EXHIBIT 4.1
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E*TRADE GROUP, INC.
and
The Bank of New York, Trustee
INDENTURE
Dated as of May 29, 2001
Subordinated Debt Securities
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Certain Terms Defined...........................................1
ARTICLE 2
SECURITIES
SECTION 2.01. Forms Generally.................................................6
SECTION 2.02. Form of Trustee's Certification of Authentication...............6
SECTION 2.03. Amount Unlimited; Issuable in Series............................6
SECTION 2.04. Authentication and Delivery of Securities.......................8
SECTION 2.05. Execution of Securities........................................10
SECTION 2.06. Certificate of Authentication..................................10
SECTION 2.07. Denomination and Date of Securities; Payments of Interest......10
SECTION 2.08. Registration, Transfer and Exchange............................11
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Securities......12
SECTION 2.10. Cancellation of Securities; Destruction Thereof................13
SECTION 2.11. Temporary Securities...........................................14
SECTION 2.12. CUSIP Numbers..................................................14
ARTICLE 3
COVENANTS OF THE ISSUER AND THE TRUSTEE
SECTION 3.01. Payment of Principal and Interest..............................14
SECTION 3.02. Offices for Payments, etc......................................15
SECTION 3.03. Appointment to Fill a Vacancy in Office of Trustee.............15
SECTION 3.04. Paying Agents..................................................15
SECTION 3.05. Certificate of the Issuer......................................16
SECTION 3.06. Securityholders Lists..........................................16
SECTION 3.07. Reports by the Trustee.........................................17
SECTION 3.08. Reports by Issuer..............................................17
ARTICLE 4
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
DEFAULT
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SECTION 4.01. Event of Default Defined; Acceleration of Maturity;
Waiver of Default...........................................17
SECTION 4.02. Collection of Indebtedness by Trustee; Trustee May Prove
Debt........................................................21
SECTION 4.03. Application of Proceeds........................................23
SECTION 4.04. Suits for Enforcement..........................................24
SECTION 4.05. Restoration of Rights on Abandonment of Proceedings............24
SECTION 4.06. Limitations on Suits by Securityholder.........................25
SECTION 4.07. Unconditional Right of Securityholders to Institute Certain
Suits.......................................................25
SECTION 4.08. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default...........................................26
SECTION 4.09. Control by Securityholders.....................................26
SECTION 4.10. Waiver of Past Defaults by Majority of Holders.................27
SECTION 4.11. Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances.......................................27
SECTION 4.12. Right of Court to Require Filing of Undertaking to Pay
Costs.......................................................27
ARTICLE 5
CONCERNING THE TRUSTEE
SECTION 5.01. Duties and Responsibilities of the Trustee; During Default;
Prior to Default............................................28
SECTION 5.02. Certain Rights of the Trustee..................................29
SECTION 5.03. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof...............31
SECTION 5.04. Trustee and Agents May Hold Securities; Collections, etc.......31
SECTION 5.05. Moneys Held by Trustee.........................................31
SECTION 5.06. Compensation and Indemnification of Trustee and Its
Prior Claim.................................................32
SECTION 5.07. Right of Trustee to Rely on Officers' Certificate, etc.........33
SECTION 5.08. Persons Eligible for Appointment as Trustee....................33
SECTION 5.09. Resignation and Removal; Appointment of Successor
Trustee.....................................................33
SECTION 5.10. Acceptance of Appointment by Successor.........................35
SECTION 5.11. Merger, Conversion, Consolidation or Succession to
Business of Trustee.........................................36
SECTION 5.12. Indentures Not Creating Potential Conflicting Interests for
the Trustee.................................................36
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ARTICLE 6
CONCERNING THE SECURITYHOLDERS
SECTION 6.01. Evidence of Action Taken by Securityholders....................37
SECTION 6.02. Proof of Execution of Instruments and of Holding of
Securities; Record Date.....................................37
SECTION 6.03. Holders to be Treated as Owners................................37
SECTION 6.04. Securities Owned by Issuer Deemed Not Outstanding..............38
SECTION 6.05. Right of Revocation of Action Taken............................38
ARTICLE 7
SUPPLEMENTAL INDENTURES
SECTION 7.01. Supplemental Indentures Without Consent of
Securityholders.............................................39
SECTION 7.02. Supplemental Indentures With Consent of Securityholders........40
SECTION 7.03. Effect of Supplemental Indenture...............................42
SECTION 7.04. Documents to Be Given to Trustee...............................42
SECTION 7.05. Notation on Securities in Respect of Supplemental
Indentures..................................................42
ARTICLE 8
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.01. Issuer May Consolidate, etc., on Certain Terms.................42
SECTION 8.02. Surviving Person Substituted...................................43
SECTION 8.03. Opinion of Counsel to Trustee..................................44
ARTICLE 9
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED
MONEYS
SECTION 9.01. Satisfaction and Discharge of Indenture........................44
SECTION 9.02. Application by Trustee of Funds Deposited for Payment of
Securities..................................................45
SECTION 9.03. Repayment of Moneys Held by Paying Agent.......................45
SECTION 9.04. Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Three Years...................................45
SECTION 9.05. Reinstatement..................................................46
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ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.01. Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability.....................46
SECTION 10.02. Provisions of Indenture for the Sole Benefit of Parties
and Securityholders.........................................47
SECTION 10.03. Successors and Assigns of Issuer Bound by Indenture...........47
SECTION 10.04. Notices and Demands on Issuer, Trustee and
Securityholders.............................................47
SECTION 10.05. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein..........................48
SECTION 10.06. Payments Due on Saturdays, Sundays and Holidays...............49
SECTION 10.07. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939.......................................49
SECTION 10.08. New York Law to Govern........................................49
SECTION 10.09. Counterparts..................................................49
SECTION 10.10. Effect of Headings............................................49
ARTICLE 11
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 11.01. Applicability of Article......................................50
SECTION 11.02. Notice of Redemption; Partial Redemptions.....................50
SECTION 11.03. Payment of Securities Called for Redemption...................51
SECTION 11.04. Exclusion of Certain Securities from Eligibility for
Selection for Redemption....................................52
SECTION 11.05. Mandatory and Optional Sinking Funds..........................52
ARTICLE 12
SUBORDINATION OF SECURITIES
SECTION 12.01. Agreement of Subordination....................................55
SECTION 12.02. Payments to Securityholders...................................55
SECTION 12.03. Subrogation of Securities.....................................57
SECTION 12.04. Authorization by Securityholders..............................58
SECTION 12.05. Notice to Trustee.............................................59
SECTION 12.06. Trustee's Relation to Senior Indebtedness.....................60
SECTION 12.07. No Impairment of Subordination................................60
SECTION 12.08. Rights of Trustee.............................................60
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THIS INDENTURE, dated as of May 29, 2001, between E*TRADE GROUP, INC., a
Delaware corporation (the "Issuer"), and The Bank of New York, a New York
banking corporation, as trustee (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 subordinated debentures, notes or other evidences of indebtedness to
be issued in one or more series (the "Securities") up to such principal amount
or amounts as may from time to time be authorized in accordance with the terms
of this Indenture and to provide, among other things, for the authentication,
delivery and administration thereof;
WHEREAS, 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 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 Securities as follows:
ARTICLE 1
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, as
amended (the "Trust Indenture Act of 1939") or the definitions of which in the
Securities Act of 1933, as amended (the "Securities Act") are referred to in
the Trust Indenture Act of 1939, including terms defined therein by reference
to the Securities Act (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 expressly defined shall
have the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted in the United States
of America 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 of Directors duly authorized to act hereunder.
"Business Day" means, with respect to any 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 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 Exchange Act, or if at any time after the
execution and delivery of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act of 1939,
then the body performing such duties on such date.
"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 000 Xxxxxxx Xxxxxx, 00X, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust Administration, or such other address as the
Trustee may designate from time to time by notice to the Holders and the
Issuer.
"Event of Default" means any event or condition specified as such in
Section 4.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder", "holder of Securities", "Securityholder" or other similar terms
mean the registered holder of any Security.
"Indenture" means this instrument as originally executed and delivered or,
if amended or supplemented as herein provided, as so amended or
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supplemented or both, and shall include the forms and terms of particular
series of Securities established as contemplated hereunder.
