As filed with the Securities and Exchange Commission on March 10, 1999
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 (I.R.S. Employer
of incorporation or organization) Identification No.)
350 Park Avenue
New York, New York 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
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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.|_|
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(Continued on following page)
<PAGE>
(Continued from previous page)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================
Proposed
Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered Registered(1)(2)(3) Per Unit(4) Offering Price(4) Registration Fee
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities
Common Stock
Stock Purchase Contracts(5)
TOTAL...................... $230,000,000 100% $230,000,000 $63,940
=========================================================================================================
</TABLE>
(1) Securities registered by the registrant under Registration Statement No.
333-34181 and not previously sold in the amount of $20,000,000 are
consolidated in this registration statement pursuant to Rule 429 under the
Securities Act. Registration fees with respect to such unsold securities
in the amount of $6,060.61 have previously been paid. The total amount
registered under this registration statement as so consolidated is
$250,000,000.
(2) Includes such indeterminate principal amount of debt securities, such
indeterminate number of shares of common stock and such indeterminate number
of stock purchase contracts, as may from time to time be issued at
indeterminate prices.
(3) 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 registrant.
(4) 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.
(5) Each stock purchase contract of the registrant obligates the registrant to
sell, and the holder thereof to purchase, a number of shares of common
stock.
---------------------------
Pursuant to Rule 429 under the Securities Act, the prospectus filed
as part of this registration statement also relates to the securities registered
by the registrant under Registration Statement No. 333-34181 that remain unsold
in the amount of $20,000,000. This registration statement also constitutes
Post-Effective Amendment No. 1 with respect to the registrant's Registration
Statement No. 333-34181.
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.
================================================================================
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS Subject to Completion
Preliminary Prospectus
Dated March 10, 1999
[LOGO]
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
350 Park Avenue
New York, New York 10022
(212) 826-0100
$250,000,000
DEBT SECURITIES, COMMON STOCK AND STOCK PURCHASE CONTRACTS
From time to time, we may sell:
o debt securities which may be senior or subordinated in priority of
payment,
o common stock, and
o stock purchase contracts.
When we decide to sell a particular series of securities, we will
prepare a prospectus supplement describing those securities. You should read
this prospectus and any prospectus supplement carefully.
Our common stock is listed on the New York Stock Exchange under the
symbol "FSA".
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined whether this prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
---------------------------
The date of this prospectus is [ ], 1999
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, we may, from time to time over approximately the next
two years, sell any combination of the securities described in this prospectus
in one or more offerings up to a total amount of $250,000,000 or the equivalent
of this amount in foreign currencies or foreign currency units.
This prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information" below.
You should rely only on the information provided in this prospectus and in
any prospectus supplement, including the information incorporated by reference.
We have not authorized anyone to provide you with different information. You
should not assume that the information in this prospectus, or any supplement to
this prospectus, is accurate at any date other than the date indicated on the
cover page of these documents.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement under the Securities
Act that registers the distribution of these securities. The registration
statement, including the attached exhibits and schedules, contains additional
relevant information about us and the securities. The rules and regulations of
the SEC allow us to omit certain information included in the registration
statement from this prospectus.
In addition, we file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy this
information and the registration statement at the following locations of the
SEC:
Chicago Regional Office
Public Reference Room New York Regional Office Citicorp Center
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street
Room 1024 Suite 1300 Suite 1400
Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. You may obtain information on the operation of
the public reference room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, like us, who file
electronically with the SEC. The address of that site is http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York.
The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be a part of this prospectus, except
for any information that is superseded by other information that is included in
or incorporated by reference into this document.
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<PAGE>
This prospectus incorporates by reference the documents listed below that
we have previously filed with the SEC. These documents contain important
information about us.
o The description of our common stock in our Form 8-A that was filed
on December 3, 1993
o Our Annual Report on Form 10-K for the year ended December 31, 1997
o Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1998, June 30, 1998 and September 30, 1998
o Our Current Report on Form 8-K dated November 6, 1998
o Our Proxy Statement on Schedule 14A that was filed on March 24, 1998
We incorporate by reference any additional documents that we may file with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
between the date of this prospectus and the termination of the offering of the
securities. These documents may include periodic reports, like Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as Proxy Statements. Any material that we subsequently file with the SEC
will automatically update and replace the information previously filed with the
SEC.
You can obtain any of the documents incorporated by reference in this
prospectus from the SEC on its web site (http://www.sec.gov). You can also
obtain these documents from us (without charge) by visiting our web site
(http://www.FSA.com) or requesting them in writing or by telephone at the
following address:
Peter E. Hoey
Managing Director, Investor Relations
Financial Security Assurance Holdings Ltd.
350 Park Avenue
New York, New York 10022
Telephone (212) 826-0100
THE COMPANY
We are Financial Security Assurance Holdings Ltd. In this prospectus we
refer to our company as "FSA Holdings", "we" or "us". We own 100% of Financial
Security Assurance Inc., which we refer to as "FSA". FSA primarily provides
financial guaranty insurance on asset-backed securities and municipal bonds. FSA
was the first insurance company organized to insure asset-backed obligations.
FSA has been a leading insurer of asset-backed obligations (based on number of
transactions insured) since its organization in 1985. In 1990, FSA expanded the
focus of its business to include writing financial guaranty insurance of
municipal obligations and has since become a major insurer of municipal bonds.
FSA writes financial guaranty insurance that typically guarantees
scheduled payments on an issuer's obligations. In the case of a default on these
payments, FSA is generally required to pay the principal, interest or other
amounts due either in accordance with the original payment schedule or, at FSA's
option, on an accelerated basis. The underwriting policy of FSA 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 issuer's
ability to impose and collect fees and charges for public services or specific
projects.
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Our business objective is to remain a leading insurer of asset-backed
obligations and to become a more prominent insurer of municipal obligations. We
believe that the demand for our financial guaranty insurance will grow over the
long term as a result of the anticipated continuation of three trends:
o expansion of asset securitization outside the residential mortgage
sector;
o growth in the insurance of municipal obligations due, in part, to
the increased use of municipal bonds to finance repairs and
improvements to the nation's infrastructure and the increased
municipal bond purchases by individuals who generally purchase
insured obligations; and
o increased volume of new domestic municipal bonds that are insured,
insurance penetration having already grown every year since 1986 to
reach 50.8% in 1998, according to published sources.
FSA Holdings or its subsidiaries maintain offices in New York City, San
Francisco, Dallas, London, Paris, Madrid, Sydney, Tokyo, Singapore and Bermuda.
In addition to our domestic business, we pursue international opportunities and
currently operate in the European and Pacific Rim markets. We were the first
financial guaranty insurance company to insure obligations in international
markets.
We expect 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.
FSA's insurance financial strength is rated "Aaa" by Moody's Investors
Service, Inc. FSA's insurer financial strength is rated "AAA" by Standard &
Poor's Ratings Services ("S&P") and Standard and Poor's (Australia) Pty. Ltd.
FSA's claims-paying ability is rated "AAA" by Fitch IBCA, Inc. and Japan Rating
and Investment Information, Inc.
FSA is licensed to engage in the financial guaranty insurance business in
all 50 states, the District of Columbia and Puerto Rico.
Our principal executive offices 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 prospectus supplement, we will use the net
proceeds from the sale of the securities for general corporate purposes.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
FSA Holdings for the periods indicated. Earnings represent consolidated earnings
before income taxes and fixed charges. Fixed charges consist of interest and one
third of rental expense which is representative of the interest factor for this
rental expense. We had no capitalized interest for the periods presented. The
ratio for 1993 is not meaningful because we incurred a significant loss in that
year.
Nine Months
Ended
Years Ended December 31, September 30,
------------------------ -------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Ratio of earnings to fixed
charges...................... N/M 51.2 70.0 35.2 22.6 15.4
DESCRIPTION OF DEBT SECURITIES
The following description provides general terms that may apply to our
debt securities. The prospectus supplement relating to any debt securities
offered will describe the particular terms of those debt securities.
The debt securities will be either senior debt securities or subordinated
debt securities. The senior debt securities will be issued under an existing
senior indenture, as supplemented from time to time, between FSA Holdings and
First Union National Bank, as trustee. The subordinated debt securities will be
issued under a subordinated indenture, as supplemented from time to time,
between FSA Holdings and a trustee to be named in the prospectus supplement. The
senior indenture and the subordinated indenture are collectively referred to as
the indentures.
The following summaries of certain provisions of the indentures are not
complete and are qualified in their entirety by reference to the indentures,
copies of which are attached as exhibits to the registration statement of which
this prospectus is a part. Whenever particular sections or defined terms in the
indentures are referred to in this prospectus or a prospectus supplement, those
sections and definitions are incorporated by reference.
General
The debt securities will be our direct and unsecured obligations. The
senior debt securities will rank equally and ratably with all of our other
unsecured and unsubordinated obligations. 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 of our senior debt.
We are a non-operating holding company and most of our assets are owned by
our subsidiaries. As a result, we rely primarily on dividends or other payments
from our subsidiaries to pay principal and interest on our outstanding debt
obligations. Accordingly, the debt securities will be effectively subordinated
to all existing and future liabilities of our subsidiaries. In addition, the
payment of dividends or other amounts by FSA, our insurance company subsidiary,
is limited under the applicable insurance laws and regulations of the State of
New York.
Neither indenture limits the total amount of debt securities that we may
issue under it, and we may issue debt securities under each indenture up to the
aggregate principal amount authorized by our Board of Directors from time to
time. Except as may be described in a prospectus supplement, neither the
indentures nor the debt securities limit the amount of other secured or
unsecured debt that we may incur or issue.
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<PAGE>
We may issue debt securities in one or more separate series of senior debt
securities and/or subordinated debt securities. The prospectus supplement
relating to an offering of a particular series of debt securities will specify
the particular amounts, prices and terms of those debt securities. These terms
may include:
o the title of the debt securities;
o any limit upon the total principal amount of the debt securities;
o the date or dates on which the principal of the debt securities is
payable;
o the rate or rates at which the debt securities bear interest, if
any, or the method by which that rate is determined, the date or
dates from which interest accrues, the interest payment dates on
which any interest is payable, our right, if any, to defer or extend
an interest payment date, and the record dates for the determination
of holders to whom interest is payable;
o the place or places where the principal and any interest on the debt
securities is payable;
o the price or prices at which, the period or periods within which and
the terms and conditions upon which the debt securities may be
redeemed, in whole or in part, at our option, pursuant to any
sinking fund or otherwise;
o our obligation, if any, to redeem, purchase or repay the debt
securities pursuant to any sinking fund or analogous provisions or
at the option of a holder 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 the debt securities will be redeemed,
purchased or repaid, in whole or in part, pursuant to that
obligation;
o if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any debt securities are
issuable;
o 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 is payable, or in
which the debt securities are denominated;
o whether the debt securities are issued in whole or in part in the
form of one or more global securities and the depositary with
respect to those global securities and the circumstances under which
those global securities may be registered for transfer or exchange,
or authenticated and delivered, in the name of a person other than
the depositary or its nominee;
o the additions, modifications or deletions, if any, in the events of
default or our covenants specified in the indenture;
o if other than the principal amount thereof, the portion of the
principal amount of the debt securities that is payable upon
declaration of acceleration of the maturity thereof or provable in
bankruptcy;
o if the amount of payments of principal of (or premium, if any) or
interest, if any, on the debt securities may be determined by
reference to an index, formula or other method, the manner in which
those amounts will be determined and any commodities, currencies,
currency units or indices, value, rate or price relevant to that
determination;
o whether defeasance and/or covenant defeasance (as described below
under the heading "--Defeasance or Covenant Defeasance" ) applies to
the debt securities;
o the relative degree, if any, to which the debt securities are senior
to or subordinated to other series of debt securities in right of
payment;
o the terms of any right to convert or exchange the debt securities
into or for other securities or property;
o any other terms of the debt securities not inconsistent with the
provisions of the applicable indenture; and
o any trustees, authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the debt securities.
