EXHIBIT 4.1
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HOUSTON INDUSTRIES INCORPORATED
AND
THE BANK OF NEW YORK
AS TRUSTEE
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JUNIOR SUBORDINATED INDENTURE
DATED AS OF ___________, ____
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JUNIOR SUBORDINATED DEBENTURES
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TABLE OF CONTENTS
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Page
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ARTICLE 1
Definitions
Section 1.01. Definitions.............................................. 2
ARTICLE 2
Issue Description, Terms, Execution Registration
and Exchange of Debentures
Section 2.01. Designation, Terms, Amount, Authentication and Delivery
of Debentures............................................ 8
Section 2.02. Form of Debenture and Trustee's Certificate.............. 10
Section 2.03. Date and Denominations of Debentures and Provisions
for Payment of Principal, Premium and Interest........... 11
Section 2.04. Execution of Debentures.................................. 12
Section 2.05. Exchange of Debentures................................... 14
Section 2.06. Temporary Debentures..................................... 15
Section 2.07. Mutilated, Destroyed, Lost or Stolen Debentures.......... 15
Section 2.08. Cancellation of Surrendered Debentures................... 16
Section 2.09. Provisions of Indenture and Debentures for Sole
Benefit of Parties and Debentureholders.................. 16
Section 2.10. Appointment of Authenticating Agent...................... 16
Section 2.11. Global Debentures........................................ 17
Section 2.12. CUSIP Numbers............................................ 18
ARTICLE 3
Redemption of Debentures and Sinking Fund Provisions
Section 3.01. Redemption............................................... 19
Section 3.02. Notice of Redemption..................................... 19
Section 3.03. Payment Upon Redemption.................................. 20
Section 3.04. Sinking Funds for Debentures............................. 21
Section 3.05. Satisfaction of Sinking Fund Payments With Debentures.... 21
Section 3.06. Redemption of Debentures for Sinking Fund................ 21
ARTICLE 4
Particular Covenants of the Company
Section 4.01. Payment of Principal of (and Premium, if any) and
Interest on Debentures.................................. 22
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Section 4.02. Maintenance of Office or Agent for Payment of
Debentures, Designation of Office or Agency for Payment,
Registration, Transfer and Exchange of Debentures........ 22
Section 4.03. Duties of Paying Agent; Company as Payment Agent; and
Holding Sums In Trust.................................... 22
Section 4.04. Appointment to Fill Vacancy in Office of Trustee......... 23
ARTICLE 5
Debentureholders Lists and Reports by the Company and the Trustee
Section 5.01. Company to Furnish Trustee Information as to Names and
Addresses of Debentureholders............................ 23
Section 5.02. Trustee to Preserve Information as to Names and
Addresses of Debentureholders............................ 24
Section 5.03. Annual and Other Reports to Be Filed by Company With
the Trustee.............................................. 25
Section 5.04. Trustee to Transmit Annual Report to Debentureholders.... 26
ARTICLE 6
Remedies of the Trustee and Debentureholders on Event of Default
Section 6.01. Events of Default Defined................................ 26
Section 6.02. Covenant of Company to Pay to Trustee Whole Amount Due
on Debentures on Default in Payment of Interest or
Principal (and Premiums, if any)........................ 29
Section 6.03. Application of Moneys Collected by Trustee............... 30
Section 6.04. Limitation on Suits by Holders of Debentures............. 31
Section 6.05. Remedies Cumulative; Delay or Omission in Exercise of
Rights Not Waiver of Default............................. 32
Section 6.06. Rights of Holders of Majority in Principal Amount of
Debentures to Direct Trustee and to Waive Defaults....... 32
Section 6.07. Trustee to Give Notice of Defaults Known To It, But
May Withhold in Certain Circumstances.................... 33
Section 6.08. Requirements of an Undertaking to Pay Costs in Certain
Suits Under Indenture or Against Trustee................. 33
ARTICLE 7
Concerning the Trustee
Section 7.01. Upon Event of Default Occurring and Continuing, Trustee
Shall Exercise Powers Vested In It, and Use Same Degree
of Care and Skill In Their Exercise, as Prudent
Individual Would Use..................................... 34
Section 7.02. Certain Rights of the Trustee............................ 35
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Section 7.03. Trustee Not Liable for Recitals In Indenture or In
Debentures............................................... 37
Section 7.04. Trustee, Paying Agent or Debenture Registrar May Own
Debentures............................................... 37
Section 7.05. Moneys Received by Trustee to Be Held In Trust Without
Interest................................................. 37
Section 7.06. Trustee Entitled to Compensation, Reimbursement and
Indemnity................................................ 38
Section 7.07. Right of Trustee to Rely on Certificate of Officers of
Company Where No Other Evidence Specifically Prescribed.. 38
Section 7.08. Disqualification; Conflicting Interests.................. 39
Section 7.09. Requirements for Eligibility of Trustee.................. 39
Section 7.10. Resignation of Trustee and Appointment of Successor...... 39
Section 7.11. Acceptance by Successor to Trustee....................... 41
Section 7.12. Successor to Trustee by Merger, Consolidation or
Succession to Business................................... 42
Section 7.13. Preferential Collection of Claims Against the Company.... 42
ARTICLE 8
Concerning the Debentures
Section 8.01. Evidence of Action by Debentureholders................... 42
Section 8.02. Proof of Execution of Instruments and of Holding of
Debentures............................................... 43
Section 8.03. Who May Be Deemed Owners of Debentures................... 43
Section 8.04. Debentures Owned by the Company or Controlled or