"Issuer" means E*TRADE Group, Inc., a Delaware corporation, and, subject
to Article 8, its successors and assigns.
"Officers' Certificate" means a certificate signed by both (a) the
chairman of the Board of Directors or any vice chairman of the Board of
Directors or the chief executive officer or the chief financial officer or the
president or any vice president and (b) by the treasurer or any assistant
treasurer or the secretary or any assistant secretary of the Issuer and
delivered to the Trustee. Each such certificate shall comply with Section 314
of the Trust Indenture Act of 1939 and include the statements provided for in
Section 10.05.
"Opinion of Counsel" means an opinion in writing signed by legal counsel
who may be an employee of or counsel to the Issuer or of the Trustee and who
shall be satisfactory to the Trustee. Each such opinion shall comply with
Section 314 of the Trust Indenture Act of 1939 and include the statements
provided for in Section 10.05, if and to the extent required hereby.
"Original Issue Discount Security" means any 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 4.01.
"Outstanding", when used with reference to Securities, shall, subject to
the provisions of Section 6.04, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Issuer) or shall
have been set aside, segregated and held in trust by the Issuer for the
holders of such Securities (if the Issuer shall act as its own paying
agent), provided that if such Securities, or portions thereof, are to be
redeemed prior to the maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to the
Trustee shall have been made for giving such notice; and
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(c) Securities in substitution for which other Securities shall have
been authenticated and delivered, or which shall have been paid, pursuant
to the terms of Section 2.09 (except with respect to any such Security as
to which proof satisfactory to the Trustee is presented that such Security
is held by a person in whose hands such Security is a legal, valid and
binding obligation of the Issuer).
In determining whether the Holders of the requisite principal amount of
Outstanding 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 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 4.01.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Responsible Officer" when used with respect to the Trustee means any
officer in the corporate trust department of the Trustee, including any vice
president, assistant secretary, assistant treasurer, any trust officer, any
assistant vice president 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.
"Security" or "Securities" has the meaning stated in the first recital of
this Indenture, or, as the case may be, Securities that have been authenticated
and delivered under this Indenture.
"Senior Indebtedness" means the principal, premium, if any, and interest
on and any other payment due pursuant to any of the following, whether
outstanding at the date hereof or hereafter incurred or created:
(a) all indebtedness of the Issuer for money borrowed (including any
indebtedness secured by a mortgage, conditional sales contract or other lien
which is (i) given to secure all or part of the purchase price of property
subject thereto, whether given to the vendor of such property or to another or
(ii) existing on property at the time of acquisition thereof);
(b) all indebtedness of the Issuer evidenced by notes, debentures, bonds
or other securities sold by the Issuer for money;
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(c) all lease obligations of the Issuer which are capitalized on the books
of the Issuer in accordance with generally accepted accounting principles;
(d) all indebtedness of others of the kinds described in either of the
preceding clauses (a) or (b) and all lease obligations of others of the kind
described in the preceding clause (c) assumed by or guaranteed in any manner by
the Issuer or in effect guaranteed by the Issuer through an agreement to
purchase, contingent or otherwise; and
(e) all renewals, extensions or refundings of indebtedness of the kinds
described in any of the preceding clauses (a), (b) and (d) and all renewals or
extensions of lease obligations of the kinds described in either of the
preceding clauses (c) and (d);
unless, in the case of any particular indebtedness, lease, renewal, extension
or refunding, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension or refunding is junior to or is not superior in right
of payment to the Securities; provided that Senior Indebtedness shall not
include (i) any indebtedness of any kind of the Issuer to any subsidiary of the
Issuer, a majority of the voting stock of which is owned, directly or
indirectly, by the Issuer, (ii) indebtedness for trade payables or constituting
the deferred purchase price of assets or services incurred in the ordinary
course of business, (iii) the Securities or (iv) securities issued under the
Indenture dated as of February 1, 2000 between the Issuer and The Bank of New
York, as trustee.
"Significant Subsidiary" means, with respect to any person, a "significant
subsidiary" of such person as such term is defined in Rule 1-02 of Regulation
S-X under the Exchange Act, except that references to income from continuing
operations are changed to revenues.
"Trustee" means the Person identified as "Trustee" in the first paragraph
hereof and, subject to the provisions of Article 5, shall also include any
successor trustee.
"Trust Indenture Act of 1939" 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".
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"Yield to Maturity" means the yield to maturity on a series of securities,
calculated at the time of issuance of such series, or, if applicable, at the
most recent redetermination of interest on such series, and calculated in
accordance with accepted financial practice.
ARTICLE 2
SECURITIES
SECTION 2.01. Forms Generally. The Securities of each series shall be
substantially in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to 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 imprinted or otherwise reproduced
thereon such legend or legends, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any rules or
regulations pursuant thereto, or with any rules of any securities exchange or
to conform to general usage, all as may be determined by the officers executing
such Securities, as evidenced by their execution of the Securities.
The definitive 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 Securities, as evidenced by their
execution of such Securities.
SECTION 2.02. Form of Trustee's Certification of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
This is one of the Securities of the series designated herein and referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------------
Authorized Signatory
SECTION 2.03. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
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The Securities may be issued in one or more series. There shall be
established in or pursuant to 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 Securities of any series,
(a) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(b) any limit upon the aggregate principal amount of the Securities
of the series (other than Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.08, 2.09, 2.11 or 11.03)
that may be authenticated and delivered under this Indenture;
(c) the date or dates on which the principal of the Securities of the
series is payable;
(d) the rate or rates at which the 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 and the
record dates for the determination of Holders to whom interest is payable;
(e) the place or places where the principal of and any interest on
Securities of the series shall be payable (if other than as provided in
Section 3.02);
(f) the price or prices at which, the period or periods within which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Issuer, pursuant to
any sinking fund or otherwise;
(g) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the price or prices at
which and the period or periods within which and the terms and conditions
upon which Securities of the series shall be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligation;
(h) if other than denominations of $1,000 and any multiple thereof,
the denominations in which Securities of the series shall be issuable;
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(i) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section
4.01 or provable in bankruptcy pursuant to Section 4.02;
(j) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture); and
(k) any trustees, authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the Securities of such
series.
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
such resolution of the Board of Directors or in an indenture supplemental
hereto.
SECTION 2.04. Authentication and Delivery of Securities. At any time and
from time to time after the execution and delivery of this Indenture, the
Issuer may deliver Securities of any series executed by the Issuer to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver such 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 chief executive officer or its chief financial
officer, or its president or any vice president and (b) its treasurer or any
assistant treasurer or its secretary or any assistant secretary, without any
further action by the Issuer. In authenticating such Securities and accepting
the additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
5.01) shall be fully protected in relying upon:
(a) 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;
(b) an executed supplemental indenture, if any;
(c) an Officers' Certificate setting forth the form and terms of the
Securities as required pursuant to Section 2.01 and 2.03, respectively and
prepared in accordance with Section 10.05;
(d) an Opinion of Counsel, prepared in accordance with Section 10.05,
to the effect that
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(i) that the form or forms and terms of such Securities have been
established by or pursuant to a resolution of the Board of Directors or by
a supplemental indenture as permitted by Section 2.01 and 2.03 in
conformity with the provisions of this Indenture;
(ii) that the Indenture has been duly authorized, executed and
delivered by the Issuer and constitutes a valid and legally binding
obligation of the Issuer enforceable against the Issuer in accordance with
its terms, except that the enforcement thereof may be subject to (A)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (B)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought;
(iii) that such Securities have been duly authorized and, when
executed and authenticated by the Trustee and issued by the Issuer in the
manner and subject to any conditions specified in such Opinion of Counsel,
will be valid and binding obligations of the Issuer, enforceable against
the Issuer in accordance with their terms, subject to (A) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (B)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought;
(iv) that the Issuer is not and, after giving effect to the offering
and sale of such Securities and the application of the proceeds thereof as
described in the offering memorandum or registration statement with
respect to such offering and sale, will not be required to register as an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended; and
(v) covering such other matters as the Trustee may reasonably
request.
The Trustee shall have the right to decline to authenticate and deliver
any Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken by the 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.