(Section 2.03).
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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. Important Federal income tax consequences and
special considerations applicable to any series of debt securities will be
described in the prospectus supplement. The prospectus supplement will also
contain any special Federal income tax, accounting or other information relating
to certain other kinds of debt securities that may be offered, including debt
securities linked to an index or payable in currencies other than U.S. Dollars.
Denominations, Registration, Payment and Transfer
The debt securities will be issuable only in registered form without
coupons. In the absence of any other specification in the prospectus supplement,
a series of debt securities will be issued in denominations of $1,000 and any
integral multiple thereof.
Debt securities of any series may be exchanged for debt securities of the
same series in other authorized denominations, in an equal aggregate principal
amount. Debt securities may also be presented for registration of transfer, upon
which the new transferee or transferees will receive new debt securities of the
same series in authorized denominations in an equal aggregate principal amount.
Debt securities to be exchanged or transferred must be presented at the office
of the registrar or at the office of any transfer agent designated by us for
that purpose with respect to any series of debt securities. Debt securities
presented for exchange or registration of transfer must be duly endorsed by, or
be accompanied by a written instrument or instruments of transfer in a form
satisfactory to us and the trustee duly executed by, the holder of these debt
securities or his attorney who has been duly authorized in writing. We 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. We will not assess a service charge.
We 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 us with respect to any
series of debt securities, we may at any time rescind the designation of any
transfer agent or paying agent or approve a change in the location through which
any transfer agent or paying agent acts. We may at any time designate additional
transfer agents or paying agents with respect to any series of debt securities.
We are not 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 those 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.
The payment of principal of (and premium, if any) and any interest on debt
securities will be made at the office of the trustee for those debt securities
in the City of New York or at the office of a paying agent or paying agents that
we may designate from time to time, except that at our option payment of any
interest may be made by check mailed to the address of the person entitled
thereto as that address appears in the register for those debt securities. The
payment of any interest on debt securities will be made to the person in whose
name that debt security is registered at the close of business on any record
date for that interest, except in the case of defaulted interest.
Global Debt Securities
We may issue debt securities of a series, in whole or in part, in the form
of one or more global debt securities that are deposited with, or on behalf of,
a depositary identified in the prospectus supplement relating to that 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 (a) by the depositary for that
global debt security to a nominee of that depositary, (b) by a nominee of that
depositary to that depositary or another nominee of that depositary or (c) by
that depositary or its nominee to a successor depositary or a nominee of that
successor depositary.
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The specific terms of the depositary arrangement with respect to a series
of debt securities will be described in the prospectus supplement relating to
that series. We anticipate that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a global debt security, and the deposit of that
global debt security with or on behalf of the depositary, the depositary for
that 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 that global debt security to the
accounts of persons that have accounts with that depositary ("participants").
Dealers, underwriters or agents will designate participant accounts with respect
to debt securities they sell, and we will designate participant accounts with
respect to debt securities that we offer and sell directly. 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 that 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 those securities in definitive form.
These limits and 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 that global debt security, that depositary or that
nominee, as the case may be, will be considered the sole owner or holder of the
debt securities represented by that global debt security for all purposes under
the indenture governing those 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 that global
debt security registered in their names, will not receive or be entitled to
receive physical delivery of any of those debt securities of that series in
definitive form and will not be considered the owners or holders thereof under
the indenture governing those 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 those debt securities. None of FSA Holdings, the trustee for those
debt securities, any paying agent, or the registrar for those 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 those debt securities or for maintaining, supervising or
reviewing any records relating to those beneficial ownership interests.
We expect 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 global debt security representing any of those debt securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
that global debt security for those debt securities as shown on the records of
that depositary or its nominee. We also expect that payments by participants to
owners of beneficial interests in that global debt security held through those
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". Those payments will be the responsibility
of those participants.
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 us within 90 days, we will issue individual debt securities of that
series in exchange for the global debt security representing that series of debt
securities. In addition, we may at any time and in our sole discretion, subject
to any limitations described in the prospectus supplement relating to those debt
securities, determine not to have any debt securities of that series represented
by one or more global debt securities and, in that event, will issue individual
debt securities of that series in exchange for the global debt security or
securities representing that series of debt securities. Further, if we specify
with respect to the debt securities of a series, an owner of a beneficial
interest in a global debt security representing debt securities of that series
may, on terms acceptable to us, the trustee and the depositary for that global
debt security, receive individual debt securities of that series in exchange for
those
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beneficial interests, subject to any limitations described in the prospectus
supplement relating to those debt securities. In these instances, 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 that global
debt security equal in principal amount to that beneficial interest and to have
those debt securities registered in its name. Individual debt securities of that
series so issued will be issued in denominations, unless otherwise specified by
us, of $1,000 and any integral multiple thereof.
A Summary of Your Rights under the Indentures
Each indenture is a contract. In these contracts we agree to perform a
number of basic tasks, such as making payments of principal and interest, if
any, on the debt securities, maintaining offices for payments on and
registrations, transfers and exchanges of the debt securities, appointing a
trustee and a paying agent for the debt securities and maintaining our corporate
existence. In addition, in each indenture we agree not to take specified actions
without the consent of holders of debt securities issued under that indenture
(these contract provisions are often referred to as negative covenants). The
purpose of these negative covenants is to prevent us from taking actions that
might reduce the value or credit quality of a debt security owned by you. While
numerous actions that could reduce the value of your debt securities are not
prohibited by either indenture, your protections under the relevant indenture
are intended to be commensurate with the protections that investors require when
purchasing similar securities from issuers with credit characteristics
comparable to ours.
The senior indenture generally prohibits us from taking the following
action unless the holders of a majority in principal amount of the affected
senior debt securities outstanding, voting as a single class, consent:
o placing a lien on the capital stock of FSA, unless the outstanding
senior debt securities (and, if we so choose, our other indebtedness
of equal rank) are entitled to share in that lien.
Each indenture generally prohibits us from taking the following actions
unless the holders of a majority in principal amount of the affected debt
securities outstanding under that indenture, voting as a single class, consent:
o selling the capital stock of FSA to a third party, unless we sell
all of the capital stock of FSA or we sell less than 20% of the
voting stock of FSA and, in each case, we receive fair value for the
stock sold; and
o consolidating with or merging into any other corporation or
conveying, transferring or leasing our properties and assets as an
entirety or substantially as an entirety to any person, unless the
surviving or purchasing entity is a domestic corporation that
assumes our obligations under that indenture and an event of default
has not otherwise occurred under that indenture.
In addition, we cannot do any of the following to your debt securities
without your consent:
o change their final maturity date;
o reduce their principal amount;
o reduce the rate or extend the time of payment of their interest;
o reduce the amount payable (if any) on their redemption;
o impair or affect your right to institute suit for payment; and
o impair or affect your right (if any) to have them redeemed at your
option.
If we breach our contract with you, you may, in accordance with the
procedures and limitations in the applicable indenture, sue us for breach of
contract.
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What follows is a more detailed description of the contract provisions of
the indentures. This description contains details that are not included in this
summary, and we encourage you to read it carefully.
Certain Covenants of FSA Holdings
Limitations on Liens. Under the senior indenture, so long as senior debt
securities are outstanding, we 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 any mortgage, pledge, lien,
security interest or other encumbrance of any nature on any of the present or
future capital stock of any Restricted Subsidiary (or any company, other than
FSA Holdings, having direct or indirect control of any Restricted Subsidiary)
unless the senior debt securities then outstanding and, if we so elect, any of
our other indebtedness ranking at least pari passu with the senior debt
securities are secured equally and ratably with, or prior to, that other secured
debt so long as it is outstanding. (Section 3.06)
"Restricted Subsidiary", as defined in the indentures, means FSA or any
successor to all or substantially all of its business, provided that the
successor is a subsidiary of FSA Holdings. A "subsidiary" is a corporation more
than 50% of the outstanding voting stock of which is owned, directly or
indirectly, by FSA Holdings and/or one or more of its subsidiaries.
Limitations on Disposition of Stock of Restricted Subsidiaries. Under the
senior and subordinated indentures, so long as debt securities are outstanding,
we 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:
o a sale, transfer or other disposition of any capital stock of any
Restricted Subsidiary to a wholly owned subsidiary of FSA Holdings
or that subsidiary;
o a sale, transfer or other disposition of the entire capital stock of
any Restricted Subsidiary for at least fair value (as determined by
our Board of Directors acting in good faith); or
o a sale, transfer or other disposition of the capital stock of any
Restricted Subsidiary for at least fair value (as determined by our
Board of Directors acting in good faith) if, after giving effect
thereto, we and our subsidiaries would own more than 80% of the
issued and outstanding voting stock of that Restricted Subsidiary.
(Section 3.07)
Limitations on Consolidation, Merger, Sale or Conveyance. Under the senior
and subordinated indentures, so long as debt securities are outstanding, we will
not consolidate with or merge into any other corporation or convey, transfer or
lease our properties and assets as an entirety or substantially as an entirety
to any person, unless:
o 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;
o the due and punctual payment of the principal of, premium, if any,
and interest on all the debt securities under that indenture,
according to their tenor, and the due and punctual performance and
observance of all of our covenants and conditions under that
indenture, shall be expressly assumed, by supplemental indenture
satisfactory in form to the applicable trustee, by the corporation
formed by that consolidation or into which we have been merged, or
which acquired that property; and
o immediately after giving effect to that transaction, no event of
default (as defined in the applicable indenture), and no event
which, after notice or lapse of time or both, would become an event
of default, has occurred and is continuing. (Section 9.01)
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Events of Default
Any one of the following events will constitute an event of default with
regard to any series of debt securities under an indenture:
(a) default continued for 30 days in payment of any installment of
interest on any of the debt securities of that series when due and
payable; or
(b) default in payment of all or any part of the principal on any of the
debt securities of that series when 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 becomes due and payable by the terms of the debt securities
of that series; or
(d) default in the performance, or breach, of any of our covenants or
warranties in respect of the debt securities of that series and
continuance of that default or breach for a period of 60 days after
written notice as provided in that indenture; or
(e) our failure to make any payment at maturity, including any
applicable grace period, in respect of indebtedness in an amount in
excess of $10,000,000, and that failure continues for a period of 10
days after written notice as provided in that indenture; or
(f) our default with respect to any indebtedness, which default results
in the acceleration of indebtedness in an amount in excess of
$10,000,000, without that indebtedness having been discharged or
that acceleration having been cured, waived, rescinded or annulled
for a period of 10 days after written notice as provided in that
indenture; or
(g) certain events of bankruptcy, insolvency, or reorganization with
respect to us or any Restricted Subsidiary; or
(h) any other event of default provided in the supplemental indenture or
resolution of our Board of Directors under which that series of debt
securities is issued or in the form of debt security for that
series. (Section 5.01)
We are required to file with the trustee annually a written statement as
to any defaults in the performance or fulfillment of any of our covenants,
agreements or conditions contained in the indenture. (Section 3.05) Each
indenture provides that the trustee may withhold notice to the holders of debt
securities of any series of any default (except in payment of principal of or
interest on the debt securities of that series) if the trustee considers it in
the interest of the holders of the debt securities of that series to do so.