Controlling Companies Disregarded for Certain Purposes... 43
Section 8.05. Instruments Executed by Debentureholders Bind Future
Holders.................................................. 44
ARTICLE 9
Supplemental Indentures
Section 9.01. Purposes for Which Supplemental Indenture May Be
Entered Into Without Consent of Debentureholders......... 44
Section 9.02. Modification of Indenture with Consent of
Debentureholders......................................... 46
Section 9.03. Effect of Supplemental Indentures........................ 47
Section 9.04. Debentures May Bear Notation of Changes By Supplemental
Indentures............................................... 47
Section 9.05. Opinion of Counsel....................................... 47
ARTICLE 10
Consolidation, Merger, Sale or Conveyance
Section 10.01. Company May Consolidate, etc. on Certain Terms........... 48
Section 10.02. Successor Corporation Substituted........................ 48
Section 10.03. Opinion of Counsel....................................... 48
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ARTICLE 11
Satisfaction and Discharge of Indenture; Unclaimed Moneys
Section 11.01. Satisfaction and Discharge of Indenture.................. 48
Section 11.02. Application by Trustee of Funds Deposited For Payment of
Debentures............................................... 51
Section 11.03. Repayment of Moneys Held by the Paying Agent............. 51
Section 11.04. Repayment of Moneys Held by the Trustee.................. 51
Section 11.05. Indemnification Relating to Governmental Obligations..... 51
ARTICLE 12
Immunity of Incorporators, Stockholders, Officers and Directors
Section 12.01. Incorporators, Stockholders, Officers and Directors of
Company Exempt From Individual Liability................. 52
ARTICLE 13
Miscellaneous Provisions
Section 13.01. Successors and Assigns of Company Bound by Indenture..... 52
Section 13.02. Acts of Board, Committee or Officer of Successor
Company Valid............................................ 52
Section 13.03. Surrender of Powers of the Company....................... 52
Section 13.04. Required Notices or Demands May be Served by Mail........ 53
Section 13.05. Indenture and Debentures to Be Construed in Accordance
with Laws of the State of New York....................... 53
Section 13.06. Officer's Certificate and Opinion of Counsel to be
Furnished Upon Application or Demands by Company;
Statements To Be Included In Each Certificate or Opinion
With Respect to Compliance With Condition or Covenant.... 53
Section 13.07. Payments Due on Sundays or Holidays...................... 53
Section 13.08. Provisions Required by Trust Indenture Act of 1939
to Control............................................... 54
Section 13.09. Indenture May Be Executed by its Counterparts............ 54
Section 13.10. Separability of Indenture Provisions..................... 54
Section 13.11. Assignment by Company to a Subsidiary or Affiliate....... 54
Section 13.12. Holders of Preferred Securities as Third Party
Beneficiaries of the Indenture; Holders of Preferred
Securities May Institute Legal Proceedings Against the
Company in Certain Cases................................. 54
ARTICLE 14
Subordination of debentures
Section 14.01. Agreement to Subordinate................................. 55
Section 14.02. Default on Senior Debt................................... 55
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Section 14.03. Liquidation; Dissolution; Bankruptcy..................... 56
Section 14.04. Subrogation of Debentures................................ 57
Section 14.05. Authorization by Debentureholders........................ 58
Section 14.06. Notice to Trustee........................................ 58
Section 14.07. Trustee's Relation to Senior Debt........................ 59
Section 14.08. No Impairment to Subordination........................... 59
Section 14.09. Article Applicable to Paying Agents...................... 60
Section 14.10. Trust Moneys Not Subordinated............................ 60
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THIS JUNIOR SUBORDINATED INDENTURE, is dated as of the ___ day of
_________, ____, between Houston Industries Incorporated, a corporation duly
organized and existing under the laws of the State of Texas (hereinafter
sometimes referred to as the "Company"), and The Bank of New York, a New York
banking corporation, as Trustee (hereinafter sometimes referred to as the
"Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has fully
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured junior subordinated debentures (hereinafter referred to as
the "Debentures"), in an unlimited aggregate principal amount to be issued from
time to time in one or more series in accordance with the terms of this
Indenture, as registered Debentures without coupons, to be authenticated by the
certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Debentures are
to be authenticated, issued and delivered, the Company has duly authorized the
execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication to be borne
by the Debentures (the "Certificate of Authentication") are to be substantially
in such forms as may be approved by the Board of Directors (as defined below) or
set forth in any indenture supplemental to this Indenture;
AND WHEREAS, all acts and things necessary to make the Debentures issued
pursuant hereto, when executed by the Company and authenticated and delivered by
the Trustee in accordance with the terms of this Indenture, the valid, binding
and legal obligations of the Company, and to constitute a valid indenture and
agreement according to its terms, have been done and performed or will be done
and performed prior to the issuance of such Debentures, and the execution of
this Indenture has been and the issuance hereunder of the Debentures has been or
will be prior to issuance in all respects duly authorized, and the Company, in
the exercise of the legal right and power in it vested, executes this Indenture
and proposes to make, execute, issue and deliver the Debentures;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Debentures
are and are to be authenticated, issued and delivered, and in consideration of
the premises and of the acquisition and acceptance of the Debentures by the