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SECTION 2.05. Execution of Securities. The 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 chief executive officer or its
chief operating officer or its chief financial officer or its president or any
vice president and (b) attested to by its treasurer or any assistant treasurer
or its secretary or any assistant secretary. Such signatures may be the manual
or facsimile signatures of the present or any future such officers.
Typographical and other minor errors or defects in any such reproduction of any
such signature shall not affect the validity or enforceability of any 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
Securities shall cease to be such officer before the Security so signed shall
be authenticated and delivered by the Trustee or disposed of by the Issuer,
such Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such
persons as, at the actual date of the execution of such 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. Only such Securities as shall
bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its 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 Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture.
SECTION 2.07. Denomination and Date of Securities; Payments of Interest.
The Securities shall be issuable as registered 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 Securities of any series,
the Securities of such series shall be issuable in denominations of $1,000 and
any multiple thereof. The 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 Security shall be dated the date of its authentication, shall bear
interest, if any, from the date and shall be payable on the dates, in each
case, which shall be specified as contemplated by Section 2.03.
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The person in whose name any 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 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 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 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 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 or
cause to be kept 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, Securities as in this Article provided. Such register shall be
in written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any 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
Security or Securities of the same series in authorized denominations for a
like aggregate principal amount.
Any Security or Securities of any series may be exchanged for a Security
or Securities of the same series in other authorized denominations, in an equal
aggregate principal amount. Securities of any series to be exchanged shall be
surrendered at any 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 Security or
Securities of the same series which the Securityholder making the exchange
shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
11
All 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 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 Securities of any series for a period of 15 days next preceding the first
mailing of notice of redemption of Securities of such series to be redeemed,
(b) any Securities selected, called or being called for redemption, in whole or
in part, except, in the case of any Security to be redeemed in part, the
portion thereof not so to be redeemed, (c) any Securities surrendered for
conversion or, if a portion of any Security is surrendered for conversion, such
portion surrendered for conversion, or (d) any Securities surrendered for
exercise of any right to require the Issuer to repurchase such Securities
(which has not been withdrawn), in whole or in part, except, in the case of any
Security to be repurchased in part, the portion thereof not so to be
repurchased.
All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Securities.
In case any temporary or definitive Security shall become mutilated, defaced or
be destroyed, lost or stolen, the Issuer in its discretion may execute, and
upon the written request of any officer of the Issuer, the Trustee shall
authenticate and deliver, a new Security of the same series, bearing a number
not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and substitution for the Security
so destroyed, lost or stolen. In every case the applicant for a substitute
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 Security and of the ownership thereof.
12
Upon the issuance of any substitute 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 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 Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated or
defaced 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 Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the provisions
of this Section by virtue of the fact that any such Security is destroyed, lost
or stolen shall constitute an additional contractual obligation of the Issuer,
whether or not the destroyed, lost or stolen Security shall be at any time
enforceable by anyone and shall be entitled to all the benefits of (but shall
be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities of such series
duly authenticated and delivered hereunder. All 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 Securities and shall
preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.10. Cancellation of Securities; Destruction Thereof. All
Securities surrendered for payment, redemption, conversion, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee, shall be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be canceled by it; and no Securities shall be
issued in lieu thereof except as expressly permitted by any of the provisions
of this Indenture. The Trustee shall dispose of canceled Securities held by it
in accordance with its customary procedures. If the Issuer shall acquire any of
the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and
until the same are delivered to the Trustee for cancellation.
13
SECTION 2.11. Temporary Securities. Pending the preparation of definitive
Securities for any series, the Issuer may execute and the Trustee shall
authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as registered Securities without coupons, of any authorized
denomination, and substantially in the form of the definitive Securities of
such series but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Issuer
with the concurrence of the Trustee. Temporary Securities may contain such
reference to any provisions of this Indenture as may be appropriate. Every
temporary 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 Securities. Without unreasonable delay the
Issuer shall execute and shall furnish definitive Securities of such series and
thereupon temporary 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 Securities of such series a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations. Until so exchanged, the temporary Securities of any
series shall be entitled to the same benefits under this Indenture as
definitive Securities of such series.
SECTION 2.12. CUSIP Numbers. The Issuer in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Issuer will
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE 3
COVENANTS OF THE ISSUER AND THE TRUSTEE
SECTION 3.01. Payment of Principal and Interest. The Issuer covenants and
agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such series at the place or places, at the respective times
and in the manner provided in such Securities. Each installment of interest on
the Securities of any series may be paid by wire transfer for such interest
payable to or upon the
14
written order of the holders of 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 Securities
of any series remain Outstanding, the Issuer will maintain in the Borough of
Manhattan, City of New York for each such series an office or agency (a) where
the Securities may be presented for payment, (b) where the Securities may be
presented for registration of transfer and for exchange as provided in this
Indenture and (c) where notices and demands to or upon the Issuer with respect
to the Securities of such series or this Indenture may be served. The Issuer
will give 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
Corporate Trust Office of the Trustee 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 shall appoint a Trustee in the manner provided in Section 5.09 whenever
necessary to avoid or fill a vacancy in the office of Trustee, so that at all
times there shall be a Trustee with respect to each series of Securities
hereunder.
SECTION 3.04. Paying Agents. Whenever the Issuer shall appoint a paying
agent other than the Trustee with respect to the Securities of any series, it
will cause such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section, that it will
(a) hold all sums received by it as such agent for the payment of the
principal of or interest on the Securities of such series (whether such
sums have been paid to it by the Issuer or by any other obligor on the
Securities of such series) in trust for the benefit of the holders of the
Securities of such series or of the Trustee,
(b) give the Trustee notice of any failure by the Issuer (or by any
other obligor on the Securities of such series) to make any payment of the
principal of or interest on the Securities of such series when the same
shall be due and payable, and
15
(c) pay any such sums so held in trust by it to the Trustee upon the
Trustee's written request at any time during the continuance of the
failure referred to in clause 3.04(b) above.
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a sum
sufficient to pay the 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
Securities of any series, it will, on or before each due date of the principal
of or interest on the Securities of such series, set aside, segregate and hold
in trust for the benefit of the holders of the 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 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.
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
Section 9.03 and 9.04.
SECTION 3.05. Certificate of the Issuer. The Issuer will furnish to the
Trustee within 120 days after the end of each fiscal year of the Issuer
(beginning with the fiscal year ending on December 31, 2001) a brief
certificate (which need not comply with Section 10.05) from the principal
executive, financial or accounting officer of the Issuer as to his or her
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 provided under this Indenture).
SECTION 3.06. Securityholders Lists. If and so long as the Trustee shall
not be the Security registrar for the Securities of any series, the Issuer 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
Securities of such series pursuant to Section 312 of the Trust Indenture Act of
1939 (a) semi-annually not more than 15 days after each record date for the
payment of
16
interest on such 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 (b) at such other times as the Trustee may request
in writing, within thirty 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.
SECTION 3.07. Reports by the Trustee. Any Trustee's report required under
Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on or
before May 15 in each year (commencing with the year 2002), so long as any
Securities are Outstanding hereunder, and shall be dated as of a date
convenient to the Trustee no more than 60 nor less than 45 days prior thereto.