(Section 5.11)
Each indenture provides that (1) if an event of default described in
clause (a), (b) or (c) above has occurred and is continuing with regard to the
debt securities of any series outstanding under that indenture, either the
trustee or the holders of not less than 25% in principal amount of the debt
securities of that series then outstanding (each series voting as a separate
class) may declare the principal (or, if debt securities of that series are
original issue discount debt securities, that portion of the principal amount as
may be specified in the terms of that series) of all debt securities of that
series and interest accrued thereon, if any, to be due and payable immediately
and (2) if an event of default described in clause (d), (e), (f), (g) or (h)
above has occurred and is continuing, either the trustee or the holders of not
less than 25% in principal amount of all debt securities (or in the case of an
event of default described in clause (d) or (h) above, all series affected by
that event of default) then outstanding (treated as a single class) may declare
the principal (or, if any debt securities are original issue discount debt
securities, that portion of the principal as may be specified in the terms of
that series) of all debt securities (in the case of clause (d) or (h) above,
limited to all series affected) then outstanding under that indenture and
interest accrued thereon, if any, to be due and payable immediately.
After a declaration of acceleration of maturity of the debt securities of
any series, if all payments due (other than payments of principal due as a
result of acceleration) have been made and all events of default
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(other than the non-payment of the principal due as a result of acceleration),
have been cured, waived or otherwise remedied as provided in the applicable
indenture, then:
o with respect to an event of default described in clauses (a), (b)
and (c) above, the holders of a majority in principal amount of the
debt securities of that series, voting as a separate class, then
outstanding may waive all defaults with respect to that series and
rescind and annul that declaration and its consequences; and
o with respect to an event of default described in clauses (d), (e),
(f), (g) and (h) above, the holders of a majority in principal
amount of the debt securities of all series (in the case of clause
(d) or (h) above, limited to all series affected by that default),
voting as a single class, then outstanding under that indenture may
waive all those defaults with respect to all the debt securities
then outstanding under that indenture and rescind and annul that
declaration and its consequences. (Section 5.01)
Prior to a declaration of acceleration of maturity of the debt securities
of any series, either the holders of a majority in principal amount of the
outstanding debt securities of all series under the applicable indenture, voting
as a single class, or the holders of a majority in principal amount of the
outstanding debt securities of the affected series, depending on the nature of
the event of default, may waive an event of default and its consequences, except
a default in the payment of the principal of or interest on any debt securities
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
affected. (Section 5.10)
Each indenture provides that the trustee is under no obligation, subject
to the trustee's duty during an event of default to act with the required
standard of care, to exercise any of the trusts or powers vested in it by that
indenture at the request, order or direction of any of the holders of debt
securities, unless those holders have offered the trustee reasonable indemnity.
(Sections 6.01 and 6.02) Subject to these provisions for indemnification, the
holders of a majority in principal amount of the debt securities of each series
affected (with each series voting as a separate class) may 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 that series. (Section 5.09)
No holder of debt securities of any series will have any right by virtue
of either indenture to institute any legal action or proceeding with respect to
that indenture, unless that holder has previously given to the trustee written
notice of a continuing default, the holders of not less than 25% in principal
amount of the debt securities of that series then outstanding have made written
request on the trustee to institute such action or proceeding and have offered
to the trustee any reasonable indemnity that the trustee may require relating to
their request and the trustee fails to institute the requested proceeding within
60 days, and no direction inconsistent with such written request has been given
to the trustee by the holders of a majority in principal amount of the debt
securities of such series then outstanding. (Section 5.06) These limitations do
not apply to a suit for enforcement of payment of the principal of or interest
on a debt security on or after the respective due dates. (Section 5.07)
Defeasance and Covenant Defeasance
The indentures contain a provision that, if made applicable to any series
of debt securities, permits us to elect, subject to certain conditions, (a) to
be discharged from our obligations with respect to the debt securities of that
series (subject to limited exceptions) ("defeasance") and/or (b) to be released
from our obligations with respect to that series of debt securities under the
covenant in the indentures relating to limitations on disposition of stock of
Restricted Subsidiaries and, in the case of the senior indenture, also the
covenant relating to limitations on liens ("covenant defeasance"). To make
either of these elections, we must irrevocably deposit with the trustee as trust
funds monies, United States Government Obligations or a combination of the two
sufficient, without reinvestment, in the opinion of a nationally recognized firm
of independent public accountants, to pay and discharge the principal of and
interest on the outstanding debt securities of that series on the maturity of
that principal or interest. (Sections 13.01 through 13.04)
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Each indenture provides that, to effect defeasance or covenant defeasance,
we 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 and that those holders 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 defeasance or covenant defeasance had not occurred. In addition, in
the case of defeasance, that opinion of counsel must state that a private letter
ruling or a general revenue ruling to the same effect has been issued by the
United States Internal Revenue Service or state that since the date of the
applicable indenture there has been a change in the applicable Federal income
tax law or the interpretation thereof to the same effect. (Section 13.04)
In order to effect defeasance or covenant defeasance under the
subordinated indenture, in addition to the requirements described above, no
default in the payment of principal of (or premium, if any) or interest on any
senior debt can have occurred and be continuing or no event of default with
respect to senior debt can have occurred and be continuing and have resulted in
that 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 with the consent of the holders of not less
than a majority in principal amount of the debt securities at the time
outstanding of all series affected by that supplemental indenture (voting as one
class), FSA Holdings and the trustee may enter into supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of that indenture or of modifying in any manner the rights
of the holders of the debt securities of that series; provided, that no
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 or the amount thereof provable in bankruptcy, or impair or affect the
right of any holder to institute suit for the payment thereof or, if the debt
securities provide therefor, any right of repayment at the option of the holder,
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 supplemental indenture, without the
consent of the holders of each debt security so affected. (Section 8.02) The
holders of at least a majority in principal amount of the debt securities of all
series outstanding under an indenture (voting as a class) may waive compliance
by us with the covenants contained in that indenture relating to limitations on
liens, limitations on dispositions of stock of Restricted Subsidiaries and
corporate existence. (Section 3.09)
Subordination under the Subordinated Indenture
To the extent provided in the subordinated indenture, the payment of the
principal of (and premium, if any) and interest on each and all of the
subordinated debt securities we issue will be subordinate and subject in right
of payment to the prior payment of all amounts then due and payable in respect
of all senior debt. 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 FSA Holdings, 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 the 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. (Sections 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 that
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, on the subordinated debt
securities. (Section 14.03)
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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 that 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 us
whether or not that claim for post-petition interest is allowed in that
proceeding), on Debt (as defined in the subordinated indenture), 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 those obligations are not
superior in right of payment to the subordinated debt securities or to the other
Debt which is pari passu with, or subordinated to, the subordinated debt
securities; provided, however, that senior debt does not include (a) any of our
Debt which when incurred and without respect to any election under Section
1111(b) of the Bankruptcy Code was without recourse to us, (b) any of our Debt
to any of our subsidiaries, (c) Debt to any of our employees, (d) any liability
for taxes, (e) indebtedness or monetary obligations to trade creditors or
assumed by us or any of our subsidiaries in the ordinary course of business in
connection with the obtaining of goods, materials or services and (f) the
subordinated debt securities.
The subordinated indenture places no limitation on the amount of
additional senior debt that may be incurred by us. We 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 that issuance. Any change will be described
in the prospectus supplement relating to those subordinated debt securities.
Conversion or Exchange
The debt securities of any series may be convertible or exchangeable into
common stock or other securities. The specific terms and conditions on which
debt securities of any series may be so converted or exchanged will be set forth
in the applicable prospectus supplement. Those terms may include the conversion
or exchange price, provisions for conversion or exchange, either mandatory, at
the option of the holder, or at our option, and provisions under which the
number of shares of common stock or other securities to be received by the
holders of debt securities would be calculated as of a time and in the manner
stated in the applicable prospectus supplement.
DESCRIPTION OF COMMON STOCK
We are authorized to issue up to 50,000,000 shares of common stock. At
February 10, 1999, 31,533,781 shares of our common stock were outstanding. This
number of shares outstanding includes shares owned by a trust on our behalf and
excludes 742,520 shares of treasury stock.
The following description of our common stock does not purport to be
complete. It does not give full effect to the provisions of statutory or common
law applicable to securities like our common stock. The description is qualified
in its entirety by reference to our certificate of incorporation and by-laws,
which have been incorporated by reference as exhibits to the registration
statement of which this prospectus is a part.
The amount of dividends we pay in the future will be reviewed periodically
by our Board of Directors in light of our earnings, financial condition and
capital and other cash requirements. It is the policy of our Board of Directors
that we retain an adequate portion of our earnings to support the growth of our
business. We cannot assure you that any dividends will be paid.
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Most of our operations are conducted through FSA and thus our ability to
pay dividends is dependent on FSA's financial condition, results of operations,
cash requirements and other related factors. FSA is also subject to restrictions
contained in the insurance laws and related regulations of New York and other
states.
We 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 who are not 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.
Our common stock is traded on the New York Stock Exchange under the symbol
"FSA". The transfer agent for our common stock is The Bank of New York.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
As may be specified in a prospectus supplement, we may issue stock
purchase contracts, including contracts obligating holders to purchase from us,
and us to sell to the holders, a specified number of shares of our common stock
at a future date or dates. The consideration per share of common stock may be
fixed at the time the stock purchase contracts are issued or may be determined
by a specific reference to a formula set forth in the stock purchase contracts.
The stock purchase contracts may be issued separately or as part of units
("stock purchase units") consisting of a stock purchase contract and debt
securities, preferred securities or debt obligations of third parties, including
U.S. Treasury securities, securing the holders' obligations to purchase our
common stock under the stock purchase contracts. The stock purchase contracts
may require us to make periodic payments to the holders of the stock purchase
units or vice versa, and such payments may be unsecured or prefunded on some
basis. The stock purchase contracts may require holders to secure their
obligations under the stock purchase contracts in a specified manner.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units and any applicable pledge
arrangement. The description in the prospectus supplement will not necessarily
be complete and will be qualified in its entirety by reference to the stock
purchase contracts, any securities comprising the stock purchase units, and, if
applicable, collateral arrangements and depositary arrangements, relating to
those stock purchase contracts or stock purchase units.
PLAN OF DISTRIBUTION
We may sell the securities to one or more underwriters for a public
offering by them. We may also sell securities to investors directly or through
agents or dealers. The supplemental prospectus will include the names of any
underwriters, agents or dealers to be used in the distribution.
The securities may be offered and sold at a fixed price or prices, which
may be changed from time to time. They may also be offered and sold from time to
time at market prices prevailing at the time of sale, at prices related to these
prevailing market prices or at negotiated prices. We may also, from time to
time, authorize underwriters acting as our agents to offer and sell the
securities. A prospectus supplement will include the terms of these
arrangements. If securities are sold through an underwritten offering, we will
execute an underwriting agreement with an underwriter or underwriters. The
prospectus supplement will include the names of the specific managing
underwriter or underwriters and other underwriters, and the amount of securities
to be underwritten by those underwriters. The prospectus supplement will also
have the terms of the transaction, including commissions, discounts and any
other compensation of the underwriters and dealers. The underwriters will use
this prospectus and the prospectus supplement to sell the securities. The
underwriting agreement will provide that the obligations of the underwriters are
subject to specified conditions precedent and that the underwriters will be
obligated to purchase all the securities if any are purchased.
In connection with the sale of securities, underwriters may be considered
to have received compensation from us in the form of underwriting discounts or
commissions. They may also receive
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commissions from purchasers of securities for whom they may act as agent.
Underwriters may sell securities to or through dealers. These dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters, and they may also receive commissions from the purchasers for
whom they may act as agent.
The prospectus supplement will set forth any underwriting compensation
paid by us to underwriters or agents in connection with the offering of
securities, as well as any discounts, concessions or commissions allowed by
underwriters to participating dealers. Underwriters, dealers and agents
participating in the distribution of the securities may be deemed to be
underwriters under the Securities Act. Also 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 us to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement by us for
various expenses.
If we use a dealer in the sale of the securities, we will sell the
securities to the dealer, as principal. The dealer may then resell these
securities to the public at varying prices to be determined by the dealer at the
time of resale. The prospectus supplement will name these dealers and the terms
of these arrangements.