holders thereof, the Company covenants and agrees with the Trustee, for the
equal and proportionate benefit (subject to the provisions of this Indenture) of
the respective holders from time to time of the Debentures, without any
discrimination, preference or priority of any one Debenture over any other by
reason of priority in the time of issue, sale or negotiation thereof, or
otherwise, except as provided herein, as follows:
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ARTICLE 1
Definitions
Section 1.01. Definitions. The terms defined in this Section (except as in
this Indenture otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture, any resolution of the Board of
Directors of the Company and of any indenture supplemental hereof shall have the
respective meanings specified in this Section. All other terms used in this
Indenture which are defined in the Trust Indenture Act of 1939, as amended, or
which are by reference in such Act defined in the Securities Act of 1933, as
amended (except as herein otherwise expressly provided or unless the context
otherwise 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
instrument.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, no HI Trust to which
Debentures have been issued shall be deemed to be an Affiliate of the Company.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authenticating Agent" means an authenticating agent with respect to all or
any of the series of Debentures, as the case may be, appointed with respect to
all or any series of the Debentures, as the case may be, by the Trustee pursuant
to Section 2.10.
"Board of Directors" means the Board of Directors of the Company, or any
committee of such Board duly authorized to act hereunder.
"Board Resolution" means a copy of one or more resolutions, certified by
the secretary or an assistant secretary of the Company to have been adopted or
consented to by the Board of Directors and to be in full force and effect, and
delivered to the Trustee.
"Business Day", with respect to any series of Debentures, means any day
other than (i) a Saturday or a Sunday, (ii) a day on which banking institutions
in the Borough of Manhattan, The City and State of New York or Houston, Texas,
are authorized or obligated by law or executive order to close or (iii) a day on
which the Corporate Trust Office of the Trustee, or, with respect to Debentures
of a series initially issued to an HI Trust, the principal corporate trust
office of the Property Trustee under the related Declaration of Trust, is closed
for business.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer, the principal accounting officer or
the Treasurer of the Company. The Certificate need not comply with the
provisions of Section 13.06.
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"Common Securities" means the common undivided beneficial interests in the
assets of the applicable HI Trust.
"Company" means Houston Industries Incorporated, a corporation duly
organized and existing under the laws of the State of Texas, and, subject to the
provisions of Article 10, shall also include its successor and assigns.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of this Indenture is located at 000
Xxxxxxx Xxxxxx, Xxxxx 21 West, New York, New York 10286, Attention: Corporate
Trust Trustee Administration.
"Debenture" or "Debentures" means any Debenture or Debentures, as the case
may be, authenticated and delivered under this Indenture.
"Debenture Register" has the meaning assigned in Section 2.05(b).
"Debenture Registrar" has the meaning assigned in Section 2.05(b).
"Debentureholder", "holder of Debentures", "registered holder", or other
similar term, means the person or persons in whose name or names a particular
Debenture shall be registered on the books of the Company kept for the purpose
in accordance with the terms of this Indenture.
"Debt" means, with respect to any Person at any date of determination
(without duplication), (i) all indebtedness of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses, (iii) all obligations of such
Person in respect of letters of credit or bankers' acceptances or other similar
instruments (or reimbursement obligations thereto) issued on the account of such
person, (iv) all obligations of such person to pay the deferred purchase price
of property or services, except Trade Payables, (v) all obligations of such
Person as lessee under capitalized leases, (vi) all Debt of others secured by a
Lien on any asset of such Person, whether or not such Debt is assumed by such
Person; provided that, for purposes of determining the amount of any Debt of the
type described in this clause (vi), if recourse with respect to such Debt is
limited to such asset, the amount of such Debt shall be limited to the lesser of
the fair market value of such asset or the amount of such Debt, (vii) all Debt
of others Guaranteed by such Person to the extent such Debt is Guaranteed by
such Person, and (viii) to the extent not otherwise included in this definition,
all obligations of such Person for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity prices, forward
contracts, options, swaps, collars and similar arrangements.
"Declaration of Trust" means the Amended and Restated Declaration of Trust
of an HI Trust, if any, specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Debentures pursuant
to Section 2.01 hereof.
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"Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default hereunder.
"Depositary" means with respect to Debentures of any series, for which the
Company shall determine that such Debentures will be issued as one or more
Global Debentures, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to either Section 2.01 or 2.11.
"Event of Default", with respect to Debentures of a particular series means
any event specified in Section 6.01(a), continued for the period of time, if
any, and the giving of the notice, if any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Global Debenture" means, with respect to any series of Debentures, a
Debenture in the form prescribed in Section 2.11 executed by the Company and
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with the Indenture, which shall be registered in
the name of the Depositary or its nominee.