SECTION 3.08. Reports by Issuer. The Issuer shall file with the Trustee
(and the Commission at any time after the Indenture becomes qualified under the
Trust Indenture Act), such information, documents and other reports and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to such Act, whether or not the
Securities are governed by such Act; provided, however, that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within fifteen (15) days after the same is so required to be filed with
the Commission. Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE 4
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
DEFAULT
SECTION 4.01. Event of Default Defined; Acceleration of Maturity; Waiver
of Default. "Event of Default" with respect to Securities of any series
wherever used herein, means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
17
(a) default in the payment of any installment of interest upon any of
the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days, whether
or not such payment is prohibited by Article 12;
(b) default in the payment of all or any part of the principal or
premium on any of the Securities of such series as and when the same shall
become due and payable either at maturity, upon redemption, by declaration
or otherwise, whether or not such payment is prohibited by Article 12;
(c) default in the payment of any sinking fund installment as and
when the same shall become due and payable by the terms of the Securities
of such series;
(d) default in the performance, or breach, of any covenant of the
Issuer in respect of the Securities of such series or in this Indenture
(other than a covenant a default in whose performance or whose breach is
specifically dealt with elsewhere in this Section), 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 aggregate
principal amount of the Outstanding 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;
(e) failure on the part of the Issuer or any of its Significant
Subsidiaries to make any payment at maturity, including any applicable
grace period, with respect to any indebtedness of, or guaranteed or
assumed by, the Issuer or any of its Significant Subsidiaries, in a
principal amount then outstanding in excess of $75,000,000 in the
aggregate for all such indebtedness, and the continuance of such failure
for a period of thirty (30) days after there shall have been given, by
registered or certified mail, 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 Securities then outstanding, a written notice
specifying such default and requiring the Issuer to cause such default to
be cured or waived and stating that such notice is a "Notice of Default"
hereunder;
(f) default on the part of the Issuer or any of its Significant
Subsidiaries with respect to any indebtedness of, or guaranteed or assumed
by, the Issuer or any of its Significant Subsidiaries, which default
results in the acceleration of indebtedness in a principal amount then
outstanding in
18
excess of $75,000,000 in the aggregate for all such indebtedness, and such
indebtedness shall not have been discharged or such acceleration shall not
have been rescinded or annulled for a period of thirty (30) days after
there shall have been given, by registered or certified mail, 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 Securities then
outstanding, a written notice specifying such default and requiring the
Issuer to cause such default to be cured or waived or such acceleration to
be rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder;
(g) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Issuer or any of its Significant
Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing
a receiver, liquidator, assignee, custodian, trustee or sequestrator (or
similar official) of the Issuer or any of its Significant Subsidiaries or
for any substantial part of its property or ordering the winding up or
liquidation of its affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days;
(h) the Issuer or any of its Significant Subsidiaries shall commence
a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent to
the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official) of the
Issuer or any of its Significant Subsidiaries or for any substantial part
of its property, or make any general assignment for the benefit of
creditors; or
(i) any other Event of Default provided in the supplemental indenture
or resolution of the Board of Directors under which such series of
Securities is issued or in the form of Security for such series.
If an Event of Default occurs and is continuing (other than an Event of Default
specified in Section 4.01(g) or 4.01(h) with respect to the Issuer), then, and
in each and every such case, unless the principal of all of the 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
Securities of such series then Outstanding hereunder, by notice in writing to
the Issuer (and to the Trustee if given by Securityholders), may declare the
entire principal (or, if the Securities of such series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of such series) of all Securities of such series and the interest
accrued thereon, if any, to be due and payable immediately,
19
and upon any such declaration the same shall become immediately due and payable
without necessity of further action. If an Event of Default specified in
Section 4.01(g) or 4.01(h) occurs and is continuing with respect to the Issuer,
the principal (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all the Securities then Outstanding hereunder and the
interest accrued thereon shall be immediately due and payable.
The foregoing provisions, however, are subject to the condition that if,
at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any series shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys
due shall have been obtained or entered as hereinafter provided, the Issuer
shall pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of such series and the
principal of any and all Securities of such series which shall have become due
otherwise than by acceleration (with interest upon such principal and, to the
extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest, in each case at the rate specified in the
Securities of such series or the Yield to Maturity (in the case of Original
Issue Discount Securities) specified in the Securities of such series to the
date of such payment or deposit) and such amount as shall be sufficient to
cover reasonable compensation 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 this Indenture, other than the non-payment of
the principal of Securities of such series which shall have become due by
acceleration, shall have been cured, waived or otherwise remedied as provided
herein, then and in every such case the Holders of a majority in aggregate
principal amount of all the Securities of such series, 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, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the principal of
any Original Issue Discount Securities shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed,
for all purposes hereunder, to be such portion of the principal thereof as
shall be due and payable as a result of such acceleration, and payment of such
portion of the principal thereof as shall be due and payable as a result of
such acceleration,
20
together with interest, if any, thereon and all other amounts owing thereunder,
shall constitute payment in full of such Original Issue Discount Securities.
SECTION 4.02. 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 installment of interest on any of the Securities of any series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity
of the Securities of such series or upon any redemption or by declaration or
otherwise--then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole
amount that then shall have become due and payable on all 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 Securities) specified in the Securities of such
series); and in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including reasonable compensation
to 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 Securities of any series to the registered Holders,
whether or not the principal of and interest on the 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
Securities and collect in the manner provided by law out of the property of the
Issuer or other obligor upon such Securities, wherever situated, the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or any
other obligor upon the Securities under Title 11 of the United States Code or
any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in
21
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 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 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 Securities of any series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of such series) owing and unpaid in respect of the
Securities of any series, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the Securityholders allowed in
any judicial proceedings relative to the Issuer or other obligor upon the
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 Securities of any series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation
or other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the Securityholders to
make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to the Securityholders, to pay
to the Trustee such amounts as shall be sufficient to cover reasonable
compensation 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
22
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 5.06.
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
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof 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 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 Securities in respect to which such action was taken, and it
shall not be necessary to make any holders of such Securities parties to any
such proceedings.
SECTION 4.03. Application of Proceeds. Any moneys 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 moneys on account of principal or interest, upon
presentation of the several Securities in respect of which monies have been
collected and stamping (or otherwise noting) thereon the payment, or issuing
Securities of such series in reduced principal amounts in exchange for the
presented Securities of like series if only partially paid, or upon surrender
thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such series
in respect of which 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
5.06;
23
SECOND: In case the principal of the Securities of such series in
respect of which moneys have been collected shall not have become and be
then due and payable, to the payment of interest on the Securities of such
series in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in such Securities, such
payments to be made ratably to the persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Securities of such series in
respect of which moneys have been collected shall have become and shall be
then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities 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 Securities) specified in the
Securities of such series; and in case such moneys shall be insufficient
to pay in full the whole amount so due and unpaid upon the Securities of
such series, then to the payment of such principal and interest or yield
to maturity, without preference or priority of principal over interest or
yield to maturity, or of interest or yield to maturity over principal, or
of any installment of interest over any other installment of interest, or
of any Security of such series over any other Security of such series,
ratably to the aggregate of such principal and accrued and unpaid interest
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 4.04. 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 4.05. Restoration of Rights on Abandonment of Proceedings. In case
the Trustee shall have proceeded to enforce any right under this Indenture
24
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 Securityholders shall continue as though no such
proceedings had been taken.
SECTION 4.06. Limitations on Suits by Securityholder. No holder of any
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 Securities of such
series then Outstanding shall have made written request upon the Trustee to
institute such action or proceedings in its own name as trustee hereunder and
shall have offered to the Trustee such indemnity reasonably satisfactory to it
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby and the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute any such
action or proceeding and no direction inconsistent with such written request
shall have been given to the Trustee pursuant to Section 4.09; it being
understood and intended, and being expressly covenanted by the taker and Holder
of every Security with every other taker and Holder and the Trustee, that no
one or more Holders of 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 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
Securities of the applicable series. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 4.07. Unconditional Right of Securityholders to Institute Certain
Suits. Notwithstanding any other provision in this Indenture and any provision
of any Security, the right of any Holder of any Security to receive payment of
the principal of and interest on such Security on or after the respective due
dates expressed in such Security, or to institute suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
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SECTION 4.08. Powers and Remedies Cumulative; Delay or Omission Not Waiver
of Default. Except as provided in Section 4.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Securityholders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Securityholder to exercise
any right or power accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and, subject to
Section 4.06, every power and remedy given by this Indenture or by law to the
Trustee or to the Securityholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Securityholders.
SECTION 4.09. Control by Securityholders. The Holders of a majority in
aggregate principal amount of the 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 Securities of such series by this Indenture;
provided that such direction shall not be otherwise than in accordance with law
and the provisions of this Indenture; and provided further that (subject to the
provisions of Section 5.01) 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
Securities of all series so affected not joining in the giving of said
direction, it being understood that (subject to Section 5.01) 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 Securityholders.
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SECTION 4.10. Waiver of Past Defaults by Majority of Holders. Prior to a
declaration of the acceleration of the maturity of the Securities of any series
as provided in Section 4.01, the Holders of a majority in aggregate principal
amount of the Securities of such series at the time Outstanding (each such
series voting as a separate class) may on behalf of the Holders of all the
Securities of such series waive any past default or Event of Default, except a
default in respect of a covenant or provision hereof which cannot be modified
or amended without the consent of each Holder affected as provided in Section
7.02. In the case of any such waiver, the Issuer, the Trustee and the Holders
of the Securities of each series affected shall be restored to their former
positions and rights hereunder, respectively.
