<PAGE>
As filed with the Securities and Exchange Commission on August 22, 1997
Registration No. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
(Exact name of registrant as specified in its charter)
New York 13-3261323
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
350 Park Avenue
New York, NY 10022
(212) 826-0100
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
------------------------
Bruce E. Stern, Esq.
General Counsel and Secretary
Financial Security Assurance Holdings Ltd.
350 Park Avenue
New York, New York 10022
(212) 826-0100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
Copies to:
William H. Widen, Esq.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019-7475
------------------------
Approximate date of commencement of proposed sale to public: From time to
time after the effective date of this registration statement, as determined by
market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, 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. / /
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
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- -----------------------------------------------------------------------------------------------
<CAPTION>
Proposed
Maximum Proposed
Title of Each Class of Offering Maximum Amount of
Securities to be Amounts to be Price Aggregate Registration
Registered Registered(1)(2) Per Unit(3) Offering Price Fee
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Debt Securities
Common Stock
TOTAL................. $250,000,000 100% $250,000,000 $75,757.58
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- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Includes such indeterminate principal amount of Debt Securities and such
indeterminate number of Shares of Common Stock, as may from time to time be
issued at indeterminate prices.
(2) In United States dollars or the equivalent thereof in one or more foreign
denominated currencies or currency units if Debt Securities are issued with
principal amounts denominated in one or more foreign or composite currencies
as shall be designated by the Company.
(3) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933 and exclusive
of accrued interest and dividends, if any.
------------------------
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>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
SUBJECT TO COMPLETION DATED , 1997
PRELIMINARY PROSPECTUS
US $250,000,000
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Debt Securities
Common Stock
Financial Security Assurance Holdings Ltd., a New York corporation (the
"Company"), may offer from time to time (a) its unsecured debt securities, in
one or more series, which may be either senior debt securities (the "Senior Debt
Securities") or subordinated debt securities (the "Subordinated Debt Securities"
and, together with the Senior Debt Securities, the "Debt Securities"); and (b)
shares of its Common Stock, par value $.01 per share (the "Common Stock"). The
Debt Securities and Common Stock (collectively, the "Securities") will be
offered in amounts, at prices and on terms to be determined at the time any such
Securities are to be offered. The Securities will have an aggregate initial
offering price of up to $250,000,000 or the equivalent thereof in U.S. dollars
if any Securities are denominated in a foreign currency or in currency units.
Specific terms of the particular Debt Securities in respect of which this
Prospectus is being delivered will be set forth in an accompanying Prospectus
Supplement (the "Prospectus Supplement"), which will describe, without
limitation and where applicable, the following: (a) in the case of the Debt
Securities, the specific designation, aggregate principal amount, denominations,
maturity, premium, if any, interest rate (which may be fixed or variable) or
method of calculation of interest and premium, if any, place or places where
principal, premium, if any, and interest will be payable, any terms of
redemption, any sinking fund provisions, terms for any conversion or exchange
into other Securities, initial public offering or purchase price, methods of
distribution and other special terms, and (b) in the case of Common Stock, the
number of shares offered, initial public offering or purchase price, methods of
distribution and other special terms.
The Prospectus Supplement will also contain information, as applicable,
about certain United States Federal income tax considerations relating to the
Securities.
The Securities may be sold to or through underwriters, through dealers or
agents or directly to purchasers. See "Plan of Distribution". The names of any
underwriters, dealers or agents involved in the sale of Securities in respect of
which this Prospectus is being delivered and any applicable fee, commission or
discount arrangements with them will be set forth in the Prospectus Supplement.
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.
----------
The date of this Prospectus is , 1997
<PAGE>
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. The securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER
OF INSURANCE FOR THE STATE OF NORTH CAROLINA, NOR HAS THE COMMISSIONER RULED
UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT.
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and the applicable Prospectus
Supplement, and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or any agent,
underwriter or dealer. This Prospectus and the Prospectus Supplement do not
constitute an offer to sell or a solicitation of an offer to buy any securities
to which they relate in any jurisdiction in which it is unlawful to make such an
offer or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof.
AVAILABLE INFORMATION
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, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports and proxy
and information statements and other information concerning the Company may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549
and at the following regional offices of the Commission: Northwestern Atrium
Center, 500 West Madison Street, Chicago, Illinois 60661, 14th Floor, and Seven
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549,
at prescribed rates, or may be viewed by visiting the Commission's web site at
http://www.sec.gov. Reports, proxy statements and other information concerning
the Company may also be inspected at the offices of the New York Stock Exchange,
Inc. at 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act")
with respect to the securities offered hereby. This Prospectus does not contain
all 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. In addition, certain documents filed by the Company with the
Commission have been incorporated by reference in this Prospectus. See
"Incorporation of Certain Documents by Reference." Statements contained herein
concerning the provisions of any document do not purport to be complete, and in
each instance are qualified in all respects by reference to the copy of such
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein 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 each of the first
two calendar quarters of 1997.
(3) The description of the Common Stock of the Company contained in the
Company's Registration Statement on Form 8-A declared effective by the
Commission on May 6, 1994, and any amendment or report filed for the purpose
of updating such description.
Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Prospectus, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference (other
than exhibits to such documents unless such exhibits are specifically
incorporated by reference into the foregoing documents). Any such request should
be directed to: Bruce E. Stern, Esq., Financial Security Assurance Holdings
Ltd., 350 Park Avenue, New York, New York 10022 (telephone: (212) 826-0100).
THE COMPANY
Financial Security Assurance Holdings Ltd. (the "Company"), through its
wholly owned subsidiary, Financial Security Assurance Inc. ("FSA"), is primarily
engaged in the business of providing financial guaranty insurance on
asset-backed securities and municipal bonds. FSA was the first insurance company
organized to insure asset-backed obligations and has been a leading insurer of
asset-backed obligations (based on number of transactions insured) since its
inception in 1985. FSA expanded the focus of its business in 1990 to include
financial guaranty insurance of municipal obligations. For the six months ended
June 30, 1997, FSA had gross premiums written of $132.1 million, of which 49%
related to insurance of asset-backed obligations and 51% related to insurance of
municipal obligations. At June 30, 1997, FSA had net insurance in force of
$102.5 billion, of which 69% represented insurance of municipal obligations and
31% represented insurance of asset-backed obligations.
Financial guaranty insurance written by FSA typically guarantees scheduled
payments on an issuer's obligations. In the case of a payment default on an
insured obligation, FSA is generally required to pay the principal, interest or
other amounts due in accordance with the obligations' original payment schedule
or, at its option, to pay such amounts on an accelerated basis. FSA's
underwriting policy is to insure asset-backed and municipal obligations that
would otherwise be investment grade without the benefit of FSA's insurance. The
asset-backed obligations insured by FSA are generally issued in structured
transactions backed by pools of assets such as residential mortgage loans,
consumer or trade receivables, securities or other assets having an
ascertainable cash flow or market value. The municipal obligations insured by
FSA consist primarily of general obligation bonds supported by the issuers'
taxing power and special revenue bonds and other special obligations of state
and local governments supported by the issuers' ability to impose and collect
fees and charges for public services or specific projects.
The Company's business objective is to remain a leading insurer of
asset-backed obligations and to become a more prominent insurer of municipal
obligations. The Company's acquisition of Capital Guaranty Corporation
("Capital Guaranty") in December 1995 increased the Company's presence in the
insured
3
<PAGE>
municipal bond sector. The Company believes that the demand for its
financial guaranty insurance will grow over the long term in response to
anticipated growth in insured asset-backed and municipal obligations. The
Company expects continued growth in the insurance of asset-backed obligations,
due in part to the continued expansion of asset securitization outside of the
residential mortgage sector. In the long term, the Company also expects
continued growth in the insurance of municipal obligations, due in part to
increased issuance of municipal bonds to finance repairs and improvements to the
nation's infrastructure and increased municipal bond purchases by individuals
who generally purchase insured obligations. In addition the percentage of new
domestic municipal bond volume which is insured has increased each year since
1986, to 46% for the year ending 1996 according to published sources. The
company maintains offices in New York City, San Francisco, Dallas, London,
Paris, Madrid and Sydney, and expects soon to open an office in Singapore. In
addition to its domestic business, the Company pursues international
opportunities and currently operates in the European and Pacific Rim markets.
The Company was the first financial guaranty insurance company to insure
obligations in international markets.
The Company expects to continue to emphasize a diversified insured portfolio
characterized by insurance of both asset-backed and municipal obligations, with
a broad geographic distribution and a variety of revenue sources and transaction
structures.
The claims-paying ability of FSA is rated "Aaa" by Moody's Investors
Service, Inc. and "AAA" by Standard & Poor's Ratings Services ("S&P"), Fitch
Investors Service, L.P., Nippon Investors Services and S&P (Australia) Pty. Ltd.
FSA is licensed to engage in the financial guaranty insurance business in
all 50 states, the District of Columbia and Puerto Rico.
The principal executive offices of the Company are located at 350 Park
Avenue, New York, New York 10022. The telephone number at that location is (212)
826-0100.
USE OF PROCEEDS
Unless otherwise stated in the applicable Prospectus Supplement, the net
proceeds to the Company from the sale of the Securities will be used for general
corporate purposes of the Company.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the periods indicated. Earnings represent consolidated income
before income taxes and fixed charges. Fixed charges consist of interest and
one-third of rental expense which is deemed representative of the interest
factor for such rental expense. The ratio for 1993 is considered not
meaningful because of the significant loss incurred by the Company in that
year. The Company had no capitalized interest for the periods presented.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
----------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
Ratio of earnings to fixed charges..... 31.1 N/M 51.2 70.0 35.2 32.7 39.5
</TABLE>
4
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities offered hereby are to be issued in one or more
series under a Senior Indenture, as supplemented from time to time (as so
supplemented, the "Senior Indenture"), between the Company and a trustee to be
named in the applicable Prospectus Supplement (the "Senior Indenture
Trustee"). The Subordinated Debt Securities offered hereby are to be issued in
one or more series under a Subordinated Indenture, as supplemented from time
to time (as so supplemented, the "Subordinated Indenture" and, together with
the Senior Indenture, the "Indentures"), between the Company and a trustee to
be named in the applicable Prospectus Supplement (the "Subordinated Indenture
Trustee" and, together with the Senior Indenture Trustee, the "Trustees").
Copies of the Senior Indenture and the form of the Subordinated Indenture have
been filed as exhibits to the Registration Statement of which this Prospectus
forms a part.
The statements herein relating to the Debt Securities and the following
summaries of certain provisions of the Indentures do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indentures (as they may be amended or supplemented from time
to time) and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). Whenever particular sections or defined terms of the Indentures (as they
may be amended or supplemented from time to time) are referred to herein or in a
Prospectus Supplement, such sections or defined terms are incorporated herein or
therein by reference.
General
The Debt Securities will be direct and unsecured obligations of the Company.
The Senior Debt Securities will rank equally and ratably with all other
unsecured and unsubordinated obligations of the Company. The Subordinated Debt
Securities will be subordinate and junior in right of payment to the extent and
in the manner set forth in the Subordinated Indenture to all Senior Debt (as
defined below) of the Company. See "-Subordination under the Subordinated
Indenture". As a non-operating holding company, most of the assets of the
Company are owned by the Company's subsidiaries, and the Company relies
primarily on dividends or other payments from such subsidiaries to meet its
obligations for payment of principal and interest on its outstanding debt
obligations. Accordingly, the Debt Securities will be effectively subordinated
to all existing and future liabilities of the Company's subsidiaries. In
addition, the payment of dividends or other amounts by the Company's insurance
company subsidiary, Financial Security Assurance Inc., is limited under the
applicable insurance laws and regulations of the State of New York. The
Indentures do not limit the aggregate amount of Debt Securities that may be
issued thereunder. Except as otherwise provided in the applicable Prospectus
Supplement, the Indentures, as they apply to any series of Debt Securities, do
not limit the incurrence or issuance of other secured or unsecured debt of the
Company, whether under either of the Indentures or any other indenture that the
Company may enter into in the future or otherwise.
The Debt Securities will be issuable in one or more series pursuant to an
indenture supplemental to the Senior Indenture or the Subordinated Indenture, as
the case may be, or in accordance with a resolution of the Company's Board of
Directors or a committee thereof.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Debt Securities (to the extent such terms
are applicable to such Debt Securities): (1) the title of the Debt Securities;
(2) any limit upon the aggregate principal amount of the Debt Securities; (3)
the date or dates on which the principal of the Debt Securities is payable;
(4) the rate or rates, if any, at which the Debt Securities shall bear
interest, the interest payment dates on which any such interest shall be
payable, the right, if any, of the Company to defer or extend an interest
payment date, or the method by which any of the foregoing shall be determined;
(5) the place or places where, subject to the terms of the Indenture, the
principal of and premium, if any, and interest on the Debt Securities will be
payable; (6) any period or periods within or date or dates on which, the price
or prices at which and the terms and conditions upon which Debt Securities may
be redeemed, in whole or in part, at the option of the Company pursuant to any
sinking fund or otherwise; (7) the obligation, if any, of the Company to
redeem, purchase or repay the Debt Securities pursuant to any sinking fund,
amortization or analogous provisions or at the option of a Holder thereof and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which and the other terms
and conditions upon which the Debt Securities shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation; (8) the
denominations in which any Debt Securities shall be issuable if other than
denominations of $1,000 and any integral multiple thereof; (9) if other than
in U.S. Dollars, the currency or currencies (including currency unit or units)
in which the principal of (and premium, if any) and interest, if any, on the
Debt Securities shall be payable, or in which the Debt Securities
5
<PAGE>
shall be denominated; (10) any additions, modifications or deletions, in the
Events of Default or covenants of the Company specified in the Indenture with
respect to the Debt Securities; (11) if other than the principal amount
thereof, the portion of the principal amount of Debt Securities that shall be
payable upon declaration of acceleration of the maturity thereof; (12) any
index or indices used to determine the amount of payments of principal of and
premium, if any, on the Debt Securities and the manner in which such amounts
will be determined; (13) the issuance of a temporary Global Security
representing all of the Debt Securities of such series and exchange of such
temporary Global Security for definitive Debt Securities of such series; (14)
whether the Debt Securities of the series shall be issued in whole or in part
in the form of one or more Global Securities and, in such case, the Depositary
for such Global Securities, and the circumstances under which any such
Registered Global Security may be registered for transfer or exchange, or
authenticated and delivered, in the name of a Person other than such
Depositary or its nominee, if other than as set forth in the Indentures; (15)
the appointment of any paying agent, transfer agent or registrars; (16) the
terms and conditions of any obligation or right of the Company to convert or
exchange the Subordinated Debt Securities into other Securities or at the
option of a Holder thereof; (17) the relative degree, if any, to which the
Debt Securities of any series shall be senior to or subordinated to other
series of Debt Securities in right of payment, whether such other series of
Debt Securities are outstanding or not; and (18) any other terms of the Debt
Securities not inconsistent with the provisions of the Indentures. (Section
2.03).
Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Certain federal income tax consequences and
special considerations applicable to any such Debt Securities will be described
in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is payable in one or
more foreign currencies or currency units or if any Debt Securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any Debt Securities is
payable in one or more foreign currencies or currency units, the restrictions,
elections, certain federal income tax considerations, specific terms and other
information with respect to such issue of Debt Securities and such foreign
currency or currency units will be set forth in the applicable Prospectus
Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of Debt Securities, special federal
income tax, accounting and other considerations applicable thereto will be
described in the applicable Prospectus Supplement.
Denominations, Registration, Payment and Transfer
Unless otherwise specified in the applicable Prospectus Supplement, the Debt
Securities will be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. Debt Securities of
any series will be exchangeable for other Debt Securities of the same issue and
series, of any authorized denominations, of a like aggregate principal amount.
Debt Securities may be presented for exchange as provided above, and may
be presented for registration of transfer (with the form of transfer endorsed
thereon, or a satisfactory written instrument of transfer, duly executed), at
the office of the registrar or at the office of any transfer agent designated
by the Company for such purpose with respect to any series of Debt Securities
and referred to in an applicable Prospectus Supplement, without service charge
and upon payment of any taxes and other governmental charges as described in
the Indenture. The Company will appoint the Trustees as registrars under the
Indentures. If the applicable Prospectus Supplement refers to any transfer
agents or paying agents (in addition to the registrar) initially designated by
the Company with respect to any series of Debt Securities, the Company may at
any time rescind the designation of any such transfer agent or paying agent or
approve a change in the location through which any such transfer agent or
paying agent acts. The Company may at any time designate additional transfer
agents or paying agents with respect to any series of Debt Securities.
Neither the Company nor the Trustees shall be required to exchange or
register a transfer of (a) any Debt Securities of any series for a period of 15
days preceding the first mailing of notice of redemption for such series to be
redeemed, or (b) any Debt Securities selected, called or being called for
redemption except, in the case of any Debt Security to be redeemed in part, the
portion thereof not so to be redeemed.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Debt Securities will
be made at the office of the Trustee for such Debt
6
<PAGE>
Securities in the City of New York or at the office of such paying agent or
paying agents as the Company may designate from time to time in an applicable
Prospectus Supplement, except that at the option of the Company payment of any
interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the register. Unless otherwise
indicated in an applicable Prospectus Supplement, payment of any interest on
Debt Securities will be made to the person in whose name such Debt Security is
registered at the close of business on any record date for such interest,
except in the case of defaulted interest.
Global Debt Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Debt Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Global Debt Securities may be issued only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a Global Debt Security may not be transferred except as a
whole by the Depositary for such Global Debt Security to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any nominee to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will generally
apply to depositary arrangements.
Upon the issuance of a Global Debt Security, and the deposit of such Global
Debt Security with or on behalf of the Depositary, the Depositary for such
Global Debt Security or its nominee will credit on its book-entry registration
and transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Debt Security to the accounts of persons
that have accounts with such Depositary ("Participants"). Such accounts shall be
designated by the dealers, underwriters or agents with respect to such Debt
Securities or by the Company if such Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests in a Global Debt
Security will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global Debt
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interests of Participants) and the 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 transfer beneficial interests in a Global Debt Security.
So long as the Depositary for a Global Debt Security, or its nominee, is
the registered owner of such Global Debt Security, such Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Global Debt Security for all purposes
under the Indenture governing such Debt Securities. Except as provided below,
owners of beneficial interests in a Global Debt Security will not be entitled
to have any of the individual Debt Securities of the series represented by
such Global Debt Security registered in their names, will not receive or be
entitled to receive physical delivery of any such Debt Securities of such
series in definitive form and will not be considered the owners or holders
thereof under the Indenture governing such Debt Securities.
Payments of principal of (and premium, if any) and interest on individual
Debt Securities represented by a Global Debt Security registered in the name of
a Depositary or its nominee will be made to the Depositary or its nominee, as
the case may be, as the registered owner of the Global Debt Security
representing such Debt Securities. None of the Company, the Trustee for such
Debt Securities, any paying agent, or the Securities registrar for such 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
of the Global Debt Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Debt Security representing any of such Debt
Securities, immediately will credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of such Global Debt Security for such Debt Securities as shown on the
records of such Depositary or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global Debt
Security held through such
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<PAGE>
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.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Debt Securities is at any time unwilling, unable or
ineligible to continue as depositary and a successor depositary is not appointed
by the Company within 90 days, the Company will issue individual Debt Securities
of such series in exchange for the Global Debt Security representing such series
of 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 Debt Securities, determine not to have any Debt Securities of
such series represented by one or more Global Debt Securities and, in such
event, will issue individual Debt Securities of such series in exchange for the
Global Debt Security or Securities representing such series of Debt Securities.
Further, if the Company so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Debt Security representing
Debt Securities of such series may, on terms acceptable to the Company, the
Trustee and the Depositary for such Global Debt Security, receive individual
Debt Securities of such series in exchange for such beneficial interests,
subject to any limitations described in the Prospectus Supplement relating to
such Debt Securities. In any such instance, an owner of a beneficial interest in
a Global Debt Security will be entitled to physical delivery of individual Debt
Securities of the series represented by such Global Debt Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name. Individual 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.
CERTAIN COVENANTS OF THE COMPANY
Limitations on Liens. Under the Senior Indenture, so long as Senior Debt
Securities are outstanding, the Company will not, and will not permit any
Subsidiary to, directly or indirectly, create, issue, assume, incur or
guarantee any indebtedness for borrowed money which is secured by a Mortgage
of any nature on any of the present or future capital stock of any Restricted
Subsidiary unless the Senior Debt Securities then outstanding shall be secured
equally and ratably with, or prior to, such other secured debt so long as it
is outstanding. (Section 3.06)
Limitations on Disposition of Stock of Restricted Subsidiaries. Under the
Senior and Subordinated Indentures, so long as Debt Securities are
outstanding, the Company will not, and will not permit any Subsidiary to,
sell, transfer or otherwise dispose of any shares of capital stock of any
Restricted Subsidiary except for (i) a sale, transfer or other disposition of
any capital stock of any Restricted Subsidiary to a wholly owned Subsidiary of
the Company or such Subsidiary; (ii) a sale, transfer or other disposition of
the entire capital stock of any Restricted Subsidiary for at least fair value
(as determined by the Board of Directors of the Company acting in good faith);
or (iii) a sale, transfer or other disposition of the capital stock of any
Restricted Subsidiary for at least fair value (as determined by the Board of
Directors of the Company acting in good faith) if, after giving effect
thereto, the Company and its Subsidiaries would own more than 80% of the
issued and outstanding Voting Stock of such Restricted Subsidiary. (Section
3.07)
Consolidation, Merger, Sale or Conveyance
Under the Senior and Subordinated Indentures, so long as Debt Securities are
outstanding, the Company will not consolidate with or merge into any other
corporation or convey, transfer or lease its properties or assets as an entirety
or substantially as an entirety to any person, unless (i) the successor or
purchaser is a corporation organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia; (ii) such
successor or purchaser shall expressly assume, by supplemental indenture
satisfactory in form to the related Trustee, the due and punctual payment of the
principal of, premium, if any, and interest on all the Debt Securities and the
performance and observance of every covenant and condition of the Company under
the related Indenture; and (iii) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing under the related Indenture. (Section 9.01)
8
<PAGE>
Certain Definitions
The covenants and other provisions relating to the Debt Securities are to be
read in conjunction with the definitions contained in the Senior and
Subordinated Indentures, certain of which are substantially to the following
effect:
"Debt Securities" means all unsecured debt securities, notes or other
evidences of indebtedness issued in one or more series that the Company may
issue from time to time in accordance with the terms of the related Indentures.
"Mortgage" means any mortgage, pledge, lien, security interest or other
encumbrance.
"Restricted Subsidiary" means Financial Security Assurance Inc. and any
successor to all or substantially all of its business, provided that such
successor is a Subsidiary.
"Subsidiary" means a corporation more than 50% of the outstanding Voting
Stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
"Voting Stock" means, with respect to any Subsidiary, stock of any class or
classes (or equivalent interests), if the holders of the stock of such class or
classes (or equivalent interests) are ordinarily, in the absence of
contingencies, entitled to vote for the election of the directors (or persons
performing similar functions) of such corporation, even though the right so to
vote has been suspended by the happening of such a contingency.
Events of Default
Any one of the following events will constitute an Event of Default with
regard to any series of Debt Securities under each of the Indentures: (i)
default continued for 30 days in payment of any installment of interest on any
of the Debt Securities when due; (ii) default in payment of all or any part of
the principal of the Debt Securities when due and payable either at maturity,
upon any redemption, by declaration or otherwise; (iii) default continued for
60 days after notice of such default in performance of any covenant or
warranty of the Indenture by the Company in respect of the Debt Securities;
(iv) certain events of default with respect to indebtedness of the Company
(other than the Debt Securities or non-recourse obligations of the Company) in
an aggregate principal amount in excess of $10,000,000 which default shall
consist of the failure to make any payment at maturity or shall have resulted
in the acceleration of the maturity of such indebtedness; (v) certain events
of bankruptcy, insolvency, or reorganization of the Company or any Restricted
Subsidiary; or (vi) any other Event of Default provided in the supplemental
indenture or resolution of the Board of Directors under which such series of
Debt Securities is issued or in the form of Debt Security for such series.
(Section 5.01) The Company is required to file with the Trustee annually a
written statement as to the fulfillment of certain of its obligations under
the Indenture. (Section 3.05)
Each Indenture provides that the Trustee may withhold notice to the holders
of Debt Securities of any default (except in payment of principal of or premium,
if any, or interest on the Debt Securities) if the Trustee considers it in the
interest of the holders of the Debt Securities to do so. (Section 5.11)
Each Indenture provides that (a) if an Event of Default described in clause
(i) or (ii) above shall have occurred and be continuing with regard to the Debt
Securities of any series, either the Trustee or the holders of 25% in aggregate
principal amount of the Debt Securities of that series then outstanding (each
such series acting as a separate class) may declare the principal (or, if Debt
Securities of such series are original issue discount Debt Securities, such
portion of the principal amount as may be specified in the terms of that series)
of all Debt Securities of such series and interest accrued thereon, if any, to
be due and payable immediately and (b) if an Event of Default described in
clause (iii), (iv) or (v) above shall have occurred and be continuing, either
the Trustee or the holders of 25% in aggregate principal amount of all Debt
Securities (or in the case of an Event of Default described in clause (iii)
above, all series affected by such Event of Default) then outstanding (voting as
a single class) may declare the principal (or, if Debt Securities of such series
are original issue discount Debt Securities, such portion of the principal
amount as may be specified in the terms of that series) of all Debt Securities
(in the case of clause (iii) above, limited to all series affected) then
outstanding and interest accrued thereon, if any, to be due and payable
immediately. Upon certain conditions, such declaration by the holders of Debt
Securities of any series may be annulled and past defaults which have
9
<PAGE>
been cured may be waived by (a) with respect to clauses (i) or (ii) the
holders of a majority in aggregate principal amount of Debt Securities of such
series (each such series voting as a separate class) then outstanding and (b)
with respect to clauses (iii), (iv) or (v) above, the holders of a majority in
aggregate principal amount of the Debt Securities of all series (in the case
of clause (iii) above, limited to all series affected by such default) then
outstanding (voting as a single class). (Section 5.01) Prior to a declaration
of acceleration of maturity of the Debt Securities of any series, the holders
of a majority in aggregate principal amount of the Debt Securities of each
series voting separately or all series voting as a single class, depending on
the nature of the Event of Default, may waive any Event of Default, and its
consequences, except a default in the payment of the principal of or premium,
if any, or interest on any of the Debt Securities of such series or in respect
of a covenant or provision of the Indenture which cannot be modified or
amended without the consent of the holder of each Debt Security of such series
affected. (Section 5.10)
Subject to the provisions of each Indenture relating to the duties of the
Trustee, the Trustee shall be under no obligation to exercise any of its rights
or powers under the relative Indenture at the request, order or direction of any
of the holders of Debt Securities, unless such holders shall have offered the
Trustee reasonable indemnity. (Section 6.02) Subject to such provision for
indemnification, the holders of a majority in aggregate principal amount of the
Debt Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee. (Section 5.09)
Defeasance and Covenant Defeasance
Except as may otherwise be provided in the applicable Prospectus
Supplement with respect to the Debt Securities of any series, each Indenture
provides that, subject to certain conditions, the Company may elect either (i)
to be discharged from any and all obligations with respect to the Debt
Securities (except for the obligations to register the transfer or exchange of
the Debt Securities, to replace temporary or mutilated, defaced, destroyed,
lost or stolen Debt Securities, to maintain an office or agency for the
payment of principal and interest in respect of the Debt Securities, to
appoint a paying agent and, if the Company elects to act as the paying agent,
to hold moneys for such payment in trust) ("Defeasance") or (ii) to be
released from its obligations with respect to the Debt Securities under
Sections 3.06 and 3.07 of the Indenture (being the sections of the Indenture
captioned "Limitations on Liens" and "Limitations on Disposition of Stock of
Restricted Subsidiaries" see "Certain Covenants of the Company") ("Covenant
Defeasance"), upon the deposit with the Trustee (or another qualifying
trustee) irrevocably in trust for such purpose, of money and/or United States
government obligations in an amount which, in the opinion of a nationally
recognized firm of independent public accountants delivered to such trustee,
would be sufficient to pay the principal of and premium, if any, and interest
on the Debt Securities on the scheduled due dates therefor. (Sections 13.01
through 13.04)
Each Indenture provides that, to effect Defeasance or Covenant Defeasance,
the Company must deliver to the Trustee an opinion of counsel to the effect that
Defeasance or Covenant Defeasance, as the case may be, will not cause the
holders of the Debt Securities to recognize income, gain or loss for federal
income tax purposes. In addition, in the case of Defeasance, such opinion of
counsel must state that a private letter ruling or a revenue ruling to the same
effect has been issued by the United States Internal Revenue Service or state
that since the date of the Indenture there has been a change in the applicable
federal income tax law or the interpretation thereof to the same effect.
(Section 13.04)
With respect to the Subordinated Indenture, in order to be discharged as
described above, no default in the payment of principal of (or premium, if any)
or interest on any Senior Debt shall have occurred and be continuing or no Event
of Default with respect to the Senior Debt shall have occurred and be continuing
and shall have resulted in such Senior Debt becoming or being declared due and
payable prior to the date it would have become due and payable.
Modification and Waiver
Each Indenture provides that the Company may enter into a supplemental
indenture or indentures for the purpose of adding to, changing or eliminating
any of the provisions of such Indenture or of any supplemental indentures or of
modifying the rights of the holders of Debt Securities issued thereunder if
approved in writing signed by the holders of not less than a majority in
aggregate principal amount of all outstanding Debt Securities affected thereby
voting as one class; provided that the consent of each holder of Debt Securities
affected thereby is required for any modification or alteration which (i)
extends the final
10
<PAGE>
maturity of any Debt Securities, or reduces the principal amount thereof, or
reduces the rate or extends the time of payment of interest thereon, or
reduces any amount payable on redemption thereof or impairs or affects the
right of any holder of Debt Securities to institute suit for the payment
thereof, (ii) reduces the percentage in aggregate principal amount, the
consent of the holders of which is required for any such supplemental
indenture or (iii) modifies any provision with respect to the subordination of
Debt Securities of any series in a manner adverse to the holders thereof.
(Section 8.02) The holders of at least a majority in aggregate principal
amount of the outstanding Debt Securities of all series (including the Debt
Securities) voting as one class may waive compliance by the Company with
certain covenants contained in each Indenture. (Section 3.08)
Subordination under the Subordinated Indenture
In the Subordinated Indenture, the Company has covenanted and agreed that
any Subordinated Debt Securities issued thereunder will be subordinate and
junior in right of payment to all Senior Debt to the extent provided in the
Subordinated Indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in
connection with any insolvency or bankruptcy proceeding of the Company, the
holders of the Senior Debt will first be entitled to receive payment in full
of principal of (and premium, if any) and interest, if any, on such Senior
Debt before the holders of Subordinated Debt Securities will be entitled to
receive or retain any payment in respect of the principal of (and premium, if
any) or interest, if any, on the Subordinated Debt Securities. (Section 14.01
and 14.02)
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the holders of
Subordinated Debt Securities will be entitled to receive any payment upon the
principal of (or premium, if any) or interest, if any, or the Subordinated Debt
Securities. (Section 14.03)
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Subordinated Debt Securities may be made if there shall
have occurred and be continuing a default in any payment with respect to Senior
Debt, or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default. (Section 14.04)
The Subordinated Indenture defines "Senior Debt" as the principal of (and
premium, if any) and interest, if any (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not such claim for post-petition interest is allowed in such
proceeding), on Debt, whether incurred on or prior to the date of the
Subordinated Indenture or thereafter incurred, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is provided that such obligations are not superior in right of payment to the
Subordinated Debt Securities or to other Debt which is PARI PASSU with, or
subordinated to, the Subordinated Debt Securities; provided, however, that
Senior Debt shall not be deemed to include (i) any Debt of the Company which
when incurred and without respect to any election under Section 1111(b) of the
Bankruptcy code was without recourse to the Company, (ii) any Debt of the
Company to any of its subsidiaries, (iii) Debt to any employee of the Company,
(iv) any liability for taxes, (v) indebtedness or monetary obligations to trade
taxes and (v) indebtedness or monetary obligations to trade creditors or assumed
by the Company or any of its subsidiaries in the ordinary course of business in
connection with the obtaining of materials or services. As used in the
proceeding sentence the term "Debt" means with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed; (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses; (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person; (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such Person;
and (vi) every obligation of the type referred to in clauses (i) through (v) of
another Person and all dividends of another Person the payment of which, in
either case, such Person has guaranteed or is responsible or liable, directly or
indirectly, as obligor or otherwise.
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<PAGE>
The Subordinated Indenture places no limitation on the amount of additional
Senior Debt that may be incurred by the Company. The Company may from time to
time incur additional indebtedness constituting Senior Debt.
The Subordinated Indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular issue of Subordinated Debt
Securities, may be changed prior to such issuance. Any such change would be
described in the Prospectus Supplement relating to such Subordinated Debt
Securities.
Conversion or Exchange
The Subordinated Debt Securities of any series may be convertible or
exchangeable into Common Stock or other Securities. The specific terms and
conditions on which Subordinated Debt Securities of any series may be so
converted or exchanged will be set forth in the applicable Prospectus
Supplement. Such terms may include the conversion or exchange price, provisions
for conversion or exchange, either mandatory, at the option of the holder, or at
the option of the Company, and provisions under which the number of shares of
Common Stock or other Securities to be received by the holders of Subordinated
Debt Securities would be calculated as of a time and in the manner stated in the
applicable Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The Company's Certificate of Incorporation authorizes the issuance of
50,000,000 shares of Common Stock, par value $.01 per share. At July 31st, 1997,
there were outstanding 31,016,527 shares of Common Stock of the Company
(includes 1,127,883 shares of Common Stock owned by a trust on behalf of the
Company and excludes 1,325,774 shares of Common Stock actually held in
treasury).
The following description of the common stock of the Company is subject to
the detailed provisions of the Company's Certificate of Incorporation and
by-laws as currently in effect (the "Bylaws"). This description does not purport
to be complete or to give full effect to the terms of the provisions of
statutory or common law and is subject to, and qualified in its entirety by
reference to, the Certificate of Incorporation and the Bylaws, each of which has
been filed as an exhibit to or will be incorporated by reference in the
Registration Statement of which this Prospectus is a part.
The amount of dividends payable in the future will be reviewed periodically
by the Board of Directors in light of the Company's earnings, financial
condition and capital and other cash requirements. It is the policy of the Board
of Directors that FSA Holding retain an adequate portion of its earnings to
support the growth of its business. There is no requirement or assurance that
dividends will be paid.
Most of the operations of the Company are conducted through FSA. FSA's
ability to declare and pay dividends to Capital Guaranty which in turn declares
and pays dividends to the Company, is dependent on FSA's financial condition,
results of operations, cash requirements and other related factors and is also
subject to restrictions contained in the insurance laws and related regulations
of New York and other states.
The Company will ordinarily be required to withhold United States federal
income taxes in the amount of 30% of any dividends paid to non-United States
shareholders not otherwise subject to United States federal income taxation,
unless a tax treaty between the United States and the country of the
shareholder's residence provides for withholding at a reduced rate.
The Common Stock is traded on the New York Stock Exchange under the symbol
FSA. The transfer agent for the Common Stock is The Bank of New York.
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell Securities to investors directly or
through agents or dealers. Any such underwriter, agent or dealer involved in the
offer and sale of the Securities will be named in an applicable Prospectus
Supplement.
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<PAGE>
Offers and sales of Securities hereunder may be effected at a fixed price
or prices, which may be changed, or from time to time at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Company also may, from time to time,
authorize underwriters acting as its agents to offer and sell the Securities
upon the terms and conditions set forth in any Prospectus Supplement. If
Securities are sold by means of an underwritten offering, the Company will
execute an underwriting agreement with an underwriter or underwriters at the
time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the applicable Prospectus Supplement
which will be used by the underwriters to make resales of the Securities in
respect of which this Prospectus is being delivered to the public. If any
underwriter or underwriters are utilized in the sale of the Securities, unless
otherwise set forth in the applicable Prospectus Supplement, the underwriting
agreement will provide that the obligations of the underwriters are subject to
certain conditions precedent and that the underwriters with respect to a sale
of Securities will be obligated to purchase all such Securities if any are
purchased.
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
(which may be changed from time to time) 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 Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set forth
in an applicable Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Securities may be deemed to be
underwriters under the Securities Act, 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 with the
Company to indemnification against and contribution toward certain civil
liabilities, including liabilities, under the Securities Act, and to
reimbursement by the Company for certain expenses.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to such
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale. The
name of the dealer and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Offers to purchase Securities may be solicited directly by the Company and
the sale thereof may be made by the Company directly to institutional investors
or others, who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resale thereof. The terms of any such
transaction will be set forth in the Prospectus Supplement relating thereto.
The Securities may or may not be listed on a national securities exchange or
a foreign securities exchange. Certain series of the Securities will be a new
issue and will not have an established trading market. No assurances can be
given that there will be a market for any of the Securities.
Agents, underwriters and dealers may be customers of, engage in transactions
with or perform services for, the Company and its subsidiaries in the ordinary
course of business.
LEGAL MATTERS
Certain legal matters with respect to the legality of the Securities being
offered hereby will be passed upon for the Company by Bruce E. Stern, Esq.,
General Counsel of the Company, and for any underwriters of agents by counsel to
be named in the Prospectus Supplement.
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EXPERTS
The consolidated financial statements and the related financial
statement schedule of the Company appearing or incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996, have
been audited by Coopers & Lybrand L.L.P., independent accountants, as set forth
in their reports thereon dated January 24, 1997 incorporated by reference or
included therein and incorporated herein by reference. Such consolidated
financial statements and financial statement schedule are incorporated herein
by reference in reliance upon such reports given on the authority of such firm
as experts in accounting and auditing.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection with the
issuance and distribution of the Securities being registered, other than
underwriting discounts and commissions:
<TABLE>
<S> <C>
Registration................................................................... $75,757.58
Trustee Fees................................................................... 7,500.00
Printing....................................................................... 30,000.00
Accounting Fees................................................................ 30,000.00
Legal Fees..................................................................... 80,000.00
Rating Agency Fees............................................................. 60,000.00
Blue Sky Fees and Expense...................................................... 20,000.00
Miscellaneous.................................................................. $ 2,000.00
----------
----------
$305,257.58
</TABLE>
Item 15. Indemnification of Officers and Directors.
Pursuant to the New York Business Corporation Law (the "NYBCL"), the Company
has the power to indemnify certain persons, including its officers and
directors, under stated circumstances and subject to certain limitations in
connection with services performed in good faith for the Company.
Under the Company Bylaws, any person made or threatened to be made a party
to any civil or criminal action or proceeding by reason of the fact that he or
she or his or her testator or intestate is or was a director or officer of the
Company, or served any other corporation or entity of any type or kind, domestic
or foreign, in any capacity, at the request of the Company, shall be indemnified
against judgments, fines, amounts paid in settlement and reasonable expenses,
unless (i) his or her acts were committed in bad faith or were the result of his
or her active and deliberate dishonesty and were material to such action or
proceedings or (ii) he or she personally gained in fact a financial profit or
other advantage to which he or she was not legally entitled.
The indemnification provided in the NYRCL is not exclusive of any other
rights to which a director or officer may be entitled, whether contained in the
certificate of incorporation or bylaws or, when authorized by the certificate of
incorporation or the bylaws, a shareholders' or directors' resolution or an
indemnification agreement, except that no indemnification may be made in any
case if a judgment or other final adjudication adverse to the director or
officer establishes that his or her acts were committed in bad faith or where
the result of active and deliberate dishonesty and were material to the cause of
action so adjudicated, or that he or she personally gained in fact a financial
profit or other advantage to which he or she was not legally entitled.
The Company maintains directors' and officers' liability insurance which
insures against liabilities that directors or officers of the Company may incur
in such capacities.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
<TABLE>
<C> <S>
1.01. Form of Underwriting Agreement.*
4.01. Form of Trust Indenture.
4.02. Form of Subordinated Indenture
5.01. Opinion of Bruce E. Stern, Esq.
12.01. Computation of Ratios of Earnings to Fixed Charges.
</TABLE>
15
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<TABLE>
<C> <S>
23.01. Consent of Coopers & Lybrand L.L.P.
23.02. Consent of Bruce E. Stern, Esq. (contained in Exhibit 5.01).
24.01. Powers of Attorney.
25.01. Statement of Eligibility and Qualification on Form T-1 under the Trust Indenture Act
of 1939, as amended, of the Senior Indenture Trustee under the Senior Indenture.*
25.02. Statement of Eligibility and Qualification on Form T-1 of the Subordinated Indenture
Trustee under the Subordinated Indenture.*
</TABLE>
- ------------------------
* To be filed by a report on Form 8-K pursuant to Item 601 of Regulation S-K.