"Governmental Obligations" means securities that are (i) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Governmental Obligation or the specific payment of principal of
or interest on the Governmental Obligation evidenced by such depository receipt.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Debt or other obligation of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such Debt or
other obligation of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Debt of other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided that the term "Guarantee"
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shall not include endorsements for collection or deposit in the ordinary course
of business. The term "Guarantee" used as a verb has a corresponding meaning.
"HI Trust" means any statutory business trust created under the laws of the
State of Delaware as specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Debentures pursuant
to Section 2.01 hereof.
"Indenture" means this instrument as originally executed, or, if amended or
supplemented as herein provided, as so amended or supplemented.
"Interest Payment Date" when used with respect to any installment of
interest on a Debenture of a particular series means the date specified in such
Debenture or in a Board Resolution or in an indenture supplemental hereto with
respect to such series as the fixed date on which an installment of interest
with respect to Debentures of that series is due and payable.
"Lien" means, with respect to any property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
property. For purposes of this Indenture, the Company shall be deemed to own
subject to a Lien any property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such property.
"Officers' Certificate" means a certificate signed by the President or a
Vice President and by the Treasurer or an Assistant Treasurer or the Comptroller
or an Assistant Comptroller or the Secretary or an Assistant Secretary of the
Company, and delivered to the Trustee. Each such certificate shall include the
statements provided for in Section 13.06, if and to the extent required by the
provisions thereof.
"Opinion of Counsel" means an opinion in writing signed by legal counsel,
who may be counsel for the Company, an HI Trust or the Trustee, which may be an
employee of the Company but not an employee of an HI Trust or the Trustee, and
who shall be reasonably acceptable to the Trustee. Each such opinion shall
include the statements provided for in Section 13.06, if and to the extent
required by the provisions thereof.
"Outstanding", when used with reference to Debentures of any series,
subject to the provisions of Section 8.01, means, as of any particular time, all
Debentures of that series theretofore authenticated and delivered by the Trustee
under this Indenture, except (a) Debentures theretofore cancelled by the Trustee
or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or which have previously been cancelled; (b) Debentures or portions
thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust for the holders of such Debentures by the Company
(if the Company shall act as its own paying agent); provided, however, that if
such Debentures or portions of such Debentures are to be redeemed prior to the
maturity thereof, notice of such
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redemption shall have been given as in Article 3 provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; (c)
Debentures paid pursuant to Section 2.07; and (d) Debentures in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered pursuant to the terms of Section 2.07; provided, however, that in
determining whether the holders of the requisite principal amount of Outstanding
Debentures are present at a meeting of holders of Debentures for quorum purposes
or have consented to or voted in favor of any request, demand, authorization,
direction, notice, consent, waiver, amendment or modification hereunder,
Debentures held for the account of the Company, any of its subsidiaries or any
of its Affiliates shall be disregarded and deemed not to be Outstanding, except
that in determining whether the Trustee shall be protected in making such a
determination or relying upon any such quorum, consent or vote, only Debentures
which the Trustee actually knows to be so owned shall be so disregarded.
"Person" means any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment", when used with respect to the Debentures of any series,
means the place or places where the principal of and any premium and interest on
the Debentures of that series are payable as specified as contemplated by
Section 2.01.
"Predecessor Debenture" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for the purposes of this definition, any Debenture
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.
"Preferred Securities" means the preferred undivided beneficial interests
in the assets of the applicable HI Trust.
"Property Trustee" means the entity performing the function of the Property
Trustee under the applicable Declaration of Trust of an HI Trust.
"Responsible Officer" shall mean, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs 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 such Person's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
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"Security Exchange" when used with respect to the Debentures of any series
which are held as trust assets of an HI Trust pursuant to the Declaration of
Trust of such HI Trust, means the distribution of the Debentures of such series
by such HI Trust in exchange for the Preferred Securities and Common Securities
of such HI Trust in dissolution of such HI Trust pursuant to the Declaration of
Trust of such HI Trust.
"Senior Debt" means the principal of (and premium, if any) and interest on
all Debt of the Company whether created, incurred or assumed before, on or after
the date of this Indenture; provided that such Senior Debt shall not include (i)
Debt of the Company that, when incurred and without respect to any election
under Section 1111(b) of Title 11, U.S. Code, was without recourse, and (ii) any
other Debt of the Company which by the terms of the instrument creating or
evidencing the same is specifically designated as being subordinated to or pari
passu with the Debentures, and in particular the Debentures shall rank pari
passu with all other debt securities and guarantees issued to any trust,
partnership or other entity affiliated with the Company which is a financing
vehicle of the Company in connection with an issuance of preferred securities by
such financing entity.
"Subsidiary" means any corporation at least a majority of whose outstanding
voting stock shall at the time be owned, directly or indirectly, by the Company
or by one or more Subsidiaries or by the Company and one or more Subsidiaries.
For the purposes only of this definition of the term "Subsidiary", the term
"voting stock", as applied to the stock of any corporation shall mean stock of
any class or classes having ordinary voting power for the election of a majority
of the directors of such corporation, other than stock having such power only by
reason of the occurrence of a contingency.