Upon any such waiver, such default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 4.11. Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall give to the Securityholders of any
series, as the names and addresses of such Holders appear on the registry
books, notice by mail of all defaults known to the Trustee which have occurred
with respect to such series, such notice to be transmitted within 90 days after
the occurrence thereof, unless such defaults shall have been cured before the
giving of such notice (the term "default" or "defaults" for the purposes of
this Section being hereby defined to mean any event or condition which is, or
with notice or lapse of time or both would become, an Event of Default);
provided that, except in the case of default in the payment of the principal of
or interest on any of the Securities of such series, or in the payment of any
sinking or purchase fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so
long as 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 Securityholders of such series.
SECTION 4.12. Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party
27
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 or to any suit
instituted by any Securityholder or group of Securityholders of any series
holding more than 10% in aggregate principal amount of the Securities of such
series, or to any suit instituted by any Securityholder for the enforcement of
the payment of the principal of or interest on any Security on or after the due
date expressed in such Security.
ARTICLE 5
CONCERNING THE TRUSTEE
SECTION 5.01. Duties and Responsibilities of the Trustee; During Default;
Prior to Default. With respect to the Holders of any series of Securities
issued hereunder, the Trustee, prior to the occurrence of an Event of Default
with respect to the Securities of a particular series and after the curing or
waiving of all Events of Default which may have occurred with respect to such
series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the 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 person would exercise or use under the circumstances in the
conduct of such person's own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any series and after the curing or waiving of all such
Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to
the Securities of 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
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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 4.09 relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
The provisions of this Section 5.01 are in furtherance of and subject to
Sections 315 and 316 of the Trust Indenture Act of 1939.
SECTION 5.02. Certain Rights of the Trustee. In furtherance of and subject
to the Trust Indenture Act of 1939, and subject to Section 5.01:
(a) the Trustee may conclusively 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
29
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 of its selection 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 and in accordance with such advice or
Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities which might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within 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 Securities of all series affected then
Outstanding; provided that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require indemnity reasonably
satisfactory to it against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation shall be
paid by the Issuer or, if paid by the Trustee or any predecessor trustee,
shall be repaid by the Issuer upon demand;
(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;
30
(h) the Trustee shall not be deemed to have notice of any default
(the term "default" for the purposes of this subsection 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) or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and
such notice references the Securities and this Indenture;
(i) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and each agent, custodian and other
Person employed to act hereunder; and
(j) the Trustee may request that the Issuer deliver an Officers'
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to
this Indenture, which Officers' Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person
specified as so authorized in any such certificate previously delivered
and not superseded.
SECTION 5.03. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's 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
Securities. The Trustee shall not be accountable for the use or application by
the Issuer of any of the Securities or of the proceeds thereof.
SECTION 5.04. Trustee and Agents May Hold 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 Securities with the same
rights it would have if it were not the Trustee or such agent and 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 5.05. Moneys Held by Trustee. Subject to the provisions of Section
9.04 hereof, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required by
31
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 moneys received by
it hereunder.
SECTION 5.06. 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, such compensation as the Issuer and the
Trustee may agree upon in writing (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 to the extent any such expense,
disbursement or advance 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, damage, claims, liability or expense,
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee) arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and the performance of
its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim (whether asserted by the Issuer, any Holder
or any other person) of liability, except to the extent such loss liability or
expense is due to the negligence or bad faith of the Trustee or such
predecessor Trustee. 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 and the resignation or
removal of the Trustee. Such additional indebtedness shall be a senior claim to
that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Securities, and the Securities are hereby subordinated to such
senior claim.
The Trustee shall have a lien prior to the Securities as to all property
and funds held by the Trustee as such, for any amount owing it or any
predecessor Trustee pursuant to this Section 5.06, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 4.01(g) or 4.01(h), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
32
administration under applicable Federal or state bankruptcy, insolvency or
other similar law.
SECTION 5.07. Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 5.01 and 5.02, 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 5.08. Persons Eligible for Appointment as Trustee. The Trustee for
each series of Securities hereunder shall at all times be a corporation having
a combined capital and surplus of at least $50,000,000, and which is eligible
in accordance with the provisions of Section 310(a) of the Trust Indenture Act
of 1939. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of a Federal, State or District of
Columbia 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.
SECTION 5.09. Resignation and Removal; Appointment of Successor Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign with respect to one or more or all series of Securities by giving
written notice of resignation to the Issuer and by mailing notice thereof by
first class mail to Holders of the applicable series of Securities at their
last addresses as they shall appear on the 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 at the expense of the Issuer for
the appointment of a successor trustee, or any Securityholder who has been a
bona fide Holder of a Security or Securities of the applicable series for at
least six months may, subject to the provisions of Section 4.12, on behalf of
himself and all others similarly situated, petition any
33
such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939 with respect to any
series of Securities after written request therefor by the Issuer or
by any Securityholder who has been a bona fide Holder of a Security
or Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 310(a) of the Trust Indenture Act of 1939
and shall fail to resign after written request therefor by the Issuer
or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with respect
to any series of 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 Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of 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
Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has
been a bona fide Holder of a Security or Securities of such series for at least
six months may on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
If an instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
removal, the Trustee being removed may petition, at the expense of the Issuer,
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
34
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series at the time Outstanding may at any time remove the
Trustee with respect to Securities of such series and appoint a successor
trustee with respect to the Securities of such series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 6.01 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any series
and any appointment of a successor trustee with respect to such series pursuant
to any of the provisions of this Section 5.09 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 5.10.
SECTION 5.10. Acceptance of Appointment by Successor. Any successor
trustee appointed as provided in Section 5.09 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 9.04, pay over to
the successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any such successor
trustee, the 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 5.06.
If a successor trustee is appointed with respect to the Securities of one
or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the 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 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
35
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.
Upon acceptance of appointment by any successor trustee as provided in
this Section 5.10, the Issuer shall mail notice thereof by first-class mail to
the Holders of Securities of any series for which such successor trustee is
acting as trustee at their last addresses as they shall appear in the Security
register. If the acceptance of appointment is substantially contemporaneous
with the resignation, then the notice called for by the preceding sentence may
be combined with the notice called for by Section 5.09. 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 5.11. 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 eligible under the provisions of Section 5.08, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor 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
Securities of such series or in this Indenture provided that the certificate of
the Trustee shall have; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of any
series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 5.12. Indentures Not Creating Potential Conflicting Interests for
the Trustee. The following indentures are hereby specifically described for the
purposes of Section 310(b)(1) of the Trust Indenture Act of 1939: Indenture
dated as of February 1, 2000 between the Issuer and The Bank of New York, as
trustee.
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ARTICLE 6
CONCERNING THE SECURITYHOLDERS
SECTION 6.01. Evidence of Action Taken by 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 Securityholders of any or all series may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such specified percentage of Securityholders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and
(subject to Sections 5.01 and 5.02) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.
SECTION 6.02. Proof of Execution of Instruments and of Holding of
Securities; Record Date. Subject to Sections 5.01 and 5.02, the execution of
any instrument by a Securityholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Securities shall be proved by the Security register or by a
certificate of the registrar thereof. The Issuer may set a record date for
purposes of determining the identity of holders of Securities of any series
entitled to vote or consent to any action referred to in Section 6.01, which
record date may be set at any time or from time to time by notice to the
Trustee, for any date or dates (in the case of any adjournment or
reconsideration) not more than 60 days nor less than five days prior to the
proposed date of such vote or consent, and thereafter, notwithstanding any
other provisions hereof, only holders of Securities of such series of record on
such record date shall be entitled to so vote or give such consent or revoke
such vote or consent.
SECTION 6.03. 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 Security shall be registered upon the Security register for such
series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest on such 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
37
the sum or sums so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Security.
