder shall specify the date
fixed for redemption, the redemption price, the place or places of payment, that
payment will be made upon presentation and surrender of such Securities, and
that, unless otherwise specified in such notice, Coupon Securities, if any,
surrendered for payment must be accompanied by all Coupons maturing subsequent
to the redemption date, failing which the amount of any such missing Coupon or
Coupons will be deducted from the sum due for payment, that such redemption is
pursuant to the mandatory or optional sinking fund, or both, if such be the
case, that interest accrued to the date fixed for redemption will be paid as
specified in such notice and that on and after said date interest thereon or on
the portions thereof to be redeemed
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will cease to accrue and that, if less than all of the Outstanding Securities of
a Series are to be redeemed, the identification and principal amount of the
Securities to be redeemed. In case any Security of a Series is to be redeemed in
part, the notice of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Security, a new Security or Securities of
such Series in principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities of any Series to be redeemed
at the option of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name and at the expense of the Company.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section, the Company will deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
3.4) an amount of money sufficient to redeem on the redemption date all the
Securities of such Series so called for redemption at the appropriate redemption
price, together with accrued interest to the date fixed for redemption. If less
than all the Outstanding Securities of a Series are to be redeemed, the Company
will deliver to the Trustee at least 60 days prior to the date fixed for
redemption an Officer's Certificate stating the aggregate principal amount of
Securities to be redeemed.
If less than all the Securities of a Series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such Series to be redeemed in whole in part. Securities may be
redeemed in part in multiples equal to the minimum authorized denomination for
Securities of such Series or any multiple thereof. The Trustee shall promptly
notify the Company in writing of the Securities of such Series selected for
redemption and, in the case of any Securities of such Series selected for
partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities of any Series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 13.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the
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place stated in such notice at the applicable redemption price together with
interest accrued to the date fixed for redemption, and on and after said date
(unless the Company shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue and, except as provided in Sections 6.5 and 10.4, such Securities shall
cease from and after the date fixed for redemption to be entitled to any benefit
or security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
said Securities or the specified portions thereof shall be paid and redeemed by
the Company at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that any semiannual payment
of interest on Registered Securities becoming due on the date fixed for
redemption shall be payable to the Holders of such Securities registered as such
on the relevant record date subject to the terms and provisions of Section 2.7
hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed or redemption at the rate of
interest borne by the Security.
Upon presentation of any Security redeemed in part only and the
Coupons appertaining thereto, the Company shall execute and the Trustee shall
authenticate and deliver to or on the order of the Holder thereof, at the
expense of the Company, a new Security or Securities and the Coupons
appertaining thereto, of authorized denominations, in principal amount equal to
the unredeemed portion of the Security so presented.
SECTION 13.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Company and
delivered to the Trustee at least 60 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by, either (a) the Company or (b) an entity specifically
identified in such written statement directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
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SECTION 13.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of Securities of
any Series is herein referred to as a "mandatory sinking fund payment," and any
payment in excess of such minimum amount provided for by the terms of Securities
of any Series is herein referred to as an "optional sinking fund payment." The
date on which a sinking fund payment is to be made is herein referred to as the
"sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any Series of Securities in cash, the Company may at its
option (a) deliver to the Trustee Securities of such Series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Company or receive credit for Securities of such
Series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Company and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such Series (not previously so credited)
redeemed by the Company through any optional redemption provision contained in
the terms of such Series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund redemption price specified in
such Securities.