Item 17. Undertakings.
(A) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(B) 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 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.
(C) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, 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 said Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
(D) Rule 415 Offering
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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end
16
<PAGE>
of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective 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 (1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by such 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.
(E) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee under subsection (a)
of Section 310 of the Trust Indenture Act (the "Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
17
<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 New York, New York, on August 22, 1997.
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.,
By: *
---------------------------
Robert P. Cochran President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
<S> <C> <C>
President, Chief Executive
* Officer and Director
- ------------------------------ (principal executive August 22, 1997
Robert P. Cochran officer)
* Chief Financial Officer
- ------------------------------ (principal financial August 22, 1997
John A. Harrison officer)
* Controller (principal
- ------------------------------ accounting officer) August 22, 1997
Jeffrey S. Joseph
* Chairman, Director
- ------------------------------ August 22, 1997
John J. Byrne
* Vice Chairman, Director
- ------------------------------ August 22, 1997
Michael Djordjevich
* Director
- ------------------------------ August 22, 1997
Robert N. Downey
* Director
- ------------------------------ August 22, 1997
Anthony M. Frank
* Director
- ------------------------------ August 22, 1997
Toshiki Kaneda
* Director
- ------------------------------ August 22, 1997
K. Thomas Kemp
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
<S> <C> <C>
* Director
- ------------------------------ August 22, 1997
David O. Maxwell
* Director
- ------------------------------ August 22, 1997
James M. Osterhoff
* Director
- ------------------------------ August 22, 1997
James H. Ozanne
* Director
- ------------------------------ August 22, 1997
Staats M. Pellett, Jr.
* Director
- ------------------------------ August 22, 1997
Richard A. Post
* Director
- ------------------------------ August 22, 1997
Roger K. Taylor
* Director
- ------------------------------ August 22, 1997
Allan L. Waters
* Director
- ------------------------------ August 22, 1997
Howard M. Zelikow
</TABLE>
* Bruce E. Stern, by signing his name hereto, does hereby execute this
Registration Statement on behalf of the directors and officers of Financial
Security Assurance Holdings Ltd. indicated above by asterisks, pursuant to
powers of attorney duly executed by such directors and officers and filed as
Exhibit 24.1 to the Registration Statement.
By: /s/ Bruce E. Stern
----------------------------
Bruce E. Stern
Attoney-in-Fact
19
<PAGE>
TABLE OF CONTENTS
Available Information....................................................... 2
Incorporation of Certain Documents by Reference............................. 3
The Company................................................................. 3
Use of Proceeds............................................................. 4
Ratio of Earnings to Fixed Charges.......................................... 4
Description of Debt Securities.............................................. 5
Description of Common Stock................................................. 12
Plan of Distribution........................................................ 12
Legal Matters............................................................... 13
Experts..................................................................... 14
<PAGE>
EXHIBIT 4.01
_______________________________________________________________________________
TRUST INDENTURE
between
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
and
____________________________,
as Trustee
Dated as of _______ __, 1997
_______________________________________________________________________________
<PAGE>
CROSS REFERENCE SHEET (*)
Between provisions of Trust Indenture Act of 1939 and Indenture to be dated
as of _______ __, 1997, between Financial Security Assurance Holdings Ltd. and
____________________, as Trustee:
Section of the Act Section of Indenture
------------------ --------------------
310(a)(1) and (2). . . . . . . . . . . . . 6.09
310(a)(3) and (4). . . . . . . . . . . . . Inapplicable
310(b) . . . . . . . . . . . . . . . . . . 6.08 and 6.10(a), (b) and (d)
310(c) . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . 6.13(a) and (c)(1) and (2)
311(b) . . . . . . . . . . . . . . . . . . 6.13(b)
311(c) . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . 4.01 and 4.02(a)
312(b) . . . . . . . . . . . . . . . . . . 4.02(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . . . . . . . . . 4.02 (c)
313(a) . . . . . . . . . . . . . . . . . . 4.04(a)(i), (ii), (iii), (iv),
(v) and (vi)
313(b)(1). . . . . . . . . . . . . . . . . Inapplicable
313(b)(2). . . . . . . . . . . . . . . . . 4.04
313(c) . . . . . . . . . . . . . . . . . . 4.04
313(d) . . . . . . . . . . . . . . . . . . 4.04
314(a) . . . . . . . . . . . . . . . . . . 4.03
314(b) . . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2). . . . . . . . . . . . . 11.05
314(c)(3). . . . . . . . . . . . . . . . . Inapplicable
- --------------------
(*) This Cross Reference Sheet is not part of the Indenture.
<PAGE>
Section of the Act Section of Indenture
------------------ --------------------
314(d) . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . 11.05
314(f) . . . . . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d). . . . . . . . . . . . 6.01
315(b) . . . . . . . . . . . . . . . . . . 5.11
315(e) . . . . . . . . . . . . . . . . . . 5.12
316(a)(1). . . . . . . . . . . . . . . . . 5.09
316(a)(2). . . . . . . . . . . . . . . . . Not required
316(a) (last sentence) . . . . . . . . . . 7.04
316(b) . . . . . . . . . . . . . . . . . . 5.07
317(a) . . . . . . . . . . . . . . . . . . 5.02
317(b) . . . . . . . . . . . . . . . . . . 3.04(a) and (b)
318(a) . . . . . . . . . . . . . . . . . . 11.07
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.01. Certain Terms Defined. . . . . . . . . . . . . . . . . . 1
ARTICLE II
Securities
SECTION 2.01. Forms Generally.. . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.02. Form of Trustee's Certificate of Authentication.. . . . . 7
SECTION 2.03. Amount Unlimited; Issuable in Series. . . . . . . . . . . 7
SECTION 2.04. Authentication and Delivery of Debt Securities. . . . . . 10
SECTION 2.05. Execution of Debt Securities. . . . . . . . . . . . . . . 11
SECTION 2.06. Certificate of Authentication.. . . . . . . . . . . . . . 12
SECTION 2.07. Denomination and Date of Debt Securities;
Payments of Interest. . . . . . . . . . . . . . . . . . 12
SECTION 2.08. Registration, Transfer and Exchange.. . . . . . . . . . . 13
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Debt
Securities. . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.10. Cancellation of Debt Securities; Destruction Thereof. . . 16
SECTION 2.11. Temporary Debt Securities.. . . . . . . . . . . . . . . . 16
SECTION 2.12. Debt Securities Issuable in the Form of a Registered
Global Security . . . . . . . . . . . . . . . . . . . . 17
ARTICLE III
Covenants of the Issuer
SECTION 3.01. Payment of Principal and Interest.. . . . . . . . . . . . 19
SECTION 3.02. Offices for Payments, etc.. . . . . . . . . . . . . . . . 19
SECTION 3.03. Appointment to Fill a Vacancy in Office of Trustee. . . . 20
SECTION 3.04. Paying Agents.. . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.05. Written Statement to Trustee. . . . . . . . . . . . . . . 21
SECTION 3.06. Limitations on Liens. . . . . . . . . . . . . . . . . . . 21
SECTION 3.07. Limitations on Disposition of Stock of Restricted
Subsidiaries. . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.08. Corporate Existence.. . . . . . . . . . . . . . . . . . . 22
SECTION 3.09. Waiver of Certain Covenants.. . . . . . . . . . . . . . . 22
<PAGE>
Page
ARTICLE IV
Debt Securityholders' Lists and Reports
by the Issuer and the Trustee
SECTION 4.01. Issuer to Furnish Trustee Information as to Names and
Addresses of Debt Securityholders . . . . . . . . . . . 23
SECTION 4.02. Preservation and Disclosure of Debt Securityholders'
Lists . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.03. Reports by the Issuer . . . . . . . . . . . . . . . . . . 25
SECTION 4.04. Reports by the Trustee. . . . . . . . . . . . . . . . . . 26
ARTICLE V
Remedies of the Trustee and Debt Securityholder
SECTION 5.01. Event of Default Defined; Acceleration of Maturity;
Waiver of Default . . . . . . . . . . . . . . . . . . . 28
SECTION 5.02. Collection of Indebtedness by Trustee; Trustee May Prove
Debt. . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.03. Application of Proceeds . . . . . . . . . . . . . . . . . 36
SECTION 5.04. Suits for Enforcement . . . . . . . . . . . . . . . . . . 38
SECTION 5.05. Restoration of Rights on Abandonment of Proceedings . . . 38
SECTION 5.06. Limitations on Suits by Debt
Securityholders. . . . . . . . . . . . . . . . . . . . 38
SECTION 5.07. Unconditional Right of Debt
Securityholders to Institute Certain Suits . . . . . . 39
SECTION 5.08. Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default . . . . . . . . . . . . . . . . 39
SECTION 5.09. Control by Debt Securityholders . . . . . . . . . . . . . 40
SECTION 5.10. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 40
SECTION 5.11. Trustee to Give Notice of Default,
but May Withhold in Certain Circumstances . . . . . . . 41
SECTION 5.12. Right of Court to Require Filing of Undertaking
to Pay Costs. . . . . . . . . . . . . . . . . . . . . . 42
<PAGE>
Page
ARTICLE VI
Concerning the Trustee
SECTION 6.01. Duties and Responsibilities of the Trustee;
During Default; Prior to Default. . . . . . . . . . . . 43
SECTION 6.02. Certain Rights of the Trustee.. . . . . . . . . . . . . . 44
SECTION 6.03. Trustee Not Responsible for Recitals, Disposition of Debt
Securities or Application of Proceeds Thereof . . . . . 46
SECTION 6.04. Trustee and Agents May Hold Debt Securities;
Collections, Etc. . . . . . . . . . . . . . . . . . . . 46
SECTION 6.05. Monies Held by Trustee. . . . . . . . . . . . . . . . . . 46
SECTION 6.06. Compensation and Indemnification of Trustee and Its
Prior Claim . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.07. Right of Trustee to Rely on Officers'
Certificate, Etc. . . . . . . . . . . . . . . . . . . . 47
SECTION 6.08. Qualification of Trustee; Conflicting Interests . . . . . 48
SECTION 6.09. Persons Eligible for Appointment as Trustee . . . . . . . 56
SECTION 6.10. Resignation and Removal; Appointment of Successor
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.11. Acceptance of Appointment by Successor Trustee. . . . . . 58
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business of Trustee . . . . . . . . . . . . . . . . . . 59
SECTION 6.13. Preferential Collection of Claims Against the Issuer. . . 60
ARTICLE VII
Concerning the Debt Securityholders
SECTION 7.01. Evidence of Action Taken by Debt Securityholders. . . . . 65
SECTION 7.02. Proof of Execution of Instruments And of Holding of
Debt Securities . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.03. Holders to Be Treated as Owners . . . . . . . . . . . . . 66
SECTION 7.04. Debt Securities Owned by Issuer Deemed Not Outstanding. . 66
<PAGE>
Page
SECTION 7.05. Right of Revocation of Action Taken . . . . . . . . . . . 67
ARTICLE VIII
Supplemental Indentures
SECTION 8.01. Supplemental Indentures Without Consent of Debt
Securityholders . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.02. Supplemental Indentures with Consent of Debt
Securityholders . . . . . . . . . . . . . . . . . . . . 68
SECTION 8.03. Effect of Supplemental Indenture. . . . . . . . . . . . . 69
SECTION 8.04. Documents to Be Given to Trustee... . . . . . . . . . . . 70
SECTION 8.05. Notation on Debt Securities in Respect of Supplemental
Indentures. . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
SECTION 9.01. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except under Certain Conditions. . . . . . . . 70
SECTION 9.02. Successor Corporation Substituted . . . . . . . . . . . . 71
SECTION 9.03. Opinion of Counsel to Trustee.. . . . . . . . . . . . . . 72
ARTICLE X
Satisfaction and Discharge of
Indenture; Unclaimed Monies
SECTION 10.01. Satisfaction and Discharge of Indenture.. . . . . . . . . 72
SECTION 10.02. Application by Trustee of Funds Deposited for Payment
of Debt Securities. . . . . . . . . . . . . . . . . . . 74
SECTION 10.03. Repayment of Monies Held by Paying Agent. . . . . . . . . 74
SECTION 10.04. Return of Monies Held by Trustee and Paying Agent
Unclaimed for Three Years.. . . . . . . . . . . . . . . 74
<PAGE>
Page
ARTICLE XI
Miscellaneous Provisions
SECTION 11.01. Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability . . . . . . . . 75
SECTION 11.02. Provisions of Indenture for the Sole Benefit of Parties
and Debt Securityholders. . . . . . . . . . . . . . . . 75
SECTION 11.03. Successors and Assigns of Issuer Bound by Indenture.. . . 75
SECTION 11.04. Notices and Demands on Issuer, Trustee and Debt
Securityholders . . . . . . . . . . . . . . . . . . . . 75
SECTION 11.05. Officers' Certificate and Opinions of Counsel; Statements
to Be Contained Therein . . . . . . . . . . . . . . . . 76
SECTION 11.06. Payments Due on Saturdays, Sundays and Holidays . . . . . 78
SECTION 11.07. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939 . . . . . . . . . . . . . . . . . 78
SECTION 11.08. New York Law to Govern. . . . . . . . . . . . . . . . . . 78
SECTION 11.09. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.10. Effect of Headings. . . . . . . . . . . . . . . . . . . . 78
ARTICLE XII
Redemption of Debt Securities and Sinking Funds
SECTION 12.01. Applicability of Article. . . . . . . . . . . . . . . . . 79
SECTION 12.02. Notice of Redemption; Partial Redemptions.. . . . . . . . 79
SECTION 12.03. Payment of Debt Securities Called for Redemption. . . . . 80
SECTION 12.04. Exclusion of Certain Debt Securities from Eligibility for
Selection for Redemption. . . . . . . . . . . . . . . . 81
SECTION 12.05. Mandatory and Optional Sinking Funds. . . . . . . . . . . 82
<PAGE>
Contents, p. 9
Page
ARTICLE XIII
Defeasance and Covenant Defeasance
SECTION 13.01. Applicability of Article; Issuer's Option to Effect
Defeasance or Covenant Defeasance.. . . . . . . . . . . 85
SECTION 13.02. Defeasance and Discharge. . . . . . . . . . . . . . . . . 86
SECTION 13.03. Covenant Defeasance.. . . . . . . . . . . . . . . . . . . 86
SECTION 13.04. Conditions to Defeasance or Covenant Defeasance.. . . . . 87
SECTION 13.05. Deposited Monies and U.S. Government Obligations
to Be Held in Trust; Other Miscellaneous Provisions . . 89
SECTION 13.06. Reinstatement.. . . . . . . . . . . . . . . . . . . . . . 90
<PAGE>
TRUST INDENTURE, dated as of
_______ ___, 1997, between Financial Security
Assurance Holdings Ltd., a New York
corporation (the "Issuer"), and
, a
(the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue from time to time
of its unsecured debt securities, notes or other evidences of indebtedness to be
issued in one or more series (the "Debt 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 Issuer 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 Debt Securities by the holders thereof, the Issuer and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the respective
holders from time to time of the Debt Securities as follows:
ARTICLE I
Definitions
SECTION 1.01. 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 in said Securities Act as in force at
the date of this Indenture. All accounting terms used herein and not
<PAGE>
2
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 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
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.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act hereunder.
"Business Day" means, with respect to any Debt Security, a day that in
the city (or in any of the cities, if more than one) in which amounts are
payable, as specified in the form of such Debt Security, is not a day on which
banking institutions are authorized by law or regulation to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if on any date 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, then the body performing such duties on such date.
"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 _________________________________.
"Debt Security" or "Debt Securities" (except as otherwise provided in
Section 6.08) has the meaning stated in the first recital of this Indenture, or,
as the case may be, Debt Securities that have been authenticated and delivered
under this Indenture.
"Depositary" means with respect to any Debt Securities issued in the
form of one or more Registered Global Securities, such Person as the Board of
Directors may designate and its successors.
<PAGE>
3
"Dollars" shall mean United States Dollars.
"Event of Default" means any event or condition specified as such in
Section 5.01.
"Holder", "Holder of Debt Securities", "Debt Securityholder" or other
similar terms mean the registered holder of any Debt Security.
"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 Debt
Securities established as contemplated hereunder.
"Interest" means, when used with respect to non-interest bearing Debt
Securities, interest payable after maturity.
"Issuer" means (except as otherwise provided in Section 6.13)
Financial Security Assurance Holdings Ltd., a New York corporation, and, subject
to Article Nine, its successors and assigns.
"Mortgage" means any mortgage, pledge, lien, security interest or
other encumbrance.
"Officers' Certificate" means a certificate signed by the chairman of
the Board of Directors or the president or any managing director and by the
treasurer or the secretary or any assistant secretary of the Issuer and
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 11.05.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer or who may be other
counsel satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 11.05, if and to the extent required hereby.
"Original Issue Date" of any Debt Security (or portion thereof) means
the earlier of (a) the date of such Debt Security or (b) the date of any Debt
Security (or portion thereof) for which such Debt Security was issued (directly
or indirectly) on registration of transfer, exchange or substitution.
<PAGE>
4
"Original Issue Discount Debt Security" means any Debt Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 5.01.
"Outstanding" (except as otherwise provided in Section 6.08), when
used with reference to Debt Securities, subject to the provisions of
Section 7.04, means, as of any particular time, all Debt Securities
authenticated and delivered by the Trustee under this Indenture, except:
(a) Debt Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancelation;
(b) Debt Securities, or portions thereof, for the payment or
redemption of which monies in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other than
the Issuer) or shall have been set aside, segregated and held in trust by
the Issuer for the holders of such Debt Securities (if the Issuer shall act
as its own paying agent), provided that if such Debt 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) Debt Securities in substitution for which other Debt Securities
shall have been authenticated and delivered, or which shall have been paid,
pursuant to the terms of Section 2.08, 2.09, 2.11, 2.12 or 12.03 (except
with respect to any such Debt Security as to which proof satisfactory to
the Trustee is presented that such Debt Security is held by a person in
whose hands such Debt Security is a legal, valid and binding obligation of
the Issuer).
In determining whether the holders of the requisite principal
amount of Outstanding Debt Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Debt 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
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5
of the date of such determination upon a declaration of acceleration of the
maturity thereof pursuant to Section 5.01.
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Principal" whenever used with reference to the Debt Securities or any
Debt Security or any portion thereof, shall be deemed to include "and premium,
if any".
"Registered Global Security" means a Debt Security issued to the
Depositary in accordance with Article Two and bearing the legend prescribed in
Section 2.12.
"Responsible Officer" when used with respect to the Trustee, means the
chairman of the board of directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president,
the cashier, the secretary, the treasurer, any trust officer, any assistant
trust officer, any assistant vice president, any assistant cashier, any
assistant secretary, any assistant treasurer, 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 because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means Financial Security Assurance Inc., a New
York corporation, and any successor to all or substantially all of its business;
provided that such successor is a Subsidiary.
"Subsidiary" means a corporation more than 50% of the outstanding
Voting Stock of which is owned, directly or indirectly, by the Issuer or by one
or more other Subsidiaries, or by the Issuer and one or more other Subsidiaries.
<PAGE>
6
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.01 and 8.02) means the Trust Indenture Act of 1939 as in force at the
date as of which this Indenture was originally executed.
"Vice President" when used with respect to the Issuer 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, with respect to any Subsidiary, stock of any
class or classes (or equivalent interests), if the holders of the stock of such
class or classes (or equivalent interests) are ordinarily, in the absence of
contingencies, entitled to vote for the election of the directors (or Persons
performing similar functions) of such Subsidiary, even though the right so to
vote has been suspended by the happening of such a contingency.
"Yield to Maturity" means the yield to maturity on a series of Debt
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, as
calculated in accordance with accepted financial practice.
ARTICLE II
Securities
SECTION 2.01. Forms Generally. The Debt Securities of each series
shall be substantially in such form (not inconsistent with this Indenture) as
shall be established by or authorized in accordance with a resolution of the
Board of Directors or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
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7
officers executing such Debt Securities, as evidenced by their execution of the
Debt Securities.
The definitive Debt Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Debt Securities, as evidenced by
their execution of such Debt Securities.
SECTION 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Debt Securities shall be in
substantially the following form:
This is one of the Debt Securities of the series designated herein and
referred to in the within-mentioned Indenture.
[TRUSTEE]
as Trustee
by ______________________________
Authorized Officer
SECTION 2.03. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Debt Securities which may be authenticated and delivered
under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall
be established in or in accordance with a resolution of the Board of Directors
and set forth in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Debt Securities of any
series:
(1) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of the series from the Debt Securities of
any other series and from any other securities issued by the Issuer);
(2) any limit upon the aggregate principal amount of the Debt
Securities of the series that may be authenticated and delivered under this
Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for,
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8
or in lieu of, other Debt Securities of the series pursuant to Section 2.08,
2.09, 2.11, 2.12 or 12.03);
(3) the date or dates on which the principal of the Debt Securities of
the series is payable;
(4) the rate or rates at which the Debt Securities of the series shall
bear interest, if any, or the method by which such rate shall be
determined, the date or dates from which such interest shall accrue, the
interest payment dates on which such interest shall be payable, the right,
if any, of the Issuer to defer or extend an interest payment date, and the
record dates for the determination of Holders to whom interest is payable;
(5) the place or places where the principal and any interest on Debt
Securities of the series shall be payable (if other than as provided in
Section 3.02);
(6) the price or prices at which, the period or periods within which
and the terms and conditions upon which Debt Securities of the series may
be redeemed, in whole or in part, at the option of the Issuer, pursuant to
any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem, purchase or repay
Debt 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, the currency or currencies
(including currency unit or units) in which, and the terms and conditions
upon which Debt Securities of the series shall be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(9) if other than Dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any) and
interest, if any, on the Debt Securities of the series shall be payable, or
in which the Debt Securities of the series shall be denominated;
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9
(10) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Registered Global Securities and, in
such case, the Depositary with respect to such Registered Global Security
or Securities and the circumstances under which any such Registered Global
Security may be registered for transfer or exchange, or authenticated and
delivered, in the name of a Person other than such Depositary or its
nominee, if other than as set forth in Section 2.12;
(11) the additions, modifications or deletions, if any, in the Events
of Default or covenants of the Issuer set forth herein with respect to the
Debt Securities of such series.
(12) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 5.01 or provable in bankruptcy pursuant to Section 5.02;
(13) the application, if any, of Section 13.02 or Section 13.03 to the
Securities of any series;
(14) the relative degree, if any, to which the Debt Securities of the
series shall be senior to or be subordinated to other series of Debt
Securities in right of payment, whether such other series of Debt
Securities are Outstanding or not;
(15) the terms of any right to convert or exchange Debt Securities of
the series into or for other securities or property, including (i) the
conversion of or exchange price, (ii) the conversion or exchange period,
(iii) provisions as to whether conversion or exchange will be at the option
of the Holder or the Issuer and (iv) the events requiring an adjustment to
the conversion or exchange price;
(16) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture); and
(17) any trustees, authenticating or paying agents, transfer agents or
registrars or any other
<PAGE>
10
agents with respect to the Debt Securities of such series.
All Debt Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such resolution of the Board of Directors or in any such indenture
supplemental hereto.
SECTION 2.04. Authentication and Delivery of Debt Securities. At any
time and from time to time after the execution and delivery of this Indenture,
the Issuer may deliver Debt Securities of any series executed by the Issuer to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver such Debt Securities to or upon the written order of the Issuer, signed
by both (a) the chairman of its Board of Directors, or any vice chairman of its
Board of Directors, or its president or any managing director and (b) by its
treasurer or any assistant treasurer or its secretary or any assistant
secretary, without any further action by the Issuer. In authenticating such
Debt Securities, and accepting the additional responsibilities under this
Indenture in relation to such Debt Securities, the Trustee shall be entitled to
receive, and (subject to Section 6.01) shall be fully protected in relying upon:
(1) a certified copy of any resolution or resolutions of the Board of
Directors authorizing the action taken pursuant to the resolution or
resolutions delivered under clause (2) below;
(2) a copy of any resolution or resolutions of the Board of Directors
relating to such series, in each case certified by the Secretary or an
Assistant Secretary of the Issuer;
(3) an executed supplemental indenture, if any;
(4) an Officers' Certificate setting forth the form and terms of the
Debt Securities as required pursuant to Sections 2.01 and 2.03,
respectively and prepared in accordance with Section 11.05;
(5) an Opinion of Counsel, prepared in accordance with Section 11.05,
which shall state:
<PAGE>
11
(A) that the form or forms and terms of such Debt Securities have
been established by or in accordance with a resolution of the Board of
Directors or by a supplemental indenture as permitted by Sections 2.01
and 2.03 in conformity with the provisions of this Indenture;
(B) that such Debt Securities, when authenticated and delivered
by the Trustee and issued by the Issuer in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute
valid and binding obligations of the Issuer;
(C) that all laws and requirements in respect of the execution
and delivery by the Issuer of the Debt Securities have been complied
with; and
(D) such other matters as the Trustee may reasonably request.
The Trustee shall have the right to decline to authenticate and
deliver any Debt Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Issuer or
if the Trustee in good faith by its board of directors or board of trustees,
executive committee, or a trust committee of directors or trustees or
Responsible Officers shall determine that such action would expose the Trustee
to personal liability to existing Holders.
SECTION 2.05. Execution of Debt Securities. The Debt Securities
shall be signed on behalf of the Issuer by both (a) the chairman of its Board of
Directors or any vice chairman of its Board of Directors or its president or any
managing director and (b) its treasurer or any assistant treasurer or its
secretary or any assistant secretary, under its corporate seal which may, but
need not, be attested. Such signatures may be the manual or facsimile
signatures of any such officers. The seal of the Issuer may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Debt 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 Debt Security
<PAGE>
12
that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Debt Securities shall cease to be such officer before the Debt Security so
signed shall be authenticated and delivered by the Trustee or disposed of by the
Issuer, such Debt Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debt Security had not ceased to
be such officer of the Issuer; and any Debt Security may be signed on behalf of
the Issuer by such persons as, at the actual date of the execution of such Debt
Security, shall be the proper officers of the Issuer, although at the date of
the execution and delivery of this Indenture any such person was not such an
officer.
SECTION 2.06. Certificate of Authentication. Each Debt Security
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 authorized 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 Debt Security executed by the Issuer shall be conclusive evidence that the
Debt Security so authenticated has been duly authenticated and delivered
hereunder and that the holder is entitled to the benefits of this Indenture.
SECTION 2.07. Denomination and Date of Debt Securities; Payments of
Interest. The Debt Securities shall be issuable as registered debt securities
without coupons and in denominations as shall be specified as contemplated by
Section 2.03. In the absence of any such specification with respect to the Debt
Securities of any series, the Debt Securities of such series shall be issuable
in denominations of $1,000 and any integral multiple thereof. The Debt
Securities shall be numbered, lettered, or otherwise distinguished in such
manner or in accordance with such plan as the officers of the Issuer executing
the same may determine with the approval of the Trustee as evidenced by the
execution and authentication thereof.
Each Debt Security shall be dated the date of its authentication,
shall bear interest, if any, from such date and shall be payable on the dates,
in each case, which shall be specified as contemplated by Section 2.03.
<PAGE>
13
The person in whose name any Debt Security of any series is registered
at the close of business on any record date applicable to a particular series
with respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Debt Security subsequent to the
record date and prior to such interest payment date, except if and to the extent
the Issuer shall default in the payment of the interest due on such interest
payment date for such series, in which case such defaulted interest shall be
paid to the persons in whose names outstanding Debt Securities for such series
are registered at the close of business on a subsequent record date (which shall
be not less than five Business Days prior to the date of payment of such
defaulted interest) established by notice given by mail by or on behalf of the
Issuer to the holders of Debt Securities not less than 15 days preceding such
subsequent record date. The term "record date" as used with respect to any
interest payment date (except a date for payment of defaulted interest) shall
mean the date specified as such in the terms of the Debt 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 fifteenth day of the next
preceding calendar month or, if such interest payment date is the fifteenth day
of a calendar month, the first day of such calendar month, whether or not such
record date is a Business Day.
SECTION 2.08. Registration, Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.02 a register or registers in which, subject to such reasonable
regulations as it may prescribe, it will register, and will register the
transfer of, Debt Securities as provided in this Article. 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.
Subject to Section 2.12, upon due presentation for registration of
transfer of any Debt Security of any series at any such office or agency to be
maintained for the purpose as provided in Section 3.02, the Issuer shall execute
and the Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Debt
<PAGE>
14
Security or Debt Securities of the same series in authorized denominations
for a like aggregate principal amount.
Subject to Section 2.12, any Debt Security or Debt Securities of any
series may be exchanged for a Debt Security or Debt Securities of the same
series in other authorized denominations, in an equal aggregate principal
amount. Debt Securities of any series to be exchanged shall be surrendered at
an office or agency to be maintained by the Issuer for the purpose as provided
in Section 3.02, and the Issuer shall execute and the Trustee shall authenticate
and deliver in exchange therefor the Debt Security or Debt Securities of the
same series which the Debt Securityholder making the exchange shall be entitled
to receive, bearing numbers not contemporaneously outstanding.
All Debt Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Debt Securities. No service charge shall be made
for any such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Debt Securities of any series for a period of 15 days next preceding the
first mailing of notice of redemption of Debt Securities of such series to be
redeemed, or (b) any Debt Securities selected, called or being called for
redemption except, in the case of any Debt Security where public notice has been
given that such Debt Security is to be redeemed in part, the portion thereof not
so to be redeemed. All Debt Securities issued upon any transfer or exchange of
Debt Securities shall be valid obligations of the Issuer, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debt
Securities surrendered upon such transfer or exchange.
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Debt
Securities. In case any temporary or definitive Debt Security of any series
shall become
<PAGE>
15
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its sole
discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver, a new Debt Security of
the same series, bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Debt Security, or in
lieu of and substitution for the Debt Security so destroyed, lost or stolen.
In every case the applicant for a substitute Debt Security shall furnish to
the Issuer and to the Trustee and any agent of the Issuer 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 Debt Security and of the ownership thereof.
Upon the issuance of any substitute Debt Security, the Issuer 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 Debt
Security 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 Issuer may instead of issuing a substitute Debt Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated or defaced Debt Security), if the applicant for such payment
shall furnish to the Issuer and to the Trustee and any agent of the Issuer 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 Issuer and the Trustee and any agent of the
Issuer or the Trustee evidence to their satisfaction of the destruction, loss or
theft of such Debt Security and of the ownership thereof.
Every substitute Debt Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Debt Security is
destroyed, lost or stolen shall constitute an additional contractual obligation
of the Issuer, whether or not the destroyed, lost or stolen Debt Security 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
<PAGE>
16
all other Debt Securities of such series duly authenticated and delivered
hereunder. All Debt Securities shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced or
destroyed, lost or stolen Debt Securities 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 Debt Securities; Destruction Thereof.
All Debt Securities surrendered for payment, redemption, registration of
transfer, for conversion or exchange, or for credit against any payment in
respect of a sinking or analogous fund, if surrendered to the Issuer or any
agent of the Issuer or the Trustee, shall be delivered to the Trustee for
cancellation or, if surrendered to the Trustee, shall be cancelled by it; and no
Debt Securities shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Indenture. The Trustee shall destroy cancelled
Debt Securities held by it and deliver a certificate of destruction to the
Issuer. If the Issuer shall acquire any of the Debt Securities, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Debt Securities unless and until the same are
delivered to the Trustee for cancelation.
SECTION 2.11. Temporary Debt Securities. Pending the preparation of
definitive Debt Securities for any series, the Issuer may execute and the
Trustee shall authenticate and deliver temporary Debt Securities for such series
(printed, lithographed, typewritten or otherwise reproduced, in each case in
form satisfactory to the Trustee). Temporary Debt Securities of any series
shall be issuable as registered Debt Securities without coupons, of any
authorized denomination, and substantially in the form of the definitive Debt
Securities of such series but with such omissions, insertions and variations as
may be appropriate for temporary Debt Securities, all as may be determined by
the Issuer with the concurrence of the Trustee. Temporary Debt Securities may
contain such reference to any provisions of this Indenture as may be
appropriate. Every temporary Debt Security shall be executed by the Issuer and
be authenticated by the Trustee
<PAGE>
17
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Debt Securities. Without unreasonable delay the
Issuer shall execute and shall furnish definitive Debt Securities of such
series and thereupon temporary Debt Securities of such series may be
surrendered in exchange therefor without charge at each office or agency to
be maintained by the Issuer for that purpose pursuant to Section 3.02, and
the Trustee shall authenticate and deliver in exchange for such temporary
Debt Securities of such series a like aggregate principal amount of
definitive Debt Securities of the same series of authorized denominations.
Until so exchanged, the temporary Debt Securities of any series shall be
entitled to the same benefits under this Indenture as definitive Debt
Securities of such series.
SECTION 2.12. Debt Securities Issuable in the Form of a Registered
Global Security. (a) If the Issuer shall establish pursuant to Section 2.03
that the Debt Securities of a series are to be issued in the form of one or more
Registered Global Securities, then the Issuer shall execute and the Trustee
shall, in accordance with this Article Two, authenticate and deliver, one or
more Registered Global Securities which (i) shall represent, and shall be
denominated in an amount equal to, the aggregate principal amount of all of the
Debt Securities of such series, (ii) shall be registered in the name of the
Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction, and (iv) shall bear a
legend substantially to the following effect: "Except as otherwise provided in
Section 2.12 of the Indenture, this Registered Global Security may be
transferred, in whole but not in part, by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary or to a nominee of such successor Depositary. Unless this
Registered Global Security is presented by an authorized representative of the
Depositary to the Issuer or its agent for registration of transfer, exchange or
payment, and, in the case of any transfer or exchange, any Registered Global
Security issued in exchange therefor is registered in the name of the Depositary
or such other name as requested by an authorized representative of the
Depositary and, in the case of any payment, such payment is made to the
Depositary or the Depositary's nominee, ANY TRANSFER, PLEDGE OR OTHER USE
<PAGE>
18
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof has an interest herein."
(b) Notwithstanding any other provision of this Section 2.12 or of
Section 2.08, the Registered Global Securities may be transferred, in whole but
not in part and in the manner provided in Section 2.08, by the Depositary to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary selected or approved by the Issuer or to a nominee of
such successor Depositary.
(c) The Depositary shall be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and any other applicable statute or
regulation.
(d) If at any time the Depositary notifies the Issuer that it is
unwilling or unable to continue as Depositary for such series or if at any time
the Depositary for such series shall no longer be eligible under paragraph (c)
of this Section 2.12, and a successor Depositary is not appointed by the Issuer
within 90 days after the Issuer receives such notice or becomes aware of such
condition, as the case may be, this Section 2.12 shall no longer be applicable
to the Debt Securities of such series and the Issuer will execute, and the
Trustee will authenticate and deliver, Debt Securities of such series in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Registered
Global Securities of such series then outstanding in exchange for such
Registered Global Securities. In addition, the Issuer may at any time and in
its sole discretion determine that the Debt Securities of any series shall no
longer be represented by Registered Global Securities and that the provisions of
this Section 2.12 shall no longer apply to the Debt Securities of such series.
In such event the Issuer will execute, and the Trustee, upon receipt of an
Officers' Certificate evidencing such determination by the Issuer, will
authenticate and deliver, Debt Securities of such series in definitive
registered form without coupons, in authorized denominations and in an aggregate
principal amount equal to the principal amount of the Registered Global
Securities of such series then outstanding in exchange for such Registered
Global Securities. Upon the exchange of the Registered Global
<PAGE>
19
Securities for such Debt Securities in definitive registered form without
coupons, in authorized denominations, such Registered Global Securities shall
be canceled by the Trustee. Such Debt Securities in definitive registered
form issued in exchange for the Registered Global Securities pursuant to this
Section 2.12(d) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debt Securities to the Persons in whose names such Debt
Securities are so registered.
(e) As long as the Outstanding Debt Securities of any series are
represented by one or more Registered Global Securities, the Issuer shall pay or
cause to be paid the principal of, and interest on, such Registered Global
Securities to the registered holders thereof, or to such Persons as the
registered holders thereof may designate, by wire transfer of immediately
available funds on the date such payments are due.
ARTICLE III
Covenants of the Issuer
SECTION 3.01. Payment of Principal and Interest. The Issuer will
duly and punctually pay or cause to be paid the principal of, and interest on,
the Debt Securities of each series at the place or places, at the respective
times and in the manner provided in such Debt Securities. Subject to
Section 2.12(e), each instalment of interest on the Debt Securities of any
series may be paid by mailing checks for such interest payable to or upon the
written order of the holders of Debt Securities entitled thereto as they shall
appear on the registry books of the Issuer.
SECTION 3.02. Offices for Payments, etc. So long as any of the Debt
Securities remain outstanding, the Issuer will maintain in the Borough of
Manhattan, the City of New York, the following for each series: an office or
agency (a) where the Debt Securities may be presented for payment, (b) where the
Debt Securities may be presented for registration of transfer and for exchange
as in this Indenture provided and (c) where notices and demands to or upon the
Issuer in respect of the Debt Securities or of this Indenture may be served.
The Issuer will give to the
<PAGE>
20
Trustee written notice of the location of any such office or agency and of
any change of location thereof. Unless otherwise specified in accordance
with Section 2.03, the Issuer hereby initially designates the Trustee's
office at [ ], as the office to be maintained by it for each
such purpose. In case the Issuer shall fail to so designate or maintain any
such office or agency or shall fail to give such notice of the location or of
any change in the location thereof, presentations and demands may be made and
notices may be served at the Corporate Trust Office.
SECTION 3.03. Appointment to Fill a Vacancy in Office of Trustee.
The Issuer, 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 Debt
Securities hereunder.
SECTION 3.04. Paying Agents. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to the Debt 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 Debt Securities of such
series (whether such sums have been paid to it by the Issuer or by any
other obligor on the Debt Securities of such series) in trust for the
benefit of the holders of the Debt Securities of such series or of the
Trustee; and
(b) that it will give the Trustee notice of any failure by the Issuer
(or by any other obligor on the Debt Securities of such series) to make any
payment of the principal of or interest on the Debt Securities of such
series when the same shall be due and payable.
The Issuer will, on or prior to each due date of the principal of or
interest on the Debt Securities of such series, 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 Issuer will promptly notify the Trustee of
any failure to take such action.
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21
If the Issuer shall act as its own paying agent with respect to the
Debt Securities of any series, it will, on or before each due date of the
principal of or interest on the Debt Securities of such series, set aside,
segregate and hold in trust for the benefit of the holders of the Debt
Securities of such series a sum sufficient to pay such principal or interest so
becoming due. The Issuer will promptly notify the Trustee of any failure to
take such action.
Anything in this Section to the contrary notwithstanding, the Issuer
may at any time, for the purpose of obtaining a satisfaction and discharge with
respect to one or more or all series of Debt Securities 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 Issuer or any paying agent hereunder, as required by this
Section, such sums to be held by the Trustee upon the trusts herein contained;
and, upon such payment by any paying agent to the Trustee, such paying agent
shall be released from all further liability with respect to such monies.
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 10.03 and 10.04.
SECTION 3.05. Written Statement to Trustee. The Issuer will deliver
to the Trustee on or before ________ in each year (beginning with _______) a
written statement, signed by two of its officers (which need not comply with
Section 11.05), stating that in the course of the performance of their duties as
officers of the Issuer they would normally have knowledge of any default by the
Issuer 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 3.06. Limitations on Liens. So long as Debt Securities are
outstanding, the Issuer will not, and will not permit any Subsidiary to,
directly or indirectly, create, issue, assume, incur or guarantee any
indebtedness for borrowed money which is secured by a Mortgage of any nature on
any of the present or future capital stock of any Restricted Subsidiary (or any
company, other than the
<PAGE>
22
Issuer, having direct or indirect control of any Restricted Subsidiary)
unless the Debt Securities then Outstanding and, if the Issuer so elects, any
other indebtedness of the Issuer ranking at least pari passu with the Debt
Securities, shall be secured equally and ratably with, or prior to, such
other secured debt so long as it is outstanding.