SECTION 6.04. Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Issuer or any other obligor on the Securities with respect to which such
determination is being made or by any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Issuer or
any other obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction,
consent or waiver only Securities which the Trustee knows are so owned shall be
so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Issuer or any other obligor upon the Securities or
any person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Issuer or any other obligor on the
Securities. In case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
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 5.01
and 5.02, 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
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 6.05. Right of Revocation of Action Taken. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 6.01, of
the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far as
concerns such Security. Except as aforesaid any such action taken by the Holder
of any Security shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Security and of any Securities issued in
exchange or substitution therefor, irrespective of whether or not any notation
in regard thereto is made
38
upon any such Security. Any action taken by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the case
may be, specified in this Indenture in connection with such action shall be
conclusively binding upon the Issuer, the Trustee and the Holders of all the
Securities affected by such action.
ARTICLE 7
SUPPLEMENTAL INDENTURES
SECTION 7.01. Supplemental Indentures Without Consent of Securityholders.
The Issuer, when authorized by a resolution of its Board of Directors (such
resolution to be confirmed by an Officers' Certificate of the Issuer to such
effect), and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another corporation to the Issuer,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Issuer pursuant to
Article 8;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as its Board of Directors and the
Trustee shall consider to be for the protection of the Holders of
Securities, and to make the occurrence, or the occurrence and continuance,
of a default in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or any of
the several remedies provided in this Indenture as herein set forth;
provided that in respect of any such additional covenant, restriction,
condition or provision, such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may
limit the right of the Holders of a majority in aggregate principal amount
of the Securities of such series to waive such an Event of Default;
39
(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 Board of Directors may deem necessary or
desirable and which shall not adversely affect the interests of any
Holders of the Securities;
(e) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the Trust Indenture Act of
1939;
(f) to establish the form or terms of Securities of any series as
permitted by Sections 2.01 and 2.03; and
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant
to the requirements of Section 5.10.
The Trustee is hereby authorized to join with the Issuer in the execution
of any such supplemental indenture and 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. Every amendment to or supplement
of this Indenture or the Securities shall comply with the Trust Indenture Act
of 1939 as in effect at the date of such amendment or supplement.
Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Securities at
the time Outstanding, notwithstanding any of the provisions of Section 7.02.
SECTION 7.02. Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Article 6) of the Holders of not
less than a majority in aggregate principal amount of the Securities of any
series at the time Outstanding affected by such supplemental indenture (voting
as a separate class), the Issuer, when authorized by a resolution of its Board
of Directors, and the Trustee may, from time to time and at any time, enter
into an indenture or
40
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indenture as it relates to such series of Securities or
of modifying in any manner the rights of the Holders of the Securities of such
series; provided that no such supplemental indenture shall (a) change the final
maturity of any Security, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or change the currency
in which the Securities are payable, or waive a payment default with respect to
the Securities, or impair or change, in any respect adverse to the
Securityholders, the right to convert the Securities into any other security,
if any, or the provisions with respect to the subordination of the Securities,
or alter or waive any provision regarding redemption thereof or reduce the
amount of the principal of an Original Issue Discount Security that would be
due and payable upon an acceleration of the maturity thereof pursuant to
Section 4.01 or the amount thereof provable in bankruptcy pursuant to Section
4.02, or impair or affect the right of any Securityholder to institute suit for
any payment thereof, in each case, without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
amendment, waiver, consent or supplemental indenture, without the consent of
the Holders of each 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 Securityholders
as aforesaid and other documents, if any, required by Section 6.01, 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 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 Securities of
each series affected thereby at their addresses as they shall appear on the
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.
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SECTION 7.03. 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 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 7.04. Documents to Be Given to Trustee. Prior to entering into any
supplemental indenture, the Trustee shall receive an Officers' Certificate and
an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 7 complies with the applicable provisions of
this Indenture.
SECTION 7.05. Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear 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
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 Securities of
such series then Outstanding.
ARTICLE 8
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.01. Issuer May Consolidate, etc., on Certain Terms. The Issuer
covenants that it will not merge, consolidate or combine with or into or,
directly or indirectly, sell, assign, convey, lease, transfer or otherwise
dispose of all or substantially all of its properties and assets to any Person
or Persons, in a single transaction or series of transactions, unless (i)
either (x) the Issuer shall be the continuing Person or (y) the successor
Person or Persons which, directly or indirectly, acquires by sale, assignment,
conveyance, lease, transfer or other disposition substantially all the
properties and assets of the Issuer (the "Surviving Person") shall be a
corporation or limited liability company organized and
42
existing under the laws of the United States of America, any state thereof or
the District of Columbia and shall expressly assume the due and punctual
payment of the principal of and any premium and interest on all the Securities,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be performed or
observed by the Issuer, by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such Surviving Person, (ii)
immediately after such merger, consolidation, combination, sale, assignment,
conveyance, lease, transfer or other disposition, no default hereunder has
occurred and is continuing, and (iii) the Issuer or such Surviving Person shall
have delivered to the Trustee an Opinion of Counsel stating that such merger,
consolidation, combination, sale, assignment, conveyance, lease, transfer or
other disposition, and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with this Article.
SECTION 8.02. Surviving Person Substituted. In case of any such merger,
consolidation or combination (if the Issuer shall not be the continuing
corporation), or such sale, assignment, conveyance, lease, transfer or other
disposition and following such an assumption by the Surviving Person, such
Surviving Person shall succeed to and be substituted for the Issuer, with the
same effect as if it had been named herein. Such Surviving Person 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 Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such Surviving Person 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 Securities
which previously shall have been signed and delivered by the officers of the
Issuer to the Trustee for authentication, and any Securities which such
Surviving Person thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation, combination, merger, sale, assignment,
conveyance, lease, transfer or other disposition, such changes in phraseology
and form (but not in substance) may be made in the Securities thereafter to be
issued as may be appropriate.
In the event of any such sale, assignment, conveyance, transfer or other
disposition (other than by way of lease), the Issuer or any Surviving Person
which shall theretofore have become such in the manner described in this
Article shall be
43
discharged from all obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.
SECTION 8.03. Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 5.01 and 5.02, may receive an Opinion of Counsel,
prepared in accordance with Section 10.05, as conclusive evidence that any such
consolidation, combination, merger, sale, assignment, conveyance, lease,
transfer or other disposition, and any such assumption, and any such
liquidation or dissolution, complies with the applicable provisions of this
Indenture.
ARTICLE 9
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED
MONEYS
SECTION 9.01. Satisfaction and Discharge of Indenture. If at any time
either (a) the Issuer shall have delivered to the Trustee for cancellation all
securities of any series theretofore authenticated (other than any 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 (b) (i) all the
securities of such series not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or will be redeemable 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 moneys repaid by the Trustee or any paying agent to the Issuer in
accordance with Section 9.04) 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 Securities of such
series (other than any 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
cancellation, including principal and interest due or to become due on or prior
to such date of maturity as the case may be, and if, in either case (a) or (b)
above, the Issuer shall also pay or cause to be paid all other sums payable
hereunder by the Issuer with respect to Securities of such series, then this
Indenture shall cease to be of further effect with respect to Securities of
such series (except as to (i) rights of registration of transfer and exchange
of Securities of such series, and the Issuer's right of optional redemption, if
any, (ii) rights of conversion of Securities of such series, if any (provided
upon the surrender for conversion of any such convertible Securities, the
Issuer shall be repaid from the amounts so deposited the amounts deposited or
44
caused to be deposited to pay any principal and interest due or to become due
on or prior to such date of maturity, and any other sums payable hereunder by
the Issuer, with respect to such convertible Securities surrendered for
conversion), (iii) substitution of mutilated, defaced, destroyed, lost or
stolen Securities, (iv) rights of Holders to receive payments of principal
thereof and interest thereon, upon the original stated dates therefor (but not
upon acceleration), and remaining rights of the Holders to receive mandatory
sinking fund payments, if any, (v) the rights, obligations and immunities of
the Trustee hereunder and (vi) the rights of the Securityholders of such series
as beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them), and the Trustee, on demand of the
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 Securities to
receive amounts in respect of principal of and interest on the 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 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 Securities of such series.
SECTION 9.02. Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 9.04, all moneys deposited with the Trustee
pursuant to Section 9.01 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 Securities of
such series for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest; but such money need not be segregated from other funds
except to the extent required by law. Money so held in trust shall not be
subject to the subordination provisions of Article 12.
SECTION 9.03. Repayment of Moneys Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to Securities of
any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of 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 moneys.