On or before the sixtieth day next preceding each sinking fund
payment date for any Series, the Company will deliver to the Trustee an
Officer's Certificate (a) specifying the portion of the mandatory sinking fund
payment to be satisfied by payment of cash and the portion to be satisfied by
credit of Securities of such Series, (b) stating that none of the Securities of
such Series has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respect to such Series have
occurred (which have not been waived or cured) and are continuing, (d) stating
whether or not the Company intends to exercise its right to make an optional
sinking fund payment with respect to such Series and, if so, specifying the
amount of such optional sinking fund payment which the Company intends to pay on
or before the next succeeding sinking fund payment date and (e) specifying such
sinking fund payment date. Any Securities of such Series to be credited and
required to be delivered to the Trustee in order for the Company to be entitled
to credit therefor as aforesaid which have not theretofore been delivered to the
Trustee shall be delivered for cancellation pursuant to Section 2.10 to the
Trustee with such written statement (or reasonably promptly thereafter if
acceptable to the Trustee). Such written statement shall be irrevocable and upon
its receipt by the Trustee the Company shall
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become unconditionally obligated to make all the cash payments or payments
therein referred to, if any, on or before the next succeeding sinking fund
payment date. Failure of the Company, on or before any such sixtieth day to
deliver such written statement and Securities specified in this paragraph, if
any, shall not constitute a default but shall constitute, on and as of such
date, the irrevocable election of the Company (i) that the mandatory sinking
fund payment for such Series due on the next succeeding sinking fund payment
date shall be paid entirely in cash without the option to deliver or credit
Securities of such Series in respect thereof and (ii) that the Company will make
no optional sinking fund payment with respect to such Series as provided in this
Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 (or a lesser sum if the Company shall so request) with respect to
the Securities of any particular Series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
Series at the sinking fund redemption price together with accrued interest to
the date fixed for redemption. If such amount shall be $50,000 or less and the
Company makes no such request then it shall be carried over until a sum in
excess of $50,000 is available. The Trustee shall select, in the manner provided
in Section 13.2, for redemption on such sinking fund payment date a sufficient
principal amount of Securities of such Series to absorb said cash, as nearly as
may be possible, and shall (if requested in writing by the Company) inform the
Company of the serial numbers of the Securities of such Series (or portions
thereof) so selected. Securities of any Series which are identified by
registration and certificate number in an Officer's Certificate at least 60 days
prior to the sinking fund payment date as being beneficially owned by, and not
pledged or hypothecated by, the Company or an entity directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company shall be excluded from Securities of such Series eligible for selection
for redemption. The Trustee, in the name and at the expense of the Company (or
the Company, if it shall so notify the Trustee in writing) shall cause notice of
redemption of the Securities of such Series to be given in substantially the
manner provided in Section 13.2 (and with the effect provided in Section 13.3)
for the redemption of Securities of such Series in part at the option of the
Company. The amount of any sinking fund payments not so applied or allocated to
the redemption of Securities of such Series shall be added to the next cash
sinking fund payment for such Series and, together with such payment, shall be
applied in accordance with the provisions of this Section. Any and all sinking
fund moneys
101
<PAGE>
held on the stated maturity date of the Securities of any particular Series (or
earlier, if such maturity is accelerated), which are not held for the payment or
redemption of particular Securities of such Series shall be applied, together
with other moneys, if necessary, sufficient for the purpose, to the payment of
the principal of, and interest on, the Securities of such Series at maturity.
On or before each sinking fund payment date, the Company shall pay to the
Trustee in cash or shall otherwise provide for the payment of all interest
accrued to the date fixed for redemption on Securities to be redeemed on such
sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities
of a Series with sinking fund moneys or mail or publish any notice of redemption
of Securities for such Series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default except that, where the mailing or publication of notice of
redemption of any Securities shall theretofore have been made, the Trustee shall
redeem or cause to be redeemed such Securities, provided that it shall have
received from the Company a sum sufficient for such redemption. 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 the sinking fund, shall, during the continuance of such default or Event of
Default, be deemed to have been collected under Article Five and held for the
payment of all such Securities. In case such Event of Default shall have been
waived as provided in Section 5.10 or the default cured on or before the
sixtieth day preceding the sinking fund payment date in any year, such moneys
shall thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Securities.
102
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereto affixed and
attested, all as of the day and year first above written.
ATTEST ENHANCE FINANCIAL SERVICES
GROUP INC.
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
[CORPORATE SEAL]
ATTEST: The Chase Manhattan Bank,
as Trustee
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
[CORPORATE SEAL]
103
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __th day of ____________ 1998, before me personally came
____________, to me personally known, who, being by me duly sworn, did depose
and say that he resides at ____________, ____________; that he is the _________
of Enhance Financial Services Group Inc., one of the corporations described in
and which executed the above instrument; that he knows the corporate 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.
[NOTARIAL SEAL]
----------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __th day of __________ 1998 , before me personally came ___________, to
me personally known, who, being by me duly sworn, did depose and say that he
resides at ______________; that he is a _____________ of ________________, one
of the corporations described in and which executed the above instrument; that
he knows the corporate 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.