We may offer and sell the securities directly to institutional investors
or others. These parties may be deemed to be underwriters under the Securities
Act with respect to their resales. The prospectus supplement will include the
terms of these transactions.
The securities may or may not be listed on a national securities exchange
or a foreign securities exchange. The securities may 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, us and our subsidiaries in the
ordinary course of business.
LEGAL MATTERS
Certain legal matters with respect to the legality of the securities will
be passed upon for us by Bruce E. Stern, Esq., our General Counsel, and for any
underwriters or agents by counsel to be named in the prospectus supplement.
EXPERTS
The consolidated financial statements and the related financial statement
schedule of Financial Security Assurance Holdings Ltd. and Subsidiaries included
or incorporated by reference in our Annual Report on Form 10-K for the year
ended December 31, 1997 (including the consolidated financial statements of
Finacial Security Assurance Inc. and Subsidiaries included as an exhibit
thereto), incorporated by reference in this prospectus, have been incorporated
by reference herein in reliance on the reports of PricewaterhouseCoopers LLP,
given on the authority of that firm as experts in accounting and auditing and
incorporated herein by reference.
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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:
Registration......................... $ 63,940
Trustee Fees ........................ 7,500
Printing ............................ 30,000
Accounting Fees ..................... 30,000
Legal Fees .......................... 80,000
Rating Agency Fees .................. 60,000
Miscellaneous........................ 2,000
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$273,440
Item 15. Indemnification of Officers and Directors.
Pursuant to the New York Business Corporation Law (the "NYBCL"), we have
the power to indemnify certain persons, including our officers and directors,
under stated circumstances and subject to certain limitations in connection with
services performed in good faith for us.
Under our by-laws, 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 our director or officer, or served
any other corporation or entity of any type or kind, domestic or foreign, in any
capacity, at our request, shall be indemnified against judgments, fines, amounts
paid in settlement and reasonable expenses, unless (a) 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 (b) 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 NYBCL is not exclusive of any other
rights to which a director or officer may be entitled, whether contained in the
certificate of incorporation or by-laws or, when authorized by the certificate
of incorporation or the by-laws, 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 were
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.
We maintain directors' and officers' liability insurance which insures
against liabilities that our directors or officers may incur in such capacities.
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Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
1.1 Form of Underwriting Agreement.*
3.1 Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3.1 to the registrant's Annual Report on Form 10-K for the
year ended December 31, 1994).
3.1(A) Certificate of Amendment of the Amended and Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3.1(A) to the
registrant's Registration Statement on Form S-1 (No. 33-70230), as
such Registration Statement has been amended).
3.2 Amended and Restated By-Laws, as amended and restated on February
14, 1996 (incorporated by reference to Exhibit 5 to registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996).
4.1 Amended and Restated Trust Indenture dated as of February 24, 1999,
between the registrant and First Union National Bank, as Trustee.
4.2 Form of Subordinated Indenture.
4.3 Form of senior debt security (contained in Exhibit 4.1).
4.4 Form of subordinated debt security (contained in Exhibit 4.2).
4.5 Form of Purchase Contract Agreement (including as Exhibit A thereto
the Form of the Security Certificate).*
5.1 Opinion of Bruce E. Stern, Esq.
12.1 Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Bruce E. Stern, Esq. (contained in Exhibit 5.1).
24.1 Power of Attorney.
25.1 Statement of Eligibility and Qualification on Form T-1 under the
Trust Indenture Act of 1939, as amended, of the trustee under the
Amended and Restated Trust Indenture filed as Exhibit 4.1 to this
registration statement.
25.2 Statement of Eligibility and Qualification on Form T-1 under the
Trust Indenture Act of 1939, as amended, of the trustee under the
Subordinated Indenture filed as Exhibit 4.2 to this registration
statement.*
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* 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:
(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 of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the SEC 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;
18
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with the SEC 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.
(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) 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.
(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.
19
<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 March 10, 1999.
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:
Signature Title Date
--------- ----- ----
* Chairman of the Board, Chief March 10, 1999
- ----------------- Executive Officer and Director
Robert P. Cochran (principal executive officer)
* President and Director March 10, 1999
- -----------------
Roger K. Taylor
* Executive Vice President and March 10, 1999
- ----------------- Director
Sean W. McCarthy
* Chief Financial Officer March 10, 1999
- ----------------- (principal financial officer)
John A. Harrison
* Controller March 10, 1999
- ----------------- (principal accounting officer)
Jeffrey S. Joseph
* Vice Chairman of the Board March 10, 1999
- ----------------- and Director
John J. Byrne
* Director March 10, 1999
- -----------------
Robert N. Downey
* Director March 10, 1999
- -----------------
Anthony M. Frank
* Director March 10, 1999
- -----------------
Fudeji Hama
20
<PAGE>
Signature Title Date
* Director March 10, 1999
- ------------------
K. Thomas Kemp
* Director March 10, 1999
- ------------------
David O. Maxwell
* Director March 10, 1999
- ------------------
James M. Osterhoff
* Director March 10, 1999
- ------------------
James H. Ozanne
* Director March 10, 1999
- ------------------
Richard A. Post
* Director March 10, 1999
- ------------------
Howard M. Zelikow
* 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 Stern
----------------------
Bruce E. Stern
Attorney-in-Fact
21
Exhibit 4.1
================================================================================
AMENDED AND RESTATED TRUST INDENTURE
between
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
and
FIRST UNION NATIONAL BANK,
as Trustee
Dated as of February 24, 1999
================================================================================
<PAGE>
CROSS REFERENCE SHEET*
Between provisions of the Trust Indenture Act of 1939 and the
Amended and Restated Indenture dated as of February 24, 1999, between Financial
Security Assurance Holdings Ltd. and First Union National Bank, as Trustee:
- --------------------------------------------------------------------------------
Section of the Act Section of Indenture
- --------------------------------------------------------------------------------
310(a) 6.09
- --------------------------------------------------------------------------------
310(b) 6.08, 6.10
- --------------------------------------------------------------------------------
310(c) Inapplicable
- --------------------------------------------------------------------------------
311(a) 6.13
- --------------------------------------------------------------------------------
311(b) 6.13
- --------------------------------------------------------------------------------
311(c) Inapplicable
- --------------------------------------------------------------------------------
312(a) 4.01
- --------------------------------------------------------------------------------
312(b) 4.02(b)
- --------------------------------------------------------------------------------
312(c) 4.02(c)
- --------------------------------------------------------------------------------
313(a) 4.04(a)
- --------------------------------------------------------------------------------
313(b) 4.04(b)
- --------------------------------------------------------------------------------
313(c) 4.04(b)
- --------------------------------------------------------------------------------
313(d) 4.04(c)
- --------------------------------------------------------------------------------
314(a) 4.03, 3.05
- --------------------------------------------------------------------------------
314(b) Inapplicable
- --------------------------------------------------------------------------------
314(c) 11.05
- --------------------------------------------------------------------------------
314(d) Inapplicable
- --------------------------------------------------------------------------------
314(e) 11.05
- --------------------------------------------------------------------------------
314(f) Inapplicable
- --------------------------------------------------------------------------------
315(a) 6.01
- --------------------------------------------------------------------------------
315(b) 5.11
- --------------------------------------------------------------------------------
315(c) 6.01
- --------------------------------------------------------------------------------
- ----------
* This Cross Reference Sheet is not part of the Indenture.
<PAGE>
- --------------------------------------------------------------------------------
Section of the Act Section of Indenture
- --------------------------------------------------------------------------------
315(d) 6.01
- --------------------------------------------------------------------------------
315(e) 5.12
- --------------------------------------------------------------------------------
316(a) 5.09, 7.04
- --------------------------------------------------------------------------------
316(b) 5.07
- --------------------------------------------------------------------------------
316(c) 7.02
- --------------------------------------------------------------------------------
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..........................................6
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................................................15
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................................................19
SECTION 3.04. Paying Agents.................................................19
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
i
<PAGE>
Page
----
SECTION 3.08. Corporate Existence...........................................22
SECTION 3.09. Waiver of Certain Covenants...................................22
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........................................22
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 Securityholders
on Event of Default
SECTION 5.01. Event of Default Defined; Acceleration of
Maturity; Waiver of Default............................26
SECTION 5.02. Collection of Indebtedness by Trustee;
Trustee May Prove Debt.................................31
SECTION 5.03. Application of Proceeds.......................................34
SECTION 5.04. Suits for Enforcement.........................................35
SECTION 5.05. Restoration of Rights on Abandonment of
Proceedings............................................35
SECTION 5.06. Limitations on Suits by Debt
Securityholders........................................36
SECTION 5.07. Unconditional Right of Debt Securityholders
to Institute Certain Suits.............................36
SECTION 5.08. Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default.........................37
SECTION 5.09. Control by Debt Securityholders...............................37
SECTION 5.10. Waiver of Past Defaults.......................................38
SECTION 5.11. Trustee to Give Notice of Default, but May
Withhold in Certain Circumstances......................39
SECTION 5.12. Right of Court to Require Filing of
Undertaking to Pay Costs...............................39
ii
<PAGE>
Page
----
ARTICLE VI
Concerning the Trustee
SECTION 6.01. Duties and Responsibilities of the Trustee;
During Default; Prior to Default..................40
SECTION 6.02. Certain Rights of the Trustee.................................41
SECTION 6.03. Trustee Not Responsible for Recitals,
Disposition of Debt Securities or
Application of Proceeds Thereof........................43
SECTION 6.04. Trustee and Agents May Hold Debt Securities;
Collections, Etc.......................................43
SECTION 6.05. Monies Held by Trustee........................................43
SECTION 6.06. Compensation and Indemnification of Trustee
and Its Prior Claim....................................44
SECTION 6.07. Right of Trustee to Rely on Officers'
Certificate, Etc.......................................44
SECTION 6.08. Qualification of Trustee; Conflicting
Interests..............................................45
SECTION 6.09. Persons Eligible for Appointment as
Trustee................................................45
SECTION 6.10. Resignation and Removal; Appointment of
Successor Trustee......................................45
SECTION 6.11. Acceptance of Appointment by Successor
Trustee................................................47
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business of Trustee......................49
SECTION 6.13. Preferential Collection of Claims Against
the Issuer.............................................49
ARTICLE VII
Concerning the Debt Securityholders
SECTION 7.01. Evidence of Action Taken by Debt
Securityholders........................................50
SECTION 7.02. Proof of Execution of Instruments And of
Holding of Debt Securities.............................50
SECTION 7.03. Holders to Be Treated as Owners...............................50
SECTION 7.04. Debt Securities Owned by Issuer Deemed Not
Outstanding............................................51
iii
<PAGE>
Page
----
SECTION 7.05. Right of Revocation of Action Taken...........................52
ARTICLE VIII
Supplemental Indentures
SECTION 8.01. Supplemental Indentures Without Consent of
Debt Securityholders...................................52
SECTION 8.02. Supplemental Indentures with Consent of Debt
Securityholders........................................54
SECTION 8.03. Effect of Supplemental Indenture..............................55
SECTION 8.04. Documents to Be Given to Trustee..............................56
SECTION 8.05. Notation on Debt Securities in Respect of
Supplemental Indentures................................56
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
SECTION 9.01. Covenant Not to Merge, Consolidate, Sell or
Convey Property Except under Certain
Conditions.............................................56
SECTION 9.02. Successor Corporation Substituted.............................57
SECTION 9.03. Opinion of Counsel to Trustee.................................58
ARTICLE X
Satisfaction and Discharge of Indenture;
Unclaimed Monies
SECTION 10.01. Satisfaction and Discharge of Indenture.......................58
SECTION 10.02. Application by Trustee of Funds Deposited
for Payment of Debt Securities.........................59
SECTION 10.03. Repayment of Monies Held by Paying
Agent..................................................60
SECTION 10.04. Return of Monies Held by Trustee and Paying
Agent Unclaimed for Three Years........................60
iv
<PAGE>
Page
----
ARTICLE XI
Miscellaneous Provisions
SECTION 11.01. Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from
Individual Liability...................................60
SECTION 11.02. Provisions of Indenture for the Sole Benefit
of Parties and Debt Securityholders....................61
SECTION 11.03. Successors and Assigns of Issuer Bound by
Indenture..............................................61
SECTION 11.04. Notices and Demands on Issuer, Trustee and
Debt Securityholders...................................61
SECTION 11.05. Officers' Certificate and Opinions of
Counsel; Statements to Be Contained
Therein................................................62
SECTION 11.06. Payments Due on Saturdays, Sundays and
Holidays...............................................63
SECTION 11.07. Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939............................64
SECTION 11.08. New York Law to Govern........................................64
SECTION 11.09. Counterparts..................................................64
SECTION 11.10. Effect of Headings............................................64
ARTICLE XII
Redemption of Debt Securities and Sinking Funds
SECTION 12.01. Applicability of Article......................................64
SECTION 12.02. Notice of Redemption; Partial
Redemptions............................................64
SECTION 12.03. Payment of Debt Securities Called for
Redemption.............................................66
SECTION 12.04. Exclusion of Certain Debt Securities from
Eligibility for Selection for
Redemption.............................................67
SECTION 12.05. Mandatory and Optional Sinking Funds..........................67
v
<PAGE>
Page
----
ARTICLE XIII
Defeasance and Covenant Defeasance
SECTION 13.01. Applicability of Article; Issuer's Option to
Effect Defeasance or Covenant
Defeasance.............................................71
SECTION 13.02. Defeasance and Discharge......................................71
SECTION 13.03. Covenant Defeasance...........................................72
SECTION 13.04. Conditions to Defeasance or Covenant
Defeasance.............................................72
SECTION 13.05. Deposited Monies and U.S. Government
Obligations to Be Held in Trust; Other
Miscellaneous Provisions...............................75
SECTION 13.06. Reinstatement.................................................75
Exhibit 1
vi
<PAGE>
AMENDED AND RESTATED TRUST INDENTURE, dated as of
February 24, 1999 between Financial Security Assurance
Holdings Ltd., a New York corporation (the "Issuer"), and
First Union National Bank, a national banking association
(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 230 S. Tryon St., Charlotte, NC 28288.