SECTION 3.07. Limitations on Disposition of Stock of Restricted
Subsidiaries. So long as Debt Securities are outstanding, the Issuer will not,
and will not permit any Subsidiary to, sell, transfer or otherwise dispose of
any shares of capital stock of any Restricted Subsidiary except for:
(a) a sale, transfer or other disposition of any capital stock of any
Restricted Subsidiary to a wholly owned Subsidiary of the Issuer or such
Subsidiary;
(b) a sale, transfer or other disposition of the entire capital stock
of any Restricted Subsidiary for at least fair value (as determined by the
Board of Directors of the Issuer acting in good faith); or
(c) a sale, transfer or other disposition of the capital stock of any
Restricted Subsidiary for at least fair value (as determined by the Board
of Directors of the Issuer acting in good faith) if, after giving effect
thereto, the Issuer and its Subsidiaries would own more than 80% of the
issued and outstanding Voting Stock of such Restricted Subsidiary.
SECTION 3.08. Corporate Existence. The Issuer will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence.
SECTION 3.09. Waiver of Certain Covenants. The Issuer may omit in
respect of the Debt Securities, in any particular instance, to comply with any
covenants or conditions set forth in Sections 3.06, 3.07 and 3.08, if before or
after the time for such compliance the Holders of at least a majority of the
Outstanding Debt Securities of all series (voting as a class) either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent expressly waived, and, until such waiver shall
become effective, the obligations of the Issuer and the duties of
<PAGE>
23
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
ARTICLE IV
Debt Securityholders' Lists and Reports by the
Issuer and the Trustee
SECTION 4.01. Issuer to Furnish Trustee Information as to Names and
Addresses of Debt Securityholders. (a) The Issuer 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
Debt Securities of each series:
(i) semiannually and not more than 15 days after each record date for
the payment of interest on such Debt Securities, as hereinabove specified,
as of such record date and on dates to be determined pursuant to
Section 2.03 for non-interest bearing securities in each year; and
(ii) at such other times as the Trustee may request in writing, within
30 days after receipt by the Issuer 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 Debt Security registrar for
such series, such list shall not be required to be furnished.
(b) The Issuer hereby appoints the Trustee as Debt Security Registrar
and the Trustee hereby consents to such appointment for each series of Debt
Securities to be issued hereunder.
SECTION 4.02. Preservation and Disclosure of Debt 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 Debt Securities contained in the most recent list furnished to it
as provided in Section 4.01 or maintained by the Trustee in its capacity as Debt
Security registrar for such series, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 4.01 upon receipt of a new list so
furnished.
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24
(b) In case three or more holders of Debt 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 a Debt Security for
a period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Debt Securities of a particular series (in which case the applicants must all
hold Debt Securities of such series) or with Holders of all Debt Securities with
respect to their rights under this Indenture or under such Debt 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
Debt Securities of such series or all Debt Securities, as the case may be,
whose names and addresses appear in the information preserved at the time
by the Trustee, in accordance with the provisions of subsection (a) of this
Section, and as to the approximate cost of mailing to such Debt
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 Debt Securityholder of such series or all Debt
Securities, as the case may be, whose name and address appears 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,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission together with a copy of the material to
be mailed, a written statement to the effect
<PAGE>
25
that, in the opinion of the Trustee, such mailing would be contrary to the
best interests of the holders of Debt Securities of such series or all Debt
Securities, as the case may be, or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more
of such objections, the Commission shall find, after notice and opportunity
for hearing, that all the objections so sustained have been met, and shall
enter an order so declaring, the Trustee shall mail copies of such material
to all such Debt Securityholders with reasonable promptness after the entry
of such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Each and every holder of Debt Securities, by receiving and holding
the same, agrees with the Issuer and the Trustee that neither the Issuer nor the
Trustee nor any agent of the Issuer 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 Debt Securities in accordance with the 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 4.03. Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual reports
and of the information, documents, and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Issuer may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, but if the Issuer 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
<PAGE>
26
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 Issuer 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 Debt Securities, within
30 days after the filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the Issuer
pursuant to subsections (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 4.04. Reports by the Trustee. (a) On or before [December 1]
in each year following the date hereof, so long as any Debt Securities are
outstanding hereunder, the Trustee shall transmit by mail as provided below to
the Debt Securityholders of each series, as hereinafter in this Section
provided, a brief report dated as of a date convenient to the Trustee no more
than 60 nor less than 45 days prior thereto with respect to:
(i) its eligibility under Section 6.09 and its qualification under
Section 6.08 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 Debt
<PAGE>
27
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 1% of the principal amount of the Debt
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 Issuer (or by any other obligor on the Debt
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) 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 Debt 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 Debt 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 no 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 Debt Securities of
such series on property or funds held or collected by it as Trustee and which it
has not previously reported pursuant to this subsection (b), except that the
Trustee shall not be
<PAGE>
28
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 Debt
Securities of such series outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail to
all registered holders of Debt Securities, as the names and addresses of such
holders appear upon the registry books of the Issuer.
(d) A copy of each such report shall, at the time of such transmission
to Debt Securityholders, be furnished to the Issuer and be filed by the Trustee
with each stock exchange upon which the Debt Securities of any applicable series
are listed and also with the Commission. The Issuer agrees to notify the
Trustee with respect to any series when and as the Debt Securities of such
series become admitted to trading on any national securities exchange.
ARTICLE V
Remedies of the Trustee and Debt Securityholders
on Event of Default
SECTION 5.01. Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default" with respect to Debt Securities of any
series wherever used herein, means any 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 instalment of interest upon any of
the Debt 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 Debt Securities of such series as and when the same shall become due
and payable either at maturity, upon any redemption, by declaration or
otherwise; or
<PAGE>
29
(c) default in the payment of any sinking fund instalment as and when
the same shall become due and payable by the terms of the Debt Securities
of such series; or
(d) default in the performance, or breach, of any covenant or warranty
of the Issuer in respect of the Debt Securities of such series (other than
a covenant or warranty in respect of the Debt 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 there has been given, by registered or certified
mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Debt
Securities of such series, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(e) failure by the Issuer to make any payment at maturity, including
any applicable grace period, in respect of indebtedness, which term as used
herein means obligations (other than the Debt Securities of such series or
non-recourse obligations) of, or guaranteed or assumed by, the Issuer for
borrowed monies or evidenced by bonds, debentures, notes or other similar
instruments ("Indebtedness"), in an amount in excess of $10,000,000 or the
equivalent thereof in any other currency or composite currency and such
failure shall have continued for a period of 10 days after written notice
thereof shall have been given by registered or certified mail, return
receipt requested, to the Issuer by the Trustee, or to the Issuer and the
Trustee by the holders of not less than 25% in aggregate principal amount
of the Outstanding Debt Securities (treated as one class) and stating that
such notice is a "Notice of Default" hereunder; or
(f) default by the Issuer with respect to any Indebtedness, which
default results in the acceleration of Indebtedness in an amount in excess
of $10,000,000 or the equivalent thereof in any other currency or composite
currency without such Indebtedness having been discharged or such
acceleration having been incurred, waived, rescinded or annulled for a
period of
<PAGE>
30
10 days after written notice thereof shall have been given by
registered or certified mail, return receipt requested, to the Issuer by
the Trustee, or to the Issuer and the Trustee by the holders of not less
than 25% in aggregate principal amount of the outstanding Debentures
(treated as one class) and stating that such notice is a "Notice of
Default" hereunder; or
(g) entry by a court having jurisdiction in the premises of a decree
or order for relief in respect of the Issuer or any Restricted Subsidiary
in an involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law if not
dismissed within 30 days; or
(h) commencement by the Issuer or any Restricted Subsidiary of a
voluntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law; or
(i) any other Event of Default provided in the supplemental indenture
or resolution of the Board of Directors under which such series of Debt
Securities is issued or in the form of Debt Security for such series.
If an Event of Default described in clauses (a), (b) or (c) above
occurs and is continuing, then, and in each and every such case, unless the
principal of all of the Debt Securities of such series shall have already
become due and payable, either the Trustee or the holders of not less than
25% in aggregate principal amount of the Debt Securities of such series then
Outstanding hereunder (each such series voting as a separate class) by notice
in writing to the Issuer (and to the Trustee if given by Debt
Securityholders), may declare the entire principal (or, if the Debt
Securities of such series are Original Issue Discount Debt Securities, such
portion of the principal amount as may be specified in the terms of such
series) of all Debt Securities of such series and the interest accrued
thereon, if any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable, provided that
the payment of principal and interest on such Debt Securities shall remain
subordinated to the extent provided in Article Fourteen. If an Event of
Default described in clause (d) above (if such Event of
<PAGE>
31
Default is with respect to less than all series of Debt Securities then
Outstanding) occurs and is continuing, then, and in each and every such case,
unless the principal of all of the Debt Securities of such series shall have
already become due and payable, either the Trustee or the holders of not less
than 25% of the aggregate principal amount of the Debt Securities of all such
affected series then outstanding hereunder (voting as a single class) by
notice in writing to the Issuer (and to the Trustee if given by Debt
Securityholders), may declare the entire principal (or, if the Debt
Securities of any such series are Original Issue Discount Debt Securities,
such portion of the principal amount as may be specified in the terms of such
series) of all Debt Securities of all such affected series and the interest
accrued thereon, if any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable, provided that
the payment of principal and interest on such Debt Securities shall remain
subordinated to the extent provided in Article Fourteen. If an Event of
Default described in clause (d) (if the Event of Default under clause (d) is
with respect to all series of Debt Securities then outstanding), (e), (f),
(g) or (h) occurs and is continuing, then and in each and every such case,
unless the principal of all the Debt Securities shall have already become due
and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of all the Debt Securities then Outstanding
hereunder (treated as one class), by notice in writing to the Issuer (and to
the Trustee if given by Debt Securityholders), may declare the entire
principal (or, if any Debt Securities are Original Issue Discount Debt
Securities, such portion of the principal as may be specified in the terms
thereof) of all the Debt Securities then outstanding and interest accrued
thereon, if any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Debt Securities are Original
Issue Discount Debt Securities, such portion of the principal as may be
specified in the terms thereof) of the Debt Securities of any series (or of all
the Debt Securities, as the case may be) shall have been so declared due and
payable, and before any judgment or decree for the payment of the monies due
shall have been obtained or entered as hereinafter provided, the Issuer shall
pay or shall deposit with the Trustee a sum
<PAGE>
32
sufficient to pay all matured instalments of interest upon all the Debt
Securities of such series (or of all the Debt Securities, as the case may be)
and the principal of any and all Debt Securities of such series (or of all
the Debt Securities, as the case may be) 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 instalments of interest, at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Debt Securities)
specified in the Debt Securities of such series (or at the respective rates
of interest or Yields to Maturity of all the Debt Securities, as the case may
be) to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation 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 non-payment of the principal of Debt 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 (i) with respect to an Event
of Default described in clauses (a), (b) and (c) above, the holders of a
majority in aggregate principal amount of the Debt Securities of such series,
voting as a separate class, then outstanding, by written notice to the Issuer
and to the Trustee, may waive all defaults with respect to such series and
rescind and annul such declaration and its consequences, (ii) with respect to
an Event of Default described in clause (d) above (if such Event of Default
is with respect to less than all series of Debt Securities then Outstanding),
the holders of a majority in aggregate principal amount of the Debt
Securities of all such affected series (voting as a single class) then
Outstanding, by written notice to the Issuer and to the Trustee, may waive
all such defaults with respect to all such affected series and rescind and
annul such declaration and its consequences and (iii) with respect to an
Event of Default described in clauses (d) (if such Event of Default is with
respect to all Series of Debt Securities then Outstanding), (e), (f) and (g),
the holders of a majority in aggregate principal amount of the Debt
Securities of all series (voting as a single class) then Outstanding by
written notice to the Issuer and to the Trustee, may waive all such defaults
with respect to all the Debt Securities then Outstanding and rescind and
annul such declaration and
<PAGE>
33
its consequences. 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 Debt Securities shall have been accelerated and
declared due and payable pursuant to the provisions hereof, then, from and after
such declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Debt 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 Debt Securities.
SECTION 5.02. Collection of Indebtedness by Trustee; Trustee May
Prove Debt. The Issuer covenants that (a) in case default shall be made in
the payment of any instalment of interest on any of the Debt 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 part of the principal of any of
the Debt Securities of any series when the same shall have become due and
payable, whether upon maturity of the Debt Securities of such series or upon
any redemption or by declaration or otherwise--then upon demand of the
Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of
the Debt Securities of such series the whole amount that then shall have
become due and payable on all Debt Securities of such series for principal 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 Debt Securities) specified in the Debt 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 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
<PAGE>
34
predecessor Trustee except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Debt Securities of any series to the registered
holders, whether or not the principal of and interest on the Debt Securities of
such series be overdue.
In case the Issuer 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 Issuer or other obligor upon such Debt
Securities and collect in the manner provided by law out of the property of the
Issuer or other obligor upon such Debt Securities, wherever situated, the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Debt Securities under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor, or in case of any other comparable judicial proceedings relative to the
Issuer or other obligor upon the Debt Securities of any series, or to the
creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of any Debt 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, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Debt Securities of any series are
Original Issue Discount Debt Securities, such portion of the principal
amount as may be specified in the terms of such series) owing and unpaid in
respect of the Debt Securities of any
<PAGE>
35
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 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 Debt Securityholders allowed in any judicial
proceedings relative to the Issuer or other obligor upon the Debt
Securities of any series, or to the creditors or property of the Issuer
or such other obligor;
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Debt 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 monies or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Debt Securityholders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the Debt Securityholders
to make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to the Debt Securityholders, to
pay to the Trustee such amounts as shall be sufficient to cover reasonable
compensation 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 6.06.
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 Debt
Securityholder any plan or reorganization, arrangement, adjustment or
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36
composition affecting the Debt 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 Debt 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 Debt Securities, may be enforced by the Trustee without the
possession of any of the Debt Securities or the production thereof on 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 Debt Securities 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 Debt Securities in respect to which such action was taken, and it shall
not be necessary to make any holders of such Debt Securities parties to any such
proceedings.
SECTION 5.03. Application of Proceeds. Any monies collected by the
Trustee pursuant to this Article in respect 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 monies on account of principal or interest, upon
presentation of the several Debt Securities in respect of which monies have been
collected and stamping (or otherwise noting) thereon the payment, or issuing
Debt Securities of such series in reduced principal amounts in exchange for the
presented Debt 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 monies have been collected, including reasonable
compensation to the Trustee and each predecessor Trustee and their
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37
respective agents and attorneys and 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 all other
amounts due to the Trustee or any predecessor Trustee pursuant to Section
6.06;
SECOND: In case the principal of the Debt Securities of such series in
respect of which monies have been collected shall not have become and be
then due and payable, to the payment of interest on the Debt Securities of
such series in default in the order of the maturity of the instalments of
such interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue instalments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Debt Securities) specified in such Debt Securities,
such payments to be made ratably to the persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Debt Securities of such series in
respect of which monies 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 Debt Securities of such series for principal and
interest, with interest upon the overdue principal, and (to the extent 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 Debt Securities) specified in the
Debt Securities of such series; and in case such monies shall be
insufficient to pay in full the whole amount so due and unpaid upon the
Debt 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 instalment of interest over any other instalment
of interest, or of any Debt Security of such series over any other Debt
Security of such series, ratably to the aggregate of such principal and
accrued and unpaid interest or yield to maturity; and
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38
FOURTH: To the payment of the remainder, if any, to the Issuer or any
other person lawfully entitled thereto.
SECTION 5.04. 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 effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in 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.
SECTION 5.05. 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 Issuer and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers
of the Issuer, the Trustee and the Debt Securityholders shall continue as though
no such proceedings had been taken.
SECTION 5.06. Limitations on Suits by Debt Securityholders. No
holder of any Debt Security of any series 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 trustee, receiver,
liquidator, 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 Debt 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 reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby and the
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39
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 5.09; it being understood and intended, and being
expressly covenanted by the taker and Holder of every Debt Security with
every other taker and Holder and the Trustee, that no one or more Holders of
Debt Securities of any series shall have any right in any manner whatever by
virtue or by availing of any provision of this Indenture to affect, disturb
or prejudice the rights of any other such Holder of Debt Securities, or to
obtain or seek to obtain priority over or preference to any other such Holder
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of Debt
Securities of the applicable series. For the protection and enforcement of
the provisions of this Section, each and every Debt Securityholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 5.07. Unconditional Right of Debt Securityholders to
Institute Certain Suits. Notwithstanding any other provision in this Indenture
and any provision of any Debt Security, the right of any Holder of any Debt
Security to receive payment of the principal of and interest on such Debt
Security on or after the respective due dates expressed in such Debt 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 5.08. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 5.06, no right or remedy
herein conferred upon or reserved to the Trustee or to the Debt 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 Debt Securityholder to
exercise any right or power accruing upon
<PAGE>
40
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 5.06, every power
and remedy given by this Indenture or by law to the Trustee or to the Debt
Securityholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Debt Securityholders.
SECTION 5.09. Control by Debt Securityholders. The Holders of a
majority in aggregate principal amount of the Debt Securities of each series
affected (with each series voting as a separate class) at the time outstanding
shall have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series 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 Sections 6.01 and 6.02) 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 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 Debt Securities of all series so affected not
joining in the giving of said direction, it being understood that (subject to
Sections 6.01 and 6.02) the Trustee shall have no duty to ascertain whether or
not such actions or forebearances 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 direction or directions by Debt Securityholders.
SECTION 5.10. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Debt Securities of any series as
provided in Section 5.01, the Holders of a majority in aggregate principal
amount of
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41
the Debt Securities of such series at the time Outstanding may on
behalf of the Holders of all the Debt Securities of such series waive any past
default or Event of Default described in clause (c) of Section 5.01 (or, in the
case of an Event of Default specified in clause (d) of Section 5.01 which
relates to less than all series of Debt Securities then Outstanding, the Holders
of a majority in aggregate principal amount of the Debt Securities then
Outstanding affected thereby (voting as single class)) may waive any such
default or Event of Default, or, in the case of an Event of Default specified in
clause (d) (if the Event of Default under clause (d) relates to all series of
Debt Securities then outstanding), (e), (f), (g) or (h) of Section 5.01 the
Holders of Debt Securities of a majority in principal amount of all the Debt
Securities then Outstanding (voting as one class) 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 Debt Security affected. In the case of any such
waiver, the Issuer, the Trustee and the Holders of the Debt Securities of such
series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.
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 Debt Securityholders
of any series, as the names and addresses of such Holders appear on the registry
books, notice by mail 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
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42
principal of or interest on any of the Debt Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of
directors or trustees and/or responsible officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of
the Debt 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 Debt
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debt Securityholder or group of Debt
Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Debt Securities of such series, or, in the
case of any suit relating to or arising under clause (d) of Section 5.01 (if the
suit relates to Debt Securities of more than one but less than all series), 10%
in aggregate principal amount of Debt Securities outstanding affected thereby,
or in the case of any suit relating to or arising under clause (d) (if the suit
under clause (d) relates to all the Debt Securities then outstanding), (e), (f),
(g) or (h) of Section 5.01, 10% in aggregate principal amount of all Debt
Securities Outstanding, or to any suit instituted by any Debt Securityholder for
the enforcement of the payment of the principal of or interest on any Debt
Security on or after the due date expressed in such Debt Security.
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43
ARTICLE VI
Concerning the Trustee
SECTION 6.01. Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of Debt
Securities issued hereunder, the Trustee, prior to the occurrence of an Event of
Default with respect to the Debt 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. In case an Event of Default with
respect to the Debt Securities of a series has occurred (which has not been
cured or waived) 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
Debt 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
Debt Securities of any 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
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44
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 direction
of the Holders pursuant to Section 5.09 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 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 6.02. Certain Rights of the Trustee. Subject to Section
6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' 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 Issuer mentioned
herein shall be sufficiently evidenced
<PAGE>
45
by an Officers' 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 an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice or 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 in reliance on 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 Debt Securityholders pursuant to the provisions of
this Indenture, unless such Debt Securityholders shall have offered to the
Trustee reasonable security or indemnity 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 the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an 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 so
to do by the holders of not less than a majority in aggregate principal
amount of the Debt 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 reasonable indemnity
against such expenses or liabilities as a condition to proceeding;
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46
the reasonable expenses of every such investigation shall be paid by the
Issuer or, if paid by the Trustee or any predecessor trustee, shall be
repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
SECTION 6.03. Trustee Not Responsible for Recitals, Disposition of
Debt Securities or Application of Proceeds Thereof. The recitals contained
herein and in the Debt Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer, 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
Debt Securities. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Debt Securities or of the proceeds
thereof.
SECTION 6.04. Trustee and Agents May Hold Debt Securities;
Collections, Etc. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Debt
Securities with the same rights it would have if it were not the Trustee or such
agent and, subject to Sections 6.08 and 6.13, if operative, may otherwise deal
with the Issuer and receive, collect, hold and retain collections from the
Issuer with the same rights it would have if it were not the Trustee or such
agent.
SECTION 6.05. Monies Held by Trustee. Subject to the provisions of
Section 10.04 hereof, all monies 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 Issuer or the Trustee shall be under any liability for interest on any
monies received by it hereunder.
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47
SECTION 6.06. Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer 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 Issuer 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 Issuer 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 Issuer 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 Debt 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 Debt Securities, and the Debt Securities are hereby
subordinated to such senior claim.
SECTION 6.07. Right of Trustee to Rely on Officers' Certificate, Etc.
Subject to Sections 6.01 and 6.02, 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, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such certificate,
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48
in the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Indenture upon the faith thereof.
SECTION 6.08. 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 Debt Securityholders at their last addresses as they appear on
the Debt Security register.
(c) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest with respect to Debt Securities of any series if:
(i) the Trustee is trustee under this Indenture with respect to
the outstanding Debt 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
the Issuer are outstanding, unless such other indenture is a
collateral trust indenture under which the only collateral consists of
Debt Securities issued under this Indenture and this Indenture with
respect to the Debt Securities of any other series and there shall
also be so excluded any other indenture or indentures under which
other securities, or certificates of interest or participation in
other securities, of the Issuer are outstanding if (x) this Indenture
is and, if applicable, this Indenture and any series issued pursuant
to this Indenture 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
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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 Debt 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
Debt Securities of such series and such other series, or under this
Indenture or such other indenture or indentures, or (y) 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 Debt 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 Debt 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 Debt Securities of any series issued under this
Indenture or an underwriter for the Issuer;
(iii) the Trustee directly or indirectly controls or is directly
or indirectly controlled by or is under direct or indirect common
control with the Issuer or an underwriter for the Issuer;
(iv) the Trustee or any of its directors or executive officers is
a director, officer, partner, employee, appointee, or representative
of the Issuer, or of an underwriter (other than the Trustee itself)
for the 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
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director or an executive officer, or both, of the Issuer, but may
not be at the same time an executive officer of both the Trustee and
the 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 the Issuer; and (z) the Trustee may be designated by the
Issuer or by any underwriter for the 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 the 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 the 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 the Issuer, not including the Debt 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 the 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
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or is under direct or indirect common control with, the 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 the 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 subsections (c)(vi), (vii) or (viii) of this Section.
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 security. 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 the Issuer
fails to make payment in full of principal of or interest on any of
the Debt Securities when and as the same becomes due and payable, and
such failure continues for 30 days thereafter, the Trustee shall make
a prompt check of its holdings of such securities in any of the
above-mentioned capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be considered
as though beneficially owned by the Trustee for the
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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 subsections (c)(iii) or (vii) of this Section.
For the purposes of subsections (c)(vi), (vii), (viii) and (ix) of
this Section only:
(A) 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 monies 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;
(B) 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
(C) 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 depositary, 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
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53
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 the 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 any such undertaking, or has participated or has had
a participation in the direct or indirect underwriting of any such
undertaking, but such term shall not include a person whose interest
was limited to a commission from an underwriter or dealer not in
excess of the usual and customary distributors' or sellers'
commission;
(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 any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, or government or any agency 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 in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust,
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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 in the direction or management of the affairs of a
person;
(v) the term "Issuer" shall mean any obligor upon the Debt
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, the Issuer or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means
such amount of the outstanding voting securities of such person as
entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person;
(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 evidence of indebtedness, the
number of shares if relating to capital shares, and the number of
units if relating to any other kind of security;
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(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.
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SECTION 6.09. Persons Eligible for Appointment as Trustee. The
Trustee for each series of Debt 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. 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. So long as any Debt Securities are outstanding, there shall at all times
be a Trustee hereunder.
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 Debt
Securities by giving written notice of resignation to the Issuer and by
mailing notice thereof by first-class mail to Holders of the applicable
series of Debt Securities at their last addresses as they shall appear on the
Debt Security register. Upon receiving such notice of resignation, the
Issuer 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
Debt Securityholder who has been a bona fide Holder of a Debt Security or
Debt 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
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successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor trustee.
(b) If at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 6.08 with respect to any series of Debt Securities after written
request therefor by the Issuer or by any Debt Securityholder who has been a
bona fide Holder of a Debt Security or Debt 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 6.09 and shall fail to resign after written request
therefor by the Issuer or by any Debt Securityholder; or
(iii) the Trustee shall become incapable of acting with respect to any
series of Debt 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 Issuer may remove the Trustee with respect to the
applicable series of Debt Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the President
or the Board of Directors of the Issuer, 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 Debt Securityholder who has been
a bona fide Holder of a Debt Security or Debt 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.
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(c) The Holders of a majority in aggregate principal amount of the
Debt Securities of each series at the time outstanding may at any time remove
the Trustee with respect to Debt Securities of such series and appoint a
successor trustee with respect to the Debt Securities of such series by
delivering to the Trustee so removed, to the successor trustee so appointed and
to the Issuer the evidence provided for in Section 7.01 of the action in that
regard taken by the Debt Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series of Debt Securities 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 acceptance of appointment by the successor trustee
as provided in Section 6.11.
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 Issuer 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 Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.04,
pay over to the successor trustee all monies 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 Issuer 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 6.06.
If a successor trustee is appointed with respect to the Debt
Securities of one or more (but not all) series, the Issuer, the predecessor
trustee and each successor
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trustee with respect to the Debt Securities of any 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 Debt 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 Debt 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 6.08 and eligible under the provisions of Section 6.09.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Issuer shall mail notice thereof by first-class mail to
the Holders of Debt Securities of any series for which such successor trustee is
acting as trustee at their last addresses as they shall appear in the Debt
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 Issuer 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 Issuer.
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 any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 6.08 and
eligible under the provisions of
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Section 6.09, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Debt 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 Debt Securities so authenticated; and, in case at that time any of the Debt
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Debt Securities either in the name of any
predecessor hereunder or in the name of the successor trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
Debt 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 Debt
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 Issuer.
(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 the 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 Debt Securities 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 months' period and valid as
against the 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
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or against the 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 months'
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the 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 the 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 the
Issuer in bankruptcy or receivership or in proceedings for
organization 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 months' 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 months' 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
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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 months' 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 Debt Securityholders and the holders of other indenture
securities in such manner that the Trustee, such Debt 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 the 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 the Issuer of the funds and
property in such special account and before crediting to the respective claims
of the Trustee, such Debt Securityholders and the holders of other indenture
securities dividends on claims filed against the 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
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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 Debt Securityholders
and the holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such special
account and 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 Debt 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 months' 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 months'
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 months' 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 Debt 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 the 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 Debt Securities or upon any
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 the 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
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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 Issuer 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 Issuer arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation; and
(5) the term "Issuer" shall mean any obligor upon the Debt Securities.
ARTICLE VII
Concerning the Debt Securityholders
SECTION 7.01. Evidence of Action Taken by Debt Securityholders. 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 Debt 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 Debt 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
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any purpose of this Indenture and (subject to Sections 6.01 and 6.02)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article.
SECTION 7.02. Proof of Execution of Instruments And of Holding of
Debt Securities. Subject to Sections 6.01 and 6.02, the execution of any
instrument by a Debt 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. The
holding of Debt Securities shall be proved by the Debt Security register or by a
certificate of the registrar thereof.
SECTION 7.03. Holders to Be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the person
in whose name any Debt Security shall be registered upon the Debt Security
register for such series as the absolute owner of such Debt Security (whether or
not such Debt 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, subject to the provisions of this Indenture,
interest on such Debt Security and for all other purposes; and neither the
Issuer nor the Trustee nor any agent of the Issuer 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 monies payable
upon any such Debt Security.
SECTION 7.04. Debt Securities Owned by Issuer Deemed Not Outstanding.
In determining whether the Holders of the requisite aggregate principal amount
of Outstanding Debt Securities of any or all series have concurred in any
direction, consent or waiver under this Indenture, Debt Securities which are
owned by the Issuer or any other obligor on the Debt 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
Issuer or any other obligor on the Debt 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
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such direction, consent or waiver only Debt Securities which the Trustee knows
are so owned shall be so disregarded. Debt Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Debt Securities and that the pledgee is not the Issuer or any other obligor
upon the Debt Securities or any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer or any
other obligor on the Debt 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
Issuer shall furnish to the Trustee promptly an Officers' Certificate listing
and identifying all Debt Securities, if any, known by the Issuer to be owned or
held by or for the account of any of the above-described persons; and, subject
to Sections 6.01 and 6.02, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Debt Securities not listed therein are Outstanding for the
purpose of any such determination.
SECTION 7.05. Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.01,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Debt Securities of any or all series, as the case may
be, specified in this Indenture in connection with such action, any Holder of a
Debt Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Debt 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 Debt Security. Except as aforesaid any such action
taken by the Holder of any Debt Security shall be conclusive and binding upon
such Holder and upon all future Holders and owners of such Debt Security and of
any Debt Securities issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon any such Debt
Security. Any action taken by the Holders of the percentage in aggregate
principal amount of the Debt Securities of any or all series, as the case may
be, specified in this Indenture in connection with such action shall be
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conclusively binding upon the Issuer, the Trustee and the Holders of all the
Debt Securities affected by such action.
ARTICLE VIII
Supplemental Indentures
SECTION 8.01. Supplemental Indentures Without Consent of Debt
Securityholders. The Issuer 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 Debt Securities of one or more series any property or
assets;
(b) to evidence the succession of another corporation to the Issuer,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Issuer pursuant to
Article Nine;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of Debt 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 Debt
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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 under this Indenture or under any supplemental
indenture as the Issuer may deem necessary or desirable and which shall not
adversely affect the interests of the Holders of the Debt Securities;
(e) to establish the form or terms of Debt Securities of any series as
permitted by Sections 2.01 and 2.03, and to provide for the issuance under
this Indenture of Debt Securities in coupon form (including Debt Securities
registrable as to principal only) and to provide for exchangeability of
such Debt Securities with Debt Securities issued hereunder in fully
registered form, and to make all appropriate changes for such purpose; and
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Debt Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant
to the requirements of Section 6.11.
The Trustee is hereby authorized to join with the Issuer 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 Debt
Securities at the
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time outstanding, notwithstanding any of the provisions of Section 8.02.
SECTION 8.02 Supplemental Indentures with Consent of Debt
Securityholders. With the consent (evidenced as provided in Article Seven) of
the Holders of not less than a majority in aggregate principal amount of the
Debt Securities at the time Outstanding of all series affected by such
supplemental indenture (voting as one class), the Issuer 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 Debt Securities of such
series; provided, that no such supplemental indenture shall (a) extend the final
maturity of any Debt 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 the principal of an
Original Issue Discount Debt Security that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 5.01 or the amount
thereof provable in bankruptcy pursuant to Section 5.02, or impair or affect the
right of any Debt Securityholder to institute suit for the payment thereof or,
if the Debt Securities provide therefor, any right of repayment at the option of
the Debt Securityholder without the consent of the Holder of each Debt Security
so affected or (b) reduce the aforesaid percentage of Debt Securities of any
series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Debt Security
so affected.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors certified by the secretary or an assistant secretary
of the Issuer authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Debt
Securityholders as aforesaid and other documents, if any, required by Section
7.01, the Trustee shall join with the Issuer in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under
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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 Debt 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 Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Issuer
shall mail a notice thereof by first class mail to the Holders of Debt
Securities of each series affected thereby at their addresses as they shall
appear on the Debt Security registry books of the Issuer, setting forth in
general terms the substance of such supplemental indenture. Any failure of the
Issuer 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 8.03. 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 Issuer and the
Holders of Debt Securities of each series 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 8.04. Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.01 and 6.02, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article 8 complies with the
applicable provisions of this Indenture.
SECTION 8.05. Notation on Debt Securities in Respect of Supplemental
Indentures. Notation on Debt Securities in Respect of Supplemental Indentures.
Debt Securities of any series authenticated and delivered after
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the execution of any supplemental indenture pursuant to the provisions of
this Article may bear a notation in form approved by 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 Issuer or the Trustee shall so
determine, new Debt 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 Issuer, authenticated by the Trustee and delivered in exchange for the
Debt Securities of such series then outstanding.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
SECTION 9.01. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except under Certain Conditions. So long as Debt Securities are
outstanding, the Issuer shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which the
Issuer is merged or which purchases or acquires by conveyance or transfer,
or which leases, the properties and assets of the Issuer as an entirety or
substantially as an entirety, shall be a corporation organized and existing
under the laws of the United States of America, any State thereof or the
District of Columbia;
(b) upon any such consolidation, merger, sale, lease or conveyance,
the due and punctual payment of the principal of, premium, if any, and
interest on all the Debt 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 Issuer,
shall be expressly assumed, by supplemental indenture satisfactory in form
to the Trustee, executed and delivered to the Trustee, by the corporation
formed by such consolidation, or into which the Issuer shall have been
merged, or which shall have acquired such property; and
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(c) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default shall have occurred and be continuing.
SECTION 9.02. 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 Issuer, 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 Issuer prior to such succession any
or all of the Debt Securities issuable hereunder which theretofore shall not
have been signed by the Issuer and delivered to the Trustee; and, upon the order
of such successor corporation, instead of the Issuer, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Debt Securities which previously shall
have been signed and delivered by the officers of the Issuer to the Trustee for
authentication, and any Debt Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All of the Debt Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Debt Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Debt Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance
such changes in phraseology and form (but not in substance) may be made in the
Debt 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 Issuer 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 Debt Securities
and may be liquidated and dissolved.
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SECTION 9.03. Opinion of Counsel to Trustee. The Trustee, subject
to the provisions of Sections 6.01 and 6.02, may receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
lease or conveyance, and any such assumption, and any such liquidation or
dissolution, complies with the applicable provisions of this Indenture.
ARTICLE X
Satisfaction and Discharge of Indenture;
Unclaimed Monies
SECTION 10.01. Satisfaction and Discharge of Indenture. If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Debt Securities of any series outstanding hereunder
(other than Debt Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.09) as and when the
same shall have become due and payable, or (b) the Issuer shall have
delivered to the Trustee for cancelation all Debt Securities of any series
theretofore authenticated (other than any Debt Securities of such series
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.09) or (c) (i) all the Debt
Securities of such series not theretofore delivered to the Trustee for
cancelation 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 Issuer shall have irrevocably deposited
or caused to be deposited with the Trustee as trust funds the entire amount
in cash (other than monies repaid by the Trustee or any paying agent to the
Issuer in accordance with Section 10.04) or direct obligations of the United
States of America, backed by its full faith and credit, maturing as to
principal and interest in such amounts and at such times as will insure the
availability of cash sufficient to pay at maturity or upon redemption all
Debt Securities of such series (other than any Debt Securities of such series
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.09) not theretofore delivered to
the Trustee for cancelation, including principal and interest due or to become
due to such date of
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maturity as the case may be, and if, in any such case, the Issuer shall
also pay or cause to be paid all other sums payable hereunder by the Issuer
with respect to Debt Securities of such series, then this Indenture shall
cease to be of further effect with respect to Debt Securities of such series
(except as to (i) rights of registration of transfer and exchange, and the
Issuer's right of optional redemption, (ii) substitution of mutilated,
defaced, destroyed, lost or stolen Debt Securities, (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, if any, of holders of Debt Securities to convert or exchange
Debt Securities, (v) the rights, obligations and immunities of the Trustee
hereunder and (vi) the rights of the Debt 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
Issuer accompanied by an Officers' Certificate and an Opinion of Counsel and
at the cost and expense of the Issuer, 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 Debt
Securities to receive amounts in respect of principal of and interest on the
Debt Securities held by them shall not be delayed longer than required by
then-applicable mandatory rules or policies of any securities exchange upon
which the Debt Securities are listed. The Issuer 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 or the
Debt Securities of such series.
SECTION 10.02. Application by Trustee of Funds Deposited for
Payment of Debt Securities. Subject to Section 10.04, all monies deposited
with the Trustee pursuant to Section 10.01 shall be held in trust and applied
by it to the payment, either directly or through any paying agent (including
the Issuer acting as its own paying agent), to the Holders of the particular
Debt Securities of such series for the payment or redemption of which such
monies have been deposited with the Trustee, of all sums due and to become
due thereon for principal and interest; but such
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monies need not be segregated from other funds except to the extent
required by law.
SECTION 10.03. Repayment of Monies Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Debt Securities of any series, all monies then held by any paying agent
under the provisions of this Indenture with respect to such series of Debt
Securities shall, upon demand of the Issuer, 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 monies.
SECTION 10.04. Return of Monies Held by Trustee and Paying Agent
Unclaimed for Three Years. Any monies deposited with or paid to the Trustee
or any paying agent for the payment of the principal of or interest on any
Debt Security of any series and not applied but remaining unclaimed for three
years after the date upon which such principal or interest shall have become
due and payable, shall, upon the written request of the Issuer and unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property law, be repaid to the Issuer by the Trustee for such
series or such paying agent, and the Holder of the Debt Security of such
series shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property laws, thereafter look only to the
Issuer 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 monies
shall thereupon cease.
ARTICLE XI
Miscellaneous Provisions
SECTION 11.01. Incorporators, Stockholders, Officers and Directors
of Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any Debt
Security, 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 Issuer or of any successor,
either directly or through the Issuer 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
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proceeding or otherwise, all such liability being expressly waived and
released by the acceptance of the Debt Securities by the holders thereof and
as part of the consideration for the issue of the Debt Securities.
SECTION 11.02. Provisions of Indenture for the Sole Benefit of
Parties and Debt Securityholders. Nothing in this Indenture or in the Debt
Securities, expressed or implied, shall give or be construed to give to any
person, firm or corporation, other than the parties hereto and their
successors and the Holders of the Debt Securities, 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 Debt Securities.
SECTION 11.03. Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.04. Notices and Demands on Issuer, Trustee and Debt
Securityholders. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Debt Securities to or on the Issuer may be given or served by
being sent by registered mail (except as otherwise specifically provided
herein) addressed (until another address of the Issuer is filed by the Issuer
with the Trustee) to Financial Security Assurance Holdings Ltd., 350 Park
Avenue, New York, New York 10022, Attention: General Counsel. Any notice,
direction, request or demand by the Issuer or any Debt Securityholder to or
upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at his last address as it appears in the Debt Security register. 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
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shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer and Debt
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 11.05. Officers' Certificate and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent
have been complied with, except that in the case of any such application or
demand as to which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular application or
demand, no additional certificate or opinion need be furnished.
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
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the opinion of such person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer
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 Issuer, upon the certificate, statement or
opinion of or representations by an officer or officers of the Issuer, 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 Issuer 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 Issuer, 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 11.06. Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of interest on or principal of the Debt Securities of
any series or the date fixed for redemption or repayment of any such Debt
Security shall not be a Business Day, then payment of interest or principal
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.
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SECTION 11.07. 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 11.08. New York Law to Govern. This Indenture and each
Debt 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, except as may otherwise be required by mandatory provisions of
law.
SECTION 11.09. 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.
ARTICLE XII
Redemption of Debt Securities and Sinking Funds
SECTION 12.01. Applicability of Article. The provisions of this
Article shall be applicable to the Debt Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Debt Securities of a series except as otherwise specified as contemplated by
Section 2.03 for Debt Securities of such series.
SECTION 12.02. Notice of Redemption; Partial Redemptions. Notice
of redemption to the Holders of Debt Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 20
days and not more than 60 days prior to the date fixed for redemption to such
Holders of Debt Securities of such series at their last addresses as they
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shall appear upon the registry books. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice. Failure to give notice
by mail, or any defect in the notice to the Holder of any Debt 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 Debt Security of
such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Debt Security of such series held by such Holder to
be redeemed, 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 Debt Securities, that such redemption is pursuant to the
mandatory or optional sinking fund, or both, or any other redemption
provision as the case may be, 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. In case any Debt Security of a series is to be redeemed in
part only 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 Debt Security, a new Debt
Security or Debt Securities of such series in principal amount equal to the
unredeemed portion thereof will be issued.
The notice of redemption of Debt Securities of any series to be
redeemed at the option of the Issuer shall be given by the Issuer or, at the
Issuer's request, by the Trustee in the name and at the expense of the
Issuer.