SECTION 9.04. Return of Moneys Held by Trustee and Paying Agent Unclaimed
for Three Years. Any moneys deposited with or paid to the Trustee or
45
any paying agent for the payment of the principal of or interest on any
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 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 moneys shall thereupon
cease.
SECTION 9.05. Reinstatement. If the Trustee or any paying agent is unable
to apply any money in accordance with Section 9.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
then the Issuer's obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section
9.01 until such time as the Trustee or such paying agent is permitted to apply
all such money in accordance with Section 9.02, provided that if the Issuer has
made any payment of the principal of or interest on any Securities because of
the reinstatement of its obligations, the Issuer shall be subrogated to the
rights of the Holders of such Securities to receive any such payment from the
money held by the Trustee or such paying agent.
ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.01. 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
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 Securities by the
holders thereof and as part of the consideration for the issue of the
Securities.
46
SECTION 10.02. Provisions of Indenture for the Sole Benefit of Parties and
Securityholders. Nothing in this Indenture or in the Securities, expressed or
implied, shall give or be construed to give to any person, firm or corporation,
other than the parties hereto and their successors and holders of Senior
Indebtedness and the Holders of the 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 holders of Senior Indebtedness and of
the Holders of the Securities.
SECTION 10.03. Successors and Assigns of Issuer Bound by Indenture. All
the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 10.04. Notices and Demands on Issuer, Trustee and Securityholders.
Any notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the Holders of Securities
to or on the Issuer may be given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Issuer is filed by the Issuer with the Trustee)
to E*TRADE Group, Inc., 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxx. Any notice, direction, request or demand by the
Issuer or any 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 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
Securityholders when such notice is required to be given pursuant to any
provision of this
47
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 10.05. Officers' Certificates and Opinions of Counsel; Statements
to Be Contained Therein. Upon any application or demand by the Issuer to the
Trustee to take any action under any of the provisions of this Indenture, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion 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
48
or opinion of or representations by an accountant or firm of accountants in the
employ of the Issuer, unless such officer or counsel, as the case may be, knows
that the certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with the Trustee shall contain a statement that such firm is independent.
SECTION 10.06. Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of interest on or principal of the Securities of any series or
the date fixed for redemption or repayment of any such 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 10.07. Conflict of Any Provision of Indenture with Trust Indenture
Act of 1939. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture by
operation of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939
(an "incorporated provision"), such incorporated provision shall control.
SECTION 10.08. New York Law to Govern. This Indenture and each Security
shall be deemed to be a contract under the laws of the State of New York, and
for all purposes shall be construed in accordance with the laws of such State,
except as may otherwise be required by mandatory provisions of law.
SECTION 10.09. 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 10.10. 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.
49
ARTICLE 11
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 11.01. Applicability of Article. The provisions of this Article
shall be applicable to the Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 2.03 for
Securities of such series.
SECTION 11.02. Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a whole
or in part at the option of the Issuer shall be given by mailing notice of such
redemption by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such Holders of
Securities of such series 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 Security of a series designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify the principal
amount of each Security of such series held by such Holder to be redeemed, the
date fixed for redemption, the redemption price, the conversion price in effect
at such time in the case of convertible Securities, the place or places of
payment, that payment will be made upon presentation and surrender of such
Securities, that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest accrued to the date
fixed for redemption will be paid as specified in such notice and that on and
after said date interest thereon or on the portions thereof to be redeemed will
cease to accrue. In case any 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 Security, a new Security or Securities of
such series in principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities of any series to be redeemed at the
option of the 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
50
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 money sufficient to redeem on the redemption date
all the Securities of such series so called for redemption at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption. If less than all the Outstanding Securities of a series are to be
redeemed, the Issuer will deliver to the Trustee at least 70 days prior to the
date fixed for redemption an Officers' Certificate stating the aggregate
principal amount of Securities to be redeemed.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such series to be redeemed in whole or in part. If a portion of
the Securities of a series to be redeemed that are convertible have been
submitted by the Holder thereof for conversion, the converted portion shall be
deemed to be the portion selected for redemption. Securities may be redeemed in
part in multiples equal to the minimum authorized denomination for Securities
of such series or any multiple thereof. The Trustee shall promptly notify the
Issuer in writing of the Securities of such series selected for redemption and,
in the case of any Securities of such series selected for partial redemption,
the principal amount thereof to be redeemed. For all purposes of this
Indenture, unless the context otherwise requires, all provisions relating to
the redemption of Securities of any series shall relate, in the case of any
Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
SECTION 11.03. Payment of Securities Called for Redemption. If notice of
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date
and at the place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption, and on and
after said date (unless the Issuer shall default in the payment of such
Securities at the redemption price, together with interest accrued to said
date) interest on the Securities or portions of Securities so called for
redemption shall cease to accrue and, except as provided in Sections 5.05 and
9.04, such Securities shall cease from and after the date fixed for redemption
to be entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a place of
payment specified in said notice, said Securities or the specified portions
thereof shall be paid and redeemed by the 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 Securities registered as
51
such on the relevant record date subject to the terms and provisions of Section
2.04 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the rate of interest or
Yield to Maturity (in the case of an Original Issue Discount Security) borne by
the Security.
Upon presentation of any 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 Security or Securities
of such series, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 11.04. Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the 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 controlled by or under direct or indirect common control with
the Issuer.
SECTION 11.05. Mandatory and Optional Sinking Funds. The minimum amount of
any sinking fund payment provided for by the terms of Securities of any series
is herein referred to as a "mandatory sinking fund payment", and any payment in
excess of such minimum amount provided for by the terms of Securities of any
series is herein referred to as an "optional sinking fund payment". The date on
which a sinking fund payment is to be made is herein referred to as the
"sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Issuer may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except upon redemption pursuant to the mandatory sinking
fund) by the Issuer or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant
to Section 2.07, (b) receive credit for optional sinking fund payments (not
previously so credited) made pursuant to this Section, or (c) receive credit
for Securities of such series (not previously so credited) redeemed by the
Issuer through any optional redemption
52
provision contained in the terms of such series. Securities so delivered or
credited shall be received or credited by the Trustee at the sinking fund
redemption price specified in such Securities.
On or before the sixtieth day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee a written statement
(which need not contain the statements required by Section 10.05) 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 Securities of such series, (b) stating that none of the
Securities of such series has theretofore been so credited, (c) stating that no
defaults in the payment of interest or Events of Default with respect to such
series have occurred (which have not been waived or cured) and are continuing
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. Any
Securities of such series to be credited and required to be delivered to the
Trustee in order for the Issuer to be entitled to credit therefor as aforesaid
which have not theretofore been delivered to the Trustee shall be delivered for
cancellation pursuant to Section 2.10 to the Trustee with such written
statement (or reasonably promptly thereafter if acceptable to the Trustee).
Such written statement shall be irrevocable and upon its receipt by the Trustee
the Issuer shall become unconditionally obligated to make all the cash payments
or payments therein referred to, if any, on or before the next succeeding
sinking fund payment date. Failure of the Issuer, on or before any such
sixtieth day, to deliver such written statement and Securities specified in
this paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the 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 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
Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the sinking fund redemption price together with accrued interest to
the date fixed for redemption. If such amount shall be $50,000 or less and the
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
53
11.02, for redemption on such sinking fund payment date a sufficient principal
amount of Securities of such series to absorb said cash, as nearly as may be,
and shall (if requested in writing by the Issuer) inform the Issuer of the
serial numbers of the Securities of such series (or portions thereof) so
selected. 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 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 60 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
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
Securities of such series to be given in substantially the manner provided in
Section 11.02 (and with the effect provided in Section 11.03) for the
redemption of 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 Securities of such series shall be added to the next cash sinking
fund payment for such series and, together with such payment, shall be applied
in accordance with the provisions of this Section. Any and all sinking fund
moneys held on the stated maturity date of the Securities of any particular
series (or earlier, if such maturity is accelerated), which are not held for
the payment or redemption of particular Securities of such series shall be
applied, together with other moneys, if necessary, sufficient for the purpose,
to the payment of the principal of, and interest on, the Securities of such
series at maturity.