"Trade Payables" means, with respect to any Person, any accounts payable or
any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Trustee" means The Bank of New York, a New York banking corporation, and,
subject to the provisions of Article 7, shall also include its successors and
assigns, and, if at any time there is more than one person acting in such
capacity hereunder, "Trustee" shall mean each such person. The term "Trustee"
as used with respect to a particular series of the Debentures shall mean the
trustee with respect to that series.
"Trust Indenture Act", subject to the provisions of Section 9.01 and 9.02,
means the Trust Indenture Act of 1939, as amended and in effect at the date of
execution of this Indenture.
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ARTICLE 2
Issue Description, Terms, Execution Registration and Exchange of Debentures
Section 2.01. Designation, Terms, Amount, Authentication and Delivery of
Debentures. The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by or
pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a particular
series. Prior to the initial issuance of Debentures of any series, there shall
be established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto:
(1) the title of the Debentures of the series (which shall distinguish
the Debentures of the series from all other Debentures);
(2) any limit upon the aggregate principal amount of the Debentures of
that series which may be authenticated and delivered under this Indenture
(except for Debentures authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Debentures of that
series);
(3) the date or dates on which the principal of the Debentures of the
series is payable and the right to shorten, extend or defer such date or
dates;
(4) the rate or rates at which the Debentures of the series shall bear
interest or the manner of calculation of such rate or rates, if any;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner
of determination of such Interest Payment Dates and the record date for the
determination of holders to whom interest is payable on any such Interest
Payment Dates;
(6) the right, if any, to extend or defer the interest payment periods
and the duration of such extension;
(7) the period or periods within which, the price or prices at which,
and the terms and conditions upon which, Debentures of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Debentures of the series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a
8
holder thereof and the period or periods within which, the price or prices
at which, the currency or currencies (including currency unit or units) in
which and the terms and conditions upon which, Debentures of the series
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) any exchangeability, conversion or prepayment provisions of the
Debentures;
(10) the form of the Debentures of the series including the form of
the Certificate of Authentication for such series;
(11) if other than denominations of $25 or any integral multiple
thereof, the denominations in which the Debentures of the series shall be
issuable;
(12) whether the Debentures are issuable as one or more Global
Debentures and, in such case, the identity of the Depositary for such
series, the form of any legend or legends which shall be borne by any such
Global Debentures in addition to or in lieu of that set forth in Section
2.11 and any circumstances in addition to or in lieu of those set forth in
Section 2.11 in which any such Global Debentures may be exchanged in whole
or in part for Debentures registered, and any transfer of such Global
Debentures in whole or in part may be registered, in the name or names of
Persons other than the Depositary for such Global Debentures or a nominee
thereof;
(13) if the Debentures of such series are to be deposited as trust
assets in an HI Trust the name of the applicable HI Trust (which shall
distinguish such statutory business trust from all other HI Trusts) into
which the Debentures of such series are to be deposited as trust assets and
the date of its Declaration of Trust;
(14) the place or places where the principal of (and premium, if any)
and interest on the Debentures of such series shall be payable, the place
or places where the Debentures of such series may be presented for
registration of transfer or exchange, and the place or places where notices
and demands to or upon the Company in respect of the Debentures of such
series may be made;
(15) if other than U.S. dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any) and
interest, if any, on the Debentures of the series shall be payable, or in
which the Debentures of the series shall be denominated;
(16) the additions, modifications or deletions, if any, in the Events
of Default or covenants of the Company set forth herein with respect to the
Debentures of such series;
9
(17) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the maturity thereof;
(18) the additions or changes, if any, to this Indenture with respect
to the Debentures of such series as shall be necessary to permit or
facilitate the issuance of the Debentures of such series in bearer form,
registrable or not registrable as to principal, and with or without
interest coupons;
(19) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Debentures of such series or the
manner in which such amounts will be determined;
(20) the appointment of any Paying Agent or Agents for the Debentures
of such series;
(21) the relative degree, if any, to which the Debentures of such
series shall be senior to or be subordinated to other series of Debentures
in right of payment, whether such other series of Debentures are
Outstanding or not;
(22) any and all other terms with respect to the Debentures of such
series (and any terms which may be required by or advisable under
applicable laws or regulations not inconsistent with the terms of this
Indenture); and
(23) an identification of any applicable United States Federal income
tax consequences with respect to the Debentures of such series, including
whether and under what circumstances the Company will pay additional
amounts on the Debentures of such series held by a Person who is not a U.S.
Person in respect of any tax, assessment or governmental charge withheld or
deducted and, if so, whether the Company will have the option to redeem the
Debentures of such series rather than pay such additional amounts.
All Debentures of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to any
such Board Resolution or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 2.02 Form of Debenture and Trustee's Certificate. The Debentures of
any series and the Trustee's certificate of authentication to be borne by such
Debentures shall be substantially
10
of the tenor and purport as set forth in one or more indentures supplemental
hereto or as provided in a Board Resolution and as set forth in an Officers'
Certificate, and may have such letters, numbers or other marks of identification
or designation and such legends or endorsements typewritten, printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or automated quotation system on
which Debentures of that series may be listed or traded, or to conform to usage.