"Debt Security" or "Debt Securities" 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.
"Dollars" shall mean United States Dollars.
<PAGE>
3
"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 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.
"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
<PAGE>
4
declaration of acceleration of the maturity thereof pursuant to Section 5.01.
"Outstanding", 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 of
the date of such determination upon a declaration of acceleration of the
maturity thereof pursuant to Section 5.01.
<PAGE>
5
"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.
"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.
<PAGE>
6
"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
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
<PAGE>
7
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.
FIRST UNION NATIONAL BANK, 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, 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;
<PAGE>
8
(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;
(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.
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9
(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) if the amount of payments of principal of (or premium, if any)
or interest, if any, on the Debt Securities of the series may be
determined by reference to an index, formula or other method, including,
without limitation, such method based on (i) currency, currencies or
currency units other than that in which the Debt Securities of such series
are payable, (ii) changes in the price of one or more other securities or
groups or indices of securities or (iii) changes in the prices of one or
more commodities or groups or indices of commodities or any combination of
the foregoing, the manner in which such amounts shall be determined and
any commodities, currencies, currency units or indices, value, rate or
price relevant to such determination;
(14) the application, if any, of Section 13.02 or Section 13.03 to
the Debt Securities of any series;
(15) 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;
(16) 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;
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture); and
(18) any trustees, authenticating or paying agents, transfer agents
or registrars or any other agents with respect to the Debt Securities of
such series.
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10
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:
(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
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11
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 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
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12
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.
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
<PAGE>
13
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 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
<PAGE>
14
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 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
<PAGE>
15
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 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
<PAGE>
16
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 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.
<PAGE>
17
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."
(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.
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(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 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
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19
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 40 Broad Street, Suite 550, New York, NY
10004, 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
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20
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.
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.
<PAGE>
21
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 May 1 in each year (beginning with May 1, 1999) a
written statement, signed by two of its officers (one of whom shall be the
principal executive officer, principal financial officer or principal accounting
officer of the Issuer) as to their knowledge of the Issuer's compliance with all
conditions and covenants under this Indenture (such compliance to be determined
without regard to any period of grace or requirement of notice under this
Indenture) and 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. This written statement need not comply with
Section 11.05.
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 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;
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22
(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 in
aggregate principal amount 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.
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
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23
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 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
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24
(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 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
<PAGE>
25
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;
(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.
<PAGE>
26
SECTION 4.04. Reports by the Trustee. (a) Within 60 days after May 1
of each year (beginning with May 1, 1999) the Trustee shall transmit to the Debt
Securityholders, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act of 1939, a brief report dated as of such May 1 if
required by Section 313(a) of the Trust Indenture Act of 1939.
(b) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act of 1939.
(c) 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
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27
(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 10 days after written notice thereof shall have been given by
registered or certified mail, return receipt
<PAGE>
28
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
(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. 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) or clause (i) above (unless otherwise 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)
occurs and is continuing, then, and in each and every such case, unless
<PAGE>
29
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. 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 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
<PAGE>
30
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 (1) 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, (2) 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) or clause (i) above
(unless otherwise 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), 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 (3) 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), (g) and (h), 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.
<PAGE>
31
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 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
<PAGE>
32
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 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,
<PAGE>
33
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
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
<PAGE>
34
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 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
<PAGE>
35
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
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
<PAGE>
36
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 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
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37
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 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
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38
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 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)) or in clause (i) of
Section 5.01 (unless otherwise 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) 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
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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 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
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40
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) or
under clause (i) of Section 5.01 (unless otherwise 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), 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.
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.
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41
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 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.
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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 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
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43
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; 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
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44
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.
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
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45
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 taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 6.08. Qualification of Trustee; Conflicting Interests. If
the Trustee has or shall acquire a conflicting interest within the meaning of
the Trust Indenture Act of 1939, the Trustee shall, if so required by the Trust
Indenture Act of 1939, either eliminate such conflicting interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act of 1939 and this 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. The Issuer may not, nor may any Person
directly or indirectly controlling, controlled by, or under common control with
the Issuer, serve as Trustee. In
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46
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
successor trustee, provided that for purposes of this Section 6.10, a court in
Mecklenburg County, North Carolina, shall be considered a court of competent
jurisdiction. 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
310(b) of the Trust Indenture Act of 1939 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
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(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.
(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.
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48
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 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
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successor trustee shall be qualified under the provisions of Section 310(b) of
the Trust Indenture Act of 1939 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 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
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trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13. Preferential Collection of Claims Against the Issuer.
If and when the Trustee shall be or become a creditor of the Issuer (or any
other obligor upon the Debt Securities), the Trustee shall be subject to the
provisions of Section 311 of the Trust Indenture Act of 1939. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the Trust
Indenture Act of 1939 to the extent provided therein.
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 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.
Unless the Issuer determines otherwise, the record date for purposes
of determining the identity of Debt Securityholders of any series entitled to
consent to any action referred to in Section 7.01 shall be 30 days prior to the
first solicitation of such consent. After such record
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date, notwithstanding any other provisions hereof, with respect to Debt
Securities of any series, only Debt Securityholders of Debt Securities of such
series of record on such record date shall be entitled to so give such consent
or revoke such consent.
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 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
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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
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
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53
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 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;
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(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 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
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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 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
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56
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. 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
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57
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
(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,
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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.
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
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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 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
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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 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.
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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.
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
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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 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
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compliance with a condition or covenant provided for in this Indenture (other
than pursuant to Section 3.05) 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 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.
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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 the duties imposed by, or with another
provision (an "incorporated provision") included in this Indenture by operation
of, Sections 310 to 318, inclusive, of the Trust Indenture Act of 1939, such
imposed duties or incorporated provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act of 1939
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or excluded, as the case may be.
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.
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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.
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.
<PAGE>
66
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 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
<PAGE>
67
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 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.
<PAGE>
68
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.
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.
<PAGE>
69
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 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
<PAGE>
70
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 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
<PAGE>
71
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 Debt Securities of a series under
Section 13.02 or (b) covenant defeasance of the Debt 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 Debt 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
<PAGE>
72
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
6.06 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, if any, 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 and Section 3.07 (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
<PAGE>
73
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
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
<PAGE>
74
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) Such defeasance or covenant defeasance shall not (i) cause the
Trustee for the Debt Securities to have a conflicting interest for
purposes of the Trust Indenture Act of 1939 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>
75
(f) In the case of an election under Section 13.03, 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>
76
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>
77
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the date first written above.
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By: /s/ John A. Harrison
------------------------------------
Name: John A. Harrison
Title: Managing Director
[CORPORATE SEAL]
Attest:
By: /s/ Bruce E. Stern
--------------------------------
Secretary
FIRST UNION NATIONAL BANK
By: /s/ Shawn K. Bednasek
-----------------------------------
Name: Shawn K. Bednasek
Title: Vice President
[CORPORATE SEAL]
Attest:
By: /s/ Terry Baker
---------------------------------
<PAGE>
Exhibit 1
[FORM OF FACE OF DEBT SECURITY]
This is a Registered Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of Cede & Co., a nominee
of Depository Trust Company, a New York corporation ("DTC"). 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 DTC to another nominee of DTC or by
a nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee of
DTC to a successor to DTC or to a nominee of such successor to DTC. Unless this
Registered Global Security is presented by an authorized representative of DTC
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 DTC or such other name
as requested by an authorized representative of DTC and, in the case of any
payment, such payment is made to DTC or DTC'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, Cede & Co., has an interest herein.
No.
Cusip No.
Debt Securities ,
$ principal amount each
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% Debt Security due 2098
Financial Security Assurance Holdings Ltd., a New York
corporation (the "Issuer"), for value received, hereby promises to pay to Cede &
Co. 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
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,
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 Debt Security from the , as the
case may be, next preceding the date of this Debt Security 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
<PAGE>
2
this Debt Security, or unless no interest has been paid on these Debt
Securities, 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 and
provided further that if the Issuer shall default in the payment of interest due
on such , then this Debt Security shall
bear interest from the next preceding
, to which interest has been paid or,
if no interest has been paid on these Debt Securities, from . The
interest so payable on any will, subject to certain exceptions provided
in the Indenture referred to on the reverse hereof, be paid to the person in
whose name this Debt Security is registered at the close of business on
the , as the case may be, next preceding .
Reference is made to the further provisions of this Debt Security
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 Debt Security 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
----------------------------------
Name:
Title:
by
----------------------------------
Name:
Title:
<PAGE>
3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated herein
referred to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK, as
Trustee,
by
----------------------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF DEBT SECURITY]
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% Debt Security due
This Debt Security is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (hereinafter
called the "Debt Securities") of the series hereinafter specified, all issued or
to be issued under and pursuant to the Amended and Restated Trust Indenture
dated as of February 24, 1999 (herein called the "Indenture"), duly executed and
delivered by the Issuer to First Union National Bank, as 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 Debt Securities. The Debt Securities 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 Debt Security is one of a
series designated as the % Debt Securities due of the Issuer,
limited in aggregate principal amount to $ .