[NOTARIAL SEAL]
----------------------------
Notary Public
104
<PAGE>
Exhibit A-1
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY]
CERTIFICATE
ENHANCE FINANCIAL SERVICES GROUP INC.
[Description of Securities to be delivered]
This is to certify that the above-captioned Securities are not being
acquired by or on behalf of a United States Person or by persons who have
purchase such Securities for offer to resell or resale to any U.S. Persons or
any person in the United States or, if a beneficial interest in the Securities
is being acquired by or on behalf of a United States Person, that such person is
a financial institution within the meaning of Section 1.1.65-12(c)(1)(v) of the
United States Treasury regulations which agrees to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder and which is not purchasing for offer to
resell or resale inside the United States. If the undersigned is a dealer, the
undersigned agrees to obtain a similar certificate from each person entitled to
delivery of any of the above-captioned Securities in bearer form purchased from
it; provided, however, that if the undersigned has actual knowledge that the
information contained in such a certificate is false, the undersigned will not
deliver a Security in temporary or definitive bearer form to the person who
signed such certificate notwithstanding the delivery of such certificate to the
undersigned.
As used herein, "United States Person" means any citizen or resident
of the United States of America (including the States an the District of
Columbia) and its territories, its possessions and all areas subject to its
jurisdiction ("United States"), including any corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof and any estate or trust which is subject to United
States federal income taxation regardless of the source of its income.
We undertake to advise you by telex if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Securities in bearer form as to all of such Securities.
A-1-1
<PAGE>
We understand that this certificate is required in connection with
United States securities and tax laws. We irrevocably authorize you to produce
this certificate or a copy hereof to any interested party in any administrative
or legal proceedings or official inquiry with respect to the matters covered by
this certificate.
Dated: ____________, 19__
[To be dated on or after
____________, 19__ (the date
determined pursuant to the
Indenture)]
[Name of person entitled to
receive Security]
By:
---------------------------
A-1-2
<PAGE>
Exhibit A-2
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE
OF A PORTION OF A TEMPORARY GLOBAL SECURITY]
CERTIFICATE
ENHANCE FINANCIAL SERVICES GROUP INC.
[Description of Securities to be delivered]
This is to certify with respect to $ principal amount of the above-captioned
Securities (i) that we have received from each of the persons appearing in our
records as persons being entitled to a portion of such principal amount (our
"Qualified Account Holders") a certificate with respect to such portion
substantially in the form attached hereto and (ii) that we are not submitting
herewith for exchange any portion of the temporary global Security representing
the above-captioned Securities excepted in such certificate or certificates.
We further certify that as of the date hereof we have not received any
notification from any of our Qualified Account Holders to the effect that the
statements made by such Qualified Account Holders with respect to any portion of
the part of the Global Security submitted herewith for exchange are no longer
true and cannot be relied upon as of the date hereof.
Dated: 19__
(To be dated no earlier than
the Exchange Date)
[MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, Brussels Office, as
Operator of the Euro-clear System]
[CEDEL S.A.]
By:
--------------------------------
<PAGE>
Exhibit A-3
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL S.A. TO OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
ENHANCE FINANCIAL SERVICES GROUP INC.
[Description of Securities on which interest is to be paid]
This is to certify with respect to the above-captioned Securities or, with
respect to payments on any global security representing Securities, the
principal amount of any global security listed below that we have received from
each of the persons appearing in our records as persons being entitled to
receive payments with respect thereto (our "Qualified Account Holders") a
certificate with respect to such Qualified Account Holders substantially in the
form attached hereto.
We further certify that as of the date hereof we have not received any
notification from any of our Qualified Account Holders to the effect that the
statements made by such Qualified Account Holders with respect to any Security
or interest in any global security listed above are no longer true and cannot be
relied upon as of the date hereof.
Dated: ______________, 19__
(To be dated no earlier than the
relevant Interest Payment Date)
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
Brussels Office, as Operator of the
Euro-clear System]
[CEDEL S.A.]
By:
------------------------------------
<PAGE>
Exhibit A-4
CERTIFICATE
[FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS
TO OBTAIN INTEREST PRIOR TO ANY EXCHANGE DATE)
ENHANCE FINANCIAL SERVICES GROUP INC.