Section 2.03. Date and Denominations of Debentures and Provisions for
Payment of Principal, Premium and Interest. The Debentures shall be issuable as
registered Debentures and in the denominations of $25 or any integral multiple
thereof, subject to Section 2.01(11). The Debentures of a particular series
shall bear interest payable on the dates and at the rate specified with respect
to that series. The principal of and the interest on the Debentures of any
series, as well as any premium thereon in case of redemption thereof prior to
maturity, shall, subject to Section 2.01(8) and (15), be payable in the coin or
currency of the United States of America which at the time is legal tender for
public and private debt, at the Place of Payment. Each Debenture shall be dated
the date of its authentication. Interest on the Debentures shall be computed on
the basis of a 360-day year composed of twelve 30-day months.
The interest installment on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name said
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Debenture of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on such Debenture will be paid upon presentation and surrender of such
Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date for Debentures of the same
series (herein called "Defaulted Interest") shall forthwith cease to be payable
to the registered holder on the relevant regular record date by virtue of having
been such holder; and such Defaulted Interest shall be paid by the Company, at
its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered at the close of business
on a special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each such Debenture and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
11
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest
which shall not be more than 15 nor less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Debentureholder at his or her address as it
appears in the Debenture Register (as hereinafter defined), not less than
10 days prior to such special record date. Notice of the proposed payment
of such Defaulted Interest and the special record date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the persons
in whose names such Debentures (or their Predecessor Debentures) are
registered on such special record date and shall be no longer payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange or automated quotation system on
which such Debentures may be listed or traded, and upon such notice as may
be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or more indentures
supplemental hereto establishing the terms of any series of Debentures pursuant
to Section 2.01 hereof, the term "regular record date" as used in this Section
with respect to a series of Debentures with respect to any Interest Payment Date
for such series shall mean either the fifteenth day of the month immediately
preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 hereof shall occur, if such Interest Payment
Date is the first day of a month, or the last day of the month immediately
preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 hereof shall occur, if such Interest Payment
Date is the fifteenth day of a month, whether or not such date is a Business
Day.
Subject to the foregoing provisions of this Section, each Debenture of a
series delivered under this Indenture upon transfer of or in exchange for or in
lieu of any other Debenture of such series shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debenture.
Section 2.04. Execution of Debentures. The Debentures shall, subject to
the provisions of Section 2.06, be printed on steel engraved borders or fully or
partially engraved, or legibly typed, as the proper officers of the Company may
determine, and shall be signed on behalf of the Company
12
by the Chairman or Vice Chairman of its Board of Directors or its Chief
Executive Officer, President or one of its Vice Presidents, under its corporate
seal attested by its Secretary or one of its Assistant Secretaries. The
signature of the Chairman, Vice Chairman, Chief Executive Officer, President or
a Vice President and/or the signature of the Secretary or an Assistant Secretary
in attestation of the corporate seal, upon the Debentures, may be in the form of
a manual or facsimile signature and may be imprinted or otherwise reproduced on
the Debentures and for that purpose the Company may use the manual or facsimile
signature of any person who shall have been a Chairman, Vice Chairman, Chief
Executive Officer, President or Vice President, or of any person who shall have
been a Secretary or Assistant Secretary, notwithstanding the fact that at the
time the Debentures shall be authenticated and delivered or disposed of such
person shall have ceased to be the Chairman, Vice Chairman, Chief Executive
Officer, President or a Vice President, or the Secretary or an Assistant
Secretary, of the Company, as the case may be. The seal of the Company may be in
the form of a facsimile of the seal of the Company and may be impressed,
affixed, imprinted or otherwise reproduced on the Debentures.
Only such Debentures as shall bear thereon a Certificate of Authentication
substantially in the form established for such Debentures, executed manually by
an authorized signatory of the Trustee, or by any Authenticating Agent with
respect to such Debentures, shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate executed by the
Trustee, or by any Authenticating Agent appointed by the Trustee with respect to
such Debentures, upon any Debenture executed by the Company shall be conclusive
evidence that the Debenture so authenticated has been duly authenticated and
made available for delivery hereunder and that the holder is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Debenture
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Debenture to the Trustee for
cancellation as provided in Section 2.08, for all purposes of this Indenture
such Debenture shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debentures of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures, signed by its
President or any Vice President and its Treasurer or any Assistant Treasurer,
and the Trustee in accordance with such written order shall authenticate and
make available for delivery such Debentures. Each Debenture shall be dated the
date of its authentication by the Trustee.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.