In case an Event of Default, as defined in the Indenture, with
respect to the % Debt Securities due 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, (a) without the consent of the Holders, to execute certain supplemental
indentures and (b) with the consent of the Holders of more than 50% in aggregate
principal amount of the Debt Securities 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 Debt Securities of each such series;
<PAGE>
2
provided, however, that no such supplemental indenture shall (i) extend the
final maturity of any Debt Security, 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 Debt Security
so affected or (ii) reduce the aforesaid percentage of Debt Securities, the
consent of the Holders of which is required for any such supplemental indenture,
without the consent of the Holder of each Debt Security affected. It is also
provided in the Indenture that, with respect to certain defaults or Events of
Default regarding the Debt Securities of any series, prior to any declaration
accelerating the maturity of such Debt Securities, the Holders of a majority in
aggregate principal amount Outstanding of the Debt Securities of such series
(or, in the case of certain defaults or Events of Default, all or certain series
of the Debt Securities) may on behalf of the Holders of all the Debt Securities
of such series (or all or certain series of the Debt Securities, 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 Debt Securities. Any
such consent or waiver by the Holder of this Debt Security (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Debt Security and any Debt Securities
which may be issued in exchange or substitution herefor, irrespective of whether
or not any notation thereof is made upon this Debt Security or such other Debt
Securities.
No reference herein to the Indenture and no provision of this Debt
Security 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 Debt Security in the manner, at the respective times, at the
rate and in the coin or currency herein prescribed.
The Debt Securities are issuable in registered form without coupons
in denominations of $ and any multiples 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 Debt Securities may be exchanged for a like aggregate
<PAGE>
3
principal amount of Debt Securities of other authorized denominations.
The Debt Securities may be redeemed at the option of the Issuer
without premium or penalty, as a whole, or from time to time in part, on any
date on or after and prior to maturity, upon mailing a notice of such
redemption not less than 20 nor more than 60 days prior to the date fixed for
redemption to the Holders of Debt Securities 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 Debt
Security at the office or agency of the Issuer in the Borough of Manhattan, The
City of New York, a new Debt Security or Debt Securities 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 Debt Security (whether or not this Debt Security 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
Debt Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
<PAGE>
4
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.
Exhibit 4.2
================================================================================
SUBORDINATED INDENTURE
between
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
and
____________________________,
as Trustee
Dated as of _______ __,_____
================================================================================
<PAGE>
CROSS REFERENCE SHEET*
Between provisions of the Trust Indenture Act of 1939 and the
Subordinated Indenture dated as of _______ __,____, between Financial Security
Assurance Holdings Ltd. and ____________________, as Trustee:
- --------------------------------------------------------------------------------
Section of the Act Section of Indenture
- --------------------------------------------------------------------------------
310(a) 6.09
- --------------------------------------------------------------------------------
310(b) 6.08, 6.10
- --------------------------------------------------------------------------------
310(c) Inapplicable
- --------------------------------------------------------------------------------
311(a) 6.13
- --------------------------------------------------------------------------------
311(b) 6.13
- --------------------------------------------------------------------------------
311(c) Inapplicable
- --------------------------------------------------------------------------------
312(a) 4.01
- --------------------------------------------------------------------------------
312(b) 4.02(b)
- --------------------------------------------------------------------------------
312(c) 4.02(c)
- --------------------------------------------------------------------------------
313(a) 4.04(a)
- --------------------------------------------------------------------------------
313(b) 4.04(b)
- --------------------------------------------------------------------------------
313(c) 4.04(b)
- --------------------------------------------------------------------------------
313(d) 4.04(c)
- --------------------------------------------------------------------------------
314(a) 4.03, 3.05
- --------------------------------------------------------------------------------
314(b) Inapplicable
- --------------------------------------------------------------------------------
314(c) 11.05
- --------------------------------------------------------------------------------
314(d) Inapplicable
- --------------------------------------------------------------------------------
314(e) 11.05
- --------------------------------------------------------------------------------
314(f) Inapplicable
- --------------------------------------------------------------------------------
315(a) 6.01
- --------------------------------------------------------------------------------
315(b) 5.11
- --------------------------------------------------------------------------------
315(c) 6.01
- --------------------------------------------------------------------------------
- --------
* This Cross Reference Sheet is not part of the Indenture.
<PAGE>
- --------------------------------------------------------------------------------
Section of the Act Section of Indenture
- --------------------------------------------------------------------------------
315(d) 6.01
- --------------------------------------------------------------------------------
315(e) 5.12
- --------------------------------------------------------------------------------
316(a) 5.09, 7.04
- --------------------------------------------------------------------------------
316(b) 5.07
- --------------------------------------------------------------------------------
316(c) 7.02
- --------------------------------------------------------------------------------
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...............................12
SECTION 2.06. Certificate of Authentication..............................12
SECTION 2.07. Denomination and Date of Debt
Securities; Payments of Interest.................13
SECTION 2.08. Registration, Transfer and Exchange........................14
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and
Stolen Debt Securities...........................15
SECTION 2.10. Cancelation of Debt Securities;
Destruction Thereof........................................16
SECTION 2.11. Temporary Debt Securities..................................17
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..................................20
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. [Reserved].................................................22
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
i
<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 Securityholders
on Event of Default
SECTION 5.01. Event of Default Defined; Acceleration
of Maturity; Waiver of Default...................27
SECTION 5.02. Collection of Indebtedness by Trustee;
Trustee May Prove Debt...........................31
SECTION 5.03. Application of Proceeds....................................34
SECTION 5.04. Suits for Enforcement......................................36
SECTION 5.05. Restoration of Rights on Abandonment
of Proceedings...................................37
SECTION 5.06. Limitations on Suits by Debt
Securityholders..................................36
SECTION 5.07. Unconditional Right of Debt Securityholders to
Institute Certain Suits..........................37
SECTION 5.08. Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default................37
SECTION 5.09. Control by Debt Securityholders............................38
SECTION 5.10. Waiver of Past Defaults....................................39
SECTION 5.11. Trustee to Give Notice of Default, but May Withhold
in Certain Circumstances.........................39
SECTION 5.12. Right of Court to Require Filing
of Undertaking to Pay Costs......................40
ii
<PAGE>
Page
ARTICLE VI
Concerning the Trustee
SECTION 6.01. Duties and Responsibilities of the
Trustee; During Default; Prior
to Default.......................................41
SECTION 6.02. Certain Rights of the Trustee..............................42
SECTION 6.03. Trustee Not Responsible for Recitals,
Disposition of Debt Securities or
Application of Proceeds Thereof..................44
SECTION 6.04. Trustee and Agents May Hold Debt
Securities; Collections, Etc.....................44
SECTION 6.05. Monies Held by Trustee.....................................44
SECTION 6.06. Compensation and Indemnification of
Trustee and Its Prior Claim......................44
SECTION 6.07. Right of Trustee to Rely on Officers'
Certificate, Etc.................................44
SECTION 6.08. Qualification of Trustee; Conflicting
Interests........................................45
SECTION 6.09. Persons Eligible for Appointment as
Trustee..........................................46
SECTION 6.10. Resignation and Removal; Appointment
of Successor Trustee.............................46
SECTION 6.11. Acceptance of Appointment by Successor
Trustee..........................................48
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business of Trustee................49
SECTION 6.13. Preferential Collection of Claims
Against the Issuer...............................50
ARTICLE VII
Concerning the Debt Securityholders
SECTION 7.01. Evidence of Action Taken by Debt
Securityholders..................................50
SECTION 7.02. Proof of Execution of Instruments And
of Holding of Debt Securities....................51
SECTION 7.03. Holders to Be Treated as Owners............................51
SECTION 7.04. Debt Securities Owned by Issuer Deemed
Not Outstanding..................................51
SECTION 7.05. Right of Revocation of Action Taken........................52
iii
<PAGE>
Page
ARTICLE VIII
Supplemental Indentures
SECTION 8.01. Supplemental Indentures Without Consent
of Debt Securityholders..........................53
SECTION 8.02. Supplemental Indentures with
Consent of Debt Securityholders. ................55
SECTION 8.03. Effect of Supplemental Indenture. .........................56
SECTION 8.04. Documents to Be Given to Trustee...........................56
SECTION 8.05. Notation on Debt Securities in Respect of
Supplemental Indentures....................................57
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
SECTION 9.01. Covenant Not to Merge, Consolidate, Sell
or Convey Property Except under Certain
Conditions.......................................57
SECTION 9.02. Successor Corporation Substituted..........................58
SECTION 9.03. Opinion of Counsel to Trustee..............................59
ARTICLE X
Satisfaction and Discharge of
Indenture; Unclaimed Monies
SECTION 10.01. Satisfaction and Discharge of Indenture....................59
SECTION 10.02. Application by Trustee of Funds
Deposited for Payment of Debt
Securities.......................................60
SECTION 10.03. Repayment of Monies Held by Paying Agent...................61
SECTION 10.04. Return of Monies Held by Trustee
and Paying Agent Unclaimed for Three
Years............................................61
ARTICLE XI
Miscellaneous Provisions
iv
<PAGE>
Page
SECTION 11.01. Incorporators, Stockholders, Officers
and Directors of Issuer Exempt
from Individual Liability........................61
SECTION 11.02. Provisions of Indenture for the
Sole Benefit of Parties and
Debt Securityholders.............................62
SECTION 11.03. Successors and Assigns of Issuer Bound
by Indenture.....................................62
SECTION 11.04. Notices and Demands on Issuer, Trustee
and Debt Securityholders.........................62
SECTION 11.05. Officers' Certificate and Opinions of
Counsel; Statements to Be Contained
Therein..........................................63
SECTION 11.06. Payments Due on Saturdays, Sundays and
Holidays.........................................64
SECTION 11.07. Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939......................64
SECTION 11.08. New York Law to Govern.....................................65
SECTION 11.09. Counterparts...............................................65
SECTION 11.10. Effect of Headings.........................................65
ARTICLE XII
Redemption of Debt Securities and Sinking Funds
SECTION 12.01. Applicability of Article...................................65
SECTION 12.02. Notice of Redemption; Partial Redemptions..................65
SECTION 12.03. Payment of Debt Securities Called for
Redemption.......................................67
SECTION 12.04. Exclusion of Certain Debt Securities
from Eligibility for Selection for
Redemption.......................................68
SECTION 12.05. Mandatory and Optional Sinking Funds.......................68
ARTICLE XIII
Defeasance and Covenant Defeasance
SECTION 13.01. Applicability of Article; Issuer's Option
to Effect Defeasance or Covenant
Defeasance.......................................72
SECTION 13.02. Defeasance and Discharge...................................72
SECTION 13.03. Covenant Defeasance........................................73
v
<PAGE>
Page
SECTION 13.04. Conditions to Defeasance or Covenant
Defeasance.......................................73
SECTION 13.05. Deposited Monies and U.S. Government
Obligations to Be Held in Trust; Other
Miscellaneous Provisions.........................76
SECTION 13.06. Reinstatement..............................................77
ARTICLE XIV
Subordination of Debt Securities
SECTION 14.01. Securities Subordinate to Senior Debt......................77
SECTION 14.02. Payment Over of Proceeds upon
Dissolution, etc.................................77
SECTION 14.03. Prior Payment to Senior Debt upon
Acceleration of Debt Securities..................79
SECTION 14.04. No Payment When Senior Debt in Default.....................80
SECTION 14.05. Payment Permitted If No Default............................81
SECTION 14.06. Subrogation to Rights of Holders of
Senior Debt......................................81
SECTION 14.07. Provisions Solely To Define Relative
Rights...........................................82
SECTION 14.08. Trustee To Effectuate Subordination........................82
SECTION 14.09. No Waiver of Subordination Provisions......................82
SECTION 14.10. Notice to Trustee..........................................82
SECTION 14.11. Reliance on Judicial Order or Certificate
of Liquidating Agent.............................83
SECTION 14.12. Trustee Not Fiduciary for Holders of Senior Debt
Trustee Not Fiduciary for Holders
of Senior Debt...................................83
SECTION 14.13. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights.................83
SECTION 14.14. Article Applicable to Paying Agents........................84
SECTION 14.15. Defeasance of this Article XIV.............................84
SECTION 14.16. Certain Conversions or Exchanges
Deemed Payment...................................84
Exhibit 1
vi
<PAGE>
1
SUBORDINATED INDENTURE, dated as of
_______ ___,_____, 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" 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.