At least one Business Day prior to the redemption date specified in
the notice of redemption given as provided in this Section, the Issuer will
deposit with the Trustee or with one or more paying agents (or, if the Issuer
is acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.04) an amount of monies sufficient to redeem on the
redemption date all the Debt 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
Debt Securities of a series are to be redeemed, the Issuer will deliver to
the Trustee at least 35 days prior to the date fixed for redemption an
Officers'
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Certificate stating the aggregate principal amount of Debt Securities to be
redeemed.
If less than all the Debt Securities of a series are to be redeemed,
the Trustee shall select, in such manner as it shall deem appropriate and
fair, Debt Securities of such series to be redeemed in whole or in part.
Debt Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Debt Securities of such series or any multiple
thereof. The Trustee shall promptly notify the Issuer in writing of the Debt
Securities of such series selected for redemption and, in the case of any
Debt 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
Debt Securities of any series shall relate, in the case of any Debt Security
redeemed or to be redeemed only in part, to the portion of the principal
amount of such Debt Security which has been or is to be redeemed.
SECTION 12.03. Payment of Debt Securities Called for Redemption.
If notice of redemption has been given as above provided, the Debt Securities
or portions of Debt 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 Issuer shall default in
the payment of such Debt Securities at the redemption price, together with
interest accrued to said date) interest on the Debt Securities or portions of
Debt Securities so called for redemption shall cease to accrue and, except as
provided in Sections 6.05 and 10.04, such Debt 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 Debt 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 Debt Securities at a place of payment
specified in said notice, said Debt Securities or the specified portions
thereof shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest accrued thereon to the date fixed for
redemption; provided that any semiannual payment of interest becoming due on
the date fixed for redemption shall be payable to the Holders of such Debt
<PAGE>
83
Securities registered as such on the relevant record date subject to the
terms and provisions of Section 2.04 hereof.
If any Debt 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 for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount Debt
Security) borne by the Debt Security.
Upon presentation of any Debt Security redeemed in part only, the
Issuer shall execute and the Trustee shall authenticate and deliver to or on
the order of the Holder thereof, at the expense of the Issuer, a new Debt
Security or Debt Securities of such series, of authorized denominations, in
principal amount equal to the unredeemed portion of the Debt Security so
presented.
SECTION 12.04. Exclusion of Certain Debt Securities from
Eligibility for Selection for Redemption. Debt 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 Issuer and delivered to the Trustee at least 40
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 Issuer or (b) an entity specifically identified in such
written statement directly or indirectly controlling or under direct or
indirect common control with the Issuer.
SECTION 12.05. Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of Debt
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by
the terms of Debt Securities of any series is herein referred to as an
"optional sinking fund payment". 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 Debt Securities in cash, the Issuer may
at its option (a) deliver to the Trustee Debt Securities of such series
theretofore purchased or otherwise acquired (except upon redemption
<PAGE>
84
pursuant to the mandatory sinking fund) by the Issuer or receive credit for
Debt Securities of such series (not previously so credited) theretofore
purchased or otherwise acquired (except as aforesaid) by the Issuer 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, (c) receive credit for Debt
Securities of such series (not previously so credited) redeemed by the Issuer
through any optional redemption provision contained in the terms of such
series, or (d) receive credit for Debt Securities which have been converted
or exchanged. Debt Securities so delivered or credited shall be received or
credited by the Trustee at the sinking fund redemption price specified in
such Debt Securities.
On or before the forty-fifth day next preceding each sinking fund
payment date for any series, the Issuer will deliver to the Trustee a written
statement (which need not contain the statements required by Section 11.05)
signed by an authorized officer of the Issuer (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 Debt Securities of such series, (b)
stating that none of the Debt 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 and (d) stating whether or not the
Issuer 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 Issuer intends to pay on or before
the next succeeding sinking fund payment date.
With respect to any sinking fund payment date, any Debt Securities
of such series to be credited and required to be delivered to the Trustee in
order for the Issuer 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 on or prior to the
thirty-fifth day preceding such sinking fund payment date (or reasonably
promptly thereafter if acceptable to the Trustee). Failure of the Issuer, on
or before any such thirty-fifth day, to deliver any such Debt Securities
shall not constitute a default but shall constitute, on and as of such date,
the irrevocable election
<PAGE>
85
of the Issuer, and the Issuer shall become unconditionally obligated, to pay
in cash on the next succeeding sinking fund payment date that portion of the
mandatory sinking fund payment due on such date that would have been
satisfied by the delivery of such Debt Securities.
Such written statement shall, except as provided in the next
preceding paragraph, be irrevocable and upon its receipt by the Trustee the
Issuer shall become unconditionally obligated to make all the cash payments
therein referred to, if any, on the next succeeding sinking fund payment
date. Failure of the Issuer, on or before any such forty-fifth day, to
deliver such written statement shall not constitute a default but shall
constitute, in and as of such date, the irrevocable election of the Issuer
(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 Debt Securities of such series in respect
thereof and (ii) that the Issuer 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 Issuer shall so request) with
respect to the Debt Securities of any particular series, such cash shall be
applied on the next succeeding sinking fund payment date to the redemption of
Debt 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 Issuer 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 12.02, for redemption on such
sinking fund payment date a sufficient principal amount of Debt Securities of
such series to absorb said cash, as nearly as may be, and shall (if requested
in writing by the Issuer) inform the Issuer of the serial numbers of the Debt
Securities of such series (or portions thereof) so selected. Debt Securities
of any series which are (a) owned by the Issuer or an entity known by the
Trustee to be directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer, as shown by the Debt
Security register, and
<PAGE>
86
not known to the Trustee to have been pledged or hypothecated by the Issuer
or any such entity or (b) identified in an Officers' Certificate at least 30
days prior to the sinking fund payment date as being beneficially owned by,
and not pledged or hypothecated by, the Issuer or an entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Issuer shall be excluded from Debt Securities of such series
eligible for selection for redemption. The Trustee, in the name and at the
expense of the Issuer (or the Issuer, if it shall so request the Trustee in
writing) shall cause notice of redemption of the Debt Securities of such
series to be given in substantially the manner provided in Section 12.02 (and
with the effect provided in Section 12.03) for the redemption of Debt
Securities of such series in part at the option of the Issuer. The amount of
any sinking fund payments not so applied or allocated to the redemption of
Debt 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
monies held on the stated maturity date of the Debt Securities of any
particular series (or earlier, if such maturity is accelerated), which are
not held for the payment or redemption of particular Debt Securities of such
series shall be applied, together with other monies, if necessary, sufficient
for the purpose, to the payment of the principal of, and interest on, the
Debt Securities of such series at maturity.
On each sinking fund payment date, the Issuer shall pay to the
Trustee in cash or shall otherwise provide for the payment of all interest
accrued to such sinking fund payment date on Debt Securities to be redeemed
on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Debt
Securities of a series with sinking fund monies or mail any notice of
redemption of Debt Securities for such series by operation of the sinking
fund during the continuance of a default in payment of interest on such Debt
Securities or of any Event of Default except that, where the mailing of
notice of redemption of any Debt Securities shall theretofore have been made,
the Trustee shall redeem or cause to be redeemed such Debt Securities,
provided that it shall have received from the Issuer a sum sufficient for
such redemption. Except as aforesaid, any monies in the
<PAGE>
87
sinking fund for such series at the time when any such default or Event of
Default shall occur, and any monies 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 Debt 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 forty-fifth
day preceding the sinking fund payment date in any year, such monies shall
thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Debt Securities.
ARTICLE XIII
Defeasance and Covenant Defeasance
SECTION 13.01. Applicability of Article; Issuer's Option to Effect
Defeasance or Covenant Defeasance. If pursuant to Section 2.03 provision is
made for either or both of (a) defeasance of the Securities of a series under
Section 13.02 or (b) covenant defeasance of the Securities of a series under
Section 13.03, then the provisions of such Section or Sections, as the case
may be, together with the other provisions of this Article Thirteen, shall be
applicable to the Securities of such series, and the Issuer may at its option
elect at any time, with respect to the Debt Securities of such series, to
have either Section 13.02 (if applicable) or Section 13.03 (if applicable) be
applied to the outstanding Debt Securities of such series upon compliance
with the conditions set forth below in this Article Thirteen.
SECTION 13.02. Defeasance and Discharge. Upon the Issuer's
exercise of the above option applicable to this Section, the Issuer shall be
deemed to have been discharged from its obligations with respect to the
Outstanding Debt Securities of such series on and after the date the
conditions precedent set forth below are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Issuer shall
be deemed to have paid and discharged the entire indebtedness represented by
the Outstanding Debt Securities of such series and to have satisfied all its
other obligations under such Debt Securities and this Indenture insofar as
such Debt Securities are concerned (and the Trustee, at the expense of the
Issuer, shall execute proper instruments acknowledging
<PAGE>
88
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of Outstanding
Debt Securities of such series to receive, solely from the trust fund
described in Section 13.04 as more fully set forth in such section, payments
of the principal of (and premium, if any) and interest on such Debt
Securities when such payments are due, (b) the Issuer's obligations with
respect to such Debt Securities under Sections 2.08, 2.09, 2.11, 3.02, 3.04
and 6.05 and such obligations as shall be ancillary thereto, (c) the rights,
powers, trusts, duties, immunities and other provisions in respect of the
Trustee hereunder, (d) the Issuer's obligations with respect to a conversion
or exchange of Debt Securities and (e) this Article Thirteen. Subject to
compliance with this Article Thirteen, the Issuer may exercise its option
under this Section 13.02 notwithstanding the prior exercise of its option
under Section 13.03 with respect to the Debt Securities of such series.
SECTION 13.03. Covenant Defeasance. Upon the Issuer's exercise of
the above option applicable to this Section, the Issuer shall be released
from its obligations under Section 3.06 (hereinafter, "covenant defeasance").
For this purpose, such covenant defeasance means that, with respect to the
Outstanding Debt Securities of such series, the Issuer may omit to comply
with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of
any reference in any such Section to any other provision herein or in any
other document, but the remainder of this Indenture and such Debt Securities
shall be unaffected thereby.
SECTION 13.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions precedent to the application of either
Section 13.02 or Section 13.03 to the Outstanding Debt Securities of such
series:
(a) the Issuer shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.09 who shall agree to comply with the provisions of this
Article Thirteen applicable to it) as trust funds in trust for the purpose
of making the following payments,
<PAGE>
89
specifically pledged as security for, and dedicated solely to, the
benefit of the holders of such Debt Securities, (i) monies in an amount,
or (ii) U.S. Government Obligations which through the scheduled payment
of principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any
payment, monies in an amount, or (iii) a combination thereof, sufficient,
without reinvestment, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall
be applied by the Trustee (or other qualifying trustee) to pay and
discharge, the principal of and interest on the outstanding Debt
Securities of such series on the maturity of such principal or interest.
Before such a deposit the Issuer may make arrangements satisfactory to
the Trustee for the redemption of Debt Securities at a future date or
dates in accordance with Article Twelve, which shall be given effect in
applying the foregoing. For this purpose, "U.S. Government Obligations"
means securities that are (A) direct obligations of the United States of
America for the payment of which its full faith and credit is pledged or
(B) obligations of any Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case, are not callable
or redeemable at the option of the issuer thereof, and shall also include
a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any
such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian
for the account of the holder of such depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest
on the U.S. Government Obligation evidenced by such depository receipt.
<PAGE>
90
(b) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to the Debt
Securities of such series shall have occurred and be continuing (i) on the
date of such deposit or (ii) insofar as Subsections 5.01(g) and 5.01(h) are
concerned, at any time during the period ending on the 121st day after the
date of such deposit or, if longer, ending on the day following the
expiration of the longest preference period applicable to the Issuer in
respect of such deposit (it being understood that this condition shall not
be deemed satisfied until the expiration of such period).
(c) Such defeasance or covenant defeasance shall not (i) cause the
Trustee for the Debt Securities to have a conflicting interest as defined
in Section 6.08 or for purposes of the Trust Indenture Act with respect to
any securities of the Issuer or (ii) result in the trust arising from such
deposit to constitute, unless it is qualified as, a regulated investment
company under the Investment Company Act of 1940, as amended.
(d) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Issuer is a party or by
which it is bound.
(e) In the case of an election under Section 13.02, the Issuer shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Issuer has received from the United States Internal Revenue Service (the
"IRS") a private letter ruling, (ii) there has been published by the IRS a
general revenue ruling, or (iii) since the date of this Indenture there has
been a change in the applicable Federal income tax law or the
interpretation thereof, in each case to the effect that, and based thereon
such opinion shall confirm that, the holders of the Outstanding Debt
Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same time as would have been the case if such defeasance had not
occurred.
<PAGE>
91
(f) In the case of an election under Section 13.03 or Section 13.04,
the Issuer shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the Outstanding Debt Securities will not
recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred.
(g) Such defeasance or covenant defeasance shall be effected in
compliance with any additional terms, conditions or limitations which may
be imposed by the Issuer in connection therewith pursuant to Section 2.01.
(h) The Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section
13.02 or the covenant defeasance under Section 13.03 (as the case may be)
have been complied with.
SECTION 13.05. Deposited Monies and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions. Subject to the provisions
of Section 10.04, all monies and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee
- -collectively, for purposes of this Section 13.05, the "Trustee") pursuant to
Section 13.04 in respect of the Outstanding Debt Securities of such series
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Debt Securities and this Indenture, to the payment, either
directly or through any paying agent (but not including the Issuer acting as
its own paying agent) as the Trustee may determine, to the Holders of such
Debt Securities, of all sums due and to become due thereon in respect of
principal and interest, but such monies need not be segregated from other
funds except to the extent required by law.
The Issuer shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the monies or U.S. Government
Obligations deposited pursuant to Section 13.04 or the principal and interest
received in respect thereof.
<PAGE>
92
Anything herein to the contrary notwithstanding, the Trustee shall
deliver or pay to the Issuer from time to time upon the written request of
the Issuer any monies or U.S. Government Obligations held by it as provided
in Section 13.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would
then be required to be deposited to effect an equivalent defeasance or
covenant defeasance.
SECTION 13.06. Reinstatement. If the Trustee or the paying agent is
unable to apply any monies in accordance with Section 13.05 by reason of any
order or judgment or any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Issuer's
obligations under the Debt Securities of such series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article
Thirteen until such time as the Trustee or paying agent is permitted to apply
all such monies in accordance with Section 13.05; provided that, if the
Issuer makes any payment of principal of any such Debt Security following the
reinstatement of its obligations, the Issuer shall be subrogated to the
rights of the Holders of such Debt Securities to receive such payment from
the monies held by the Trustee or the paying agent.
<PAGE>
93
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of ______________.
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By
----------------------------
Authorized Officer
[CORPORATE SEAL]
Attest:
By
-----------------
Secretary
[TRUSTEE]
By
--------------------
[CORPORATE SEAL]
Attest:
By
-----------------
<PAGE>
94
STATE OF New York )
)ss.:
COUNTY OF New York )
On this ___ day of _______, 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 Financial Security Assurance Holdings
Ltd., 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
<PAGE>
Exhibit
(Form 1)
[FORM OF FACE OF NOTE]
No. $
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% NOTE DUE
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to or
registered assigns, at the office or agency of the Issuer in the Borough of
Manhattan, The City of New York, the principal sum of Dollars on
, , in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semiannually on and
of each year, commencing , , on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum specified in the title of this Note, from the or
the , as the case may be, next preceding the date of this
Note to which interest has been paid, unless the date hereof is a date to
which interest has been paid, in which case from the date of this Note, or
unless no interest has been paid on these Notes, in which case from
, , until payment of said principal sum has
been made or duly provided for; provided, that payment of interest may be
made at the option of the Issuer by check mailed to the address of the person
entitled thereto as such address shall appear on the security register.
Notwithstanding the foregoing, if the date hereof is after the day of
or , as the case may be, and before the
following or this Note shall bear interest from
such or ; provided, that if the Issuer shall
default in the payment of interest due on such or
, then this Note shall bear interest from the next preceding or
, to which interest has been paid or, if no interest has been paid on
these Notes, from . The interest so payable on any or , will,
subject to certain exceptions provided in the Indenture referred to on the
reverse hereof, be paid to the person in whose name this Note is registered
at the close of business on the or , as the case
may be, next preceding such or .
<PAGE>
2
Reference is made to the further provisions of this Note set forth
on the reverse hereof. Such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by facsimile by its duly authorized
officers and has caused a facsimile of its corporate seal to be affixed
hereunto or imprinted hereon.
Dated:
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By
---------------------------------
By
---------------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Debentures of the series designated herein
referred to in the within-mentioned Indenture.
[TRUSTEE] , as
Trustee
By
---------------------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF NOTE]
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% NOTE DUE
This Note is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Issuer (hereinafter called
the "Debentures") of the series hereinafter specified, all issued or to be
issued under and pursuant to an indenture dated as of ,
(herein called the "Indenture"), duly executed and delivered by the Issuer to
, Trustee (herein called the "Trustee"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Issuer and the holders of the
Debentures. The Debentures may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may
be subject to different redemption provisions (if any), may be subject to
different sinking, purchase or analogous funds (if any) and may otherwise
vary as in the Indenture provided. This Note is one of a series designated
as the % Notes Due of the Issuer, limited in aggregate principal
amount to $ .
In case an Event of Default with respect to the % Notes Due
, as defined in the Indenture, shall have occurred and be continuing, the
principal hereof may be declared, and upon such declaration shall become, due
and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of more than 50% in aggregate
principal amount of the Debentures at the time Outstanding (as defined in the
<PAGE>
2
Indenture) of all series to be affected (voting as one class), evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner
the rights of the Holders of the Debentures of each such series; provided,
however, that no such supplemental indenture shall (i) extend the final
maturity of any Debenture, or reduce the principal amount thereof or any
premium thereon, or reduce the rate or extend the time of payment of any
interest thereon, or impair or affect the rights of any Holder to institute
suit for the payment thereof, without the consent of the Holder of each
Debenture so affected, (ii) reduce the aforesaid percentage of Debentures,
the Holders of which are required to consent to any such supplemental
indenture or (iii) modify any provision relating to the subordination of
Outstanding Debt Securities of any series in a manner adverse to the Holders
thereof, without the consent of the Holder of each Debenture affected. It is
also provided in the Indenture that, with respect to certain defaults or
Events of Default regarding the Debentures of any series, prior to any
declaration accelerating the maturity of such Debentures, the Holders of a
majority in aggregate principal amount Outstanding of the Debentures of such
series (or, in the case of certain defaults or Events of Default, all or
certain series of the Debentures) may on behalf of the Holders of all the
Debentures of such series (or all or certain series of the Debentures, as the
case may be) waive any such past default or Event of Default and its
consequences. The preceding sentence shall not, however, apply to a default
in the payment of the principal of or premium, if any, or interest on any of
the Debentures. Any such consent or waiver by the Holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Note and any
Notes which may be issued in exchange or substitution herefor, irrespective
of whether or not any notation thereof is made upon this Note or such other
Notes.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Note in the manner, at the respective times, at the rate and
in the coin or currency herein prescribed.
The Notes are issuable in registered form without coupons in
denominations of $ and any multiple of $ at the
office or agency of the
<PAGE>
3
Issuer in the Borough of Manhattan, The City of New York, and in the manner
and subject to the limitations provided in the Indenture, but without the
payment of any service charge, notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.
The Notes may be redeemed at the option of the Issuer as a whole, or
from time to time in part, on any date after and prior to
maturity, upon mailing a notice of such redemption not less than 30 nor more
than 45 days prior to the date fixed for redemption to the Holders of Notes
at their last registered addresses, all as further provided in the Indenture,
at the following redemption prices (expressed in percentages of the principal
amount) together in each case with accrued interest to the date fixed for
redemption:
If redeemed during the twelve-month period beginning
Year Percentage Year Percentage
Upon due presentment for registration of transfer of this Note at
the office or agency of the Issuer in the Borough of Manhattan, The City of
New York, a new Note or Notes of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Indenture, without
charge except for any tax or other governmental charge imposed in connection
therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or
the Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and subject to the provisions on the face hereof, interest
hereon, and for all other purposes, and neither the Issuer nor the Trustee
nor any authorized agent of the Issuer or the Trustee shall be affected by
any notice to the contrary.
<PAGE>
4
No recourse under or upon any obligation, covenant or agreement of
the Issuer in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, of the Issuer or of any successor corporation, either directly or
through the Issuer or any successor corporation, 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 hereof and as part of
the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE>
Exhibit
(Form 2)
[FORM OF FACE OF DEBENTURE]
No. $
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% DEBENTURE DUE
Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to
or registered assigns, at the office or agency of the Issuer in the Borough
of Manhattan, the City of New York, the principal sum of
Dollars on , , in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay interest, semiannually on
and of each year, commencing ,
, on said principal sum at said office or agency, in like coin or currency,
at the rate per annum specified in the title of this Debenture, from the
or the , as the case may be, next preceding the date of
this Debenture to which interest has been paid, unless the date hereof is a
date to which interest has been paid, in which case from the date of this
Debenture, or unless no interest has been paid on these Debentures, in which
case from , until payment of said principal sum has been made
or duly provided for; provided, that payment of interest may be made at the
option of the Issuer by check mailed to the address of the person entitled
thereto as such address shall appear on the security register.
Notwithstanding the foregoing, if the date hereof is after the day of
or , as the case may be, and before the following
or , this Debenture shall bear interest from such
or ; provided, that if the Issuer shall default
in the payment of interest due on such or
, then this Debenture shall bear interest from the next preceding
or , to which interest has been paid or, if no interest
has been paid on these Debentures, from . The interest so
payable on any or will, subject to certain
exceptions provided in the Indenture referred to on the reverse hereof, be
paid to the person in whose name this Debenture is registered at the close of
business on the or , as the case may be, next
preceding such or .
<PAGE>
2
Reference is made to the further provisions of this Debenture set
forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Debenture shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed
by the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by facsimile by its duly authorized
officers and has caused a facsimile of its corporate seal to be affixed
hereunto or imprinted hereon.
Dated:
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By
-----------------------------
By
-----------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This one of the Debentures of the series designated therein referred
to in the within-mentioned Indenture.
, as Trustee
By
-----------------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF DEBENTURE]
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% DEBENTURE DUE
This Debenture is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the issuer (hereinafter
called the "Debentures") of the series hereinafter specified, all issued or
to be issued under and pursuant to a indenture dated (herein called
the "Indenture"), duly executed and delivered by the Issuer to ,
Trustee (herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Issuer and the Holders of the Debentures. The Debentures
may be issued in one or more series, which different series may be issued in
various aggregate principal amounts, may mature at different times, may bear
interest (if any) at different rates, may be subject to different redemption
provisions (if any) may be subject to different sinking, purchase or
analogous funds (if any) and may otherwise vary as in the Indenture provided.
This Debenture is one of a series designated as the % Debentures Due of the
Issuer, limited in aggregate principal amount to $ .
In case an Event of Default with respect to the % Debentures
Due, as defined in the Indenture, shall have occurred and be continuing, the
principal hereof may be declared, and upon such declaration shall become, due
and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of more than 50% in aggregate
principal amount of the
<PAGE>
2
Debentures at the time Outstanding (as defined in the Indenture) of all
series to be affected (voting as one class), evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
Holders of the Debentures of each such series; provided, however, that no
such supplemental indenture shall (i) extend the final maturity of any
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of any interest thereon, or
impair or affect the rights of any Holder to institute suit for the payment
thereof, without the consent of the Holder of each Debenture so affected,
(ii) reduce the aforesaid percentage of Debentures, the Holders of which are
required to consent to any such supplemental indenture or (iii) modify any
provision relating to the subordination of Outstanding Debt Securities of any
series in a manner adverse to the Holders thereof , without the consent of
the Holder of each Debenture affected. It is also provided in the Indenture
that, with respect to certain defaults or Events of Default regarding the
Debentures of any series, prior to any declaration accelerating the maturity
of such Debentures, the Holders of a majority in aggregate principal amount
Outstanding of the Debentures of such series (or, in the case of certain
defaults or Events of Default, all or certain series of the Debentures) may
on behalf of the Holders of all the Debentures of such series (or all or
certain series of the Debentures, as the case may be) waive any such past
default or Event of Default and its consequences. The preceding sentence
shall not, however, apply to a default in the payment of the principal of or
premium, if any, or interest on any of the Debentures. Any such consent or
waiver by the Holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Debenture and any Debentures which may be
issued in exchange or substitution herefor, irrespective of whether or not
any notation thereof is made upon this Debenture or such other Debentures.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Debenture in the manner, at the respective
times, at the rate and in the coin or currency herein prescribed.
<PAGE>
3
The Debentures are issuable in registered form without coupons in
denominations of $ and any multiple of $ at the office or agency
of the Issuer in the Borough of Manhattan, The City of New York, and in the
manner and subject to the limitations provided in the Indenture, but without
the payment of any service charge, Debentures may be exchanged for a like
aggregate principal amount of Debentures of other authorized denominations.
The Debentures may be redeemed at the option of the Issuer, as a
whole, or from time to time in part, on any date after and prior
to maturity, upon mailing a notice of such redemption not less than 30 nor
more than 45 days prior to the date fixed for redemption to the Holders of
Debentures at their last registered addresses, all as further provided in the
Indenture, at the following optional redemption prices (expressed in
percentages of the principal amount) together in each case with accrued
interest to the date fixed for redemption:
If redeemed during the twelve-month period beginning ,
Year Percentage Year Percentage
[provided, however, that no such optional redemption may be effected prior
to directly or indirectly from or in anticipation of monies borrowed
by or for the account of the Issuer at an interest cost (calculated in
accordance with generally accepted financial practice) of less than % per
annum.]
[The Debentures are also subject to redemption, through the operations of
the sinking fund as herein provided on and on each thereafter
to and including on notice as set forth above and at 100% of the
principal amount thereof (the sinking fund redemption price), together with
accrued interest to the date fixed for redemption.
As and for a sinking fund for the retirement of the Debentures and
so long as any of the Debentures remain outstanding and unpaid, the Issuer
will pay to the Trustee in cash (subject to the right to deliver certain
Debentures in credit therefor as in the Indenture provided), on or
<PAGE>
4
before and on or before in each year
thereafter to and including an amount sufficient to redeem $
principal amount of the Debentures (or such lesser amount equal to the
principal amount then Outstanding) at the sinking fund redemption price.
At its option the Issuer may pay into the sinking fund for the
retirement of Debentures, in cash except as provided in the Indenture, on or
before and on or before in each year thereafter to and
including , an amount sufficient to redeem an additional
principal amount of Debentures up to but not to exceed $ at
the sinking fund redemption price. To the extent that the right to such
optional sinking fund payment is not exercised in any year, it shall not be
cumulative or carried forward to any subsequent year.]
Upon due presentment for registration of transfer of this Debenture
at the office or agency of the Issuer in the Borough of Manhattan, The City
of New York, a new Debenture or Debentures of authorized denominations for an
equal aggregate principal amount will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Indenture, without
charge except for any tax or other governmental charge imposed in connection
therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or
the Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Debenture (whether or not this Debenture shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and, subject to the provisions on the face hereof, interest
hereon, and for all other purposes, and neither the Issuer nor the Trustee
nor any authorized agent of the Issuer or the Trustee shall be affected by
any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of
the Issuer in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, of the Issuer or of any successor corporation, either directly or
through the Issuer or any successor corporation, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment
or by any legal or equitable proceeding or
<PAGE>
5
otherwise, all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE>
Exhibit
(Form 3)
[FORM OF FACE OF]
No. $
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% [ ] DUE
Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to or
registered assigns, at the office or agency of the Issuer in the Borough of
Manhattan, the City of New York, the principal sum of Dollars on
, in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semiannually on and
in each year, commencing , , on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum specified in the title of this [ ], from the
or the , as the case may be, next preceding the date of this
[ ] to which interest has been paid, unless the date hereof is a
date to which interest has been paid, in which case from the date of this
[ ], or unless no interest has been paid on these [ ]s,
in which case from , until payment of said principal sum has been
made or duly provided for; provided, that payment of interest may be made at
the option of the Issuer by check mailed to the address of the person
entitled thereto as such address shall appear on the security register.
Notwithstanding the foregoing, if the date hereof is after the
day of or , as the case may be, and before the
following or , this [ ]shall bear interest
from such or; provided, that if the Issuer shall default in the payment of
interest due on such or , then this [ ]
shall bear interest from the next preceding or , to
which interest has been paid or , if no interest has
been paid on these [ ]s, from . The interest so payable
on any or will, subject to certain exceptions
provided in the Indenture referred to on the reverse hereof, be paid to the
person in whose name this [ ] is registered at the close of
business on or , as the
<PAGE>
2
case may be, next preceding such or .
Reference is made to the further provisions of this [ ]
set forth on the reverse hereof. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This [ ] shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed
by the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by facsimile by its duly authorized
officers and has caused a facsimile of its corporate seal to be affixed
hereunto or imprinted hereon.
Dated: ,
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By
------------------------------
By
------------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
, as Trustee
By
------------------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF ]
FOR PURPOSES OF SECTION 1232 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF THIS [ ] IS % OF
ITS PRINCIPAL AMOUNT AND THE ISSUE DATE IS , .
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% [ ] DUE
This [ ] is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (hereinafter
called the "Debentures") of the series hereinafter specified, all issued or
to be issued under and pursuant to an indenture dated as of
(herein called the "Indenture"), duly executed and delivered by the Issuer to
, Trustee (herein called the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Issuer and the Holders of the
Debentures. The Debentures may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may
be subject to different redemption provisions (if any), may be subject to
different sinking, purchase or analogous funds (if any) and may otherwise
vary as in the Indenture provided. This [ ] is one of a series
designated as the % [ ] Due of the Issuer,
limited in aggregate principal amount to $ .
In case an Event of Default with respect to [ ], as
defined in the Indenture, shall have occurred and be continuing, (i) that
portion of the principal equal to the initial public offering price of this
[ ] plus accrued amortization of the original issue discount
calculated using the "interest" method (computed in accordance with generally
accepted accounting principles in effect on the date of the Indenture) from
, to the date of acceleration and (ii) any accrued interest to
the date of acceleration may be declared, and upon such declaration shall
become, due and
<PAGE>
2
payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of more than 50% in aggregate
principal amount of the Debentures at the time Outstanding (as defined in the
Indenture) of all series to be affected (voting as one class), evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner
the rights of the Holders of the Debentures of each such series to be
affected; provided, however, that no such supplemental indenture shall (i)
extend the final maturity of any Debenture, or reduce the rate or extend the
time of payment of any interest thereon, or reduce the principal amount
thereof, or reduce the amount of the principal of an Original Issue Discount
Debenture that would be due and payable upon acceleration of the maturity
thereof or the amount provable in bankruptcy or impair or affect the rights
of any Holder to institute suit for the payment thereof, without the consent
of the Holder of each Debenture so affected, (ii) reduce the aforesaid
percentage of Debentures, the Holders of which are required to consent to any
such supplemental indenture or (iii) modify any provision relating to the
subordination of Outstanding Debt Securities of any series in a manner
adverse to the Holders thereof, without the consent of the Holder of each
Debenture affected. It is also provided in the Indenture that, with respect
to certain defaults or Events of Default regarding the Debentures of any
series, prior to any declaration accelerating the maturity of such
Debentures, the Holders of a majority in aggregate principal amount
Outstanding of the Debentures of such series (or, in the case of certain
defaults or Events of Default, all or certain series of the Debentures) may
on behalf of the Holders of all the Debentures of such series (or all or
certain series of the Debentures, as the case may be) waive any such past
default
<PAGE>
3
or Event of Default. The preceding sentence shall not, however, apply to a
default in the payment of the principal of, or interest, if any, on any of
the Debentures. Any such consent or waiver by the Holder of this
[ ] (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and
owners of this [ ] and any [ ]s which may be issued in exchange or
substitution herefor, irrespective of whether or not any notation thereof is
made upon this [ ] or such other [ ]s.
No reference herein to the Indenture and no provision of this
[ ] or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this [ ] in the manner, at the respective times, at the
rate and in the coin or currency herein prescribed.
The [ ]s are issuable in registered form without coupons
in denominations of $ and any multiple of $ at the
office or agency of the Issuer in the Borough of Manhattan, The City of New
York, and in the manner and subject to the limitations provided in the
Indenture, but without the payment of any service charge, [ ]s may
be exchanged for a like aggregate principal amount of [ ]s of other
authorized denominations.
The [ ] may be redeemed at the option of the Issuer, as a
whole, or from time to time in part, on any date prior to maturity, upon
mailing of notice of such redemption not less than 30 nor more than 45 days
prior to the date fixed for redemption to the Holders of [ ]s at
their last registered addresses, all as further provided in the Indenture, at
the redemption price of 100% of the principal amount thereof together with
accrued interest to the date fixed for redemption.
Upon due presentment for registration of transfer of this
[ ] at the office or agency of the Issuer in the Borough of
Manhattan, The City of New York, a new [ ] or [ ]s of
authorized denominations for an equal aggregate principal amount will be
issued to the transferee in exchange therefor, subject to the limitations
provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or
the Trustee may deem and treat the
<PAGE>
4
registered Holder hereof as the absolute owner of this [ ](whether
or not this [ ] shall be overdue and notwithstanding any notation
of ownership or other writing hereon), for the purpose of receiving payment
of, or on account of, the principal hereof, and subject to the provisions on
the face hereof, interest hereon, and for all other purposes, and neither the
Issuer nor the Trustee nor any authorized agent of the Issuer or the Trustee
shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of
the Issuer in the Indenture or any indenture supplemental thereto or in any
[ ], or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, of the Issuer or of any successor corporation, either
directly or through the Issuer or any successor corporation, 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 hereof and as
part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE>
Exhibit
(Form 4)
[FORM OF FACE OF ZERO COUPON SECURITY]
No. $
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
ZERO COUPON [ ]
Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to or
registered assigns, at the office or agency of the Issuer in the Borough of
Manhattan, The City of New York, the principal sum of Dollars on
, , in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts. The principal of this [ ] shall not bear
interest, except in the case of default in payment of principal upon
acceleration, redemption or maturity, and in such case the amount in default
shall bear interest at the rate of % per annum (to the extent enforceable
under applicable law) from the date of default in payment to the date such
payment has been made or duly provided for, at said office or agency and in
like coin or currency.
Reference is made to the further provisions of this [ ]
set forth on the reverse hereof. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This [ ] shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed
by the Trustee under the Indenture referred to on the reverse hereof.
<PAGE>
2
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by facsimile by its duly authorized
officers and has caused a facsimile of its corporate seal to be affixed
hereunto or imprinted hereon.
Dated: ,
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By
------------------------------
By
------------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
, as Trustee
By
------------------------------
Authorized Officer
<PAGE>
3
[FORM OF REVERSE OF ]
FOR THE PURPOSES OF SECTION 1232 OF THE UNITED STATES INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF THIS [ ] IS
% OF ITS PRINCIPAL AMOUNT AND THE ISSUE DATE IS , .
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
ZERO COUPON [ ] DUE
This [ ] is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (hereinafter
called the "Debentures") of the series hereinafter specified, all issued or
to be issued under and pursuant to an indenture dated as of
(herein called the "Indenture"), duly executed and delivered by the Issuer to
, Trustee (herein called the "Trustee"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Issuer and the holders of the
Debentures. The Debentures may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may
be subject to different redemption provisions (if any), may be subject to
different sinking, purchase or analogous funds (if any) and may otherwise
vary as in the Indenture provided. This [ ] is one of a series
designated as the Zero Coupon [ ] Due of the Issuer,
limited in aggregate principal amount to $ .
In case an Event of Default with respect to the Zero Coupon
[ ], as defined in the Indenture, shall have occurred and be
continuing, (i) that portion of the principal equal to the initial public
offering price of this [ ] plus accrued amortization of the
original issue discount calculated using the "interest" method (computed in
accordance with generally accepted accounting principles in effect on the
date of the Indenture) from , to the date of
acceleration may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
<PAGE>
4
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of more than 50% in aggregate
principal amount of the Debentures at the time Outstanding (as defined in the
Indenture) of all series to be affected (voting as one class), evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner
the rights of the Holders of the Debentures of each such series; provided,
however, that no such supplemental indenture shall (i) extend the final
maturity of any Debenture, or reduce the rate or extend the time of payment
of interest thereon, or reduce the principal amount thereof, or reduce the
amount of the principal of an Original Issue Discount Debenture that would be
due and payable upon acceleration or provable in bankruptcy or impair or
affect the rights of any Holder to institute suit for the payment thereof,
without the consent of the Holder of each Debenture so affected, (ii) reduce
the aforesaid percentage of Debentures, the Holders of which are required to
consent to any such supplemental indenture or (iii) modify any provision
relating to the subordination of Outstanding Debt Securities of any series in
a manner adverse to the Holders thereof, without the consent of the Holder of
each Debenture affected. It is also provided in the Indenture that, with
respect to certain defaults or Events of Default regarding the Debentures of
any series, prior to any declaration accelerating the maturity of the
Debentures of any series, the Holders of a majority in aggregate principal
amount Outstanding of the Debentures of such series (or, in the case of
certain defaults or Events of Default, all or certain series of the
Debentures) may on behalf of the Holders of all the Debentures of such series
(or all or certain series of the Debentures, as the case may be) waive any
such past default or Event of Default and its consequences. The preceding
sentence shall not, however, apply to a default in the payment of the
principal of, or interest, if any, on any of the Debentures. Any such
consent or waiver by the Holder of this [ ] (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders and owners of this [ ] and any
[ ] which may be issued in exchange or substitution herefor,
irrespective of whether or not any notation thereof is made upon this
[ ] or such other [ ].
No reference herein to the Indenture and no provision of this
[ ] or of the Indenture shall alter or impair the obligation of the
Issuer, which is
<PAGE>
5
absolute and unconditional, to pay the principal of and interest, if any, on
this [ ] in the manner, at the respective times, at the rate and in
the coin or currency herein prescribed.
The [ ] are issuable in registered form without coupons in
denominations of $ or any multiple of $ at the office
or agency of the Issuer in the Borough of Manhattan, The City of New York,
and in the manner and subject to the limitations provided in the Indenture,
but without the payment of any service charge, [ ] may be exchanged
for a like aggregate principal amount of [ ] of other authorized
denominations.
The [ ] may be redeemed at the option of the Issuer, as a
whole, or from time to time in part, on any date prior to maturity, upon
mailing a notice of such redemption to the holders of [ ] at their
last registered addresses, all as further provided in the Indenture, at the
redemption price of 100% of the principal amount thereof.
Upon due presentment for registration of transfer of this
[ ] at the office or agency of the Issuer in the Borough of
Manhattan, The City of New York, a new [ ] or [ ] of
authorized denominations for an equal aggregate principal amount will be
issued to the transferee in exchange therefor, subject to the limitations
provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or
the Trustee may deem and treat the registered Holder hereof as the absolute
owner of this [ ](whether or not this [ ] shall be
overdue, and notwithstanding any notation of ownership or other writing
hereon), for the purpose of receiving payment hereof, or on account hereof,
and for all other purposes, and neither the Issuer nor the Trustee nor any
authorized agent of the Issuer or the Trustee shall be affected by any notice
to the contrary.
No recourse under or upon any obligation, covenant or agreement of
the Issuer in the Indenture or any indenture supplemental thereto or in any
[ ], or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, of the Issuer or of any successor corporation, either
directly or through the Issuer or any
<PAGE>
6
successor corporation, 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 hereof and as part of the consideration for
the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE>
Exhibit
(Form 5)
[FORM OF FACE OF EXTENDIBLE NOTE]
No. $
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
- YEAR EXTENDIBLE NOTE
Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to or
registered assigns, at the office or agency of the Issuer in the Borough of
Manhattan, The City of New York, the principal sum of Dollars on
, , in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, (at the rate per annum from
time to time in effect as described below) semiannually on and
of each year, commencing , on said principal sum at
said office or agency, in like coin or currency, from the or the
, as the case may be, next preceding the date of this Note to which
interest has been paid, unless the date hereof is a date to which interest
has been paid, in which case from the date of this Note, or unless no
interest has been paid on these Notes, in which case from , ,
until payment of said principal sum has been made or duly provided; provided,
however, that payment of interest may be made at the option of the Issuer by
check mailed to the address of the person entitled thereto as such address
shall appear on the security register. Notwithstanding the foregoing, if the
date hereof is after the day of or , as the case may
be, and before the following or , this Note bear
interest from such or ; provided, however, that if the
Issuer shall default in the payment of interest due on such or
, then this Note shall bear interest from the next preceding
or , to which interest has been paid or, if no interest has
been paid on these Notes, from . The interest so payable on any
or , will, subject to certain exceptions provided in the
Indenture referred to on the reverse hereof, be paid to the person in whose
name this Note is registered at the close of business on such or
, as the case may be, next preceding such or .