[Description of Securities on which interest is to be paid]
This is to certify that as of the Interest Payment Date on (Insert Date)and
except as provided in the second paragraph hereof, none of the above-captioned
Securities held by you for our account or any interest in any global security
representing the such Securities was beneficially owned by a United States
Person (as defined below) or by persons who have purchased such Securities for
offer to resell or resale to any United States Persons or any person in the
United States or, if any of such Securities held by you for our account were
beneficially owned by a United States Person, such United States Person either
provided an Internal Revenue Service Form W-9 with respect to such interest
payment or certified with respect to such interest payment that it was an exempt
recipient as defined in Section 1.6049-4(c)(1)(ii) of the United States Treasury
regulations.
This certificate excepts and does not relate to $______ principal amount of the
above-captioned Securities or an interest in a global security representing the
Securities appearing in your books as being held for our account as to which we
are not yet able so to certify and as to which we understand that we cannot
receive any payments with respect thereto until we are able so to certify.
We understand that this certificate is required in connection with United States
tax laws. We irrevocably authorize you to produce this certificate or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered by this certificate.
As used herein, "United States Person" means any citizen or resident of the
United States of America (including the States and the District of Columbia),
its territories and possessions an all areas subject to its jurisdiction
("United States"), including any corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof and any estate or trust which is subject to United States
federal income taxation regardless of the source of its income.
A-4-1
<PAGE>
(Name of person entitled to
receive interest)
By:
-----------------------------------
Dated: ______________, 19__
(To be dated on or after the
15th day before the relevant
Interest Payment Date)
A-4-2
<PAGE>
A-4-3
<PAGE>
EXHIBIT 5
March 13, 1998
Enhance Financial Services Group Inc.
335 Madison Avenue
New York, New York 10017
Ladies and Gentlemen:
I am General Counsel of Enhance Financial Services Group Inc., a New York
corporation (the "Company"), and I am rendering this opinion in connection with
the Registration Statement on Form S-3 with exhibits thereto (as it may be
amended by a Prospectus Supplement, the "Registration Statement") filed by the
Company under the Securities Act of 1933 (the "Act"), relating to the
registration of the Company's Debt Securities (the "Debt Securities") and Common
Stock, par value $.10 per share ("Common Stock").
As such counsel, I have participated in the preparation of the Registration
Statement and have reviewed the corporate proceedings in connection with the
issuance of the Securities. I have also examined and relied upon originals or
copies, certified or otherwise authenticated to my satisfaction, of all such
corporate records, documents, agreements, and instruments relating to the
Company, and certificates of public officials and of representatives of the
Company, and have made such investigations of law, and have discussed with
representatives of the Company and such other persons such questions of fact, as
I have deemed proper and necessary as a basis for the rendering of this opinion.
Based upon, and subject to, the foregoing, I am of the opinion that:
(i) the Debt Securities, when duly executed by the Company,
authenticated by the trustee pursuant to the terms of the related Indenture
and sold in accordance with the terms set forth in the Registration
Statement, will be duly authorized and legally issued and will constitute
binding obligations of the Company entitled to the benefits of the related
Indenture in accordance with their terms, subject as to their binding nature
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and subject to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding in law or in equity); and
(ii) the Common Stock registered pursuant to the Registration Statement,
when issued and sold in accordance with the terms set forth in the
Registration Statement, will be duly authorized, validly issued, fully paid
and non-assessable.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving the foregoing consent, I do not admit that
I am in the category of persons whose consent is required under Section 7 of
the Act, or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
Very truly yours,
/s/ Samuel Bergman
<PAGE>
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
AT DECEMBER 31, AT SEPTEMBER 30,
----------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
Pre-Tax earnings............................... $ 50,203 $ 55,519 $ 38,479 $ 69,478 $ 82,572 $ 56,635 $ 70,680
Fixed Charges:
Interest Expense............................... 754 5,235 5,820 5,638 6,182 4,080 5,287
1/3 of rental payments under operating
leases....................................... 0 0 0 0 0 0 0
--------- --------- --------- --------- --------- --------- ---------
Total Fixed Charges............................ 754 5,235 5,820 5,638 6,182 4,080 5,287
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Ratio.......................................... 66.6x 10.6x 6.6x 12.3x 13.4x 13.9x 13.4x
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>
- - For purposes of calculating the ratio of earnings to fixed charges, "Pre-tax
earnings" consist of income before income taxes and extraordinary items plus
fixed charges.