"Dollars" shall mean United States Dollars.
<PAGE>
3
"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 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
(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", 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 of
the date of such determination upon a declaration of
<PAGE>
5
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 obligations are not
superior in right of payment to the Debt Securities or to the other Debt which
is pari passu with, or
<PAGE>
6
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
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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,
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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) if the amount of payments of principal of (or premium, if any)
or interest, if any, on the Debt Securities of the series may be
determined by reference to an index, formula or other method, including,
without limitation, such method based on (i) currency, currencies or
currency units other than that in which the Debt Securities of such series
are payable, (ii) changes in the price of one or more other securities or
groups or indices of securities or (iii) changes in the prices of one or
more commodities or groups or indices of commodities or any combination of
the foregoing, the manner in which such amounts
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10
shall be determined and any commodities, currencies, currency units or
indices, value, rate or price relevant to such determination;
(14) the application, if any, of Section 13.02 or Section 13.03 to
the Debt Securities of any series;
(15) 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;
(16) 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;
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture); and
(18) 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
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11
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:
(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 authenti cated 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
<PAGE>
12
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 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
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13
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.
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
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14
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 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
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15
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 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
<PAGE>
16
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 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.
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17
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 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
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18
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."
(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
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19
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 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
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20
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 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
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21
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.
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 notwith standing, 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 (one of whom shall be the
principal executive officer, principal financial officer or principal accounting
officer of the Issuer) as to their knowledge of the Issuer's compliance with all
conditions and covenants under this Indenture (such compliance to be determined
without regard to any period of grace or requirement of notice under this
Indenture) and stating that in the course of the performance of their duties as
officers of the Issuer they would normally have knowledge of any
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22
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. This written statement
need not comply with Section 11.05.
SECTION 3.06. [Reserved].
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 3.07 and 3.08, if before or after
the time for such compliance the Holders of at least a majority in aggregate
principal amount 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
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23
and the duties of 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 informa tion 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
Security holders 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
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25
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 pre scribe) 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
<PAGE>
26
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) Within 60 days after
_______ of each year (beginning with _________) the Trustee shall transmit to
the Debt Securityholders, in the manner and to the extent provided in Section
313(c) of the Trust Indenture Act of 1939, a brief report dated as of such
________ if required by Section 313(a) of the Trust Indenture Act of 1939.
(b) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act of 1939.
(c) 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.
<PAGE>
27
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 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
<PAGE>
28
(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 Debt Securities
(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 involun tary 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
<PAGE>
29
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) or
clause (i) above (unless otherwise 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) 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 Security holders), 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
<PAGE>
30
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, 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 (1) with
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31
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, (2) 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) or clause (i) above (unless otherwise 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), 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 (3) 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), (g) and (h), 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.
<PAGE>
32
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>
33
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>
34
(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 liquida tor, 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 predeces sor 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 compo
sition 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
<PAGE>
35
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
<PAGE>
36
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 Abandon ment 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 Security holders shall continue as
though no such proceedings had been taken.
<PAGE>
37
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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39
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)) or in clause (i) of
Section 5.01 (unless otherwise 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) 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
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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 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 Security holder 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) or
under clause (i) of Section 5.01 (unless otherwise provided in the supplemental
indenture or resolution of the Board of Directors under which such series of
Debt Securities is
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41
issued or in the form of Debt Security for such 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.
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 here under, 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 pro visions of this Indenture, and the Trustee shall
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42
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 correct ness 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 state ments, 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 ascer
taining 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 perform ance 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,
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43
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 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
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44
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; 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
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45
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.
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
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46
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 taken,
suffered or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 6.08. Qualification of Trustee; Conflicting Interests. If
the Trustee has or shall acquire a conflicting interest within the meaning of
the Trust Indenture Act of 1939, the Trustee shall, if so required by the Trust
Indenture Act of 1939, either eliminate such conflicting interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act of 1939 and this 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. The Issuer may not, nor may any Person
directly or indirectly controlling, controlled by, or under common control with
the Issuer, serve as Trustee. 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; Appoint ment 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
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47
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
310(b) of the Trust Indenture Act of 1939 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
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48
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 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
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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
appli cable 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 admini stration
of the trusts hereunder by more than one trustee, it being understood that
nothing herein or in such supple mental 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 310(b) of the Trust Indenture Act of 1939 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.
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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.
If and when the Trustee shall be or become a creditor of the Issuer (or any
other obligor upon the Debt Securities), the Trustee shall be subject to the
provisions of Section 311 of the Trust Indenture Act of 1939. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the Trust
Indenture Act of 1939 to the extent provided therein.
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51
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 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.
Unless the Issuer determines otherwise, the record date for purposes
of determining the identity of Debt Securityholders of any series entitled to
consent to any action referred to in Section 7.01 shall be 30 days prior to the
first solicitation of such consent. After such record date, notwithstanding any
other provisions hereof, with respect to Debt Securities of any series, only
Debt Securityholders of Debt Securities of such series of record on such record
date shall be entitled to so give such consent or revoke such consent.
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
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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 determina tion 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.
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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 substitu tion 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
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;
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(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 Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supple ment any provision
contained herein or in any supple mental 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;
(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
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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.
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
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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 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
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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. 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,
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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
(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
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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.
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 liquida tion 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
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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 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.
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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 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.
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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.
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
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63
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 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
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compliance with a condition or covenant provided for in this Indenture (other
than pursuant to Section 3.05) 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 repre sentations 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
representa tions 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.
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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 the duties imposed by, or with another
provision (an "incorporated provision") included in this Indenture by operation
of, Sections 310 to 318, inclusive, of the Trust Indenture Act of 1939, such
imposed duties or incorporated provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act of 1939
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or excluded, as the case may be.
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.
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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 redemp
tion 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.
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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 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
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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
redemp tion 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 thereof, at the expense of the Issuer, a new Debt Security
or Debt Securities of such series, of authorized denomina tions, 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.
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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.
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 satis fied 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.
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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
accept able 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 uncondition ally 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 redemp tion 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
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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 hypothe cated 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 redemp tion 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
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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 Debt Securities of a series under
Section 13.02 or (b) covenant defeasance of the Debt 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 Debt 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
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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
6.06 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, if any, 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 3.07 (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
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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 instrumental ity 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.
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(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 appli cable 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 for
purposes of the Trust Indenture Act of 1939 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.
(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
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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, 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 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
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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 recog nized 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.
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
herein after 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
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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, liquida tion, 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 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 distribu tion 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
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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 bank ruptcy, 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 concur rent 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 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
<PAGE>
80
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 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
<PAGE>
81
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 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
<PAGE>
82
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 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
<PAGE>
83
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, regard less 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 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
<PAGE>
84
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 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
<PAGE>
85
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
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 the date first written above.
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.,
by
---------------------------------
Authorized Officer
[CORPORATE SEAL]
Attest:
By
------------------------
Secretary
[TRUSTEE],
by
---------------------------------
[CORPORATE SEAL]
Attest:
By
------------------------
<PAGE>
Exhibit 1
[FORM OF FACE OF DEBT SECURITY]
This is a Registered Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of Cede & Co., a nominee
of Depository Trust Company, a New York corporation ("DTC"). 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 DTC to another nominee of DTC or by
a nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee of
DTC to a successor to DTC or to a nominee of such successor to DTC. Unless this
Registered Global Security is presented by an authorized representative of DTC
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 DTC or such other name
as requested by an authorized representative of DTC and, in the case of any
payment, such payment is made to DTC or DTC'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, Cede & Co., has an interest herein.
No.
Cusip No.
Debt Securities ,
$ principal amount each
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% Debt Security due 2098
Financial Security Assurance Holdings Ltd., a New York corporation
(the "Issuer"), for value received, hereby promises to pay to Cede & Co. 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
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, 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 Debt Security from the , as the case
may be, next preceding the date of this Debt Security 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
<PAGE>
2
this Debt Security, or unless no interest has been paid on these Debt
Securities, 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 and provided
further that if the Issuer shall default in the payment of interest due on such
, then this Debt Security shall bear
interest from the next preceding
, to which interest has been paid or,
if no interest has been paid on these Debt Securities, from .
The interest so payable on any will subject to certain exceptions provided
in the Indenture referred to on the reverse hereof, be paid to the person in
whose name this Debt Security is registered at the close of business on
the , as the case may be, next preceding .
Reference is made to the further provisions of this Debt Security
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 Debt Security 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
------------------------------
Name:
Title:
by
------------------------------
Name:
Title:
<PAGE>
3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated herein
referred to in the within-mentioned Indenture.
, as Trustee,
by
-----------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF DEBT SECURITY]
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
% Debt Security due
This Debt Security is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (hereinafter
called the "Debt Securities") of the series hereinafter specified, all issued or
to be issued under and pursuant to the Subordinated Indenture dated as of ,
(herein called the "Indenture"), duly executed and delivered by the Issuer
to , as 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 Debt
Securities. The Debt Securities 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 Debt Security is one of a series designated as
the % Debt Securities
due of the Issuer, limited in aggregate principal amount to $ .
In case an Event of Default, as defined in the Indenture, with
respect to the %
Debt Securities due 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 Debt Security 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 Debt Security is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Debt Security, 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, (a) without the consent of the Holders, to execute certain supplemental
indentures and (b) with the consent of the Holders of more than 50% in aggregate
principal amount of the Debt Securities 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 Debt Securities of each such series; provided,
however, that no such supplemental indenture shall (i) extend the final maturity
of any Debt Security, 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 Debt Security so
affected or (ii) reduce the aforesaid percentage of Debt Securities, the consent
of the Holders of which is required for any such supplemental indenture, without
the consent of the Holder of each Debt Security affected. It is also provided in
the Indenture that, with respect to certain defaults or Events of Default
regarding the Debt Securities of any series, prior to any declaration
accelerating the maturity of such Debt Securities, the Holders of a majority in
aggregate principal amount Outstanding of the Debt Securities of such series
(or, in the case of certain defaults or Events of Default, all or certain series
of the Debt Securities) may on behalf of the Holders of all the Debt Securities
of such series (or all or certain series of the Debt Securities, 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 Debt Securities. Any
such consent or waiver by the Holder of this Debt Security (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Debt Security and any Debt Securities
which may be issued in exchange or substitution herefor, irrespective of whether
or not any notation thereof is made upon this Debt Security or such other Debt
Securities.
No reference herein to the Indenture and no provision of this Debt
Security 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
<PAGE>
3
premium and interest on this Debt Security in the manner, at the respective
times, at the rate and in the coin or currency herein prescribed.
The Debt Securities are issuable in registered form without coupons
in denominations of $ and any multiples 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 Debt Securities may be exchanged for a like aggregate
principal amount of Debt Securities of other authorized denominations.
The Debt Securities may be redeemed at the option of the Issuer
without premium or penalty, as a whole, or from time to time in part, on any
date on or after and prior to maturity, upon mailing a notice of
such redemption not less than 20 nor more than 60 days prior to the date fixed
for redemption to the Holders of Debt Securities 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 Debt
Security at the office or agency of the Issuer in the Borough of Manhattan, The
City of New York, a new Debt Security or Debt Securities 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 Debt Security (whether or not this Debt Security shall be overdue
and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or
<PAGE>
4
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 Debt
Security, 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.
EXHIBIT 5.1
[LETTERHEAD OF FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.]