The Trustee shall not be required to authenticate such Debentures if the
issue of such Debentures pursuant to this Indenture will affect the Trustee's
own rights, duties or immunities
13
under the Debentures and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
Section 2.05. Exchange of Debentures. (a) Debentures of any series may be
exchanged upon presentation thereof at a Place of Payment, for other Debentures
of such series of authorized denominations, and for a like aggregate principal
amount, upon payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, all as provided in this Section. In respect of any
Debentures so surrendered for exchange, the Company shall execute, the Trustee
shall authenticate and such office or agency shall make available for delivery
in exchange therefor the Debenture or Debentures of the same series which the
Debentureholder making the exchange shall be entitled to receive, bearing
numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at the Corporate Trust
Office of the Trustee (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment is herein sometimes
collectively referred to as the "Debenture Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall register the
Debentures and the transfers of Debentures as in this Article provided and which
at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Debentures and transfer of Debentures
as herein provided shall be appointed by the Company (the "Debenture
Registrar"). The initial Debenture Registrar shall be the Trustee.
Upon surrender for transfer of any Debenture at the office or agency of the
Company in a Place of Payment, the Company shall execute and the Trustee shall
authenticate and deliver, in the name of the transferee or transferees, one or
more new Debentures of the same series as the Debenture presented, of any
authorized denominations and of like tenor and aggregate principal amount.
All Debentures presented or surrendered for exchange or registration of
transfer, as provided in this Section, shall be accompanied (if so required by
the Company or the Debenture Registrar) by a written instrument or instruments
of transfer, in form satisfactory to the Company or the Debenture Registrar,
duly executed by the registered holder or by his duly authorized attorney in
writing.
(c) No service charge shall be made for any exchange or registration of
transfer of Debentures, or issue of new Debentures in case of partial redemption
of any series, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, other than exchanges
pursuant to Section 2.06, the second paragraph of Section 3.03 and Section 9.04
not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or register
the transfer of any Debentures during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Debentures and ending at the close of business on the day of such mailing, nor
(ii) to register the transfer of or exchange any Debentures of any series or
portions
14
thereof called for redemption. The provisions of this Section 2.05 are, with
respect to any Global Debenture, subject to Section 2.11 hereof.
Section 2.06. Temporary Debentures. Pending the preparation of definitive
Debentures of any series, the Company may execute, and the Trustee shall
authenticate and make available for delivery, temporary Debentures (printed,
lithographed or typewritten) of any authorized denomination, and substantially
in the form of the definitive Debentures in lieu of which they are issued, but
with such omissions, insertions and variations as may be appropriate for
temporary Debentures, all as may be determined by the Company. Every temporary
Debenture of any series shall be executed by the Company and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Debentures of such series. Without
unnecessary delay the Company will execute and will furnish definitive
Debentures of such series and thereupon any or all temporary Debentures of such
series may be surrendered in exchange therefor (without charge to the holders),
at a Place of Payment, and upon receipt of a written order of the Company signed
by its President or any Vice President and its Treasurer or any Assistant
Treasurer, the Trustee shall authenticate and deliver in exchange for such
temporary Debentures an equal aggregate principal amount of definitive
Debentures of such series, unless the Company advises the Trustee to the effect
that definitive Debentures need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debentures of such
series shall be entitled to the same benefits under this Indenture as definitive
Debentures of such series authenticated and delivered hereunder.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Debentures. In case any
temporary or definitive Debenture shall become mutilated or be destroyed, lost
or stolen, the Company (subject to the next succeeding sentence) shall execute,
and upon its written request the Trustee (subject as aforesaid) shall
authenticate and make available for delivery, a new Debenture of the same series
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Debenture, or in lieu of and in substitution for the Debenture
so destroyed, lost or stolen. In every case the applicant for a substituted
Debenture shall furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of the
destruction, loss or theft of the applicant's Debenture and of the ownership
thereof. The Trustee may authenticate any such substituted Debenture and make
available for delivery the same upon the written request or authorization of any
officer of the Company. Upon the issuance of any substituted Debenture, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
In case any Debenture which has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Debenture, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Debenture) if the applicant
for such payment shall furnish to the Company and to the Trustee such security
or indemnity as they may require to save them harmless, and, in case of
destruction, loss or theft, evidence to the
15
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) 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 2.08. Cancellation of Surrendered Debentures. All Debentures
surrendered for the purpose of payment, redemption, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent, be delivered
to the Trustee for cancellation, or, if surrendered to the Trustee, shall be
cancelled by it, and no Debentures shall be issued in lieu thereof except as
expressly required or permitted by any of the provisions of this Indenture. On
written request of the Company, the Trustee shall deliver to the Company
cancelled Debentures held by the Trustee. If the Company shall otherwise acquire
any of the Debentures, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for cancellation.
Section 2.09. Provisions of Indenture and Debentures for Sole Benefit of
Parties and Debentureholders. Nothing in this Indenture or in the Debentures,
express or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and the holders of the Debentures,
any legal or equitable right, remedy or claim under or in respect of this
Indenture, or under any covenant, condition or provision herein contained; all
such covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Debentures.