- - For purposes of calculating the ratio of earnings to fixed charges, "Fixed
Charges" consist of interest expense incurred, capitalized interest,
amortization of debt expense and 1/3 of rental payments under operating
leases (an amount estimated to be the interest component of such rentals).
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement
on Form S-3 of Enhance Financial Services Group Inc. of our report dated March
3, 1997, appearing in the Annual Report on Form 10-K of Enhance Financial
Services Group Inc. and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
<TABLE>
<CAPTION>
<S> <C>
New York, New York DELOITTE & TOUCHE LLP
March 12, 1998
</TABLE>
<PAGE>
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
---------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
---------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
---------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------
Enhance Financial Services Group Inc.
(Exact name of obligor as specified in its charter)
New York 13-3333448
(State or other jurisdiction o (I.R.S. employer
incorporation or organization) identification No.)
335 Madison Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
---------------------
Senior Debt Securities
<PAGE>
GENERAL
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.
New York State Banking Department, State House, Albany,
New York 12110.
Board of Governors of the Federal Reserve System,
Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980,
September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see
Exhibit 1 to Form T-1 filed in connection with Registration Statement No.
333-06249, which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which
is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement
No. 33-50010, which is incorporated by reference.
2
<PAGE>
On July 14, 1996, in connection with the merger of Chemical Bank and The
Chase Manhattan Bank (National Association), Chemical Bank, the surviving
corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, 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 12th
day of February, 1998.
THE CHASE MANHATTAN BANK
By /s/Gemmel Richards
--------------------------------
Gemmel Richards, Trust Officer
3
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar
Amounts
in Millions
-----------
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin...... $ 12,428
Interest-bearing balances............................... 3,428
Securities:...............................................
Held to maturity securities............................... 2,561
Available for sale securities............................. 43,058
Federal funds sold and securities purchased under
agreements to resell..................................... 29,633
Loans and lease financing receivables:
Loans and leases, net of unearned income................ 129,260
Less: Allowance for loan and lease losses............... 2,783
Less: Allocated transfer risk service................... 0
---------
Loans and leases, net of unearned income,
allowance, and reserve................................. 126,477
Trading Assets............................................ 62,575
Premises and fixed assets (including capitalized leases).. 2,943
Other real estate owned................................... 295
Investments in unconsolidated subsidiaries and
Associated companies..................................... 231
Customers' liability to this bank on acceptances
outstanding.............................................. 1,698
Intangible assets......................................... 1,466
Other assets.............................................. 10,268
---------
TOTAL ASSETS.............................................. $ 297,061
---------
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dollar
Amounts
in Millions
-----------
<S> <C>
LIABILITIES
Deposits
In domestic offices..................................... $ 94,524
Noninterest-bearing..................................... $ 39,487
Interest-bearing........................................ 55,037
In foreign offices, Edge and Agreement
subsidiaries, and IBF's................................ 71,162
Noninterest-bearing..................................... 3,205
Interest-bearing........................................ 67,957
Federal funds purchased and securities sold under
agreements to repurchase................................. 43,181
Demand notes issued to the U.S. Treasury.................. 1,000
Trading liabilities....................................... 48,903
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less........... 3,599
With a remaining maturity of more than one year
through three years.................................... 253
With a remaining maturity of more than three years...... 132
Bank's liability on acceptances executed and outstanding.. 1,698
Subordinated notes and debentures......................... 5,715
Other liabilities......................................... 9,896
TOTAL LIABILITIES......................................... 280,063
---------
EQUITY CAPITAL
Perpetual preferred stock and related surplus............. --0--
Common stock.............................................. 1,211
Surplus (exclude all surplus related to preferred stock).. 10,291
Undivided profits and capital reserve..................... 5,502
Net unrealized holding gains (losses) on
available-for-sale securities........................... (22)
Cumulative foreign currency translation adjustment........ 16
TOTAL EQUITY CAPITAL...................................... 16,998
---------
TOTAL LIABILITIES AND EQUITY CAPITAL...................... $ 297,061
---------
---------
</TABLE>
2
<PAGE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do
hereby declare that this Report of Condition has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory authority
and is true to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness Of this Report
of Condition and declare that it has been examined by us, and to the best of
our knowledge and belief has been prepared in conformance with the
in-structions issued by the appropriate Federal regulatory authority and is
true and correct.