At least one Business Day before 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 the date fixed for redemption on Securities
to be redeemed on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of a
series with sinking fund moneys or mail any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the mailing of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default
shall occur, and any moneys thereafter paid into the sinking fund, shall,
during the continuance of such default
54
or Event of Default, be deemed to have been collected under Article 4 and held
for the payment of all such Securities. In case such Event of Default shall
have been waived as provided in Section 4.09 or the default cured on or before
the sixtieth day preceding the sinking fund payment date in any year, such
moneys shall thereafter be applied on the next succeeding sinking fund payment
date in accordance with this Section to the redemption of such Securities.
ARTICLE 12
SUBORDINATION OF SECURITIES
SECTION 12.01. Agreement of Subordination. The Issuer covenants and
agrees, and each holder of Securities issued hereunder by his acceptance
thereof likewise covenants and agrees, that all Securities shall be issued
subject to the provisions of this Article 12; and each Securityholder, whether
upon original issue or upon transfer or assignment thereof, accepts and agrees
to be bound by such provisions.
The payment of the principal of and interest on all Securities issued
hereunder shall, to the extent and in the manner hereinafter set forth, be
subordinated and subject in right of payment to the prior payment in full of
all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred.
No provision of this Article 12 shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 12.02. Payments to Securityholders. In the event and during the
continuation of (a) any default in the payment of principal, premium, if any,
or interest on or any other monetary amounts due and payable on any Senior
Indebtedness, or (b) any other default having occurred concerning any Senior
Indebtedness which permits the holder or holders of any Senior Indebtedness to
accelerate the maturity of any Senior Indebtedness with notice or lapse of time
or both, and the Issuer and the Trustee receive a written notice of such
default (a "Payment Blockage Notice") from a representative of such Senior
Indebtedness or a holder of such Senior Indebtedness or the Issuer, in each
case continuing beyond the period of grace, if any, specified in the instrument
or lease evidencing such Senior Indebtedness, then, unless and until such
default shall have been cured or waived or shall have ceased to exist, no
payment shall be made by the Issuer with respect to the principal of
(including, without limitation, sinking fund payments, if any) or interest on
the Securities.
The Issuer may and shall resume payments on the Securities (1) in the case
of a payment default, on the date upon which such default is cured or waived or
55
ceases to exist, and (2) in the case of a nonpayment default with respect to
Senior Indebtedness, on the earlier of the date on which the nonpayment default
is cured or waived or ceases to exist or 179 days have passed after the date on
which the applicable Payment Blockage Notice is received.
No new period of payment blockage may be commenced pursuant to a Payment
Blockage Notice unless (A) at least 365 days shall have elapsed since the
Issuer's receipt of the immediately prior Payment Blockage Notice and (B) all
scheduled payments of principal, premium, if any, and interest on the
Securities that have come due have been paid in full in cash, or in such other
form of payment as may be acceptable to the holders of the Securities, and the
Trustee or the requisite holders of Securities shall not have begun proceedings
to enforce the right of the holders to receive payments. No default (whether or
not such event of default is on the same issue of Senior Indebtedness) that
existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent Payment
Blockage Notice.
Upon any payment by the Issuer, or distribution of assets of the Issuer of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution, winding-up, liquidation or reorganization of the Issuer,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other such proceedings, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made on account of
the principal or interest on the Securities (except payments made pursuant to
Article 9 hereof from monies deposited with the Trustee pursuant thereto prior
to the happening of such dissolution, winding-up, liquidation or
reorganization); and, upon any such dissolution, winding-up, liquidation or
reorganization, any payment by the Issuer, or distribution of assets of the
Issuer of any kind or character, whether in cash, property or securities, to
which the holders of the Securities or the Trustee would be entitled except for
the provisions of this Article 12, shall (except as aforesaid) be paid by the
Issuer or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the holders of the
Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Issuer) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness, before any
payment or distribution is made to the holders of the Securities or to the
Trustee.
56
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Issuer of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the holders of the Securities before all Senior Indebtedness is paid
in full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective interests may appear, as
calculated by the Issuer, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
For purposes of this Article 12, the words, "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, the payment of which is
subordinated at least to the extent provided in this Article 12 with respect to
the Securities to the payment of all Senior Indebtedness which may at the time
be outstanding; provided that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of the Senior Indebtedness (other than
leases) and of leases which are assumed are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Issuer with, or the merger of the Issuer into, another corporation or the
liquidation or dissolution of the Issuer following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article 8 hereof
shall not be deemed a dissolution, winding-up, liquidation or reorganization
for the purposes of this Section 12.02 if such other corporation shall, as a
part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article 8 hereof. Nothing in this Section 12.02 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
5.06.
SECTION 12.03. Subrogation of Securities. Subject to the payment in full
of all Senior Indebtedness, the rights of the holders of the Securities shall
be subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Issuer
applicable to the Senior Indebtedness until the principal of and interest on
the Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or
57
securities to which the holders of the Securities or the Trustee would be
entitled except for the provisions of this Article 12, and no payment over
pursuant to the provisions of this Article 12, to or for the benefit of the
holders of Senior Indebtedness by holders of the Securities or the Trustee,
shall, as between the Issuer, its creditors other than holders of Senior
Indebtedness, and the holders of the Securities, be deemed to be a payment by
the Issuer to or on account of the Senior Indebtedness. It is understood that
the provisions of this Article 12 are and are intended solely for the purpose
of defining the relative rights of the holders of the Securities, on the one
hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article 12 or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Issuer, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Securities, the obligation of the Issuer, which is absolute and unconditional,
to pay to the holders of the Securities the principal of and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
holders of the Securities and creditors of the Issuer other than the holders of
the Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or the holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 12 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Issuer received upon the
exercise of any such remedy.
Upon any payment or distribution of assets of the Issuer referred to in
this Article 12, the Trustee, subject to the provisions of Section 5.01, and
the holders of the Securities shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee
or to the holders of the Securities, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Issuer, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 12.
SECTION 12.04. Authorization by Securityholders. Each holder of a Security
by his acceptance thereof authorizes and directs the Trustee in his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article 12 and appoints the Trustee his
attorney-in-fact for any and all such purposes.
58
SECTION 12.05. Notice to Trustee. The Issuer shall give promptly written
notice to a Responsible Officer of the Trustee of any fact known to the Issuer
which would prohibit the making of any payment of monies to or by the Trustee
in respect of the Securities pursuant to the provisions of this Article 12.
Notwithstanding the provisions of this Article 12 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 of monies
to or by the Trustee in respect of the Securities pursuant to the provisions of
this Article 12, unless and until a Responsible Officer of the Trustee shall
have received written notice thereof at the Corporate Trust Office of the
Trustee from the Issuer or a holder or holders of Senior Indebtedness or from
any trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 5.01, shall be entitled in all
respects to assume that no such facts exist; provided that if on a date not
fewer than three Business Days prior to the date upon which by the terms hereof
any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Security) the
Trustee shall not have received, with respect to such monies, the notice
provided for in this Section 12.05, 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 on or after such prior date.
Notwithstanding anything to the contrary hereinbefore set forth, nothing
shall prevent any payment by the Issuer or the Trustee to the Securityholders
of monies in connection with a redemption of Securities if (i) notice of such
redemption has been given pursuant to Article 11 or Section 9.01 hereof prior
to the receipt by the Trustee of written notice as aforesaid, and (ii) such
notice of redemption is given not earlier than 60 days before the redemption
date.
The Trustee conclusively shall be entitled to rely on the delivery to it
of a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a trustee on behalf
of any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article 12, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article 12, and if such
evidence is not furnished the Trustee may
59
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment.
SECTION 12.06. Trustee's Relation to Senior Indebtedness. The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article 12 in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness and nothing elsewhere in
this Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall pay over or
deliver to holders of Securities, the Issuer or any other Person money or
assets to which any holder of Senior Indebtedness shall be entitled by virtue
of this Article 12 or otherwise.
SECTION 12.07. No Impairment of Subordination. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Issuer or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Issuer with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charge with.
SECTION 12.08. Rights of Trustee. Nothing in this Article 12 shall apply
to claims of or payments to, the Trustee pursuant to Section 5.06 or 9.04.
60
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first above written.
E*TRADE GROUP, INC.
By:
--------------------------------
Name:
Title:
Attest:
By:
--------------------------
THE BANK OF NEW YORK
By:
--------------------------------
Name:
Title:
61