<PAGE>
2
Interest on these Notes is payable at the rate of % per annum from
through , and for each month period beginning
, and , at a rate per annum established by the Issuer on the
preceding each such , or at a rate per annum
determined by a method established by the Issuer on the preceding
each such . The Issuer shall establish the interest rate or
method to be used to determine such interest rate by delivery to the Trustee
of an Officers' Certificate on such . On or before the
prior to the commencement of the -month period to which it applies,
the Trustee shall cause notice of such interest rate or the method to be used
in ascertaining the interest rate on the following and the
interest rate that would have been applicable to such -month period had
such determination been made as of such , all as specified in the
aforesaid Officers' Certificate, to be mailed to each holder of these Notes.
The Issuer shall cause notice of the interest rate established as of the
preceding the commencement of the -month period to be enclosed
with the interest payment checks mailed to the Holders of the Notes for the
period ending on the following such .
The Notes of this series are subject to repayment on ,
, and , at the option of the Holders thereof exercisable
on or before the , but not prior to the preceding such
, at a repayment price equal to the principal amount thereof to be
repaid, together with interest payable thereon to the repayment date, as
described on the reverse side hereof.
Reference is made to the further provisions of this Note set forth
on the reverse hereof. Such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by
<PAGE>
3
facsimile by its duly authorized officers and has caused a facsimile of its
corporate seal to be affixed hereunto or imprinted hereon.
Dated: ,
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By
------------------------------
By
------------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
, as Trustee
By
------------------------------
Authorized Officer
<PAGE>
4
[FORM OF REVERSE OF -YEAR EXTENDIBLE NOTE]
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
-Year Extendible Note
This Note is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Issuer (the "Debentures") of
the series hereinafter specified, all issued or to be issued under an
indenture dated as of (herein called the "Indenture"), duly
executed and delivered by the Issuer to , Trustee (herein called
the "Trustee"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Issuer and the holders of the Debentures. The Debentures may be issued in
one or more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest (if any)
at different rates, may be subject to different redemption provisions (if
any), may be subject to different sinking, purchase or analogous funds (if
any) and may otherwise vary as in the Indenture provided. This Note is one
of a series designated as the -Year Extendible Notes of the
Issuer, limited in aggregate principal amount to $ .
[The -Year Extendible Notes may be redeemed at the option
of the Issuer as a whole or in part, or from time to time in part, on any date
(i) on or after , and prior to , , (ii) on or
after , , and prior to , (iii) on or after
, , and prior to , and (iv) on or after
, and prior to maturity upon mailing a notice of such redemption not
less than 30 nor more than 45 days prior to the date fixed for redemption to
the Holders of Notes at their last registered addresses, all as further
provided in the Indenture at 100% of the principal amount thereof, together
with accrued interest to the date fixed for redemption. If this Note is
redeemed in part, the principal amount that remains Outstanding shall not be
less than $ .]
<PAGE>
5
In case an Event of Default with respect to the -Year
Extendible Notes, as defined in the Indenture, shall have occurred and be
continuing, the principal hereof may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect and subject to
the conditions provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of more than 50% in aggregate
principal amount of the Debentures at the time Outstanding (as defined in the
Indenture) of all series to be affected (voting as one class), evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner
the rights of the Holders of the Debentures of each such series; provided,
however, that no such supplemental indenture shall (i) extend the final
maturity of any Debenture, or reduce the rate or extend the time of payment
of any interest thereon or impair or affect the rights of any Holder to
institute suit for the payment thereof or reduce the principal amount thereof
or any premium thereon, or, in the case of the -Year Extendible
Notes, adversely affect the right to repayment at the option of the Holder of
said Notes, without the consent of the Holder of each Debenture so affected,
(ii) reduce the aforesaid percentage of Debentures, the Holders of which are
required to consent to any such supplemental indenture or (iii) modify any
provision relating to the subordination of Outstanding Debt Securities of any
series in a manner adverse to the Holders thereof, without the consent of the
Holder of each Debenture affected. It is also provided in the Indenture
that, with respect to certain defaults or Events of Default regarding the
Debentures of any series, prior to any declaration accelerating the maturity
of such Debentures, the Holders of a majority in aggregate principal amount
Outstanding of the Debentures of such series (or, in the case of certain
defaults or Events of Default, all or certain series of the Debentures) may
on behalf of the Holders of all the Debentures of such series (or all or
certain series of the Debentures, as the case may be) waive
<PAGE>
6
any such past default or Event of Default. The preceding sentence shall not,
however, apply to a default in the payment of the principal of or premium, if
any, or interest, on any of the Debentures. Any such consent or waiver by
the Holder of this Note (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and any -Year Extendible Notes which may be
issued in exchange or substitution herefor, irrespective of whether or not
any notation thereof is made upon this Note or such other -Year
Extendible Notes.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and premium, if any,
and interest on this Note in the manner, at the respective times, at the rate
and in the coin or currency herein prescribed.
The -Year Extendible Notes are subject to repayment in
whole, or in part, on , , and , in
increments of $ or multiples of $ in excess of $
provided that the portion of the principal amount of any -Year
Extendible Note not being repaid shall be at least $ , at the option
of the Holders thereof at a repayment price equal to the principal amount
thereof to be repaid, together with interest payable thereon to the repayment
date. For this Note to be repaid at the option of the Holder, the Issuer
must receive at its office or agency in the Borough of Manhattan, The City of
New York, on or before the , or, if such is not a Business Day,
the next succeeding Business Day, but not earlier than the prior
to the on which the repayment price will be paid (i) this Note,
with the form entitled "Option to Elect Repayment" below duly completed, or
(ii) a telegram, telex, facsimile transmission or letter from a member of a
national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or trust company in the United States of
America setting forth the name of the Holder of the Note, the principal
amount of the Note, the amount of such Note to be repaid, a statement that
the option to elect repayment is being made thereby and a guarantee that the
Note to be repaid with the form entitled "Option to Elect Repayment" on the
reverse thereof duly completed will be received by the Issuer no later than
five Business Days after the date of such telegram, telex, facsimile
transmission or letter, and such Note and form duly completed are received by
the Issuer by such fifth Business Day. Either form of notice duly
<PAGE>
7
received on or before the preceding any such shall be
irrevocable. All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Notes for repayment will be determined by the
Issuer, whose determination shall be final and binding.
The -Year Extendible Notes are issuable in registered
form without coupons in denominations of $ and any multiple of $
at the office or agency of the Issuer in the Borough of Manhattan,
The City of New York, and in the manner and subject to the limitations
provided in the Indenture, but without the payment of any service charge,
-Year Extendible Notes may be exchanged for a like aggregate principal
amount of -Year Extendible Notes of other authorized denominations.
The Issuer, the Trustee and any authorized agent of the Issuer or
the Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and subject to the provisions on the face hereof, interest
hereon and for all other purposes, and neither the Issuer nor the Trustee nor
any authorized agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of
the Issuer in the Indenture or any indenture supplemental thereto or in any
-Year Extendible Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor
corporation, 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 hereof and as part of the consideration for
the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE>
[FORM OF OPTION TO ELECT REPAYMENT]
Option To Elect Repayment
The undersigned hereby irrevocably requests and instructs the Issuer
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with
interest to the repayment date, to the undersigned, at
(Please Print or Typewrite Name and Address of the Undersigned)
FOR THIS NOTE TO BE REPAID THE ISSUER MUST RECEIVE AT ITS OFFICE OR
AGENCY IN THE BOROUGH OF MANHATTAN, THE CITY AND STATE OF NEW YORK, OR AT
SUCH ADDITIONAL PLACE OR PLACES OF WHICH THE ISSUER SHALL FROM TIME TO TIME
NOTIFY THE HOLDER OF THE WITHIN NOTE, ON OR BEFORE THE OR, IF SUCH
IS NOT A BUSINESS DAY, THE NEXT SUCCEEDING BUSINESS DAY, BUT NOT
EARLIER THAN THE PRIOR TO , , AND
, (I) THIS NOTE WITH THIS "OPTION TO ELECT REPAYMENT" FORM DULY
COMPLETED OR (II) A TELEGRAM, TELEX, FACSIMILE TRANSMISSION OR LETTER FROM A
MEMBER OF A NATIONAL SECURITIES EXCHANGE OR THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. OR A COMMERCIAL BANK OR A TRUST COMPANY IN THE
UNITED STATES OF AMERICA SETTING FORTH THE NAME OF THE HOLDER OF THE NOTE,
THE PRINCIPAL AMOUNT OF THE NOTE, THE AMOUNT OF THE NOTE TO REPAID, A
STATEMENT THAT THE OPTION TO ELECT REPAYMENT IS BEING MADE THEREBY AND A
GUARANTEE THAT THE NOTE TO BE REPAID WITH THE FORM ENTITLED "OPTION TO ELECT
REPAYMENT" ON THE REVERSE OF THE NOTE DULY COMPLETED WILL BE RECEIVED BY THE
ISSUER NOT LATER THAN FIVE BUSINESS DAYS AFTER THE DATE OF SUCH TELEGRAM,
TELEX, FACSIMILE TRANSMISSION OR LETTER, AND SUCH NOTE AND FORM DULY
COMPLETED ARE RECEIVED BY THE ISSUER BY SUCH FIFTH BUSINESS DAY.
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof (which shall be $ or an
integral multiple of $ in excess of $ ) which the
Holder elects to have repaid: $ ; and specify the denomination or
denominations (which shall be $ or multiple of $ in
excess of $ ) of the -Year.
Extendible Note or Notes to be issued to the Holder for the portion
of the within Note not being repaid
<PAGE>
2
(in the absence of such specification, one such Note will be issued for the
portion not being repaid); $ .
Dated:
----------------------------------
Note: The signature to this Option
to Elect Repayment must correspond
with the name as written upon the
face of the Note in every
particular without alteration or
enlargement or any other change
whatsoever.
<PAGE>
Exhibit 4.02
---------------------------------------------------------------------
---------------------------------------------------------------------
SUBORDINATED INDENTURE
between
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
and
____________________________,
as Trustee
Dated as of _______ __, 1997
---------------------------------------------------------------------
---------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET (*)
Between provisions of Trust Indenture Act of 1939 and Indenture to be
dated as of _______ __, 1997, between Financial Security Assurance Holdings Ltd.
and ____________________, as Trustee:
Section of the Act Section of Indenture
------------------ --------------------
310(a)(1) and (2). . . . . . . . . . . . . . 6.09
310(a)(3) and (4). . . . . . . . . . . . . . Inapplicable
310(b) . . . . . . . . . . . . . . . . . . 6.08 and 6.10(a), (b) and (d)
310(c) . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . 6.13(a) and (c)(1) and (2)
311(b) . . . . . . . . . . . . . . . . . . . 6.13(b)
311(c) . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . 4.01 and 4.02(a)
312(b) . . . . . . . . . . . . . . . . . . . 4.02(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . . . . . . . . . . 4.02 (c)
313(a) . . . . . . . . . . . . . . . . . . . 4.04(a)(i), (ii), (iii), (iv),
(v) and (vi)
313(b)(1). . . . . . . . . . . . . . . . . . Inapplicable
313(b)(2). . . . . . . . . . . . . . . . . . 4.04
313(c) . . . . . . . . . . . . . . . . . . . 4.04
313(d) . . . . . . . . . . . . . . . . . . . 4.04
314(a) . . . . . . . . . . . . . . . . . . . 4.03
314(b) . . . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2). . . . . . . . . . . . . . 11.05
(*)This Cross Reference Sheet is not part of the Indenture.
<PAGE>
Section of the Act Section of Indenture
------------------ --------------------
314(c)(3). . . . . . . . . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . 11.05
314(f) . . . . . . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d). . . . . . . . . . . . . 6.01
315(b) . . . . . . . . . . . . . . . . . . . 5.11
315(e) . . . . . . . . . . . . . . . . . . . 5.12
316(a)(1). . . . . . . . . . . . . . . . . . 5.09
316(a)(2). . . . . . . . . . . . . . . . . . Not required
316(a) (last sentence) . . . . . . . . . . . 7.04
316(b) . . . . . . . . . . . . . . . . . . . 5.07
317(a) . . . . . . . . . . . . . . . . . . . 5.02
317(b) . . . . . . . . . . . . . . . . . . . 3.04(a) and (b)
318(a) . . . . . . . . . . . . . . . . . . . 11.07
<PAGE>
TABLE OF CONTENTS
Page
------
ARTICLE I
Definitions
SECTION 1.01. Certain Terms Defined. . . . . . . . . . . . . . . . . . 1
ARTICLE II
Securities
SECTION 2.01. Forms Generally. . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.02. Form of Trustee's Certificate of Authentication. . . . . 7
SECTION 2.03. Amount Unlimited; Issuable in Series . . . . . . . . . . 7
SECTION 2.04. Authentication and Delivery of Debt Securities . . . . . 10
SECTION 2.05. Execution of Debt Securities . . . . . . . . . . . . . . 11
SECTION 2.06. Certificate of Authentication. . . . . . . . . . . . . . 12
SECTION 2.07. Denomination and Date of Debt Securities; Payments
of Interest. . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.08. Registration, Transfer and Exchange. . . . . . . . . . . 13
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen
Debt Securities. . . . . . . . . . . . . . . . . . . . 14
SECTION 2.10. Cancelation of Debt Securities;
Destruction Thereof. . . . . . . . . . . . . . . . . . 16
SECTION 2.11. Temporary Debt Securities. . . . . . . . . . . . . . . . 16
SECTION 2.12. Debt Securities Issuable in the Form of a Registered
Global Security. . . . . . . . . . . . . . . . . . . . 17
ARTICLE III
Covenants of the Issuer
SECTION 3.01. Payment of Principal and Interest. . . . . . . . . . . . 19
SECTION 3.02. Offices for Payments, etc. . . . . . . . . . . . . . . . 19
SECTION 3.03. Appointment To Fill a Vacancy in Office of Trustee . . . 20
SECTION 3.04. Paying Agents. . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.05. Written Statement to Trustee. . . . . . . . . . . . . . 21
SECTION 3.06. Limitations on Liens . . . . . . . . . . . . . . . . . . 21
SECTION 3.07. Limitations on Disposition of Stock of Restricted
Subsidiaries. . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.08. Corporate Existence. . . . . . . . . . . . . . . . . . . 22
SECTION 3.09. Waiver of Certain Covenants. . . . . . . . . . . . . . . 22
<PAGE>
Page
------
ARTICLE IV
Debt Securityholders' Lists and Reports
by the Issuer and the Trustee
SECTION 4.01. Issuer To Furnish Trustee Information as to Names
and Addresses of Debt Securityholders . . . . . . . . 23
SECTION 4.02. Preservation and Disclosure of Debt Securityholders'
Lists. . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.03. Reports by the Issuer. . . . . . . . . . . . . . . . . . 25
SECTION 4.04. Reports by the Trustee . . . . . . . . . . . . . . . . . 26
ARTICLE V
Remedies of the Trustee and Debt Securityholder
on Event of Default
SECTION 5.01. Event of Default Defined; Acceleration of Maturity;
Waiver of Default. . . . . . . . . . . . . . . . . . . 28
SECTION 5.02. Collection of Indebtedness by Trustee; Trustee May
Prove Debt . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.03. Application of Proceeds. . . . . . . . . . . . . . . . . 36
SECTION 5.04. Suits for Enforcement. . . . . . . . . . . . . . . . . . 37
SECTION 5.05. Restoration of Rights on Abandonment of Proceedings. . . 37
SECTION 5.06. Limitations on Suits by Debt Securityholders . . . . . . 38
SECTION 5.07. Unconditional Right of Debt Securityholders To
Institute Certain Suits. . . . . . . . . . . . . . . . 38
SECTION 5.08. Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default. . . . . . . . . . . . . . . . . 39
SECTION 5.09. Control by Debt Securityholders. . . . . . . . . . . . . 39
SECTION 5.10. Waiver of Past Defaults. . . . . . . . . . . . . . . . . 40
SECTION 5.11. Trustee To Give Notice of Default, but May Withhold
in Certain Circumstances . . . . . . . . . . . . . . . 41
SECTION 5.12. Right of Court To Require Filing of Undertaking To
Pay Costs. . . . . . . . . . . . . . . . . . . . . . . 41
<PAGE>
Page
------
ARTICLE VI
Concerning the Trustee
SECTION 6.01. Duties and Responsibilities of the Trustee;
During Default; Prior to Default . . . . . . . . . . . 42
SECTION 6.02. Certain Rights of the Trustee . . . . . . . . . . . . . 43
SECTION 6.03. Trustee Not Responsible for Recitals, Disposition of Debt
Securities or Application of Proceeds Thereof. . . . . 45
SECTION 6.04. Trustee and Agents May Hold Debt Securities;
Collections, Etc . . . . . . . . . . . . . . . . . . . 45
SECTION 6.05. Monies Held by Trustee . . . . . . . . . . . . . . . . . 45
SECTION 6.06. Compensation and Indemnification of Trustee and its
Prior Claim. . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.07. Right of Trustee To Rely on Officers' Certificate,
Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.08. Qualification of Trustee; Conflicting Interests. . . . . 47
SECTION 6.09. Persons Eligible for Appointment as Trustee. . . . . . 54
SECTION 6.10. Resignation and Removal; Appointment of Successor
Trustee. . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.11. Acceptance of Appointment by Successor Trustee . . . . . 56
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business of Trustee. . . . . . . . . . . . . . . . . . 58
SECTION 6.13. Preferential Collection of Claims Against the
Issuer . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VII
Concerning the Debt Securityholders
SECTION 7.01. Evidence of Action Taken by Debt Securityholders . . . . 63
SECTION 7.02. Proof of Execution of Instruments And of Holding
of Debt Securities. . . . . . . . . . . . . . . . . . 64
SECTION 7.03. Holders To Be Treated as Owners. . . . . . . . . . . . . 64
SECTION 7.04. Debt Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . . . . . 64
SECTION 7.05. Right of Revocation of Action Taken. . . . . . . . . . . 65
<PAGE>
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ARTICLE VIII
Supplemental Indentures
SECTION 8.01. Supplemental Indentures Without Consent of Debt
Securityholders . . . . . . . . . . . . . . . . . . . 66
SECTION 8.02. Supplemental Indentures with Consent of Debt
Securityholders. . . . . . . . . . . . . . . . . . . . 68
SECTION 8.03. Effect of Supplemental Indenture . . . . . . . . . . . . 69
SECTION 8.04. Documents To Be Given to Trustee.. . . . . . . . . . . . 69
SECTION 8.05. Notation on Debt Securities in Respect of
Supplemental Indentures . . . . . . . . . . . . . . . 70
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
SECTION 9.01. Covenant Not To Merge, Consolidate, Sell or Convey
Property Except under Certain Conditions. . . . . . . 70
SECTION 9.02. Successor Corporation Substituted . . . . . . . . . . . 71
SECTION 9.03. Opinion of Counsel to Trustee . . . . . . . . . . . . . 72
ARTICLE X
Satisfaction and Discharge of
Indenture; Unclaimed Monies
SECTION 10.01. Satisfaction and Discharge of Indenture. . . . . . . . . 72
SECTION 10.02. Application by Trustee of Funds Deposited for Payment
of Debt Securities. . . . . . . . . . . . . . . . . . 73
SECTION 10.03. Repayment of Monies Held by Paying Agent . . . . . . . . 73
SECTION 10.04. Return of Monies Held by Trustee and Paying Agent
Unclaimed for Three Years . . . . . . . . . . . . . . 74
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ARTICLE XI
Miscellaneous Provisions
SECTION 11.01. Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability. . . . . . . . 74
SECTION 11.02. Provisions of Indenture for the Sole Benefit of Parties
and Debt Securityholders . . . . . . . . . . . . . . . 75
SECTION 11.03. Successors and Assigns of Issuer Bound by Indenture. . . 75
SECTION 11.04. Notices and Demands on Issuer, Trustee and Debt
Securityholders . . . . . . . . . . . . . . . . . . . 75
SECTION 11.05. Officers' Certificate and Opinions of Counsel;
Statements To Be Contained Therein. . . . . . . . . . 76
SECTION 11.06. Payments Due on Saturdays, Sundays and Holidays. . . . . 77
SECTION 11.07. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. . . . . . . . . . . . . . . . . 77
SECTION 11.08. New York Law To Govern . . . . . . . . . . . . . . . . . 78
SECTION 11.09. Counterparts . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.10. Effect of Headings . . . . . . . . . . . . . . . . . . . 78
ARTICLE XII
Redemption of Debt Securities and Sinking Funds
SECTION 12.01. Applicability of Article . . . . . . . . . . . . . . . . 78
SECTION 12.02. Notice of Redemption; Partial Redemptions. . . . . . . . 78
SECTION 12.03. Payment of Debt Securities Called for Redemption . . . . 80
SECTION 12.04. Exclusion of Certain Debt Securities from Eligibility
for Selection for Redemption. . . . . . . . . . . . . 81
SECTION 12.05. Mandatory and Optional Sinking Funds . . . . . . . . . . 81
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ARTICLE XIII
Defeasance and Covenant Defeasance
SECTION 13.01. Applicability of Article; Issuer's Option To Effect
Defeasance or Covenant Defeasance. . . . . . . . . . . 84
SECTION 13.02. Defeasance and Discharge . . . . . . . . . . . . . . . . 85
SECTION 13.03. Covenant Defeasance. . . . . . . . . . . . . . . . . . . 85
SECTION 13.04. Conditions to Defeasance or Covenant Defeasance. . . . . 86
SECTION 13.05. Deposited Monies and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions. . . . . 89
SECTION 13.06. Reinstatement. . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE XIV
Subordination of Debt Securities
SECTION 14.01. Securities Subordinate to Senior Debt. . . . . . . . . . 90
SECTION 14.02. Payment Over of Proceeds upon Dissolution, etc. . . . . 90
SECTION 14.03. Prior Payment to Senior Debt upon Acceleration of Debt
Securities . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 14.04. No Payment When Senior Debt in Default . . . . . . . . . 92
SECTION 14.05. Payment Permitted If No Default . . . . . . . . . . . . 93
SECTION 14.06. Subrogation to Rights of Holders of
Senior Debt . . . . . . . . . . . . . . . . . . . . . 94
SECTION 14.07. Provisions Solely To Define Relative
Rights . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 14.08. Trustee To Effectuate Subordination . . . . . . . . . . 95
SECTION 14.09. No Waiver of Subordination Provisions . . . . . . . . . 95
SECTION 14.10. Notice to Trustee . . . . . . . . . . . . . . . . . . . 95
SECTION 14.11. Reliance on Judicial Order or Certificate
of Liquidating Agent . . . . . . . . . . . . . . . . . 96
SECTION 14.12. Trustee Not Fiduciary for Holders of
Senior Debt Trustee Not Fiduciary for Holders of
Senior Debt . . . . . . . . . . . . . . . . . . . . . 96
SECTION 14.13. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights . . . . . . . . . . 96
SECTION 14.14. Article Applicable to Paying Agents . . . . . . . . . . 96
SECTION 14.15. Defeasance of this Article XIV . . . . . . . . . . . . . 97
SECTION 14.16. Certain Conversions or Exchanges Deemed Payment . . . . 97
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EXHIBIT (Form 1)
EXHIBIT (Form 2)
EXHIBIT (Form 3)
EXHIBIT (Form 4)
EXHIBIT (Form 5)
<PAGE>
SUBORDINATED INDENTURE, dated as of
_______ ___, 1997, between Financial Security
Assurance Holdings Ltd., a New York
corporation (the "Issuer"), and
, a
(the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue from time to time
of its unsecured debt securities, notes or other evidences of indebtedness to
be issued in one or more series (the "Debt 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 Issuer 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 Debt Securities by the holders thereof, the Issuer and the Trustee
mutually covenant and agree for the equal and proportionate benefit of the
respective holders from time to time of the Debt Securities as follows:
ARTICLE I
Definitions
SECTION 1.01. 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 in said Securities Act as in force at the date of
<PAGE>
2
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 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 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.
"Board of Directors" means either the Board of Directors of the
Issuer or any committee of such Board duly authorized to act hereunder.
"Business Day" means, with respect to any Debt Security, a day that
in the city (or in any of the cities, if more than one) in which amounts are
payable, as specified in the form of such Debt Security, is not a day on
which banking institutions are authorized by law or regulation to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or if on any date 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, then the body performing such duties on such date.
"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 _________________________________.
"Debt Security" or "Debt Securities"(except as otherwise provided in
Section 6.08) has the meaning stated in the first recital of this Indenture,
or, as the case may be, Debt Securities that have been authenticated and
delivered under this Indenture.
"Depositary" means with respect to any Debt Securities issued in the
form of one or more Registered Global Securities, such Person as the Board of
Directors may designate and its successors.
<PAGE>
3
"Dollars" shall mean United States Dollars.
"Event of Default" means any event or condition specified as such in
Section 5.01.
"Holder", "Holder of Debt Securities", "Debt Securityholder" or
other similar terms mean the registered holder of any Debt Security.
"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 Debt Securities established as contemplated hereunder.
"Interest" means, when used with respect to non-interest bearing
Debt Securities, interest payable after maturity.
"Issuer" means (except as otherwise provided in Section 6.13)
Financial Security Assurance Holdings Ltd., a New York corporation, and,
subject to Article Nine, its successors and assigns.
"Junior Subordinated Payment" has the meaning specified in Section
14.02.
"Mortgage" means any mortgage, pledge, lien, security interest or
other encumbrance.
"Officers' Certificate" means a certificate signed by the chairman
of the Board of Directors or the president or any managing director and by
the treasurer or the secretary or any assistant secretary of the Issuer and
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 11.05.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer or who may be
other counsel satisfactory to the Trustee. Each such opinion shall include
the statements provided for in Section 11.05, if and to the extent required
hereby.
"Original Issue Date" of any Debt Security (or portion thereof)
means the earlier of (a) the date of such Debt Security or (b) the date of
any Debt Security (or portion thereof) for which such Debt Security was
issued
<PAGE>
4
(directly or indirectly) on registration of transfer, exchange or
substitution.
"Original Issue Discount Debt Security" means any Debt Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant
to Section 5.01.
"Outstanding" (except as otherwise provided in Section 6.08), when
used with reference to Debt Securities, subject to the provisions of Section
7.04, means, as of any particular time, all Debt Securities authenticated and
delivered by the Trustee under this Indenture, except:
(a) Debt Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancelation;
(b) Debt Securities, or portions thereof, for the payment or
redemption of which monies in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other than
the Issuer) or shall have been set aside, segregated and held in trust by
the Issuer for the holders of such Debt Securities (if the Issuer shall act
as its own paying agent), provided that if such Debt 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) Debt Securities in substitution for which other Debt Securities
shall have been authenticated and delivered, or which shall have been paid,
pursuant to the terms of Section 2.08, 2.09, 2.11, 2.12 or 12.03 (except
with respect to any such Debt Security as to which proof satisfactory to
the Trustee is presented that such Debt Security is held by a person in
whose hands such Debt Security is a legal, valid and binding obligation of
the Issuer).
In determining whether the holders of the requisite principal
amount of Outstanding Debt Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Debt Security
that shall be deemed to be outstanding for such purposes shall be the
amount of
<PAGE>
5
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 5.01.
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Principal" whenever used with reference to the Debt Securities or
any Debt Security or any portion thereof, shall be deemed to include "and
premium, if any".
"Registered Global Security" means a Debt Security issued to the
Depositary in accordance with Article Two and bearing the legend prescribed
in Section 2.12.
"Responsible Officer" when used with respect to the Trustee, means
the chairman of the board of directors, any vice chairman of the board of
directors, the chairman of the trust committee, the chairman of the executive
committee, any vice chairman of the executive committee, the president, any
vice president, the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, 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
because of his knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means Financial Security Assurance Inc., a
New York corporation, and any successor to all or substantially all of its
business; provided that such successor is a Subsidiary.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Issuer whether
or not such claim for post-petition interest is allowed in such proceeding),
on Debt, whether incurred on or prior to the date of this Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
<PAGE>
6
obligations are not superior in right of payment to the Debt Securities or to
the other Debt which is pari passu with, or subordinated to, the Debt
Securities; provided, however, that Senior Debt shall not be deemed to
include (a) any Debt of the Issuer which when incurred and without respect to
Section 1111(b) of the Bankruptcy Code was without recourse to the Issuer,
(b) any Debt of the Issuer to any of its Subsidiaries, (c) Debt to any
employee of the Issuer, (d) any liability for taxes, (e) Debt or other
monetary obligations to trade creditors created or assumed by the Issuer by
or any of its Subsidiaries in the ordinary course of business in connection
with the obtaining of goods, materials or services and (f) the Debt
Securities.
"Subsidiary" means a corporation more than 50% of the outstanding
Voting Stock of which is owned, directly or indirectly, by the Issuer or by
one or more other Subsidiaries, or by the Issuer and one or more other
Subsidiaries.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.01 and 8.02) means the Trust Indenture Act of 1939 as in force at
the date as of which this Indenture was originally executed.
"Vice President" when used with respect to the Issuer 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, with respect to any Subsidiary, stock of any
class or classes (or equivalent interests), if the holders of the stock of
such class or classes (or equivalent interests) are ordinarily, in the
absence of contingencies, entitled to vote for the election of the directors
(or Persons performing similar functions) of such Subsidiary, even though the
right so to vote has been suspended by the happening of such a contingency.
"Yield to Maturity" means the yield to maturity on a series of Debt
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, as
calculated in accordance with accepted financial practice.
<PAGE>
7
ARTICLE II
Securities
SECTION 2.01. Forms Generally. The Debt Securities of each series
shall be substantially in such form (not inconsistent with this Indenture) as
shall be established by or authorized in accordance with a resolution of the
Board of Directors or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of
any securities exchange or as may, consistently herewith, be determined by
the officers executing such Debt Securities, as evidenced by their execution
of the Debt Securities.
The definitive Debt Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Debt Securities, as
evidenced by their execution of such Debt Securities.
SECTION 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Debt Securities shall be in
substantially the following form:
This is one of the Debt Securities of the series designated herein
and referred to in the within-mentioned Indenture.
[TRUSTEE]
as Trustee
by________________________________________
Authorized Officer
SECTION 2.03. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Debt Securities which may be authenticated and delivered
under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There
shall be established in or in accordance with a resolution of the Board of
Directors and set forth in an
<PAGE>
8
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Debt Securities of any series:
(1) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of the series from the Debt Securities of
any other series and from any other securities issued by the Issuer);
(2) any limit upon the aggregate principal amount of the Debt
Securities of the series that may be authenticated and delivered under this
Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to Section 2.08, 2.09, 2.11, 2.12 or
12.03);
(3) the date or dates on which the principal of the Debt Securities of
the series is payable;
(4) the rate or rates at which the Debt Securities of the series shall
bear interest, if any, or the method by which such rate shall be
determined, the date or dates from which such interest shall accrue, the
interest payment dates on which such interest shall be payable, the right,
if any, of the Issuer to defer or extend an interest payment date, and the
record dates for the determination of Holders to whom interest is payable;
(5) the place or places where the principal and any interest on Debt
Securities of the series shall be payable (if other than as provided in
Section 3.02);
(6) the price or prices at which, the period or periods within which
and the terms and conditions upon which Debt Securities of the series may
be redeemed, in whole or in part, at the option of the Issuer, pursuant to
any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem, purchase or repay
Debt 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, the currency or currencies
(including currency unit or units) in which, and the terms and conditions
upon which Debt Securities of the series shall be redeemed,
<PAGE>
9
purchased or repaid, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(9) if other than Dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any) and
interest, if any, on the Debt Securities of the series shall be payable, or
in which the Debt Securities of the series shall be denominated;
(10) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Registered Global Securities and, in
such case, the Depositary with respect to such Registered Global Security
or Securities and the circumstances under which any such Registered Global
Security may be registered for transfer or exchange, or authenticated and
delivered, in the name of a Person other than such Depositary or its
nominee, if other than as set forth in Section 2.12;
(11) the additions, modifications or deletions, if any, in the Events
of Default or covenants of the Issuer set forth herein with respect to the
Debt Securities of such series.
(12) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 5.01 or provable in bankruptcy pursuant to Section 5.02;
(13) the application, if any, of Section 13.02 or Section 13.03 to the
Securities of any series;
(14) the relative degree, if any, to which the Debt Securities of the
series shall be senior to or be subordinated to other series of Debt
Securities in right of payment, whether such other series of Debt
Securities are Outstanding or not;
(15) the terms of any right to convert or exchange Debt Securities
of the series into or for other securities or property, including (i) the
conversion of
<PAGE>
10
or exchange price, (ii) the conversion or exchange period, (iii)
provisions as to whether conversion or exchange will be at the option of
the Holder or the Issuer and (iv) the events requiring an adjustment to
the conversion or exchange price;
(16) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture); and
(17) any trustees, authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the Debt Securities of such
series.
All Debt Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided
in or pursuant to such resolution of the Board of Directors or in any such
indenture supplemental hereto.
SECTION 2.04. Authentication and Delivery of Debt Securities. At
any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Debt Securities of any series executed by
the Issuer to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver such Debt Securities to or upon the written order of
the Issuer, signed by both (a) the chairman of its Board of Directors, or any
vice chairman of its Board of Directors, or its president or any managing
director and (b) by its treasurer or any assistant treasurer or its secretary
or any assistant secretary, without any further action by the Issuer. In
authenticating such Debt Securities, and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities,
the Trustee shall be entitled to receive, and (subject to Section 6.01) shall
be fully protected in relying upon:
(1) a certified copy of any resolution or resolutions of the Board of
Directors authorizing the action taken pursuant to the resolution or
resolutions delivered under clause (2) below;
(2) a copy of any resolution or resolutions of the Board of Directors
relating to such series, in each case certified by the Secretary or an
Assistant Secretary of the Issuer;
<PAGE>
11
(3) an executed supplemental indenture, if any;
(4) an Officers' Certificate setting forth the form and terms of the
Debt Securities as required pursuant to Sections 2.01 and 2.03,
respectively and prepared in accordance with Section 11.05;
(5) an Opinion of Counsel, prepared in accordance with Section 11.05,
which shall state:
(A) that the form or forms and terms of such Debt Securities have
been established by or in accordance with a resolution of the Board of
Directors or by a supplemental indenture as permitted by Sections 2.01
and 2.03 in conformity with the provisions of this Indenture;
(B) that such Debt Securities, when authenticated and delivered
by the Trustee and issued by the Issuer in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute
valid and binding obligations of the Issuer;
(C) that all laws and requirements in respect of the execution
and delivery by the Issuer of the Debt Securities have been complied
with; and
(D) such other matters as the Trustee may reasonably request.
The Trustee shall have the right to decline to authenticate and
deliver any Debt Securities under this Section if the Trustee, being advised
by counsel, determines that such action may not lawfully be taken by the
Issuer or if the Trustee in good faith by its board of directors or board of
trustees, executive committee, or a trust committee of directors or trustees
or Responsible Officers shall determine that such action would expose the
Trustee to personal liability to existing Holders.
SECTION 2.05. Execution of Debt Securities. The Debt Securities
shall be signed on behalf of the Issuer by both (a) the chairman of its Board
of Directors or any vice chairman of its Board of Directors or its president
or any managing director and (b) its treasurer or any assistant treasurer or
its secretary or any assistant secretary, under its corporate seal which may,
but need not, be attested. Such signatures may be the manual or facsimile
signatures of
<PAGE>
12
any such officers. The seal of the Issuer may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on
the Debt 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 Debt Security that has been duly
authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Debt Securities shall cease to be such officer before the Debt Security so
signed shall be authenticated and delivered by the Trustee or disposed of by
the Issuer, such Debt Security nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Debt Security
had not ceased to be such officer of the Issuer; and any Debt Security may be
signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Debt Security, shall be the proper officers of the Issuer,
although at the date of the execution and delivery of this Indenture any such
person was not such an officer.
SECTION 2.06. Certificate of Authentication. Each Debt Security
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 authorized 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 Debt Security executed by the Issuer shall be conclusive
evidence that the Debt Security so authenticated has been duly authenticated
and delivered hereunder and that the holder is entitled to the benefits of
this Indenture.
SECTION 2.07. Denomination and Date of Debt Securities; Payments of
Interest. The Debt Securities shall be issuable as registered debt
securities without coupons and in denominations as shall be specified as
contemplated by Section 2.03. In the absence of any such specification with
respect to the Debt Securities of any series, the Debt Securities of such
series shall be issuable in denominations of $1,000 and any integral multiple
thereof. The Debt Securities shall be numbered, lettered, or otherwise
distinguished in such manner or in accordance with such plan as the officers
of the Issuer executing the same may determine with the approval of the
Trustee as evidenced by the execution and authentication thereof.
<PAGE>
13
Each Debt Security shall be dated the date of its authentication,
shall bear interest, if any, from such date and shall be payable on the
dates, in each case, which shall be specified as contemplated by Section
2.03.
The person in whose name any Debt Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Debt Security
subsequent to the record date and prior to such interest payment date, except
if and to the extent the Issuer shall default in the payment of the interest
due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the persons in whose names outstanding
Debt Securities for such series are registered at the close of business on a
subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice
given by mail by or on behalf of the Issuer to the holders of Debt Securities
not less than 15 days preceding such subsequent record date. The term
"record date" as used with respect to any interest payment date (except a
date for payment of defaulted interest) shall mean the date specified as such
in the terms of the Debt 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 fifteenth day of the next preceding calendar month or, if
such interest payment date is the fifteenth day of a calendar month, the
first day of such calendar month, whether or not such record date is a
Business Day.
SECTION 2.08. Registration, Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.02 a register or registers in which, subject to such reasonable
regulations as it may prescribe, it will register, and will register the
transfer of, Debt Securities as provided in this Article. 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.
Subject to Section 2.12, upon due presentation for registration of
transfer of any Debt Security of any series at any such office or agency to
be maintained for the
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14
purpose as provided in Section 3.02, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Debt Security or Debt Securities of the same series in authorized
denominations for a like aggregate principal amount.
Subject to Section 2.12, any Debt Security or Debt Securities of any
series may be exchanged for a Debt Security or Debt Securities of the same
series in other authorized denominations, in an equal aggregate principal
amount. Debt Securities of any series to be exchanged shall be surrendered
at an office or agency to be maintained by the Issuer for the purpose as
provided in Section 3.02, and the Issuer shall execute and the Trustee shall
authenticate and deliver in exchange therefor the Debt Security or Debt
Securities of the same series which the Debt Securityholder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
All Debt Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee
duly executed by, the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Debt Securities. No service charge
shall be made for any such transaction.
The Issuer shall not be required to exchange or register a transfer
of (a) any Debt Securities of any series for a period of 15 days next
preceding the first mailing of notice of redemption of Debt Securities of
such series to be redeemed, or (b) any Debt Securities selected, called or
being called for redemption except, in the case of any Debt Security where
public notice has been given that such Debt Security is to be redeemed in
part, the portion thereof not so to be redeemed. All Debt Securities issued
upon any transfer or exchange of Debt Securities shall be valid obligations
of the Issuer, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Debt Securities surrendered upon such transfer
or exchange.
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Debt
Securities. In case any temporary or
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15
definitive Debt Security of any series shall become mutilated, defaced or be
destroyed, lost or stolen, the Issuer in its sole discretion may execute, and
upon the written request of any officer of the Issuer, the Trustee shall
authenticate and deliver, a new Debt Security of the same series, bearing a
number not contemporaneously outstanding, in exchange and substitution for
the mutilated or defaced Debt Security, or in lieu of and substitution for
the Debt Security so destroyed, lost or stolen. In every case the applicant
for a substitute Debt Security shall furnish to the Issuer and to the Trustee
and any agent of the Issuer 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 Debt Security and of
the ownership thereof.
Upon the issuance of any substitute Debt Security, the Issuer 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 Debt Security 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 Issuer may instead of issuing a
substitute Debt Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated or defaced Debt
Security), if the applicant for such payment shall furnish to the Issuer and
to the Trustee and any agent of the Issuer 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 Issuer and the Trustee and any agent of the Issuer or the Trustee
evidence to their satisfaction of the destruction, loss or theft of such Debt
Security and of the ownership thereof.
Every substitute Debt Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Debt Security
is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Debt
Security 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 Debt Securities of such series duly authenticated
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16
and delivered hereunder. All Debt Securities shall be held and owned upon
the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, defaced or destroyed, lost or stolen Debt Securities 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. Cancelation of Debt Securities; Destruction Thereof.