WALTER V. SHIPLEY
THOMAS G. LABRECQUE DIRECTORS
WILLIAM B. HARRISON, JR.
3
<PAGE>
Exhibit 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
---------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
---------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
---------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------
Enhance Financial Services Group Inc.
(Exact name of obligor as specified in its charter)
New York 13-3333448
(State or other jurisdiction o (I.R.S. employer
incorporation or organization) identification No.)
335 Madison Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
---------------------
Subordinated Debt Securities
<PAGE>
GENERAL
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.
New York State Banking Department, State House, Albany,
New York 12110.
Board of Governors of the Federal Reserve System,
Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980,
September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see
Exhibit 1 to Form T-1 filed in connection with Registration Statement No.
333-06249, which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which
is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement
No. 33-50010, which is incorporated by reference.
2
<PAGE>
On July 14, 1996, in connection with the merger of Chemical Bank and The
Chase Manhattan Bank (National Association), Chemical Bank, the surviving
corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, 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 12th
day of February, 1998.
THE CHASE MANHATTAN BANK
By /s/Gemmel Richards
--------------------------------
Gemmel Richards, Trust Officer
3
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar
Amounts
in Millions
-----------
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin...... $ 12,428
Interest-bearing balances............................... 3,428
Securities:...............................................
Held to maturity securities............................... 2,561
Available for sale securities............................. 43,058
Federal funds sold and securities purchased under
agreements to resell..................................... 29,633
Loans and lease financing receivables:
Loans and leases, net of unearned income................ 129,260
Less: Allowance for loan and lease losses............... 2,783
Less: Allocated transfer risk service................... 0
---------
Loans and leases, net of unearned income,
allowance, and reserve................................. 126,477
Trading Assets............................................ 62,575
Premises and fixed assets (including capitalized leases).. 2,943
Other real estate owned................................... 295
Investments in unconsolidated subsidiaries and
Associated companies..................................... 231
Customers' liability to this bank on acceptances
outstanding.............................................. 1,698
Intangible assets......................................... 1,466
Other assets.............................................. 10,268
---------
TOTAL ASSETS.............................................. $ 297,061
---------
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dollar
Amounts
in Millions
-----------
<S> <C>
LIABILITIES
Deposits
In domestic offices..................................... $ 94,524
Noninterest-bearing..................................... $ 39,487
Interest-bearing........................................ 55,037
In foreign offices, Edge and Agreement
subsidiaries, and IBF's................................ 71,162
Noninterest-bearing..................................... 3,205
Interest-bearing........................................ 67,957
Federal funds purchased and securities sold under
agreements to repurchase................................. 43,181
Demand notes issued to the U.S. Treasury.................. 1,000
Trading liabilities....................................... 48,903
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less........... 3,599
With a remaining maturity of more than one year
through three years.................................... 253
With a remaining maturity of more than three years...... 132
Bank's liability on acceptances executed and outstanding.. 1,698
Subordinated notes and debentures......................... 5,715
Other liabilities......................................... 9,896
TOTAL LIABILITIES......................................... 280,063
---------
EQUITY CAPITAL
Perpetual preferred stock and related surplus............. --0--
Common stock.............................................. 1,211
Surplus (exclude all surplus related to preferred stock).. 10,291
Undivided profits and capital reserve..................... 5,502
Net unrealized holding gains (losses) on
available-for-sale securities........................... (22)
Cumulative foreign currency translation adjustment........ 16
TOTAL EQUITY CAPITAL...................................... 16,998
---------
TOTAL LIABILITIES AND EQUITY CAPITAL...................... $ 297,061
---------
---------
</TABLE>
2
<PAGE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do
hereby declare that this Report of Condition has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory authority
and is true to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness Of this Report
of Condition and declare that it has been examined by us, and to the best of
our knowledge and belief has been prepared in conformance with the
in-structions issued by the appropriate Federal regulatory authority and is
true and correct.
WALTER V. SHIPLEY
THOMAS G. LABRECQUE DIRECTORS
WILLIAM B. HARRISON, JR.
3