March 10, 1999
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 $230,000,000 in the aggregate of (i) debt securities representing
unsecured obligations of the Issuer (the "Senior Debt Securities") to be issued
pursuant to the Amended and Restated Trust Indenture (the "Indenture") dated as
of February 24, 1999, between the Issuer and First Union National Bank, as
trustee (the "Trustee") 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; (ii) shares of common stock of the Issuer, par value $.01 per
share ("Common Stock"); and (iii) contracts to purchase Common Stock ("Stock
Purchase Contracts").
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 Subordinated Indenture will be in substantially the
form filed as an exhibit to the Registration Statement and that the definitive
purchase contract agreement relating to the Stock Purchase Contracts (the
"Purchase Contract Agreement") will be in substantially the form to be filed as
an exhibit to an Issuer's Current Report on Form 8-K.
Based upon the foregoing, I am of the following opinion:
1. When 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
<PAGE>
2
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.
4. When the Purchase Contract Agreement has been duly authorized,
executed and delivered by the Issuer and the purchase contract agent, and
the Stock Purchase Contracts have been duly executed, countersigned,
issued, delivered and paid for as contemplated by the Registration
Statement and any prospectus supplement relating to the Stock Purchase
Contracts and in accordance with the Purchase Contract Agreement, assuming
the terms of such Stock Purchase Contracts 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 Stock Purchase Contracts 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.
The opinion expressed above is limited to the laws of the State of
New York, 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 Stern
Bruce E. Stern
Exhibit 12.1
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>
Nine Months
Ended
Year Ended December 31, September 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income taxes ($163,866) $78,290 $75,042 $109,771 $138,499 $116,747
Interest Expense 532 536 57 2,166 5,325 7,250
Portion of rental expense deemed to
be interest(1) 1,070 1,024 1,030 1,042 1,077 857
Earnings ($162,264) $79,850 $76,129 $112,979 $144,901 $124,854
Fixed Charges:
Interest Expense $532 $536 $57 $2,166 $5,325 $7,250
Portion of rental expense deemed to
be interest(1) 1,070 1,024 1,030 1,042 1,077 857
Fixed Charges(2) $1,602 $1,560 $1,087 $3,208 $6,402 $8,107
Ratio of Earnings to Fixed Charges N/M(3) 51.2 70.0 35.2 22.6 15.4
</TABLE>
(1) One third of rental expense is estimated to be representative of the
interest factor.
(2) The Company had no capitalized interest for the periods presented.
(3) The 1993 earnings to fixed charges ratio is not meaningful due to
significant loss incurred in that year.
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of Financial Security Assurance Holdings Ltd. on Form S-3, relating to the shelf
registration of $230,000,000 of debt securities, common stock and stock purchase
contracts, of:
1. Our report dated January 26, 1998 on our audits of the consolidated
balance sheets of Financial Security Assurance Holdings Ltd. and
Subsidiaries as of December 31, 1997 and 1996, and the related
consolidated statements of income, changes in shareholders' equity,
and cash flows for each of the three years in the period ended
December 31, 1997, which report is incorporated by reference in the
Annual Report on Form 10-K of Financial Security Assurance Holdings
Ltd. for the fiscal year ended December 31, 1997;
2. Our report dated January 26, 1998 on our audits of the financial
statement schedule of Financial Security Assurance Holdings Ltd.,
which report is included in the Annual Report on Form 10-K for the
fiscal year ended December 31, 1997; and
3. Our report dated January 26, 1998 on our audits of the consolidated
balance sheets of Financial Security Assurance Inc. and Subsidiaries
as of December 31, 1997 and 1996, and the related consolidated
statements of income, changes in shareholders' equity, and cash
flows for each of the three years in the period ended December 31,
1997, which report is included as Exhibit 99 to the Annual Report on
Form 10-K of Financial Security Assurance Holdings Ltd. for the
fiscal year ended December 31, 1997.
We also consent to the reference to our Firm under the caption "Experts".
/s/ PricewaterhouseCoopers LLP
March 10, 1999
Exhibit 24.1
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 12th day of November, 1998.
/s/ John J. Byrne
- ---------------------
John J. Byrne Vice Chairman of the Board and Director
/s/ Robert P. Cochran
- ---------------------
Robert P. Cochran Chairman of the Board, Chief Executive Officer
and Director
/s/ Robert N. Downey
- ---------------------
Robert N. Downey Director
/s/ Anthony M. Frank
- ---------------------
Anthony M. Frank Director
/s/ Fudeji Hama
- ---------------------
Fudeji Hama Director
<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/ Richard A. Post
- ---------------------
Richard A. Post Director
/s/ Roger K. Taylor
- ---------------------
Roger K. Taylor President, 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
<PAGE>
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, the undersigned is a director and officer of the Company as set
forth opposite his name below.
NOW, THEREFORE, 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, the undersigned has duly executed this Power of
Attorney as of this 3rd day of March, 1999.
/s/ Sean W. McCarthy
- --------------------
Sean W. McCarthy Executive Vice President and Director
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM T-1
------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE TRUST INDENTURE ACT OF
1939, AS AMENDED, OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)_______
-------------------------
FIRST UNION NATIONAL BANK
(Exact name of trustee as specified in its charter)
United States National Bank 56-0900030
(State of incorporation if I.R.S. employer
not a national bank) identification no.)
First Union National Bank
230 South Tryon Street, 9th Floor
Charlotte, North Carolina 28288-1179
(Address of principal (Zip Code)
executive offices)
Same as above
(Name, address and telephone number, including
area code, of trustee's agent for service)
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
(Exact name of obligor as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
13-3261323
(I.R.S. employer identification no.)
Bruce E. Stern, Esquire
General Counsel and Secretary
Financial Security Assurance Holdings Ltd.
350 Park Avenue
New York, New York 10022
(212)826-01004
(Address, including zip code, of principal executive offices)
---------------------------------
US $ 230,000,000
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Debt Securities
(Title of the indenture securities)
-----------------------------------
<PAGE>
Item 1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Federal Reserve Bank of Richmond, VA Richmond, VA
Comptroller of the Currency Washington, D.C.
Securities and Exchange Commission
Division of Market Regulation Washington, D.C.
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with the obligor and underwriters.
If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.
None. Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to this Item 2, the
answer to said Item is based on incomplete information. Item 2 may, however, be
considered correct unless amended by an amendment to this Form T-1.
Items 3-15.
Because the obligor is not in default on any securities issued under
indentures under which the applicant is trustee, Items 3 through 15 are not
required herein.
Item 16. List of Exhibits.
All exhibits identified below are filed as a part of this statement of
eligibility.
*1. A copy of the Articles of Association of First Union National Bank as
now in effect, which contain the authority to commence business and a grant of
powers to exercise corporate trust powers.
*2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the Articles of Association.
3. A copy of the authorization of the trustee to exercise corporate trust
powers, if such authorization is not contained in the documents specified in
exhibits (1) or (2) above.
*4. A copy of the existing By-laws of First Union National Bank, or
instruments corresponding thereto.
5. Inapplicable.
6. The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939. Included on signature page of this Form T-1 Statement.
7. A copy of the latest report of condition of the trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
8. Inapplicable.
9. Inapplicable.
2
<PAGE>
- ----------
* Incorporated by reference to Exhibits bearing identical numbers in Item 16 of
the Form T-1 of First Union National Bank, filed as Exhibit 25.1 to Form S-4
Registration Statement of Unifi, Inc. filed with the Securities and Exchange
Commission on April 2, 1998 (Registration No. 333-49243).
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, First Union National Bank, a national association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Charlotte, and State of North Carolina, on the 23rd day of February, 1999.
FIRST UNION NATIONAL BANK
(trustee)
By: /s/ Shawn Bednasek
---------------------
Name: Shawn Bednasek
Title: Vice President
CONSENT OF TRUSTEE
Under section 321(b) of the Trust Indenture Act of 1939, as amended, and
in connection with the proposed issuance by Financial Security Assurance
Holdings Ltd. of its debt securities and common stock, First Union National Bank
as the trustee herein named, hereby consents that reports of examinations of
said Trustee by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
requests therefor.
FIRST UNION NATIONAL BANK
By: /s/ Shawn Bednasek
---------------------
Name: Shawn Bednasek
Title: Vice President
Dated: February 23, 1999.
4
<PAGE>
[LOGO]
Comptroller of the Currency
Administrator of National Banks
Washington, D.C. 20219
CERTIFICATE
I, Julie L. Williams, Acting Comptroller of the Currency, do hereby
certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "First Union National Bank," Charlotte, North Carolina, (Charter No.
000001) is a National Banking Association formed under the laws of the United
States and is authorized thereunder to transact the business of banking and
exercise Fiduciary Powers on the date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal
of office to be affixed to these
presents at the Treasury Department in
the City of Washington and District of
Columbia, this 26th day of August,
1998.
/s/ Julie L. Williams
---------------------
Acting Comptroller of the Currency
[SEAL OF THE COMPTROLLER
OF THE CURRENCY]
5
<PAGE>
Consolidated Report of Condition for Insured Commercial and State-
Chartered Savings Bank for December 31, 1998
Line Description Value
Call Date 12/31/1998
Bank Name First Union National Bank
Address 2 First Union Center
City Charlotte
County Mecklenburg
Short Name FUNB
Zip Code 28288-0201
Certificate Number 33869
State NC
Charter Type 1
RC.1.a. Cash and balances due, noninterest-bearing
balances & currency & coin 12220276
RC.1.b. Cash and balances due, interest-bearing
balances 2533262
RC.2.a. Securities, held-to-maturity 1891097
RC.2.b. Securities, available-for-sale 36783824
RC.3. Federal funds sold and securities purchased
under agreements to resell 8034320
RC.4.a. Loans and leases, net of unearned income 133283216
RC.4.b. Less: allowance for loan and lease losses 1810465
RC.4.c. Less: allocated transfer risk reserve 0
RC.4.d. Loans and leases, net of unearned income,
allowance, and reserve 131472751
RC.5. Trading assets 7042399
RC.6. Premises and fixed assets (including
capitalized leases) 3165970
RC.7. Other real estate owned 128223
RC.8. Investments in unconsolidated subsidiaries
and associated companies 323890
RC.9. Customers' liability to this bank on
acceptances outstanding 1268425
RC.10. Intangible assets 5200418
RC.11. Other assets 12418468
RC.12. Total assets 222483323
RC.13.a. Deposits in domestic offices 137007272
RC.13.a.(1) Noninterest-bearing deposits, domestic 26154252
RC.13.a.(2) Interest-bearing deposits, domestic 110853020
RC.13.b. Deposits in foreign offices, Edge &
Agreement subsidiaries and IBFs 10021556
RC.13.b.(1) Noninterest-bearing deposits, foreign 477500
RC.13.b.(2) Interest-bearing deposits, foreign 9544056
RC.14. Federal funds purchased and securities sold
under agreements to repur. 19607885
RC.15.a. Demand notes issued to the U.S. Treasury 389283
RC.15.b. Trading liabilities 5075053
RC.16.a. Other borrowed money, remaining maturity of
one year or less 14089286
RC.16.b. Other borrowed money, remaining maturity of
more than 1 thru 3 years 2371510
RC.16.c. Other borrowed money, remaining maturity of
more than three years 767010
RC.18. Bank's liability on acceptances executed and
outstanding 1280934
RC.19. Subordinated notes and debentures 4045123
<PAGE>
RC.20. Other liabilities 9151594
RC.21. Total liabilities 203806506
RC.23. Perpetual preferred stock and related
surplus 160540
RC.24. Common stock 454543
RC.25. Surplus (exclude all surplus related to
preferred stock) 13206325
RC.26.a. Undivided profits and capital reserves 4441457
RC.26.b. Net unrealized holding gains (losses) on
available-for-sale securities 417625
RC.27. Cumulative foreign currency translation
adjustments -3673
RC.28. Total equity capital 18676817
RC.29. Total liabilities and equity capital 222483323
RC.M.1. Most comprehensive level of auditing by
independent external auditors N/A