All Debt Securities surrendered for payment, redemption, registration of
transfer, for conversion or exchange, or for credit against any payment in
respect of a sinking or analogous fund, if surrendered to the Issuer or any
agent of the Issuer or the Trustee, shall be delivered to the Trustee for
Cancelation or, if surrendered to the Trustee, shall be Canceled by it; and
no Debt Securities shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee shall
destroy Canceled Debt Securities held by it and deliver a certificate of
destruction to the Issuer. If the Issuer shall acquire any of the Debt
Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Debt Securities unless
and until the same are delivered to the Trustee for cancelation.
SECTION 2.11. Temporary Debt Securities. Pending the preparation
of definitive Debt Securities for any series, the Issuer may execute and the
Trustee shall authenticate and deliver temporary Debt Securities for such
series (printed, lithographed, typewritten or otherwise reproduced, in each
case in form satisfactory to the Trustee). Temporary Debt Securities of any
series shall be issuable as registered Debt Securities without coupons, of
any authorized denomination, and substantially in the form of the definitive
Debt Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Debt Securities, all as may be
determined by the Issuer with the concurrence of the Trustee. Temporary Debt
Securities may contain such reference to any provisions of this Indenture as
may be appropriate. Every temporary Debt Security shall be executed by the
Issuer and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive Debt
Securities. Without unreasonable delay the Issuer shall
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17
execute and shall furnish definitive Debt Securities of such series and
thereupon temporary Debt Securities of such series may be surrendered in
exchange therefor without charge at each office or agency to be maintained by
the Issuer for that purpose pursuant to Section 3.02, and the Trustee shall
authenticate and deliver in exchange for such temporary Debt Securities of
such series a like aggregate principal amount of definitive Debt Securities
of the same series of authorized denominations. Until so exchanged, the
temporary Debt Securities of any series shall be entitled to the same
benefits under this Indenture as definitive Debt Securities of such series.
SECTION 2.12. Debt Securities Issuable in the Form of a Registered
Global Security. (a) If the Issuer shall establish pursuant to Section 2.03
that the Debt Securities of a series are to be issued in the form of one or
more Registered Global Securities, then the Issuer shall execute and the
Trustee shall, in accordance with this Article Two, authenticate and deliver,
one or more Registered Global Securities which (i) shall represent, and shall
be denominated in an amount equal to, the aggregate principal amount of all
of the Debt Securities of such series, (ii) shall be registered in the name
of the Depositary or its nominee, (iii) shall be delivered by the Trustee to
the Depositary or pursuant to the Depositary's instruction, and (iv) shall
bear a legend substantially to the following effect: "Except as otherwise
provided in Section 2.12 of the Indenture, this Registered Global Security
may be transferred, in whole but not in part, by the Depositary to a nominee
of such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary or to a nominee of such successor Depositary.
Unless this Registered Global Security is presented by an authorized
representative of the Depositary to the Issuer or its agent for registration
of transfer, exchange or payment, and, in the case of any transfer or
exchange, any Registered Global Security issued in exchange therefor is
registered in the name of the Depositary or such other name as requested by
an authorized representative of the Depositary and, in the case of any
payment, such payment is made to the Depositary or the Depositary's nominee,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof has an interest herein."
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18
(b) Notwithstanding any other provision of this Section 2.12 or of
Section 2.08, the Registered Global Securities may be transferred, in whole
but not in part and in the manner provided in Section 2.08, by the Depositary
to a nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor Depositary selected or approved by the Issuer or
to a nominee of such successor Depositary.
(c) The Depositary shall be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and any other applicable statute
or regulation.
(d) If at any time the Depositary notifies the Issuer that it is
unwilling or unable to continue as Depositary for such series or if at any
time the Depositary for such series shall no longer be eligible under
paragraph (c) of this Section 2.12, and a successor Depositary is not
appointed by the Issuer within 90 days after the Issuer receives such notice
or becomes aware of such condition, as the case may be, this Section 2.12
shall no longer be applicable to the Debt Securities of such series and the
Issuer will execute, and the Trustee will authenticate and deliver, Debt
Securities of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Registered Global Securities of such series then
outstanding in exchange for such Registered Global Securities. In addition,
the Issuer may at any time and in its sole discretion determine that the Debt
Securities of any series shall no longer be represented by Registered Global
Securities and that the provisions of this Section 2.12 shall no longer apply
to the Debt Securities of such series. In such event the Issuer will execute,
and the Trustee, upon receipt of an Officers' Certificate evidencing such
determination by the Issuer, will authenticate and deliver, Debt Securities
of such series in definitive registered form without coupons, in authorized
denominations and in an aggregate principal amount equal to the principal
amount of the Registered Global Securities of such series then outstanding in
exchange for such Registered Global Securities. Upon the exchange of the
Registered Global Securities for such Debt Securities in definitive
registered form without coupons, in authorized denominations, such Registered
Global Securities shall be canceled by the Trustee. Such Debt Securities in
definitive registered form issued in exchange for the Registered Global
Securities pursuant to this Section 2.12(d) shall be registered in such
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19
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Debt Securities to the
Persons in whose names such Debt Securities are so registered.
(e) As long as the Outstanding Debt Securities of any series are
represented by one or more Registered Global Securities, the Issuer shall pay
or cause to be paid the principal of, and interest on, such Registered Global
Securities to the registered holders thereof, or to such Persons as the
registered holders thereof may designate, by wire transfer of immediately
available funds on the date such payments are due.
ARTICLE III
Covenants of the Issuer
SECTION 3.01. Payment of Principal and Interest. The Issuer will
duly and punctually pay or cause to be paid the principal of, and interest
on, the Debt Securities of each series at the place or places, at the
respective times and in the manner provided in such Debt Securities. Subject
to Section 2.12(e), each instalment of interest on the Debt Securities of any
series may be paid by mailing checks for such interest payable to or upon the
written order of the holders of Debt Securities entitled thereto as they
shall appear on the registry books of the Issuer.
SECTION 3.02. Offices for Payments, etc. So long as any of the
Debt Securities remain outstanding, the Issuer will maintain in the Borough
of Manhattan, the City of New York, the following for each series: an office
or agency (a) where the Debt Securities may be presented for payment, (b)
where the Debt Securities may be presented for registration of transfer and
for exchange as in this Indenture provided and (c) where notices and demands
to or upon the Issuer in respect of the Debt Securities or of this Indenture
may be served. The Issuer will give to the Trustee written notice of the
location of any such office or agency and of any change of location thereof.
Unless otherwise specified in accordance with Section 2.03, the Issuer hereby
initially designates the Trustee's office at [ ], as the office
to be maintained by it for each such purpose. In case the Issuer shall fail
to so designate or maintain any such office or agency or shall fail to give
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20
such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the
Corporate Trust Office.
SECTION 3.03. Appointment To Fill a Vacancy in Office of Trustee.
The Issuer, 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
Debt Securities hereunder.
SECTION 3.04. Paying Agents. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to the Debt 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 Debt Securities of such
series (whether such sums have been paid to it by the Issuer or by any
other obligor on the Debt Securities of such series) in trust for the
benefit of the holders of the Debt Securities of such series or of the
Trustee; and
(b) that it will give the Trustee notice of any failure by the Issuer
(or by any other obligor on the Debt Securities of such series) to make any
payment of the principal of or interest on the Debt Securities of such
series when the same shall be due and payable.
The Issuer will, on or prior to each due date of the principal of or
interest on the Debt Securities of such series, 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 Issuer will promptly notify the
Trustee of any failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Debt Securities of any series, it will, on or before each due date of the
principal of or interest on the Debt Securities of such series, set aside,
segregate and hold in trust for the benefit of the holders of the Debt
Securities of such series a sum sufficient to pay such principal or interest
so becoming due. The Issuer will promptly notify the Trustee of any failure
to take such action.
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21
Anything in this Section to the contrary notwithstanding, the Issuer
may at any time, for the purpose of obtaining a satisfaction and discharge
with respect to one or more or all series of Debt Securities 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 Issuer or any paying agent hereunder, as
required by this Section, such sums to be held by the Trustee upon the trusts
herein contained; and, upon such payment by any paying agent to the Trustee,
such paying agent shall be released from all further liability with respect
to such monies.
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 10.03 and 10.04.
SECTION 3.05. Written Statement to Trustee. The Issuer will deliver
to the Trustee on or before ________ in each year (beginning with _______) a
written statement, signed by two of its officers (which need not comply with
Section 11.05), stating that in the course of the performance of their duties as
officers of the Issuer they would normally have knowledge of any default by the
Issuer 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 3.06. Limitations on Liens. So long as Debt Securities are
outstanding, the Issuer will not, and will not permit any Subsidiary to,
directly or indirectly, create, issue, assume, incur or guarantee any
indebtedness for borrowed money which is secured by a Mortgage of any nature on
any of the present or future capital stock of any Restricted Subsidiary (or any
company, other than the Issuer, having direct or indirect control of any
Restricted Subsidiary) unless the Debt Securities then Outstanding and, if the
Issuer so elects, any other indebtedness of the Issuer ranking at least pari
passu with the Debt Securities, shall be secured equally and ratably with, or
prior to, such other secured debt so long as it is outstanding.
SECTION 3.07. Limitations on Disposition of Stock of Restricted
Subsidiaries. So long as Debt Securities are outstanding, the Issuer will
not, and will not permit any
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22
Subsidiary to, sell, transfer or otherwise dispose of any shares of capital
stock of any Restricted Subsidiary except for:
(a) a sale, transfer or other disposition of any capital stock of any
Restricted Subsidiary to a wholly owned Subsidiary of the Issuer or such
Subsidiary;
(b) a sale, transfer or other disposition of the entire capital stock
of any Restricted Subsidiary for at least fair value (as determined by the
Board of Directors of the Issuer acting in good faith); or
(c) a sale, transfer or other disposition of the capital stock of any
Restricted Subsidiary for at least fair value (as determined by the Board
of Directors of the Issuer acting in good faith) if, after giving effect
thereto, the Issuer and its Subsidiaries would own more than 80% of the
issued and outstanding Voting Stock of such Restricted Subsidiary.
SECTION 3.08. Corporate Existence. The Issuer will do or cause to
be done all things necessary to preserve and keep in full force and effect
its corporate existence.
SECTION 3.09. Waiver of Certain Covenants. The Issuer may omit in
respect of the Debt Securities, in any particular instance, to comply with
any covenants or conditions set forth in Sections 3.06, 3.07 and 3.08, if
before or after the time for such compliance the Holders of at least a
majority of the Outstanding Debt Securities of all series (voting as a class)
either waive such compliance in such instance or generally waive compliance
with such covenant or condition, but no such waiver shall extend to or affect
such covenant or condition except to the extent expressly waived, and, until
such waiver shall become effective, the obligations of the Issuer and the
duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.
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23
ARTICLE IV
Debt Securityholders' Lists and Reports by the
Issuer and the Trustee
SECTION 4.01. Issuer To Furnish Trustee Information as to Names and
Addresses of Debt Securityholders. (a) The Issuer 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 Debt Securities of each series:
(i) semiannually and not more than 15 days after each record date for
the payment of interest on such Debt Securities, as hereinabove specified,
as of such record date and on dates to be determined pursuant to
Section 2.03 for non-interest bearing securities in each year; and
(ii) at such other times as the Trustee may request in writing, within
30 days after receipt by the Issuer 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 Debt Security registrar for
such series, such list shall not be required to be furnished.
(b) The Issuer hereby appoints the Trustee as Debt Security
Registrar and the Trustee hereby consents to such appointment for each series
of Debt Securities to be issued hereunder.
SECTION 4.02. Preservation and Disclosure of Debt 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 Debt Securities contained in the most recent list
furnished to it as provided in Section 4.01 or maintained by the Trustee in
its capacity as Debt Security registrar for such series, if so acting. The
Trustee may destroy any list furnished to it as provided in Section 4.01 upon
receipt of a new list so furnished.
(b) In case three or more holders of Debt 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 a Debt
Security for a period of at least six months preceding the
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24
date of such application, and such application states that the applicants
desire to communicate with other holders of Debt Securities of a particular
series (in which case the applicants must all hold Debt Securities of such
series) or with Holders of all Debt Securities with respect to their rights
under this Indenture or under such Debt 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
Debt Securities of such series or all Debt Securities, as the case may be,
whose names and addresses appear in the information preserved at the time
by the Trustee, in accordance with the provisions of subsection (a) of this
Section, and as to the approximate cost of mailing to such Debt
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 Debt Securityholder of such series or all Debt
Securities, as the case may be, whose name and address appears 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,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders
of Debt Securities of such series or all Debt Securities, as the case may be,
or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for
a hearing upon the objections specified in the written statement so
<PAGE>
25
filed, shall enter an order refusing to sustain any of such objections or if,
after the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met, and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Debt
Securityholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every holder of Debt Securities, by receiving and
holding the same, agrees with the Issuer and the Trustee that neither the
Issuer nor the Trustee nor any agent of the Issuer 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 Debt Securities in accordance with
the 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 4.03. Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual reports
and of the information, documents, and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Issuer may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, but if the Issuer 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;
<PAGE>
26
(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 Issuer 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 Debt Securities, within
30 days after the filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the Issuer
pursuant to subsections (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 4.04. Reports by the Trustee. (a) On or before
[December 1]in each year following the date hereof, so long as any Debt
Securities are outstanding hereunder, the Trustee shall transmit by mail as
provided below to the Debt Securityholders of each series, as hereinafter in
this Section provided, a brief report dated as of a date convenient to the
Trustee no more than 60 nor less than 45 days prior thereto with respect to:
(i) its eligibility under Section 6.09 and its qualification under
Section 6.08 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 Debt 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 1% of the principal amount
of the Debt 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 Issuer (or by
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27
any other obligor on the Debt 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) 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 Debt 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 Debt 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 no 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 Debt Securities of such series on property or funds held or collected
by it as Trustee and which it has not previously reported pursuant to this
subsection (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 Debt Securities of such
series outstanding at such time, such report to be transmitted within 90 days
after such time.
(c) Reports pursuant to this Section shall be transmitted by mail to
all registered holders of Debt Securities, as the names and addresses of such
holders appear upon the registry books of the Issuer.
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(d) A copy of each such report shall, at the time of such transmission
to Debt Securityholders, be furnished to the Issuer and be filed by the Trustee
with each stock exchange upon which the Debt Securities of any applicable series
are listed and also with the Commission. The Issuer agrees to notify the
Trustee with respect to any series when and as the Debt Securities of such
series become admitted to trading on any national securities exchange.
ARTICLE V
Remedies of the Trustee and Debt Securityholders
on Event of Default
SECTION 5.01. Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default" with respect to Debt Securities of any
series wherever used herein, means any 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 instalment of interest upon any of
the Debt 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 Debt Securities of such series as and when the same shall become due
and payable either at maturity, upon any redemption, by declaration or
otherwise; or
(c) default in the payment of any sinking fund instalment as and when
the same shall become due and payable by the terms of the Debt Securities
of such series; or
(d) default in the performance, or breach, of any covenant or warranty
of the Issuer in respect of the Debt Securities of such series (other than
a covenant or warranty in respect of the Debt 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
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29
of 60 days after there has been given, by registered or certified mail, to
the Issuer by the Trustee or to the Issuer and the Trustee by the Holders
of at least 25% in principal amount of the Outstanding Debt Securities of
such series, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(e) failure by the Issuer to make any payment at maturity, including
any applicable grace period, in respect of indebtedness, which term as used
herein means obligations (other than the Debt Securities of such series or
non-recourse obligations) of, or guaranteed or assumed by, the Issuer for
borrowed monies or evidenced by bonds, debentures, notes or other similar
instruments ("Indebtedness"), in an amount in excess of $10,000,000 or the
equivalent thereof in any other currency or composite currency and such
failure shall have continued for a period of 10 days after written notice
thereof shall have been given by registered or certified mail, return
receipt requested, to the Issuer by the Trustee, or to the Issuer and the
Trustee by the holders of not less than 25% in aggregate principal amount
of the Outstanding Debt Securities (treated as one class) and stating that
such notice is a "Notice of Default" hereunder; or
(f) default by the Issuer with respect to any Indebtedness, which
default results in the acceleration of Indebtedness in an amount in excess
of $10,000,000 or the equivalent thereof in any other currency or composite
currency without such Indebtedness having been discharged or such
acceleration having been incurred, waived, rescinded or annulled for a
period of 10 days after written notice thereof shall have been given by
registered or certified mail, return receipt requested, to the Issuer by
the Trustee, or to the Issuer and the Trustee by the holders of not less
than 25% in aggregate principal amount of the outstanding Debentures
(treated as one class) and stating that such notice is a "Notice of
Default" hereunder; or
(g) entry by a court having jurisdiction in the premises of a decree
or order for relief in respect of the Issuer or any Restricted Subsidiary
in an involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law if not
dismissed within 30 days; or
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30
(h) commencement by the Issuer or any Restricted Subsidiary of a
voluntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law; or
(i) any other Event of Default provided in the supplemental indenture
or resolution of the Board of Directors under which such series of Debt
Securities is issued or in the form of Debt Security for such series.
If an Event of Default described in clauses (a), (b) or (c) above
occurs and is continuing, then, and in each and every such case, unless the
principal of all of the Debt Securities of such series shall have already
become due and payable, either the Trustee or the holders of not less than
25% in aggregate principal amount of the Debt Securities of such series then
Outstanding hereunder (each such series voting as a separate class) by notice
in writing to the Issuer (and to the Trustee if given by Debt
Securityholders), may declare the entire principal (or, if the Debt
Securities of such series are Original Issue Discount Debt Securities, such
portion of the principal amount as may be specified in the terms of such
series) of all Debt Securities of such series and the interest accrued
thereon, if any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable, provided that
the payment of principal and interest on such Debt Securities shall remain
subordinated to the extent provided in Article Fourteen. If an Event of
Default described in clause (d) above (if such Event of Default is with
respect to less than all series of Debt Securities then Outstanding) occurs
and is continuing, then, and in each and every such case, unless the
principal of all of the Debt Securities of such series shall have already
become due and payable, either the Trustee or the holders of not less than
25% of the aggregate principal amount of the Debt Securities of all such
affected series then outstanding hereunder (voting as a single class) by
notice in writing to the Issuer (and to the Trustee if given by Debt
Securityholders), may declare the entire principal (or, if the Debt
Securities of any such series are Original Issue Discount Debt Securities,
such portion of the principal amount as may be specified in the terms of such
series) of all Debt Securities of all such affected series and the interest
accrued thereon, if any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable, provided that
the payment of principal and interest on such Debt Securities shall remain
subordinated to the extent provided in Article Fourteen. If
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31
an Event of Default described in clause (d) (if the Event of Default under
clause (d) is with respect to all series of Debt Securities then
outstanding), (e), (f), (g) or (h) occurs and is continuing, then and in each
and every such case, unless the principal of all the Debt Securities shall
have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of all the Debt Securities then
Outstanding hereunder (treated as one class), by notice in writing to the
Issuer (and to the Trustee if given by Debt Securityholders), may declare the
entire principal (or, if any Debt Securities are Original Issue Discount Debt
Securities, such portion of the principal as may be specified in the terms
thereof) of all the Debt Securities then outstanding and interest accrued
thereon, if any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable, provided that
the payment of principal and interest on such Debt Securities shall remain
subordinated to the extent provided in Article Fourteen.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Debt Securities are Original
Issue Discount Debt Securities, such portion of the principal as may be
specified in the terms thereof) of the Debt Securities of any series (or of
all the Debt Securities, as the case may be) shall have been so declared due
and payable, and before any judgment or decree for the payment of the monies
due shall have been obtained or entered as hereinafter provided, the Issuer
shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured instalments of interest upon all the Debt Securities of such series
(or of all the Debt Securities, as the case may be) and the principal of any
and all Debt Securities of such series (or of all the Debt Securities, as the
case may be) 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 instalments of interest, at
the same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Debt Securities) specified in the Debt Securities of
such series (or at the respective rates of interest or Yields to Maturity of
all the Debt Securities, as the case may be) to the date of such payment or
deposit) and such amount as shall be sufficient to cover reasonable
compensation 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,
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32
other than the non-payment of the principal of Debt 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 (i) with respect
to an Event of Default described in clauses (a), (b) and (c) above, the
holders of a majority in aggregate principal amount of the Debt Securities of
such series, voting as a separate class, then outstanding, by written notice
to the Issuer and to the Trustee, may waive all defaults with respect to such
series and rescind and annul such declaration and its consequences, (ii) with
respect to an Event of Default described in clause (d) above (if such Event
of Default is with respect to less than all series of Debt Securities then
Outstanding), the holders of a majority in aggregate principal amount of the
Debt Securities of all such affected series (voting as a single class) then
Outstanding, by written notice to the Issuer and to the Trustee, may waive
all such defaults with respect to all such affected series and rescind and
annul such declaration and its consequences and (iii) with respect to an
Event of Default described in clauses (d) (if such Event of Default is with
respect to all Series of Debt Securities then Outstanding), (e), (f) and (g),
the holders of a majority in aggregate principal amount of the Debt
Securities of all series (voting as a single class) then Outstanding by
written notice to the Issuer and to the Trustee, may waive all such defaults
with respect to all the Debt Securities then Outstanding and rescind and
annul such declaration and its consequences. 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 Debt Securities shall have been accelerated and
declared due and payable pursuant to the provisions hereof, then, from and after
such declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Debt 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 Debt Securities.
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33
SECTION 5.02. Collection of Indebtedness by Trustee; Trustee May
Prove Debt. The Issuer covenants that (a) in case default shall be made in
the payment of any instalment of interest on any of the Debt 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 part of the principal of any of
the Debt Securities of any series when the same shall have become due and
payable, whether upon maturity of the Debt Securities of such series or upon
any redemption or by declaration or otherwise--then upon demand of the
Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of
the Debt Securities of such series the whole amount that then shall have
become due and payable on all Debt Securities of such series for principal 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 Debt Securities) specified in the Debt 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 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 Issuer may pay the
principal of and interest on the Debt Securities of any series to the
registered holders, whether or not the principal of and interest on the Debt
Securities of such series be overdue.
In case the Issuer 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 Issuer or other obligor
upon such Debt Securities and collect in the manner provided by law out of
the property of the Issuer or other obligor upon such Debt Securities,
wherever situated, the monies adjudged or decreed to be payable.
<PAGE>
34
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Debt Securities under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency
or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its
property or such other obligor, or in case of any other comparable judicial
proceedings relative to the Issuer or other obligor upon the Debt Securities
of any series, or to the creditors or property of the Issuer or such other
obligor, the Trustee, irrespective of whether the principal of any Debt
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, by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Debt Securities of any series are
Original Issue Discount Debt Securities, such portion of the principal
amount as may be specified in the terms of such series) owing and unpaid in
respect of the Debt 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 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 Debt Securityholders allowed in any judicial proceedings relative to
the Issuer or other obligor upon the Debt Securities of any series, or to
the creditors or property of the Issuer or such other obligor;
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Debt 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
<PAGE>
35
(c) to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Debt Securityholders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the Debt Securityholders
to make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to the Debt Securityholders, to
pay to the Trustee such amounts as shall be sufficient to cover reasonable
compensation 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 6.06.
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 Debt
Securityholder any plan or reorganization, arrangement, adjustment or
composition affecting the Debt 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 Debt 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 Debt Securities, may be enforced by the Trustee without
the possession of any of the Debt Securities or the production thereof on 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 Debt Securities 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 Debt Securities in respect to which such
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36
action was taken, and it shall not be necessary to make any holders of such
Debt Securities parties to any such proceedings.
SECTION 5.03. Application of Proceeds. Any monies collected by the
Trustee pursuant to this Article in respect 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 monies on account of principal or interest, upon
presentation of the several Debt Securities in respect of which monies have
been collected and stamping (or otherwise noting) thereon the payment, or
issuing Debt Securities of such series in reduced principal amounts in
exchange for the presented Debt 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 monies have been collected, including reasonable
compensation to the Trustee and each predecessor Trustee and their
respective agents and attorneys and 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 all other
amounts due to the Trustee or any predecessor Trustee pursuant to Section
6.06;
SECOND: In case the principal of the Debt Securities of such series
in respect of which monies have been collected shall not have become and be
then due and payable, to the payment of interest on the Debt Securities of
such series in default in the order of the maturity of the instalments of
such interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue instalments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Debt Securities) specified in such Debt Securities,
such payments to be made ratably to the persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Debt Securities of such series in
respect of which monies 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 Debt Securities of such series for principal and
interest, with interest
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upon the overdue principal, and (to the extent 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 Debt Securities) specified in the Debt Securities of such
series; and in case such monies shall be insufficient to pay in full the
whole amount so due and unpaid upon the Debt 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
instalment of interest over any other instalment of interest, or of any
Debt Security of such series over any other Debt Security of such series,
ratably to the aggregate of such principal and accrued and unpaid interest
or yield to maturity; and
FOURTH: To the payment of the remainder, if any, to the Issuer or any
other person lawfully entitled thereto.
SECTION 5.04. 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 effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in 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.
SECTION 5.05. 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 Issuer and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Debt Securityholders shall continue
as though no such proceedings had been taken.
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SECTION 5.06. Limitations on Suits by Debt Securityholders. No
holder of any Debt Security of any series 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 trustee,
receiver, liquidator, 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 Debt 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 reasonable indemnity 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 5.09; it being understood and
intended, and being expressly covenanted by the taker and Holder of every
Debt Security with every other taker and Holder and the Trustee, that no one
or more Holders of Debt Securities of any series shall have any right in any
manner whatever by virtue or by availing of any provision of this Indenture
to affect, disturb or prejudice the rights of any other such Holder of Debt
Securities, or to obtain or seek to obtain priority over or preference to any
other such Holder or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Debt Securities of the applicable series. For the protection and
enforcement of the provisions of this Section, each and every Debt
Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 5.07. Unconditional Right of Debt Securityholders To
Institute Certain Suits. Notwithstanding any other provision in this
Indenture and any provision of any Debt Security, the right of any Holder of
any Debt Security to receive payment of the principal of and interest on such
Debt Security on or after the respective due dates expressed in such Debt
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.
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SECTION 5.08. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 5.06, no right or remedy
herein conferred upon or reserved to the Trustee or to the Debt
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 Debt 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 5.06, every power and remedy given by this
Indenture or by law to the Trustee or to the Debt Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Debt Securityholders.
SECTION 5.09. Control by Debt Securityholders. The Holders of a
majority in aggregate principal amount of the Debt Securities of each series
affected (with each series voting as a separate class) at the time
outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to the
Debt Securities of such series 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 Sections 6.01 and 6.02) 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 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 Debt Securities of all series so affected not joining in the
giving of said direction, it being understood that (subject
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40
to Sections 6.01 and 6.02) the Trustee shall have no duty to ascertain
whether or not such actions or forebearances 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 direction or directions by Debt Securityholders.
SECTION 5.10. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Debt Securities of any series as
provided in Section 5.01, the Holders of a majority in aggregate principal
amount of the Debt Securities of such series at the time Outstanding may on
behalf of the Holders of all the Debt Securities of such series waive any
past default or Event of Default described in clause (c) of Section 5.01 (or,
in the case of an Event of Default specified in clause (d) of Section 5.01
which relates to less than all series of Debt Securities then Outstanding,
the Holders of a majority in aggregate principal amount of the Debt
Securities then Outstanding affected thereby (voting as single class)) may
waive any such default or Event of Default, or, in the case of an Event of
Default specified in clause (d) (if the Event of Default under clause (d)
relates to all series of Debt Securities then outstanding), (e), (f), (g) or
(h) of Section 5.01 the Holders of Debt Securities of a majority in principal
amount of all the Debt Securities then Outstanding (voting as one class) 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 Debt Security affected.
In the case of any such waiver, the Issuer, the Trustee and the Holders of
the Debt Securities of such series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.
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.
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SECTION 5.11. Trustee To Give Notice of Default, but May Withhold
in Certain Circumstances. The Trustee shall transmit to the Debt
Securityholders of any series, as the names and addresses of such Holders
appear on the registry books, notice by mail 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 Debt Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of
directors or trustees and/or responsible officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of
the Debt 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 Debt
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Debt
Securityholder or group of Debt Securityholders of any series holding in the
aggregate more than 10% in aggregate principal amount of the Debt Securities
of such series, or, in the case of any suit relating to or arising under
clause (d) of Section 5.01 (if the suit relates to Debt Securities of more
than one but less than all series), 10% in aggregate principal amount of Debt
Securities outstanding affected thereby, or in the case of any suit relating
to or arising under clause (d) (if the suit under clause (d) relates to all
the Debt Securities then outstanding), (e), (f), (g) or (h) of Section 5.01,
10% in aggregate principal amount of all Debt Securities Outstanding, or to
any suit
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42
instituted by any Debt Securityholder for the enforcement of the payment of
the principal of or interest on any Debt Security on or after the due date
expressed in such Debt Security.
ARTICLE VI
Concerning the Trustee
SECTION 6.01. Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of Debt
Securities issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Debt 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. In case an Event of
Default with respect to the Debt Securities of a series has occurred (which
has not been cured or waived) 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
Debt 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
Debt Securities of any 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
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43
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 direction
of the Holders pursuant to Section 5.09 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 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 6.02. Certain Rights of the Trustee. Subject to Section
6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon,
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44
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 Issuer mentioned
herein shall be sufficiently evidenced by an Officers' 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 an assistant secretary of the
Issuer;
(c) the Trustee may consult with counsel and any advice or 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 in reliance on 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 Debt Securityholders pursuant to the provisions of
this Indenture, unless such Debt Securityholders shall have offered to the
Trustee reasonable security or indemnity 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 the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an 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 so
to do by the holders of not less than a majority in aggregate principal
amount of the Debt 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
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45
reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such investigation shall be paid by the Issuer
or, if paid by the Trustee or any predecessor trustee, shall be repaid by
the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
SECTION 6.03. Trustee Not Responsible for Recitals, Disposition of
Debt Securities or Application of Proceeds Thereof. The recitals contained
herein and in the Debt Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer, 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
Debt Securities. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Debt Securities or of the proceeds
thereof.
SECTION 6.04. Trustee and Agents May Hold Debt Securities;
Collections, Etc. The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of Debt
Securities with the same rights it would have if it were not the Trustee or
such agent and, subject to Sections 6.08 and 6.13, if operative, may
otherwise deal with the Issuer and receive, collect, hold and retain
collections from the Issuer with the same rights it would have if it were not
the Trustee or such agent.
SECTION 6.05. Monies Held by Trustee. Subject to the provisions of
Section 10.04 hereof, all monies 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 Issuer or the Trustee shall be under any liability for interest
on any monies received by it hereunder.
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46
SECTION 6.06. Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer 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 Issuer 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 Issuer 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 Issuer 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 Debt
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
Debt Securities, and the Debt Securities are hereby subordinated to such
senior claim.
SECTION 6.07. Right of Trustee To Rely on Officers' Certificate,
Etc. Subject to Sections 6.01 and 6.02, 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, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence
or bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers' Certificate delivered to the Trustee, and
such certificate, in the absence of negligence or bad faith on the part of
the Trustee, shall be full warrant to the Trustee for any action
<PAGE>
47
taken, suffered or omitted by it under the provisions of this Indenture upon
the faith thereof.
SECTION 6.08. 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 Debt Securityholders at their last addresses as they
appear on the Debt Security register.
(c) For the purposes of this Section, the Trustee shall be deemed
to have a conflicting interest with respect to Debt Securities of any series
if:
(i) the Trustee is trustee under this Indenture with respect to
the outstanding Debt 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
the Issuer are outstanding, unless such other indenture is a
collateral trust indenture under which the only collateral consists of
Debt Securities issued under this Indenture and this Indenture with
respect to the Debt Securities of any other series and there shall
also be so excluded any other indenture or indentures under which
other securities, or certificates of interest or participation in
other securities, of the Issuer are outstanding if (x) this Indenture
is and, if applicable, this Indenture and any series issued pursuant
to this Indenture 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 Debt
Securities of such series and one
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48
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
Debt Securities of such series and such other series, or under this
Indenture or such other indenture or indentures, or (y) 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 Debt 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 Debt 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 Debt Securities of any series issued under this
Indenture or an underwriter for the Issuer;
(iii) the Trustee directly or indirectly controls or is directly
or indirectly controlled by or is under direct or indirect common
control with the Issuer or an underwriter for the Issuer;
(iv) the Trustee or any of its directors or executive officers is
a director, officer, partner, employee, appointee, or representative
of the Issuer, or of an underwriter (other than the Trustee itself)
for the 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 the Issuer, but may not be at the same
time an executive officer of both the Trustee and the 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
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49
and a director of the Issuer; and (z) the Trustee may be designated
by the Issuer or by any underwriter for the 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 the 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 the 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 the Issuer, not including the Debt 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 the 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, the 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 the Issuer; or
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(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 subsections (c)(vi), (vii) or (viii) of this Section.
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 security. 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 the Issuer
fails to make payment in full of principal of or interest on any of
the Debt Securities when and as the same becomes due and payable, and
such failure continues for 30 days thereafter, the Trustee shall make
a prompt check of its holdings of such securities in any of the
above-mentioned capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall, 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 subsections (c)(iii) or (vii) of this Section.
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51
For the purposes of subsections (c)(vi), (vii), (viii) and (ix) of
this Section only:
(A) 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 monies 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;
(B) 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
(C) 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 depositary, 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 the Issuer
shall mean every person who, within three years prior to the time as
of which the determination is made, has purchased
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52
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 any such undertaking, or has participated or
has had a participation in the direct or indirect underwriting of any
such undertaking, but such term shall not include a person whose
interest was limited to a commission from an underwriter or dealer not
in excess of the usual and customary distributors' or sellers'
commission;
(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 any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, or government or any agency 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 in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security
are presently entitled to vote in the direction or management of the
affairs of a person;
(v) the term "Issuer" shall mean any obligor upon the Debt
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
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53
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, the Issuer or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means
such amount of the outstanding voting securities of such person as
entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person;
(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 evidence 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;
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(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 6.09. Persons Eligible for Appointment as Trustee. The
Trustee for each series of Debt 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. 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. So
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55
long as any Debt Securities are outstanding, there shall at all times be a
Trustee hereunder.
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 Debt Securities
by giving written notice of resignation to the Issuer and by mailing notice
thereof by first-class mail to Holders of the applicable series of Debt
Securities at their last addresses as they shall appear on the Debt Security
register. Upon receiving such notice of resignation, the Issuer 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 Debt
Securityholder who has been a bona fide Holder of a Debt Security or Debt
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) If at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 6.08 with respect to any series of Debt Securities after written
request therefor by the Issuer or by any Debt Securityholder who has been a
bona fide Holder of a Debt Security or Debt 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 6.09 and shall fail to resign after written request
therefor by the Issuer or by any Debt Securityholder; or
(iii) the Trustee shall become incapable of acting with respect to any
series of Debt Securities, or shall be adjudged a bankrupt or insolvent, or
a receiver or
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56
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 Issuer may remove the Trustee with respect to the
applicable series of Debt Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the
President or the Board of Directors of the Issuer, 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 Debt
Securityholder who has been a bona fide Holder of a Debt Security or Debt
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
Debt Securities of each series at the time outstanding may at any time remove
the Trustee with respect to Debt Securities of such series and appoint a
successor trustee with respect to the Debt Securities of such series by
delivering to the Trustee so removed, to the successor trustee so appointed
and to the Issuer the evidence provided for in Section 7.01 of the action in
that regard taken by the Debt Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series of Debt Securities 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 acceptance of appointment by the successor
trustee as provided in Section 6.11.
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 Issuer 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
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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 Issuer or of the successor
trustee, upon payment of its charges then unpaid, the trustee ceasing to act
shall, subject to Section 10.04, pay over to the successor trustee all monies
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 Issuer 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 6.06.
If a successor trustee is appointed with respect to the Debt
Securities of one or more (but not all) series, the Issuer, the predecessor
trustee and each successor trustee with respect to the Debt Securities of any
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 Debt 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 Debt 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 6.08 and eligible under the provisions of Section 6.09.
Upon acceptance of appointment by any successor trustee as provided
in this Section 6.11, the Issuer shall mail notice thereof by first-class
mail to the Holders of Debt Securities of any series for which such successor
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trustee is acting as trustee at their last addresses as they shall appear in
the Debt 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 Issuer 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 Issuer.
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 any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 6.08 and
eligible under the provisions of Section 6.09, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Debt 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 Debt Securities so authenticated; and, in case at
that time any of the Debt Securities of any series shall not have been
authenticated, any successor to the Trustee may authenticate such Debt
Securities either in the name of any predecessor hereunder or in the name of
the successor trustee; and in all such cases such certificate shall have the
full force which it is anywhere in the Debt 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 Debt 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 Issuer.
(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 the
Issuer within four months prior to a default, as defined in
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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 Debt Securities 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 months' period and valid as
against the 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 the 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 months'
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the 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 the 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 the
Issuer in bankruptcy or receivership or in proceedings for
organization 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 months' period;
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(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 months' 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 months' 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 Debt Securityholders and the holders of other
indenture securities in such manner that the Trustee, such Debt
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 the 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 the Issuer of the funds and property in such special
account and before crediting to the respective claims of the Trustee, such
Debt Securityholders and the holders of other indenture securities dividends
on claims filed against the Issuer in bankruptcy or
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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 Debt
Securityholders and the holders of other indenture securities, in accordance
with the provisions of this paragraph, the funds and property held in such
special account and 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 Debt 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 months' 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
months' 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 months' period; and
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(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 Debt 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 the 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 Debt Securities or upon any
other
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indenture securities when and as such principal or interest becomes due and
payable;
(2) the term "other indenture securities" shall mean securities upon
which the 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 Issuer 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 Issuer arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation; and
(5) the term "Issuer" shall mean any obligor upon the Debt Securities.
ARTICLE VII
Concerning the Debt Securityholders
SECTION 7.01. Evidence of Action Taken by Debt Securityholders.
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 Debt Securityholders
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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 Debt 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 6.01 and 6.02) conclusive in favor of the Trustee and
the Issuer, if made in the manner provided in this Article.
SECTION 7.02. Proof of Execution of Instruments And of Holding of
Debt Securities. Subject to Sections 6.01 and 6.02, the execution of any
instrument by a Debt 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. The
holding of Debt Securities shall be proved by the Debt Security register or
by a certificate of the registrar thereof.
SECTION 7.03. Holders To Be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the
person in whose name any Debt Security shall be registered upon the Debt
Security register for such series as the absolute owner of such Debt Security
(whether or not such Debt 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, subject to the provisions
of this Indenture, interest on such Debt Security and for all other purposes;
and neither the Issuer nor the Trustee nor any agent of the Issuer 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 monies payable upon any such Debt Security.
SECTION 7.04. Debt Securities Owned by Issuer Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Debt Securities of any or all series have
concurred in any direction, consent or waiver under this Indenture, Debt
Securities which are owned by the Issuer or any other obligor on the Debt
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
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indirect common control with the Issuer or any other obligor on the Debt
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 Debt
Securities which the Trustee knows are so owned shall be so disregarded. Debt
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Debt Securities and that the
pledgee is not the Issuer or any other obligor upon the Debt Securities or any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Issuer or any other obligor on the Debt
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 Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all Debt
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described persons; and, subject to Sections 6.01 and
6.02, the Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth and of the fact that all Debt
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.05. Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.01,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Debt Securities of any or all series, as the case may
be, specified in this Indenture in connection with such action, any Holder of a
Debt Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Debt 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 Debt Security. Except as aforesaid any such action
taken by the Holder of any Debt Security shall be conclusive and binding upon
such Holder and upon all future Holders and owners of such Debt Security and of
any Debt Securities issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon any such Debt
Security. Any action taken by the Holders of the percentage in aggregate
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principal amount of the Debt 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 Issuer, the Trustee and the Holders of all the
Debt Securities affected by such action.
ARTICLE VIII
Supplemental Indentures
SECTION 8.01. Supplemental Indentures Without Consent of Debt
Securityholders. The Issuer 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 Debt Securities of one or more series any property or
assets;
(b) to evidence the succession of another corporation to the Issuer,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Issuer pursuant to
Article Nine;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of Debt 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
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of a majority in aggregate principal amount of the Debt 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 under this Indenture or under any supplemental
indenture as the Issuer may deem necessary or desirable and which shall not
adversely affect the interests of the Holders of the Debt Securities;
(e) to establish the form or terms of Debt Securities of any series as
permitted by Sections 2.01 and 2.03, and to provide for the issuance under
this Indenture of Debt Securities in coupon form (including Debt Securities
registrable as to principal only) and to provide for exchange ability of
such Debt Securities with Debt Securities issued hereunder in fully
registered form, and to make all appropriate changes for such purpose;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Debt Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant
to the requirements of Section 6.11; and
(g) to modify the provisions in Article Fourteen of this Indenture
with respect to the subordination of Outstanding Debt Securities of any
series in a manner not adverse to the Holders thereof.
The Trustee is hereby authorized to join with the Issuer 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.
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Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the Debt
Securities at the time outstanding, notwithstanding any of the provisions of
Section 8.02.
SECTION 8.02 Supplemental Indentures with Consent of Debt
Securityholders. With the consent (evidenced as provided in Article Seven) of
the Holders of not less than a majority in aggregate principal amount of the
Debt Securities at the time Outstanding of all series affected by such
supplemental indenture (voting as one class), the Issuer 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 Debt Securities of such
series; provided, that no such supplemental indenture shall (a) extend the final
maturity of any Debt 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 the principal of an
Original Issue Discount Debt Security that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 5.01 or the amount
thereof provable in bankruptcy pursuant to Section 5.02, or impair or affect the
right of any Debt Securityholder to institute suit for the payment thereof or,
if the Debt Securities provide therefor, any right of repayment at the option of
the Debt Securityholder without the consent of the Holder of each Debt Security
so affected, (b) reduce the aforesaid percentage of Debt Securities of any
series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Debt Security
so affected or (c) modify the provisions in Article Fourteen of this Indenture
with respect to the subordination of Outstanding Debt Securities of any series
in a manner adverse to the Holders thereof.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors certified by the secretary or an
assistant secretary of the Issuer authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of Debt Securityholders as aforesaid and
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other documents, if any, required by Section 7.01, the Trustee shall join
with the Issuer in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Debt 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 Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Issuer
shall mail a notice thereof by first class mail to the Holders of Debt
Securities of each series affected thereby at their addresses as they shall
appear on the Debt Security registry books of the Issuer, setting forth in
general terms the substance of such supplemental indenture. Any failure of the
Issuer 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 8.03. 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 Issuer and the Holders of Debt
Securities of each series 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 8.04. Documents To Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.01 and 6.02, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article 8 complies with the
applicable provisions of this Indenture.
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SECTION 8.05. Notation on Debt Securities in Respect of Supplemental
Indentures. Notation on Debt Securities in Respect of Supplemental Indentures.
Debt Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by 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 Issuer or the Trustee shall so determine, new Debt
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 Issuer,
authenticated by the Trustee and delivered in exchange for the Debt Securities
of such series then outstanding.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
SECTION 9.01. Covenant Not To Merge, Consolidate, Sell or Convey
Property Except under Certain Conditions. So long as Debt Securities are
outstanding, the Issuer shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which the
Issuer is merged or which purchases or acquires by conveyance or transfer,
or which leases, the properties and assets of the Issuer as an entirety or
substantially as an entirety, shall be a corporation organized and existing
under the laws of the United States of America, any State thereof or the
District of Columbia;
(b) upon any such consolidation, merger, sale, lease or conveyance,
the due and punctual payment of the principal of, premium, if any, and
interest on all the Debt 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 Issuer,
shall be expressly assumed, by supplemental indenture satisfactory in form
to the Trustee, executed and delivered to the Trustee, by the corporation
formed by such consolidation, or
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into which the Issuer shall have been merged, or which shall have acquired
such property; and
(c) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default shall have occurred and be continuing.
SECTION 9.02. 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 Issuer, 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 Issuer prior to such succession any
or all of the Debt Securities issuable hereunder which theretofore shall not
have been signed by the Issuer and delivered to the Trustee; and, upon the order
of such successor corporation, instead of the Issuer, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Debt Securities which previously shall
have been signed and delivered by the officers of the Issuer to the Trustee for
authentication, and any Debt Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All of the Debt Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Debt Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Debt Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance
such changes in phraseology and form (but not in substance) may be made in the
Debt 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 Issuer 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 Debt Securities
and may be liquidated and dissolved.
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SECTION 9.03. Opinion of Counsel to Trustee. The Trustee, subject to
the provisions of Sections 6.01 and 6.02, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale, lease or
conveyance, and any such assumption, and any such liquidation or dissolution,
complies with the applicable provisions of this Indenture.
ARTICLE X
Satisfaction and Discharge of Indenture;
Unclaimed Monies
SECTION 10.01. Satisfaction and Discharge of Indenture. If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Debt Securities of any series outstanding hereunder (other
than Debt Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.09) as and when the same shall
have become due and payable, or (b) the Issuer shall have delivered to the
Trustee for cancelation all Debt Securities of any series theretofore
authenticated (other than any Debt Securities of such series which shall have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.09) or (c) (i) all the Debt Securities of such series not
theretofore delivered to the Trustee for cancelation 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 Issuer shall
have irrevocably deposited or caused to be deposited with the Trustee as trust
funds the entire amount in cash (other than monies repaid by the Trustee or any
paying agent to the Issuer in accordance with Section 10.04) or direct
obligations of the United States of America, backed by its full faith and
credit, maturing as to principal and interest in such amounts and at such times
as will insure the availability of cash sufficient to pay at maturity or upon
redemption all Debt Securities of such series (other than any Debt Securities of
such series which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.09) not theretofore delivered to
the Trustee for cancelation, 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
Issuer shall also pay or cause to be paid all other sums payable hereunder by
the
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Issuer with respect to Debt Securities of such series, then this Indenture
shall cease to be of further effect with respect to Debt Securities of such
series (except as to (i) rights of registration of transfer and exchange, and
the Issuer's right of optional redemption, (ii) substitution of mutilated,
defaced, destroyed, lost or stolen Debt Securities, (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,
if any, of holders of Debt Securities to convert or exchange Debt Securities,
(v) the rights, obligations and immunities of the Trustee hereunder and (vi) the
rights of the Debt 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 Issuer accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the Issuer,
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 Debt Securities to receive amounts in respect of principal of
and interest on the Debt Securities held by them shall not be delayed longer
than required by then-applicable mandatory rules or policies of any securities
exchange upon which the Debt Securities are listed. The Issuer 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 or the Debt Securities of such series.
SECTION 10.02. Application by Trustee of Funds Deposited for Payment
of Debt Securities. Subject to Section 10.04, all monies deposited with the
Trustee pursuant to Section 10.01 shall be held in trust and applied by it to
the payment, either directly or through any paying agent (including the Issuer
acting as its own paying agent), to the Holders of the particular Debt
Securities of such series for the payment or redemption of which such monies
have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest; but such monies need not be segregated from other
funds except to the extent required by law.
SECTION 10.03. Repayment of Monies Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Debt Securities of any
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series, all monies then held by any paying agent under the provisions of this
Indenture with respect to such series of Debt Securities shall, upon demand
of the Issuer, 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 monies.
SECTION 10.04. Return of Monies Held by Trustee and Paying Agent
Unclaimed for Three Years. Any monies deposited with or paid to the Trustee or
any paying agent for the payment of the principal of or interest on any Debt
Security of any series and not applied but remaining unclaimed for three years
after the date upon which such principal or interest shall have become due and
payable, shall, upon the written request of the Issuer and unless otherwise
required by mandatory provisions of applicable escheat or abandoned or unclaimed
property law, be repaid to the Issuer by the Trustee for such series or such
paying agent, and the Holder of the Debt Security of such series shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Issuer 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 monies shall thereupon cease.
ARTICLE XI
Miscellaneous Provisions
SECTION 11.01. Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any Debt
Security, 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 Issuer or of any successor, either directly
or through the Issuer 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 Debt Securities by the holders thereof and
as part of the consideration for the issue of the Debt Securities.
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SECTION 11.02. Provisions of Indenture for the Sole Benefit of
Parties and Debt Securityholders. Nothing in this Indenture or in the Debt
Securities, expressed or implied, shall give or be construed to give to any
person, firm or corporation, other than the parties hereto and their successors
and the Holders of the Debt Securities, 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 Debt Securities.
SECTION 11.03. Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.04. Notices and Demands on Issuer, Trustee and Debt
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders
of Debt Securities to or on the Issuer may be given or served by being sent by
registered mail (except as otherwise specifically provided herein) addressed
(until another address of the Issuer is filed by the Issuer with the Trustee) to
Financial Security Assurance Holdings Ltd., 350 Park Avenue, New York, New York
10022, Attention: General Counsel. Any notice, direction, request or demand by
the Issuer or any Debt Securityholder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or made at the
Corporate Trust Office.
Where this Indenture provides for notice to Holders, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at his last address as it appears in the Debt Security register. In
any case where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee,
but such filing shall not be a condition
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precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer and Debt
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 11.05. Officers' Certificate and Opinions of Counsel;
Statements To Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
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 Issuer
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
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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 Issuer, upon
the certificate, statement or opinion of or representations by an officer or
officers of the Issuer, 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 Issuer 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 Issuer, 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 11.06. Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of interest on or principal of the Debt Securities of any
series or the date fixed for redemption or repayment of any such Debt Security
shall not be a Business Day, then payment of interest or principal 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 11.07. 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.
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SECTION 11.08. New York Law To Govern. This Indenture and each Debt
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, except as may otherwise be required by mandatory provisions of law.
SECTION 11.09. 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.
ARTICLE XII
Redemption of Debt Securities and Sinking Funds
SECTION 12.01. Applicability of Article. The provisions of this
Article shall be applicable to the Debt Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Debt Securities of a series except as otherwise specified as contemplated by
Section 2.03 for Debt Securities of such series.
SECTION 12.02. Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Debt Securities of any series to be redeemed as a
whole or in part at the option of the Issuer shall be given by mailing notice of
such redemption by first class mail, postage prepaid, at least 20 days and not
more than 60 days prior to the date fixed for redemption to such Holders of Debt
Securities of such series at their last addresses as they shall appear upon the
registry books. Any notice which is mailed in the manner herein provided shall
be conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the
notice to the Holder of any Debt 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 Debt Security of such series.
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The notice of redemption to each such Holder shall specify the
principal amount of each Debt Security of such series held by such Holder to be
redeemed, 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 Debt Securities, that such redemption is pursuant to the mandatory or
optional sinking fund, or both, or any other redemption provision as the case
may be, 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. In case any Debt
Security of a series is to be redeemed in part only 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
Debt Security, a new Debt Security or Debt Securities of such series in
principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Debt Securities of any series to be
redeemed at the option of the Issuer shall be given by the Issuer or, at the
Issuer's request, by the Trustee in the name and at the expense of the Issuer.
At least one Business Day prior to the redemption date specified in
the notice of redemption given as provided in this Section, the Issuer will
deposit with the Trustee or with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.04) an amount of monies sufficient to redeem on the
redemption date all the Debt 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 Debt Securities of a
series are to be redeemed, the Issuer will deliver to the Trustee at least 35
days prior to the date fixed for redemption an Officers' Certificate stating the
aggregate principal amount of Debt Securities to be redeemed.
If less than all the Debt Securities of a series are to be redeemed,
the Trustee shall select, in such manner as it shall deem appropriate and
fair, Debt Securities of such series to be redeemed in whole or in part.
Debt Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Debt Securities of such series or any multiple
thereof. The Trustee shall promptly notify the Issuer in writing of the Debt
Securities of such
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series selected for redemption and, in the case of any Debt 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 Debt Securities of any
series shall relate, in the case of any Debt Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Debt Security which
has been or is to be redeemed.
SECTION 12.03. Payment of Debt Securities Called for Redemption. If
notice of redemption has been given as above provided, the Debt Securities or
portions of Debt 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 Issuer shall default in the
payment of such Debt Securities at the redemption price, together with interest
accrued to said date) interest on the Debt Securities or portions of Debt
Securities so called for redemption shall cease to accrue and, except as
provided in Sections 6.05 and 10.04, such Debt 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 Debt 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 Debt Securities at a place of payment specified in said
notice, said Debt Securities or the specified portions thereof shall be paid and
redeemed by the Issuer at the applicable redemption price, together with
interest accrued thereon to the date fixed for redemption; provided that any
semiannual payment of interest becoming due on the date fixed for redemption
shall be payable to the Holders of such Debt Securities registered as such on
the relevant record date subject to the terms and provisions of Section 2.04
hereof.
If any Debt 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 for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount Debt
Security) borne by the Debt Security.
Upon presentation of any Debt Security redeemed in part only, the
Issuer shall execute and the Trustee shall authenticate and deliver to or on
the order of the Holder
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thereof, at the expense of the Issuer, a new Debt Security or Debt Securities
of such series, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debt Security so presented.
SECTION 12.04. Exclusion of Certain Debt Securities from Eligibility
for Selection for Redemption. Debt 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 Issuer and delivered to the Trustee at least 40 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 Issuer or
(b) an entity specifically identified in such written statement directly or
indirectly controlling or under direct or indirect common control with the
Issuer.
SECTION 12.05. Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of Debt Securities
of any series is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of Debt
Securities of any series is herein referred to as an "optional sinking fund
payment". 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 Debt Securities in cash, the Issuer may at
its option (a) deliver to the Trustee Debt Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Debt Securities of
such series (not previously so credited) theretofore purchased or otherwise
acquired (except as aforesaid) by the Issuer and delivered to the Trustee for
cancelation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section,
(c) receive credit for Debt Securities of such series (not previously so
credited) redeemed by the Issuer through any optional redemption provision
contained in the terms of such series, or (d) receive credit for Debt Securities
which have been converted or exchanged. Debt Securities so delivered or
credited shall be received or credited by the Trustee at the sinking fund
redemption price specified in such Debt Securities.
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On or before the forty-fifth day next preceding each sinking fund
payment date for any series, the Issuer will deliver to the Trustee a written
statement (which need not contain the statements required by Section 11.05)
signed by an authorized officer of the Issuer (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 Debt Securities of such series, (b) stating
that none of the Debt 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 and (d) stating whether or not the Issuer 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 Issuer intends to pay on or before the next succeeding sinking fund
payment date.
With respect to any sinking fund payment date, any Debt Securities of
such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefor as aforesaid which have not
theretofore been delivered to the Trustee shall be delivered for cancelation
pursuant to Section 2.10 to the Trustee on or prior to the thirty-fifth day
preceding such sinking fund payment date (or reasonably promptly thereafter if
acceptable to the Trustee). Failure of the Issuer, on or before any such
thirty-fifth day, to deliver any such Debt Securities shall not constitute a
default but shall constitute, on and as of such date, the irrevocable election
of the Issuer, and the Issuer shall become unconditionally obligated, to pay in
cash on the next succeeding sinking fund payment date that portion of the
mandatory sinking fund payment due on such date that would have been satisfied
by the delivery of such Debt Securities.
Such written statement shall, except as provided in the next preceding
paragraph, be irrevocable and upon its receipt by the Trustee the Issuer shall
become unconditionally obligated to make all the cash payments therein referred
to, if any, on the next succeeding sinking fund payment date. Failure of the
Issuer, on or before any such forty-fifth day, to deliver such written statement
shall not constitute a default but shall constitute, in and as of such date, the
irrevocable election of the Issuer (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
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Debt Securities of such series in respect thereof and (ii) that the Issuer
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 Issuer shall so request) with respect to
the Debt Securities of any particular series, such cash shall be applied on the
next succeeding sinking fund payment date to the redemption of Debt 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 Issuer 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 12.02, for redemption on such sinking fund payment date a
sufficient principal amount of Debt Securities of such series to absorb said
cash, as nearly as may be, and shall (if requested in writing by the Issuer)
inform the Issuer of the serial numbers of the Debt Securities of such series
(or portions thereof) so selected. Debt Securities of any series which are
(a) owned by the Issuer or an entity known by the Trustee to be directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Issuer, as shown by the Debt Security register, and not known
to the Trustee to have been pledged or hypothecated by the Issuer or any such
entity or (b) identified in an Officers' Certificate at least 30 days prior to
the sinking fund payment date as being beneficially owned by, and not pledged or
hypothecated by, the Issuer or an entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer shall
be excluded from Debt Securities of such series eligible for selection for
redemption. The Trustee, in the name and at the expense of the Issuer (or the
Issuer, if it shall so request the Trustee in writing) shall cause notice of
redemption of the Debt Securities of such series to be given in substantially
the manner provided in Section 12.02 (and with the effect provided in Section
12.03) for the redemption of Debt Securities of such series in part at the
option of the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Debt 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
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Section. Any and all sinking fund monies held on the stated maturity date of
the Debt Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Debt Securities of such series shall be applied, together with other monies,
if necessary, sufficient for the purpose, to the payment of the principal of,
and interest on, the Debt Securities of such series at maturity.
On each sinking fund payment date, the Issuer shall pay to the Trustee
in cash or shall otherwise provide for the payment of all interest accrued to
such sinking fund payment date on Debt Securities to be redeemed on such sinking
fund payment date.
The Trustee shall not redeem or cause to be redeemed any Debt
Securities of a series with sinking fund monies or mail any notice of redemption
of Debt Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Debt Securities or of
any Event of Default except that, where the mailing of notice of redemption of
any Debt Securities shall theretofore have been made, the Trustee shall redeem
or cause to be redeemed such Debt Securities, provided that it shall have
received from the Issuer a sum sufficient for such redemption. Except as
aforesaid, any monies in the sinking fund for such series at the time when any
such default or Event of Default shall occur, and any monies 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 Debt 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
forty-fifth day preceding the sinking fund payment date in any year, such monies
shall thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Debt Securities.
ARTICLE XIII
Defeasance and Covenant Defeasance
SECTION 13.01. Applicability of Article; Issuer's Option To Effect
Defeasance or Covenant Defeasance. If pursuant to Section 2.03 provision is
made for either or both of (a) defeasance of the Securities of a series under
Section 13.02 or (b) covenant defeasance of the Securities
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of a series under Section 13.03, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this
Article Thirteen, shall be applicable to the Securities of such series, and
the Issuer may at its option elect at any time, with respect to the Debt
Securities of such series, to have either Section 13.02 (if applicable) or
Section 13.03 (if applicable) be applied to the outstanding Debt Securities
of such series upon compliance with the conditions set forth below in this
Article Thirteen.
SECTION 13.02. Defeasance and Discharge. Upon the Issuer's exercise
of the above option applicable to this Section, the Issuer shall be deemed to
have been discharged from its obligations with respect to the Outstanding Debt
Securities of such series on and after the date the conditions precedent set
forth below are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Issuer shall be deemed to have paid and discharged the
entire indebtedness represented by the Outstanding Debt Securities of such
series and to have satisfied all its other obligations under such Debt
Securities and this Indenture insofar as such Debt Securities are concerned (and
the Trustee, at the expense of the Issuer, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
Outstanding Debt Securities of such series to receive, solely from the trust
fund described in Section 13.04 as more fully set forth in such section,
payments of the principal of (and premium, if any) and interest on such Debt
Securities when such payments are due, (b) the Issuer's obligations with respect
to such Debt Securities under Sections 2.08, 2.09, 2.11, 3.02, 3.04 and 6.05 and
such obligations as shall be ancillary thereto, (c) the rights, powers, trusts,
duties, immunities and other provisions in respect of the Trustee hereunder,
(d) the Issuer's obligations with respect to a conversion or exchange of Debt
Securities and (e) this Article Thirteen. Subject to compliance with this
Article Thirteen, the Issuer may exercise its option under this Section 13.02
notwithstanding the prior exercise of its option under Section 13.03 with
respect to the Debt Securities of such series.
SECTION 13.03. Covenant Defeasance. Upon the Issuer's exercise of
the above option applicable to this Section, the Issuer shall be released
from its obligations under Section 3.06 (hereinafter, "covenant defeasance").
For this purpose, such covenant defeasance means that, with
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respect to the Outstanding Debt Securities of such series, the Issuer may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein
or in any other document, but the remainder of this Indenture and such Debt
Securities shall be unaffected thereby.
SECTION 13.04. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions precedent to the application of either Section
13.02 or Section 13.03 to the Outstanding Debt Securities of such series:
(a) the Issuer shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.09 who shall agree to comply with the provisions of this
Article Thirteen applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the holders of such Debt Securities,
(i) monies in an amount, or (ii) U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment, monies in an amount, or (iii) a combination
thereof, sufficient, without reinvestment, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, the principal of and interest on the outstanding Debt
Securities of such series on the maturity of such principal or interest.
Before such a deposit the Issuer may make arrangements satisfactory to the
Trustee for the redemption of Debt Securities at a future date or dates in
accordance with Article Twelve, which shall be given effect in applying the
foregoing. For this purpose, "U.S. Government Obligations" means
securities that are (A) direct obligations of the United States of America
for the payment of which its full faith and credit is pledged or
(B) obligations of any Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
<PAGE>
87
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act of 1933, as amended) as custodian with respect to any such
U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for
the account of the holder of such depository receipt, provided that (except
as required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
(b) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to the Debt
Securities of such series shall have occurred and be continuing (i) on the
date of such deposit or (ii) insofar as Subsections 5.01(g) and 5.01(h) are
concerned, at any time during the period ending on the 121st day after the
date of such deposit or, if longer, ending on the day following the
expiration of the longest preference period applicable to the Issuer in
respect of such deposit (it being understood that this condition shall not
be deemed satisfied until the expiration of such period).
(c) At the time of such deposit: (A) no default in the payment of
principal of (or premium, if any) or interest on any Senior Debt shall have
occurred and be continuing or (B) no other Event of Default with respect to
any Senior Debt shall have occurred and be continuing and shall have
resulted in such Senior Debt becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable,
or, in the case of either clause (A) or clause (B) above, each such default
or Event of Default shall have been cured or waived or shall have ceased to
exist.
(d) Such defeasance or covenant defeasance shall not (i) cause the
Trustee for the Debt Securities to have a conflicting interest as defined
in Section 6.08 or for purposes of the Trust Indenture Act with respect
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88
to any securities of the Issuer or (ii) result in the trust arising from
such deposit to constitute, unless it is qualified as, a regulated
investment company under the Investment Company Act of 1940, as amended.
(e) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Issuer is a party or by
which it is bound.
(f) In the case of an election under Section 13.02, the Issuer shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Issuer has received from the United States Internal Revenue Service (the
"IRS") a private letter ruling, (ii) there has been published by the IRS a
general revenue ruling, or (iii) since the date of this Indenture there has
been a change in the applicable Federal income tax law or the
interpretation thereof, in each case to the effect that, and based thereon
such opinion shall confirm that, the holders of the Outstanding Debt
Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same time as would have been the case if such defeasance had not
occurred.
(g) In the case of an election under Section 13.03 or Section 13.04,
the Issuer shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the Outstanding Debt Securities will not
recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred.
(h) Such defeasance or covenant defeasance shall be effected in
compliance with any additional terms, conditions or limitations which may
be imposed by the Issuer in connection therewith pursuant to Section 2.01.
(i) The Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent
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89
provided for relating to either the defeasance under Section 13.02 or the
covenant defeasance under Section 13.03 (as the case may be) have been
complied with.
SECTION 13.05. Deposited Monies and U.S. Government Obligations To
Be Held in Trust; Other Miscellaneous Provisions. Subject to the provisions of
Section 10.04, all monies and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee -
collectively, for purposes of this Section 13.05, the "Trustee") pursuant to
Section 13.04 in respect of the Outstanding Debt Securities of such series shall
be held in trust and applied by the Trustee, in accordance with the provisions
of such Debt Securities and this Indenture, to the payment, either directly or
through any paying agent (but not including the Issuer acting as its own paying
agent) as the Trustee may determine, to the Holders of such Debt Securities, of
all sums due and to become due thereon in respect of principal and interest, but
such monies need not be segregated from other funds except to the extent
required by law.
The Issuer shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the monies or U.S. Government
Obligations deposited pursuant to Section 13.04 or the principal and interest
received in respect thereof.
Anything herein to the contrary notwithstanding, the Trustee shall
deliver or pay to the Issuer from time to time upon the written request of the
Issuer any monies or U.S. Government Obligations held by it as provided in
Section 13.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
SECTION 13.06. Reinstatement. If the Trustee or the paying agent is
unable to apply any monies in accordance with Section 13.05 by reason of any
order or judgment or any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the Issuer's obligations under
the Debt Securities of such series shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Thirteen until such time as the
Trustee or paying agent is permitted to apply all such monies in accordance with
Section 13.05; provided that, if
<PAGE>
90
the Issuer makes any payment of principal of any such Debt Security following
the reinstatement of its obligations, the Issuer shall be subrogated to the
rights of the Holders of such Debt Securities to receive such payment from
the monies held by the Trustee or the paying agent.
ARTICLE XIV
Subordination of Debt Securities
SECTION 14.01. Securities Subordinate to Senior Debt. The Issuer
covenants and agrees, and each Holder of Debt Security, by its acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article, the payment of the principal of (and
premium, if any) and interest on each and all of the Debt Securities are hereby
expressly made subordinate and subject in right of payment to the prior payment
in full of all amounts then due and payable in respect of all Senior Debt.
SECTION 14.02. Payment Over of Proceeds upon Dissolution, etc. In
the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, arrangement, reorganization, debt restructuring or
other similar case or proceeding in connection with any insolvency or bankruptcy
proceeding, relative to the Issuer or to its assets, or (b) any liquidation,
dissolution or other winding up of the Issuer, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any assignment for
the benefit of creditors or any other marshaling of assets and liabilities of
the Issuer, then and in any such event specified in (a), (b) or (c) above (each
such event, if any, herein sometimes referred to as a "Proceeding") the holders
of Senior Debt shall be entitled to receive payment in full of principal of (and
premium, if any) and interest, if any, on such Senior Debt, or provision shall
be made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Debt
Securities are entitled to receive or retain any payment or distribution of any
kind or character, whether in cash, property or securities (including any
payment or distribution which may be payable or deliverable by reason of the
payment of any other Debt of the Issuer (including any series of the Debt
Securities) subordinated to the payment of the Debt Securities, such payment or
distribution being hereinafter referred to as a "Junior Subordinated
<PAGE>
91
Payment"), on account of principal of (or premium, if any) or interest on the
Debt Securities or on account of the purchase or other acquisition of Debt
Securities by the Issuer or any Subsidiary and to that end the holders of
Senior Debt shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind of character, whether in
cash, property or securities, including any Junior Subordinated Payment,
which may be payable or deliverable in respect of the Debt Securities in any
such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Debt Security shall have received any
payment or distribution of assets of the Issuer of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment thereof is provided
for in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment or distribution shall be
paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
or distribution of assets of the Issuer for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or
securities" shall not be deemed to include shares of stock of the Issuer as
reorganized or readjusted, or securities of the Issuer or any other
corporation provided for by a plan of reorganization or readjustment which
securities are subordinated in right of payment to all then outstanding
Senior Debt to substantially the same extent as the Debt Securities are so
subordinated as provided in this Article. The consolidation of the Issuer
with, or the merger of the Issuer into, another Person or the liquidation or
dissolution of the Issuer following the sale of all or substantially all of
its properties and assets as any entirety to another Person or the
liquidation or dissolution of the Issuer following the sale of all or
substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set
<PAGE>
92
forth in Article Nine shall not be deemed a Proceeding for the purposes of
this Section if the Person formed by such consolidation or into which the
Issuer is merged or the Person which acquires by sale such properties and
assets as an entirety, as the case may be, shall, as a part of such
consolidation, merger, or sale comply with the conditions set forth in
Article Nine.
SECTION 14.03. Prior Payment to Senior Debt upon Acceleration of Debt
Securities. In the event that any Debt Securities are declared due and payable
before their stated maturity, then and in such event the holders of the Senior
Debt outstanding at the time such Debt Securities so become due and payable
shall be entitled to receive payment in full of all amounts due on or in respect
of such Senior Debt (including any amounts due upon acceleration), or provision
shall be made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Debt, before the Holders of the
Debt Securities are entitled to receive any payment or distribution of any kind
or character, whether in cash, properties or securities (including any Junior
Subordinated Payment) by the Issuer on account of the principal of (or premium,
if any) or interest on the Debt Securities or on account of the purchase or
other acquisition of Debt Securities by the Issuer or any Subsidiary; provided,
however, that nothing in this Section shall prevent the satisfaction of any
sinking fund payment in accordance with Article XII by delivering and crediting
pursuant to Section 12.05 Debt Securities which have been acquired (upon
redemption or otherwise) prior to such declaration of acceleration.
In the event that, notwithstanding the foregoing, the Issuer shall
make any payment to the Trustee or the Holder of any Debt Security prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior to
the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Issuer.
The provisions of this Section shall not apply to any payment with
respect to which Section 14.02 would be applicable.
SECTION 14.04. No Payment When Senior Debt in Default. (a) In the
event and during the continuation of any default in the payment of principal of
(or premium, if any) or interest on any Senior Debt, or in the event that
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93
any event of default with respect to any Senior Debt shall have occurred and
be continuing and shall have resulted in such Senior Debt becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable, unless and until such event of default shall have
been cured or waived or shall have ceased to exist and such acceleration
shall have been rescinded or annulled, or (b) in the event any judicial
proceeding shall be pending with respect to any such default in payment or
such event or default, then no payment or distribution of any kind or
character, whether in cash, properties or securities (including any Junior
Subordinated Payment) shall be made by the Issuer on account of principal of
(or premium, if any) or interest, if any, on the Debt Securities or on
account of the purchase or other acquisition of Debt Securities by the Issuer
or any Subsidiary; provided, however, that nothing in this Section shall
prevent the satisfaction of any sinking fund payment in accordance with
Article XII by delivering and crediting pursuant to Section 12.02 Debt
Securities which have been acquired (upon redemption or otherwise) prior to
such default in payment or event of default.
In the event that, notwithstanding the foregoing, the Issuer shall
make any payment to the Trustee or the Holder of any Debt Security prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior to
the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Issuer.
The provisions of this Section shall not apply to any payment with
respect to which Section 14.02 would be applicable.
SECTION 14.05. Payment Permitted If No Default. Nothing contained in
this Article or elsewhere in this Indenture or in any of the Debt Securities
shall prevent (a) the Issuer, at any time except during the pendency of any
Proceeding referred to in Section 14.02 or under the conditions described in
Sections 14.03 and 14.04, from making payments at any time of principal of (and
premium, if any) or interest on the Debt Securities, or (b) the application by
the Trustee of any money deposited with it hereunder to the payment of or on
account of the principal of (and premium, if any) or interest on the Debt
Securities or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, it did not have
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94
knowledge that such payment would have been prohibited by the provisions of
this Article.
SECTION 14.06. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all Senior Debt, or the provision for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, the Holders of the Debt Securities shall be subrogated
to the extent of the payments or distributions made to the holders of such
Senior Debt pursuant to the provisions of this Article (equally and ratably with
the holders of all indebtedness of the Issuer which by its express terms is
subordinated to Senior Debt of the Issuer to substantially the same extent as
the Debt Securities are subordinated to the Senior Debt and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of (and premium, if any) and interest on the
Debt Securities shall be paid in full. For purposes of such subrogation or
assignment, no payments or distributions to the holders of the Senior Debt of
any cash, property or securities to which the Holders of the Debt Securities or
the Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Debt by Holders of the Debt Securities or the Trustee, shall, as among
the Issuer, its creditors other than holders of Senior Debt, and the Holders of
the Debt Securities, be deemed to be a payment or distribution by the Issuer to
or on account of the Senior Debt.
SECTION 14.07. Provisions Solely To Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Debt Securities on the one
hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Debt Securities is
intended to or shall (a) impair, as between the Issuer and the Holders of the
Debt Securities, the obligations of the Issuer, which are absolute and
unconditional, to pay to the Holders of the Debt Securities the principal of
(and premium, if any) and interest on the Debt Securities as and when the same
shall become due and payable in accordance with their terms; or (b) affect the
relative rights against the Issuer of the Holders of the Debt Securities and
creditors of the Issuer other than their rights in relation to the holders of
Senior
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95
Debt; or (c) prevent the Trustee or the Holder of any Debt Security from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture including, without limitation, filing and voting claims
in any Proceeding, subject to the rights, if any, under this Article of the
holders of Senior Debt to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.
SECTION 14.08. Trustee To Effectuate Subordination. Each Holder of a
Debt Security by his or her acceptance thereof authorizes and directs the
Trustee on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination provided in this
Article and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.
SECTION 14.09. No Waiver of Subordination Provisions. No right of
any present or future holder of any Senior Debt 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 Issuer or by any act or failure to act,
in good faith, by any such holder, or by any noncompliance by the Issuer with
the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or be otherwise charged with.
SECTION 14.10. Notice to Trustee. The Issuer shall give prompt
written notice to the Trustee of any fact known to the Issuer which would
prohibit the making of any payment to or by the Trustee in respect of the Debt
Securities. Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Debt Securities, unless and until the Trustee
shall have received written notice thereof from the Issuer or a holder of Senior
Debt or from any trustee, agent or representative therefor (whether or not the
facts contained in such notice are true); provided, however, that if the Trustee
shall not have received the notice provided for in this Section at least two
Business Days prior to the date upon which by the terms hereof any monies may
become payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Debt Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such monies and to
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96
apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it within two
Business Days prior to such date.
SECTION 14.11. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Issuer
referred to in this Article, the Trustee, subject to the provisions of
Article VI, and the Holders of the Debt Securities shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such Proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of Debt Securities, for the purpose of ascertaining
the Persons entitled to participate in such payment or distribution, the holders
of the Senior Debt and other indebtedness of the Issuer, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 14.12. Trustee Not Fiduciary for Holders of Senior Debt
Trustee Not Fiduciary for Holders of Senior Debt. The Trustee, in its capacity
as trustee under this Indenture, shall not be deemed to owe any fiduciary duty
to the holders of Senior Debt and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Debt
Securities or to the Issuer or to any other Person cash, property or securities
to which any holders of Senior Debt shall be entitled by virtue of this Article
or otherwise.
SECTION 14.13. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Debt which may at any time be held by it, to the same extent as any other
holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee
of any of its rights as such holder.
SECTION 14.14. Article Applicable to Paying Agents. In case at any
time any Paying Agent other than the Trustee shall have been appointed by the
Issuer and be then acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent
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97
within its meaning as fully for all intents and purposes as if such Paying
Agent were named in this Article in addition to or in place of the Trustee.
SECTION 14.15. Defeasance of this Article XIV. The subordination of
the Debt Securities provided by this Article XIV is expressly made subject to
the provisions for defeasance or covenant defeasance in Article XIII and,
anything herein to the contrary notwithstanding, upon the effectiveness of any
such defeasance or covenant defeasance, the Debt Securities then outstanding
shall thereupon cease to be subordinated pursuant to this Article.
SECTION 14.16. Certain Conversions or Exchanges Deemed Payment. For
the purposes of this Article only, (a) the issuance and delivery of junior
securities upon conversion or exchange of Debt Securities shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest on securities or on account of the purchase or other
acquisition of Debt Securities, and (b) the payment, issuance or delivery of
cash, property or securities (other than junior securities) upon conversion or
exchange of a Debt Security shall be deemed to constitute payment on account of
the principal of such security. For the purposes of this Section, the term
"junior securities" means (i) shares of any stock of any class of the Issuer and
(ii) securities of the Issuer which are subordinated in right of payment to all
Senior Debt which may be outstanding at the time of issuance or delivery of such
securities to
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98
substantially the same extent as, or to a greater extent than, the Debt
Securities are so subordinated as provided in this Article.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of .
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.,
by
---------------------------
Authorized Officer
[CORPORATE SEAL]
Attest:
By
-----------------------
Secretary
[TRUSTEE],
by
---------------------------
[CORPORATE SEAL]
Attest:
By
-----------------------
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On this day of , 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 Financial Security Assurance Holdings Ltd.,
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
<PAGE>
Exhibit
(Form 1)
[FORM OF FACE OF NOTE]
No. $
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% NOTE DUE
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to or
registered assigns, at the office or agency of the Issuer in the Borough of
Manhattan, The City of New York, the principal sum of Dollars on
, , in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semiannually on and
of each year, commencing , , on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum specified in the title of this Note, from the or the
, as the case may be, next preceding the date of this Note to
which interest has been paid, unless the date hereof is a date to which interest
has been paid, in which case from the date of this Note, or unless no interest
has been paid on these Notes, in which case from ,
, until payment of said principal sum has been made or duly
provided for; provided that payment of interest may be made at the option of the
Issuer by check mailed to the address of the person entitled thereto as such
address shall appear on the security register. Notwithstanding the foregoing,
if the date hereof is after the day of or
, as the case may be, and before the following or
this Note shall bear interest from such or
; provided that if the Issuer shall default in the payment of
interest due on such or , then this Note shall bear
interest from the next preceding or , to which interest has
been paid or, if no interest has been paid on these Notes, from .
The interest so payable on any or , will, subject to certain exceptions provided
in the Indenture referred to on the reverse hereof, be paid to the person in
whose name this Note is registered at the close of business on the
or , as the case may be, next preceding
such or .
<PAGE>
2
Reference is made to the further provisions of this Note set forth on
the reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Debentures of the series designated herein referred
to in the within-mentioned Indenture.
[TRUSTEE] , as
Trustee,
by
---------------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF NOTE]
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% NOTE DUE
This Note is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Issuer (hereinafter called the
"Debentures") of the series hereinafter specified, all issued or to be issued
under and pursuant to an indenture dated as of , (herein called
the "Indenture"), duly executed and delivered by the Issuer to ,
Trustee (herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Issuer and the holders of the Debentures. The Debentures may be
issued in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest
(if any) at different rates, may be subject to different redemption provisions
(if any), may be subject to different sinking, purchase or analogous funds (if
any) and may otherwise vary as in the Indenture provided. This Note is one of a
series designated as the % Notes Due of the Issuer, limited in aggregate
principal amount to $ .
In case an Event of Default with respect to the % Notes Due ,
as defined in the Indenture, shall have occurred and be continuing, the
principal hereof may be declared, and upon such declaration shall become, due
and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The indebtedness evidenced by this Note is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of Senior Debt as defined in the Indenture and this
Note is issued subject to the provisions of the Indenture with respect thereto.
Each Holder of this Note, by accepting the same, agrees to and shall be bound by
such provisions and authorizes the Trustee in his behalf to effectuate the
subordination so provided and appoints the Trustee his attorney-in-fact solely
for such purpose.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of more than 50% in aggregate principal
amount of the Debentures at the time Outstanding (as defined in the Indenture)
of all series to be affected (voting as one
<PAGE>
2
class), evidenced as in the Indenture provided, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the Holders of the Debentures of each such series;
provided, however, that no such supplemental indenture shall (i) extend the
final maturity of any Debenture, or reduce the principal amount thereof or any
premium thereon, or reduce the rate or extend the time of payment of any
interest thereon, or impair or affect the rights of any Holder to institute suit
for the payment thereof, without the consent of the Holder of each Debenture so
affected, (ii) reduce the aforesaid percentage of Debentures, the Holders of
which are required to consent to any such supplemental indenture or (iii) modify
any provision relating to the subordination of Outstanding Debt Securities of
any series in a manner adverse to the Holders thereof, without the consent of
the Holder of each Debenture affected. It is also provided in the Indenture
that, with respect to certain defaults or Events of Default regarding the
Debentures of any series, prior to any declaration accelerating the maturity of
such Debentures, the Holders of a majority in aggregate principal amount
Outstanding of the Debentures of such series (or, in the case of certain
defaults or Events of Default, all or certain series of the Debentures) may on
behalf of the Holders of all the Debentures of such series (or all or certain
series of the Debentures, as the case may be) waive any such past default or
Event of Default and its consequences. The preceding sentence shall not,
however, apply to a default in the payment of the principal of or premium, if
any, or interest on any of the Debentures. Any such consent or waiver by the
Holder of this Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Note and any Notes which may be issued in exchange or substitution
herefor, irrespective of whether or not any notation thereof is made upon this
Note or such other Notes.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note in the manner, at the respective times, at the rate and in the coin
or currency herein prescribed.
The Notes are issuable in registered form without coupons in
denominations of $ and any multiple of $
at the office or agency of the Issuer in the Borough of Manhattan, The City of
New York,
<PAGE>
3
and in the manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge, notes may be exchanged for a like
aggregate principal amount of Notes of other authorized denominations.
The Notes may be redeemed at the option of the Issuer as a whole, or
from time to time in part, on any date after and prior to
maturity, upon mailing a notice of such redemption not less than 30 nor more
than 45 days prior to the date fixed for redemption to the Holders of Notes at
their last registered addresses, all as further provided in the Indenture, at
the following redemption prices (expressed in percentages of the principal
amount) together in each case with accrued interest to the date fixed for
redemption:
If redeemed during the twelve-month period beginning
Year Percentage Year Percentage
---- ---------- ---- ----------
Upon due presentment for registration of transfer of this Note at the
office or agency of the Issuer in the Borough of Manhattan, The City of
New York, a new Note or Notes of authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange therefor, subject
to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner of
this Note (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon), for the purpose of receiving
payment of, or on account of, the principal hereof and premium, if any, and
subject to the provisions on the face hereof, interest hereon, and for all other
purposes, and neither the Issuer nor the Trustee nor any authorized agent of the
Issuer or the Trustee shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any Note, or
because of the
<PAGE>
4
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, 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 hereof and as part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE>
Exhibit
(Form 2)
[FORM OF FACE OF DEBENTURE]
No. $
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% DEBENTURE DUE
Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to
or registered assigns, at the office or agency of the Issuer in the Borough of
Manhattan, the City of New York, the principal sum of
Dollars on , , in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, semiannually on
and of each year, commencing , , on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum specified in the title of this Debenture, from the or the
, as the case may be, next preceding the date of this Debenture to
which interest has been paid, unless the date hereof is a date to which interest
has been paid, in which case from the date of this Debenture, or unless no
interest has been paid on these Debentures, in which case from ,
until payment of said principal sum has been made or duly provided for; provided
that payment of interest may be made at the option of the Issuer by check mailed
to the address of the person entitled thereto as such address shall appear on
the security register. Notwithstanding the foregoing, if the date hereof is
after the day of or , as the case may be, and
before the following or , this Debenture shall bear
interest from such or ; provided that if the
Issuer shall default in the payment of interest due on such or
, then this Debenture shall bear interest from the next
preceding or , to which interest has been paid
or, if no interest has been paid on these Debentures, from .
The interest so payable on any or will, subject to
certain exceptions provided in the Indenture referred to on the reverse hereof,
be paid to the person in whose name this Debenture is registered at the close of
business on the or , as the case may be, next
preceding such or .
<PAGE>
2
Reference is made to the further provisions of this Debenture set
forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by facsimile by its duly authorized officers
and has caused a facsimile of its corporate seal to be affixed hereunto or
imprinted hereon.
Dated:
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.,
by
-------------------------
by
-------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This one of the Debentures of the series designated therein referred
to in the within-mentioned Indenture.
, as Trustee
by
-----------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF DEBENTURE]
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% DEBENTURE DUE
This Debenture is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the issuer (hereinafter called the
"Debentures") of the series hereinafter specified, all issued or to be issued
under and pursuant to a indenture dated (herein called the
"Indenture"), duly executed and delivered by the Issuer to , Trustee
(herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Issuer and the Holders of the Debentures. The Debentures may be
issued in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest
(if any) at different rates, may be subject to different redemption provisions
(if any) may be subject to different sinking, purchase or analogous funds (if
any) and may otherwise vary as in the Indenture provided. This Debenture is one
of a series designated as the % Debentures Due of the Issuer, limited in
aggregate principal amount to $ .
In case an Event of Default with respect to the % Debentures Due,
as defined in the Indenture, shall have occurred and be continuing, the
principal hereof may be declared, and upon such declaration shall become, due
and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The indebtedness evidenced by this Debenture is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of Senior Debt as defined in the Indenture
and this Debenture is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Debenture, by accepting the same, agrees
to and shall be bound by such provisions and authorizes the Trustee in his
behalf to effectuate the subordination so provided and appoints the Trustee his
attorney-in-fact solely for such purpose.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of more than 50% in aggregate principal
amount of the Debentures at the time Outstanding (as defined in the
<PAGE>
2
Indenture) of all series to be affected (voting as one class), evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the Holders of the Debentures of each such series; provided, however, that no
such supplemental indenture shall (i) extend the final maturity of any
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of any interest thereon, or impair
or affect the rights of any Holder to institute suit for the payment thereof,
without the consent of the Holder of each Debenture so affected, (ii) reduce the
aforesaid percentage of Debentures, the Holders of which are required to consent
to any such supplemental indenture or (iii) modify any provision relating to the
subordination of Outstanding Debt Securities of any series in a manner adverse
to the Holders thereof , without the consent of the Holder of each Debenture
affected. It is also provided in the Indenture that, with respect to certain
defaults or Events of Default regarding the Debentures of any series, prior to
any declaration accelerating the maturity of such Debentures, the Holders of a
majority in aggregate principal amount Outstanding of the Debentures of such
series (or, in the case of certain defaults or Events of Default, all or certain
series of the Debentures) may on behalf of the Holders of all the Debentures of
such series (or all or certain series of the Debentures, as the case may be)
waive any such past default or Event of Default and its consequences. The
preceding sentence shall not, however, apply to a default in the payment of the
principal of or premium, if any, or interest on any of the Debentures. Any such
consent or waiver by the Holder of this Debenture (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Debenture and any Debentures which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Debenture or such other Debentures.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Debenture in the manner, at the respective times,
at the rate and in the coin or currency herein prescribed.
<PAGE>
3
The Debentures are issuable in registered form without coupons in
denominations of $ and any multiple of $ at the office or agency of
the Issuer in the Borough of Manhattan, The City of New York, and in the manner
and subject to the limitations provided in the Indenture, but without the
payment of any service charge, Debentures may be exchanged for a like aggregate
principal amount of Debentures of other authorized denominations.
The Debentures may be redeemed at the option of the Issuer, as a
whole, or from time to time in part, on any date after and prior to
maturity, upon mailing a notice of such redemption not less than 30 nor more
than 45 days prior to the date fixed for redemption to the Holders of Debentures
at their last registered addresses, all as further provided in the Indenture, at
the following optional redemption prices (expressed in percentages of the
principal amount) together in each case with accrued interest to the date fixed
for redemption:
If redeemed during the twelve-month period beginning ,
Year Percentage Year Percentage
[provided, however, that no such optional redemption may be effected prior to
directly or indirectly from or in anticipation of monies
borrowed by or for the account of the Issuer at an interest cost (calculated in
accordance with generally accepted financial practice) of less than % per
annum.]
[The Debentures are also subject to redemption, through the operations
of the sinking fund as herein provided on and on each
thereafter to and including on notice as set forth above and at 100%
of the principal amount thereof (the sinking fund redemption price), together
with accrued interest to the date fixed for redemption.
As and for a sinking fund for the retirement of the Debentures and so
long as any of the Debentures remain outstanding and unpaid, the Issuer will pay
to the Trustee in cash (subject to the right to deliver certain Debentures in
credit therefor as in the Indenture provided), on or
<PAGE>
4
before and on or before in each year
thereafter to and including an amount sufficient to redeem $
principal amount of the Debentures (or such lesser amount equal to the principal
amount then Outstanding) at the sinking fund redemption price.
At its option the Issuer may pay into the sinking fund for the
retirement of Debentures, in cash except as provided in the Indenture, on or
before and on or before in each year thereafter to and
including , an amount sufficient to redeem an additional
principal amount of Debentures up to but not to exceed $ at the
sinking fund redemption price. To the extent that the right to such optional
sinking fund payment is not exercised in any year, it shall not be cumulative or
carried forward to any subsequent year.]
Upon due presentment for registration of transfer of this Debenture
at the office or agency of the Issuer in the Borough of Manhattan, The City
of New York, a new Debenture or Debentures of authorized denominations for an
equal aggregate principal amount will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Indenture, without
charge except for any tax or other governmental charge imposed in connection
therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner of
this Debenture (whether or not this Debenture shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and, subject to the provisions on the face hereof, interest
hereon, and for all other purposes, and neither the Issuer nor the Trustee nor
any authorized agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, officer or director, as such, of the
Issuer or of any successor corporation, either directly or through the Issuer or
any successor corporation, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or
<PAGE>
5
otherwise, all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE>
Exhibit
(Form 3)
[FORM OF FACE OF]
No. $
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% [ ] DUE
Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to or
registered assigns, at the office or agency of the Issuer in the Borough of
Manhattan, the City of New York, the principal sum of Dollars on
, in such coin or currency of the United States of America as
at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semiannually on and
in each year, commencing , , on said principal
sum at said office or agency, in like coin or currency, at the rate per annum
specified in the title of this [ ], from the or the
, as the case may be, next preceding the date of this [ ] to
which interest has been paid, unless the date hereof is a date to which interest
has been paid, in which case from the date of this [ ], or unless no
interest has been paid on these [ ]s, in which case from ,
until payment of said principal sum has been made or duly provided for;
provided, that payment of interest may be made at the option of the Issuer by
check mailed to the address of the person entitled thereto as such address shall
appear on the security register. Notwithstanding the foregoing, if the date
hereof is after the day of or , as the case
may be, and before the following or , this [ ]
shall bear interest from such or; provided, that if the Issuer shall default in
the payment of interest due on such or , then this
[ ] shall bear interest from the next preceding or
, to which interest has been paid or , if no
interest has been paid on these [ ]s, from . The interest
so payable on any or will, subject to certain exceptions
provided in the Indenture referred to on the reverse hereof, be paid to the
person in whose name this [ ] is registered at the close of business
on or , as the case may be, next preceding such
or .
<PAGE>
2
Reference is made to the further provisions of this [ ] set
forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This [ ] shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by facsimile by its duly authorized officers
and has caused a facsimile of its corporate seal to be affixed hereunto or
imprinted hereon.
Dated: ,
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By
------------------------
By
------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
, as Trustee
By
------------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF ]
FOR PURPOSES OF SECTION 1232 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF THIS [ ] IS % OF ITS
PRINCIPAL AMOUNT AND THE ISSUE DATE IS , .
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% [ ] DUE
This [ ] is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (hereinafter
called the "Debentures") of the series hereinafter specified, all issued or to
be issued under and pursuant to an indenture dated as of (herein
called the "Indenture"), duly executed and delivered by the Issuer to
, Trustee (herein called the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Issuer and the Holders of the
Debentures. The Debentures may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any) and may otherwise vary as in the
Indenture provided. This [ ] is one of a series designated as the
% [ ] Due of the Issuer, limited in aggregate
principal amount to $ .
In case an Event of Default with respect to [ ], as defined
in the Indenture, shall have occurred and be continuing, (i) that portion of the
principal equal to the initial public offering price of this [ ] plus
accrued amortization of the original issue discount calculated using the
"interest" method (computed in accordance with generally accepted accounting
principles in effect on the date of the Indenture) from , to the
date of acceleration and (ii) any accrued interest to the date of acceleration
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
<PAGE>
2
The indebtedness evidenced by this is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of Senior Debt as defined in the Indenture
and this is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this , by accepting the same,
agrees to and shall be bound by such provisions and authorizes the Trustee in
his behalf to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact solely for such purpose.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of more than 50% in aggregate
principal amount of the Debentures at the time Outstanding (as defined in the
Indenture) of all series to be affected (voting as one class), evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner
the rights of the Holders of the Debentures of each such series to be
affected; provided, however, that no such supplemental indenture shall (i)
extend the final maturity of any Debenture, or reduce the rate or extend the
time of payment of any interest thereon, or reduce the principal amount
thereof, or reduce the amount of the principal of an Original Issue Discount
Debenture that would be due and payable upon acceleration of the maturity
thereof or the amount provable in bankruptcy or impair or affect the rights
of any Holder to institute suit for the payment thereof, without the consent
of the Holder of each Debenture so affected, (ii) reduce the aforesaid
percentage of Debentures, the Holders of which are required to consent to any
such supplemental indenture or (iii) modify any provision relating to the
subordination of Outstanding Debt Securities of any series in a manner
adverse to the Holders thereof, without the consent of the Holder of each
Debenture affected. It is also provided in the Indenture that, with respect
to certain defaults or Events of Default regarding the Debentures of any
series, prior to any declaration accelerating the maturity of such
Debentures, the Holders of a majority in aggregate principal amount
Outstanding of the Debentures of such series (or, in the case of certain
defaults or Events of Default, all or certain series of the Debentures) may
on behalf of the Holders of all the Debentures of such series (or all or
certain series of the Debentures, as the case may be) waive any such past
default or Event of Default. The preceding sentence shall not, however, apply
to a default in the payment of the principal of, or interest, if any, on any
of the Debentures. Any such
<PAGE>
3
consent or waiver by the Holder of this [ ] (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this [ ] and any [ ]s which may
be issued in exchange or substitution herefor, irrespective of whether or not
any notation thereof is made upon this [ ] or such other
[ ]s.
No reference herein to the Indenture and no provision of this
[ ] or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this [ ] in the manner, at the respective times, at the
rate and in the coin or currency herein prescribed.
The [ ]s are issuable in registered form without coupons
in denominations of $ and any multiple of $ at the
office or agency of the Issuer in the Borough of Manhattan, The City of New
York, and in the manner and subject to the limitations provided in the
Indenture, but without the payment of any service charge, [ ]s may
be exchanged for a like aggregate principal amount of [ ]s of other
authorized denominations.
The [ ] may be redeemed at the option of the Issuer, as a
whole, or from time to time in part, on any date prior to maturity, upon mailing
of notice of such redemption not less than 30 nor more than 45 days prior to the
date fixed for redemption to the Holders of [ ]s at their last
registered addresses, all as further provided in the Indenture, at the
redemption price of 100% of the principal amount thereof together with accrued
interest to the date fixed for redemption.
Upon due presentment for registration of transfer of this
[ ] at the office or agency of the Issuer in the Borough of Manhattan,
The City of New York, a new [ ] or [ ]s of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange therefor, subject to the limitations provided in the
Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner of
this [ ](whether or not this [ ] shall be overdue and
notwithstanding any notation of ownership or
<PAGE>
4
other writing hereon), for the purpose of receiving payment of, or on account
of, the principal hereof, and subject to the provisions on the face hereof,
interest hereon, and for all other purposes, and neither the Issuer nor the
Trustee nor any authorized agent of the Issuer or the Trustee shall be affected
by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any
[ ], or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, of the Issuer or of any successor corporation, either
directly or through the Issuer or any successor corporation, 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 hereof and as part of the
consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE>
Exhibit
(Form 4)
[FORM OF FACE OF ZERO COUPON SECURITY]
No. $
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
ZERO COUPON [ ]
Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to or
registered assigns, at the office or agency of the Issuer in the Borough of
Manhattan, The City of New York, the principal sum of Dollars on
, , in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts. The principal of this [ ] shall not bear
interest, except in the case of default in payment of principal upon
acceleration, redemption or maturity, and in such case the amount in default
shall bear interest at the rate of % per annum (to the extent enforceable
under applicable law) from the date of default in payment to the date such
payment has been made or duly provided for, at said office or agency and in like
coin or currency.
Reference is made to the further provisions of this [ ] set
forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This [ ] shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
the Trustee under the Indenture referred to on the reverse hereof.
<PAGE>
2
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by facsimile by its duly authorized officers
and has caused a facsimile of its corporate seal to be affixed hereunto or
imprinted hereon.
Dated: ,
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By
------------------------
By
------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
, as Trustee
By
------------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF ]
FOR THE PURPOSES OF SECTION 1232 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF THIS [ ] IS %
OF ITS PRINCIPAL AMOUNT AND THE ISSUE DATE IS , .
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
ZERO COUPON [ ] DUE
This [ ] is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (hereinafter
called the "Debentures") of the series hereinafter specified, all issued or to
be issued under and pursuant to an indenture dated as of (herein
called the "Indenture"), duly executed and delivered by the Issuer to
, Trustee (herein called the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Issuer and the holders of the Debentures. The Debentures
may be issued in one or more series, which different series may be issued in
various aggregate principal amounts, may mature at different times, may bear
interest (if any) at different rates, may be subject to different redemption
provisions (if any), may be subject to different sinking, purchase or analogous
funds (if any) and may otherwise vary as in the Indenture provided. This
[ ] is one of a series designated as the Zero Coupon [ ] Due
of the Issuer, limited in aggregate principal amount to
$ .
In case an Event of Default with respect to the Zero Coupon
[ ], as defined in the Indenture, shall have occurred and be
continuing, (i) that portion of the principal equal to the initial public
offering price of this [ ] plus accrued amortization of the original
issue discount calculated using the "interest" method (computed in accordance
with generally accepted accounting principles in effect on the date of the
Indenture) from , to the date of acceleration may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The indebtedness evidenced by this Zero Coupon is, to the
extent and in the manner provided in the Indenture, subordinate and subject in
right of payment to the prior payment in full of Senior Debt as defined in the
Indenture and this Zero Coupon is issued subject to the provisions
of the Indenture with respect thereto. Each Holder of this Zero Coupon
, by accepting the same, agrees to and shall be bound by such
provisions and authorizes the Trustee in his behalf to effectuate the
subordination so provided and appoints the Trustee his attorney-in-fact solely
for such purpose.
<PAGE>
2
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of more than 50% in aggregate principal
amount of the Debentures at the time Outstanding (as defined in the Indenture)
of all series to be affected (voting as one class), evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
Holders of the Debentures of each such series; provided, however, that no such
supplemental indenture shall (i) extend the final maturity of any Debenture, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof, or reduce the amount of the principal of an Original
Issue Discount Debenture that would be due and payable upon acceleration or
provable in bankruptcy or impair or affect the rights of any Holder to institute
suit for the payment thereof, without the consent of the Holder of each
Debenture so affected, (ii) reduce the aforesaid percentage of Debentures, the
Holders of which are required to consent to any such supplemental indenture or
(iii) modify any provision relating to the subordination of Outstanding Debt
Securities of any series in a manner adverse to the Holders thereof, without the
consent of the Holder of each Debenture affected. It is also provided in the
Indenture that, with respect to certain defaults or Events of Default regarding
the Debentures of any series, prior to any declaration accelerating the maturity
of the Debentures of any series, the Holders of a majority in aggregate
principal amount Outstanding of the Debentures of such series (or, in the case
of certain defaults or Events of Default, all or certain series of the
Debentures) may on behalf of the Holders of all the Debentures of such series
(or all or certain series of the Debentures, as the case may be) waive any such
past default or Event of Default and its consequences. The preceding sentence
shall not, however, apply to a default in the payment of the principal of, or
interest, if any, on any of the Debentures. Any such consent or waiver by the
Holder of this [ ] (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such Holder and upon all future Holders and
owners of this [ ] and any [ ] which may be issued in
exchange or substitution herefor, irrespective of whether or not any notation
thereof is made upon this [ ] or such other [ ].
No reference herein to the Indenture and no provision of this
[ ] or of the Indenture shall alter or impair the obligation of the
Issuer, which is
<PAGE>
3
absolute and unconditional, to pay the principal of and interest, if any, on
this [ ] in the manner, at the respective times, at the rate and in
the coin or currency herein prescribed.
The [ ] are issuable in registered form without coupons in
denominations of $ or any multiple of $ at the office or
agency of the Issuer in the Borough of Manhattan, The City of New York, and in
the manner and subject to the limitations provided in the Indenture, but without
the payment of any service charge, [ ] may be exchanged for a like
aggregate principal amount of [ ] of other authorized denominations.
The [ ] may be redeemed at the option of the Issuer, as a
whole, or from time to time in part, on any date prior to maturity, upon mailing
a notice of such redemption to the holders of [ ] at their last
registered addresses, all as further provided in the Indenture, at the
redemption price of 100% of the principal amount thereof.
Upon due presentment for registration of transfer of this
[ ] at the office or agency of the Issuer in the Borough of Manhattan,
The City of New York, a new [ ] or [ ] of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange therefor, subject to the limitations provided in the
Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner of
this [ ](whether or not this [ ] shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment hereof, or on account hereof, and for all other
purposes, and neither the Issuer nor the Trustee nor any authorized agent of the
Issuer or the Trustee shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any
[ ], or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, of the Issuer or of any successor corporation, either
directly or through the Issuer or any
<PAGE>
4
successor corporation, 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 hereof and as part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE>
Exhibit
(Form 5)
[FORM OF FACE OF EXTENDIBLE NOTE]
No. $
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
- YEAR EXTENDIBLE NOTE
Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to or
registered assigns, at the office or agency of the Issuer in the Borough of
Manhattan, The City of New York, the principal sum of Dollars on
, , in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, (at the rate per annum from time to time in
effect as described below) semiannually on and of each
year, commencing , on said principal sum at said office or
agency, in like coin or currency, from the or the , as
the case may be, next preceding the date of this Note to which interest has been
paid, unless the date hereof is a date to which interest has been paid, in which
case from the date of this Note, or unless no interest has been paid on these
Notes, in which case from , , until payment of said principal sum
has been made or duly provided; provided, however, that payment of interest may
be made at the option of the Issuer by check mailed to the address of the person
entitled thereto as such address shall appear on the security register.
Notwithstanding the foregoing, if the date hereof is after the day of
or , as the case may be, and before the following
or , this Note bear interest from such or
; provided, however, that if the Issuer shall default in the payment
of interest due on such or , then this Note shall bear
interest from the next preceding or , to which interest
has been paid or, if no interest has been paid on these Notes, from .
The interest so payable on any or , will, subject to
certain exceptions provided in the Indenture referred to on the reverse hereof,
be paid to the person in whose name this Note is registered at the close of
business on such or , as the case may be, next preceding
such or .
Interest on these Notes is payable at the rate of % per annum from
through , and for
<PAGE>
2
each month period beginning , and , at a rate per
annum established by the Issuer on the preceding each such
, or at a rate per annum determined by a method established by the Issuer
on the preceding each such . The Issuer shall
establish the interest rate or method to be used to determine such interest
rate by delivery to the Trustee of an Officers' Certificate on such
. On or before the prior to the commencement of the
- -month period to which it applies, the Trustee shall cause notice of such
interest rate or the method to be used in ascertaining the interest rate on
the following and the interest rate that would have been
applicable to such -month period had such determination been made as of
such , all as specified in the aforesaid Officers' Certificate, to
be mailed to each holder of these Notes. The Issuer shall cause notice of the
interest rate established as of the preceding the commencement of
the -month period to be enclosed with the interest payment checks
mailed to the Holders of the Notes for the period ending on the
following such .
The Notes of this series are subject to repayment on ,
, and , at the option of the Holders thereof exercisable
on or before the , but not prior to the preceding such
, at a repayment price equal to the principal amount thereof to be
repaid, together with interest payable thereon to the repayment date, as
described on the reverse side hereof.
Reference is made to the further provisions of this Note set forth on
the reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
<PAGE>
3
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, Financial Security Assurance Holdings Ltd. has
caused this instrument to be signed by facsimile by its duly authorized officers
and has caused a facsimile of its corporate seal to be affixed hereunto or
imprinted hereon.
Dated: ,
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By
------------------------
By
------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
, as Trustee
By
-------------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF -YEAR EXTENDIBLE NOTE]
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
-Year Extendible Note
This Note is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Issuer (the "Debentures") of the
series hereinafter specified, all issued or to be issued under an indenture
dated as of (herein called the "Indenture"), duly executed and
delivered by the Issuer to , Trustee (herein called the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Issuer and the holders of the
Debentures. The Debentures may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any) and may otherwise vary as in the
Indenture provided. This Note is one of a series designated as the
-Year Extendible Notes of the Issuer, limited in aggregate principal
amount to $ .
[The -Year Extendible Notes may be redeemed at the option
of the Issuer as a whole or in part, or from time to time in part, on any date
(i) on or after , and prior to , , (ii) on or
after , , and prior to , (iii) on or after
, , and prior to , and (iv) on or after
, and prior to maturity upon mailing a notice of such redemption not
less than 30 nor more than 45 days prior to the date fixed for redemption to the
Holders of Notes at their last registered addresses, all as further provided in
the Indenture at 100% of the principal amount thereof, together with accrued
interest to the date fixed for redemption. If this Note is redeemed in part,
the principal amount that remains Outstanding shall not be less than
$ .]
The indebtedness evidenced by this -Year Extendible Note
is, to the extent and in the manner provided in the Indenture, subordinate and
subject in right of payment to the prior payment in full of Senior Debt as
defined in the Indenture and this -Year Extendible Note is issued
subject to the provisions of the Indenture with respect thereto. Each
<PAGE>
2
Holder of this -Year Extendible Note, by accepting the same,
agrees to and shall be bound by such provisions and authorizes the Trustee in
his behalf to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact solely for such purpose.
In case an Event of Default with respect to the -Year
Extendible Notes, as defined in the Indenture, shall have occurred and be
continuing, the principal hereof may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of more than 50% in aggregate principal
amount of the Debentures at the time Outstanding (as defined in the Indenture)
of all series to be affected (voting as one class), evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
Holders of the Debentures of each such series; provided, however, that no such
supplemental indenture shall (i) extend the final maturity of any Debenture, or
reduce the rate or extend the time of payment of any interest thereon or impair
or affect the rights of any Holder to institute suit for the payment thereof or
reduce the principal amount thereof or any premium thereon, or, in the case of
the -Year Extendible Notes, adversely affect the right to repayment
at the option of the Holder of said Notes, without the consent of the Holder of
each Debenture so affected, (ii) reduce the aforesaid percentage of Debentures,
the Holders of which are required to consent to any such supplemental indenture
or (iii) modify any provision relating to the subordination of Outstanding Debt
Securities of any series in a manner adverse to the Holders thereof, without the
consent of the Holder of each Debenture affected. It is also provided in the
Indenture that, with respect to certain defaults or Events of Default regarding
the Debentures of any series, prior to any declaration accelerating the maturity
of such Debentures, the Holders of a majority in aggregate principal amount
Outstanding of the Debentures of such series (or, in the case of certain
defaults or Events of Default, all or certain series of the Debentures) may on
behalf of the Holders of all the Debentures of such series (or all or certain
series of the Debentures, as the case may be) waive any such past default or
Event of Default. The preceding sentence shall not, however, apply to a default
in the
<PAGE>
3
payment of the principal of or premium, if any, or interest, on any of the
Debentures. Any such consent or waiver by the Holder of this Note (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Note and any
-Year Extendible Notes which may be issued in exchange or
substitution herefor, irrespective of whether or not any notation thereof is
made upon this Note or such other -Year Extendible Notes.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note in the manner, at the respective times, at the rate and in
the coin or currency herein prescribed.
The -Year Extendible Notes are subject to repayment in
whole, or in part, on , , and , in
increments of $ or multiples of $ in excess of $ provided
that the portion of the principal amount of any -Year Extendible Note
not being repaid shall be at least $ , at the option of the Holders
thereof at a repayment price equal to the principal amount thereof to be repaid,
together with interest payable thereon to the repayment date. For this Note to
be repaid at the option of the Holder, the Issuer must receive at its office or
agency in the Borough of Manhattan, The City of New York, on or before the
, or, if such is not a Business Day, the next succeeding Business
Day, but not earlier than the prior to the on which the
repayment price will be paid (i) this Note, with the form entitled "Option to
Elect Repayment" below duly completed, or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States of America setting forth the name of the Holder of
the Note, the principal amount of the Note, the amount of such Note to be
repaid, a statement that the option to elect repayment is being made thereby and
a guarantee that the Note to be repaid with the form entitled "Option to Elect
Repayment" on the reverse thereof duly completed will be received by the Issuer
no later than five Business Days after the date of such telegram, telex,
facsimile transmission or letter, and such Note and form duly completed are
received by the Issuer by such fifth Business Day. Either form of notice duly
received on or before the preceding any such shall be irrevocable.
All questions as to the validity,
<PAGE>
4
eligibility (including time of receipt) and acceptance of any Notes for
repayment will be determined by the Issuer, whose determination shall be final
and binding.
The -Year Extendible Notes are issuable in registered form
without coupons in denominations of $ and any multiple of
$ at the office or agency of the Issuer in the Borough of Manhattan,
The City of New York, and in the manner and subject to the limitations provided
in the Indenture, but without the payment of any service charge,
-Year Extendible Notes may be exchanged for a like aggregate
principal amount of -Year Extendible Notes of other authorized
denominations.
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner of
this Note (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon), for the purpose of receiving
payment of, or on account of, the principal hereof and premium, if any, and
subject to the provisions on the face hereof, interest hereon and for all other
purposes, and neither the Issuer nor the Trustee nor any authorized agent of the
Issuer or the Trustee shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any
-Year Extendible Note, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder, officer
or director, as such, of the Issuer or of any successor corporation, either
directly or through the Issuer or any successor corporation, 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 hereof and as
part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
<PAGE>
[FORM OF OPTION TO ELECT REPAYMENT]
Option To Elect Repayment
The undersigned hereby irrevocably requests and instructs the Issuer
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the repayment date, to the undersigned, at
(Please Print or Typewrite Name and Address of the Undersigned)
FOR THIS NOTE TO BE REPAID THE ISSUER MUST RECEIVE AT ITS OFFICE OR
AGENCY IN THE BOROUGH OF MANHATTAN, THE CITY AND STATE OF NEW YORK, OR AT SUCH
ADDITIONAL PLACE OR PLACES OF WHICH THE ISSUER SHALL FROM TIME TO TIME NOTIFY
THE HOLDER OF THE WITHIN NOTE, ON OR BEFORE THE OR, IF SUCH
IS NOT A BUSINESS DAY, THE NEXT SUCCEEDING BUSINESS DAY, BUT NOT EARLIER THAN
THE PRIOR TO , , AND ,
(I) THIS NOTE WITH THIS "OPTION TO ELECT REPAYMENT" FORM DULY COMPLETED OR
(II) A TELEGRAM, TELEX, FACSIMILE TRANSMISSION OR LETTER FROM A MEMBER OF A
NATIONAL SECURITIES EXCHANGE OR THE NATIONAL ASSOCIATION OF SECURITIES DEALERS,
INC. OR A COMMERCIAL BANK OR A TRUST COMPANY IN THE UNITED STATES OF AMERICA
SETTING FORTH THE NAME OF THE HOLDER OF THE NOTE, THE PRINCIPAL AMOUNT OF THE
NOTE, THE AMOUNT OF THE NOTE TO REPAID, A STATEMENT THAT THE OPTION TO ELECT
REPAYMENT IS BEING MADE THEREBY AND A GUARANTEE THAT THE NOTE TO BE REPAID WITH
THE FORM ENTITLED "OPTION TO ELECT REPAYMENT" ON THE REVERSE OF THE NOTE DULY
COMPLETED WILL BE RECEIVED BY THE ISSUER NOT LATER THAN FIVE BUSINESS DAYS AFTER
THE DATE OF SUCH TELEGRAM, TELEX, FACSIMILE TRANSMISSION OR LETTER, AND SUCH
NOTE AND FORM DULY COMPLETED ARE RECEIVED BY THE ISSUER BY SUCH FIFTH BUSINESS
DAY.
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof (which shall be $ or an
integral multiple of $ in excess of $ ) which the
Holder elects to have repaid: $ ; and specify the denomination or
denominations (which shall be $ or multiple of $ in
excess of $ ) of the -Year.
<PAGE>
2
Extendible Note or Notes to be issued to the Holder for the portion of
the within Note not being repaid (in the absence of such specification, one such
Note will be issued for the portion not being repaid); $ .
Dated:
-----------------------------------
Note: The signature to this Option
to Elect Repayment must correspond
with the name as written upon the
face of the Note in every
particular without alteration or
enlargement or any other change
whatsoever.
<PAGE>
EXHIBIT 5.01
[LETTERHEAD OF FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.]
August 22, 1997
Registration Statement on Form S-3
Ladies and Gentlemen:
This opinion is being provided to you by the undersigned, as General
Counsel of Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"). I have acted as counsel to the Issuer in connection with the
preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), of a
Registration Statement on Form S-3 (the "Registration Statement"), and the
prospectus included therein (the "Prospectus"), relating to the registration
by the Issuer of $250,000,000 in the aggregate of (i) debt securities
representing unsecured obligations of the Issuer (the "Senior Debt
Securities") to be issued pursuant to a Trust Indenture (the "Indenture")
between the Issuer and a trustee (the "Trustee") to be named in a prospectus
supplement relating to the Senior Debt Securities and subordinated debt
securities ("Subordinated Debt Securities" and, together with the Senior Debt
Securities, the "Debt Securities") to be issued pursuant to a Subordinated
Indenture (the "Subordinated Indenture") between the Issuer and a trustee
(the "Subordinated Trustee") to be named in a prospectus supplement relating
to the Subordinated Debt Securities and (ii) shares of common stock of the
Issuer, par value $.01 per share ("Common Stock").
In so acting, I have examined and relied upon the originals, or
copies certified or otherwise identified to my satisfaction, of such records,
documents, certificates and other instruments as in my judgment are necessary
or appropriate to enable us to render the opinion expressed below. My
opinion assumes that the definitive Indenture and Subordinated Indenture will
be in substantially the forms filed as Exhibits to the Registration Statement.
Based upon the foregoing, I am of the following opinion:
<PAGE>
2
1. When the Indenture has been duly authorized, executed and
delivered by the Issuer and the Trustee, and the Senior Debt Securities have
been duly executed, authenticated, issued, delivered and paid for as
contemplated by the Registration Statement and any prospectus supplement
relating to the Senior Debt Securities and in accordance with the Indenture,
assuming the terms of such Senior Debt Securities have been duly established
so as not to violate any applicable law or result in a default under or
breach of any agreement or instrument binding upon the Issuer and so as to
comply with any requirement imposed by any court or governmental body having
jurisdiction over the Issuer, the Senior Debt Securities will be validly
issued and will constitute valid and binding obligations of the Issuer in
accordance with their terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
applicability relating to or affecting the rights of creditors and by general
principles of equity.
2. When the Subordinated Indenture has been duly authorized,
executed and delivered by the Issuer and the Subordinated Trustee, and the
Subordinated Debt Securities have been duly executed, authenticated, issued,
delivered and paid for as contemplated by the Registration Statement and any
prospectus supplement relating to the Subordinated Debt Securities and in
accordance with the Subordinated Indenture, assuming the terms of such
Subordinated Debt Securities have been duly established so as not to violate
any applicable law or result in a default under or breach of any agreement or
instrument binding upon the Issuer and so as to comply with any requirement
imposed by any court or governmental body having jurisdiction over the
Issuer, the Subordinated Debt Securities will be validly issued and will
constitute valid and binding obligations of the Issuer in accordance with
their terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability relating
to or affecting the rights of creditors and by general principles of equity.
3. When the Common Stock has been duly issued and sold as
contemplated by the Registration Statement and any prospectus supplement
relating to the Common Stock, against payment of the consideration fixed
therefor by the Board of Directors of the Issuer or a duly authorized
committee thereof, the Common Stock will be duly authorized, validly issued,
fully paid and nonassessable.
<PAGE>
3
The opinions expressed above is limited to the laws of the State of
New York and the Act and the federal laws of the United States of America.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name under the caption "Legal
Matters" in the Prospectus. In giving such consent, I do not thereby concede
that I am within the category of persons whose consent is required under
Section 7 of the Act or the Rules and Regulations of the Commission
thereunder.
Very truly yours,
/s/ Bruce E. Stern, Esq.
<PAGE>
Exhibit 12.01
Financial Security Assurance Holdings Ltd.
Computation of the Ratio of Earnings to Fixed Charges
(in thousands except for ratios)
The information appearing below presents historical
consolidated financial results for the Company
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31 JUNE 30,
-------------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1992 1993 1994 1995 1996 1996 1997
--------- ----------- --------- --------- ---------- --------- ---------
Earnings:
Income before income taxes................ $ 52,842 ($ 163,866) $ 78,290 $ 75,042 $ 109,771 $ 51,445 $ 62,324
Interest Expense.......................... 680 532 536 57 2,166 1,083 1,083
Portion of rental expense deemed to be
interest (1)............................ 1,075 1,070 1,024 1,030 1,042 539 534
--------- ----------- --------- --------- ---------- --------- ---------
Earnings.............................. $ 54,597 ($ 162,264) $ 79,850 $ 76,129 $ 112,979 $ 53,067 $ 63,941
--------- ----------- --------- --------- ---------- --------- ---------
--------- ----------- --------- --------- ---------- --------- ---------
Fixed Charges:
Interest Expense.......................... $ 680 $ 532 $ 536 $ 57 $ 2,166 $ 1,083 $ 1,083
Portion of rental expense deemed to be
interest (1)............................ 1,075 1,070 1,024 1,030 1,042 539 534
--------- ----------- --------- --------- ---------- --------- ---------
Fixed Charges......................... $ 1,755 $ 1,602 $ 1,560 $ 1,087 $ 3,208 $ 1,622 $ 1,617
--------- ----------- --------- --------- ---------- --------- ---------
--------- ----------- --------- --------- ---------- --------- ---------
Ratio of Earnings to Fixed Charges.......... 31.1 (2) N/M 51.2 70.0 35.2 32.7 39.5
</TABLE>
(1) One third of rental expense is estimated to be representative of the
interest factor.
(2) The 1993 earnings to fixed charges ratio is not meaningful due to the
significant loss incurred in that year.
<PAGE>
Exhibit 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
Financial Security Assurance Holdings Ltd. and Subsidiaries on Form S-3,
relating to the shelf registration of $250,000,000 of debt securities and
common stock, of:
1. Our report dated January 24, 1997 on our audits of the consolidated
financial statements of Financial Security Assurance Holdings Ltd. and
Subsidiaries as of December 31, 1996 and 1995, and for each of the
three years in the period ended December 31, 1996 which report is
incorporated by reference in the Annual Report on Form 10-K for the
fiscal year ended December 31, 1996;
2. Our report dated January 24, 1997 on our audits of the financial
statement schedule of Financial Security Assurance Holdings Ltd. and
Subsidiaries, which report is included in the Annual Report on Form 10-K
for the fiscal year ended December 31, 1996; and
3. Our report dated January 24, 1997 on our audits of the consolidated
financial statements of Financial Security Assurance Inc. and
Subsidiaries as of December 31, 1996 and 1995, and for each of the
three years in the period ended December 31, 1996, which report is
included in exhibit 99 to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1996.
We also consent to the reference to our Firm under the caption "Experts".
/s/COOPERS & LYBRAND L.L.P.
New York, New York
August 22, 1997
<PAGE>
EXHIBIT 24.01
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS:
WHEREAS, Financial Security Assurance Holdings Ltd., a New York
corporation (the "Company"), proposes to file with the Securities and
Exchange Commission (the "Commission"), under the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), a Registration
Statement on Form S-3, and one or more amendments thereto, with respect to
debt securities and/or common stock of the Company (the "Registration
Statement"); and
WHEREAS, each of the undersigned is a director or officer of the Company
as set forth opposite his name below.
NOW, THEREFORE, each of the undersigned hereby constitutes and appoints
Robert P. Cochran, Roger K. Taylor and Bruce E. Stern, and each of them, with
full power to act without the other, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution for him and in his
name, place and stead, in any and all capacities (until revoked in writing),
to sign the Registration Statement and any amendments thereto, and to sign
any related Registration Statement filed by the Company pursuant to Rule
462(b) under the Securities Act, and any amendments thereto, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and thing requisite and necessary fully to all intents and purposes as he
might or could do in person, thereby ratifying and confirming all that said
attorney-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has duly executed this Power
of Attorney as of this 14th day of August, 1997.
/s/JOHN J. BYRNE
- ----------------
John J. Byrne Chairman of the Board and Director
/s/ ROBERT P. COCHRAN
- ---------------------
Robert P. Cochran President, Chief Executive Officer and Director
/s/ MICHAEL DJORDJEVICH
- -----------------------
Michael Djordjevich Vice Chairman of the Board and Director
/s/ ROBERT N. DOWNEY
- --------------------
Robert N. Downey Director
/s/ ANTHONY M. FRANK
- --------------------
Anthony M. Frank Director
/s/ TOSHIKI KANEDA
- ------------------
Toshiki Kaneda Director
<PAGE>
Page 2
/s/ K. THOMAS KEMP
- ------------------
K. Thomas Kemp Director
/s/ DAVID O. MAXWELL
- --------------------
David O. Maxwell Director
/s/ JAMES M. OSTERHOFF
- ----------------------
James M. Osterhoff Director
/s/ JAMES H. OZANNE
- -------------------
James H. Ozanne Director
/s/ STAATS M. PELLETT, JR.
- --------------------------
Staats M. Pellett, Jr. Director
/s/ RICHARD A. POST
- -------------------
Richard A. Post Director
/s/ ROGER K. TAYLOR
- -------------------
Roger K. Taylor Director
/s/ ALLAN L. WATERS
- -------------------
Allan L. Waters Director
/s/ HOWARD M. ZELIKOW
- ---------------------
Howard M. Zelikow Director
/s/ JOHN A. HARRISON
- --------------------
John A. Harrison Managing Director and Chief Financial Officer
/s/ JEFFREY S. JOSEPH
- ---------------------
Jeffrey S. Joseph Managing Director and Controller