Section 2.10. Appointment of Authenticating Agent. So long as any of the
Debentures of any series remain outstanding there may be an Authenticating Agent
for any or all such series of Debentures which the Trustee shall have the right
to appoint. Said Authenticating Agent shall be authorized to act on behalf of
the Trustee to authenticate Debentures of such series issued upon exchange,
transfer or partial redemption thereof, and Debentures so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All references in
this Indenture to the authentication of Debentures by the Trustee shall be
deemed to include authentication by an Authenticating Agent for such series
except for authentication upon original issuance or pursuant to Section 2.07
hereof. Each Authenticating Agent shall be acceptable to the Company and shall
be a corporation which has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any
16
jurisdiction under which it is organized or in which it is doing business to
conduct a trust business, and which is otherwise authorized under such laws to
conduct such business and is subject to supervision or examination by Federal or
State authorities. If at any time any Authenticating Agent shall cease to be
eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time (and
upon request by the Company shall) terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
to the Company. Upon resignation, termination or cessation of eligibility of
any Authenticating Agent, the Trustee may appoint an eligible successor
Authenticating Agent acceptable to the Company. Any successor Authenticating
Agent, upon acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as if originally
named as an Authenticating Agent pursuant hereto.
Section 2.11. Global Debentures. (a) If the Company shall establish
pursuant to Section 2.01 that the Debentures of a particular series are to be
issued as one or more Global Debentures, then the Company shall execute and the
Trustee shall, in accordance with Section 2.04, authenticate and deliver, one or
more Global Debentures which (i) shall represent, and shall be denominated in an
aggregate amount equal to the aggregate principal amount of, all of the
Outstanding Debentures of such series, (ii) shall be registered in the name of
the Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear,
subject to Section 2.01(12), a legend substantially to the following effect:
"Except as otherwise provided in Section 2.11 of the Indenture, this Debenture
may be transferred, in whole but not in part, only to another nominee of the
Depositary or to a successor Depositary or to a nominee of such successor
Depositary."
(b) Notwithstanding the provisions of Section 2.05, the Global Debenture of
a series may be transferred, in whole but not in part and in the manner provided
in Section 2.05, only to another nominee of the Depositary for such series, or
to a successor Depositary for such series selected or approved by the Company or
to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of Debentures notifies the
Company that it is unwilling or unable to continue as Depositary for such series
or if at any time the Depositary for such series shall no longer be registered
or in good standing under the Exchange Act, or other applicable statute or
regulation and a successor Depositary for such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, this Section 2.11 shall no longer be
applicable to the Debentures of such series and the Company will execute, and
subject to Section 2.05, the Trustee will authenticate and make available for
delivery Debentures of such series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debentures of such series in exchange for
such Global Debentures. In addition, the Company may at any time determine that
the Debentures of any series shall no longer be represented by one or more
Global Debentures and that the provisions of this Section 2.11 shall
17
no longer apply to the Debentures of such series. In such event the Company will
execute and subject to Section 2.05, the Trustee, upon receipt of an Officers'
Certificate evidencing such determination by the Company, will authenticate and
deliver Debentures of such series in definitive registered form without coupons,
in authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debentures of such series in exchange for such
Global Debentures. Upon the exchange of the Global Debentures for Debentures in
definitive registered form without coupons, in authorized denominations, the
Global Debentures shall be cancelled by the Trustee. Such Debentures in
definitive registered form issued in exchange for Global Debentures pursuant to
this Section 2.11(c) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debentures to the Depositary for delivery to the persons in
whose name such Debentures are so registered.
(d) Debentures distributed to holders of Global Certificates (as defined in
the applicable Declaration of Trust) upon the dissolution of the applicable HI
Trust shall be distributed in the form of one or more Global Debentures
registered in the name of the Depositary or its nominee, and deposited with the
Debenture Registrar, as custodian for the Depositary, or with such Depositary,
for credit by the Depositary to the respective accounts of the beneficial owners
of the Debentures represented thereby (or such other accounts as they may
direct). Debentures distributed to holders of Certificates (as defined in the
applicable Declaration of Trust), other than Global Certificates, upon the
dissolution of the applicable HI Trust shall not be issued in the form of a
Global Debenture or any other form intended to facilitate book-entry trading in
beneficial interests in such Debentures.
(e) The Depositary or its nominee, as the registered owner of a Global
Debenture, shall be the holder of such Global Debenture for all purposes under
this Indenture and the Debentures, and owners of beneficial interests in a
Global Debenture shall hold such interests pursuant to the applicable procedures
of the Depositary. Accordingly, any such owner's beneficial interest in a
Global Debenture shall be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee or
its participants. None of the Company, the Trustee or the Debenture Registrar
shall have any liability in respect of any transfer effected by the Depositary.
(f) The rights of owners of beneficial interests in a Global Debenture
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its participants.
Section 2.12. CUSIP Numbers. The Company in issuing the Debentures may use
"CUSIP" numbers, and the Trustee shall use such CUSIP numbers in notices of
redemption or exchange as a convenience to Debentureholders and no
representation shall be made as to the correctness of such numbers either as
printed on the Debentures or as contained in any notice of redemption or
exchange. The Company shall promptly notify the Trustee of any change in the
CUSIP numbers of the Debentures.
18
ARTICLE 3
Redemption of Debentures and Sinking Fund Provisions
Section 3.01. Redemption. The Company may redeem the Debentures of any
series issued hereunder on and after the dates and in accordance with the terms
established for such series pursuant to Section 2.01 hereof.
Section 3.02. Notice of Redemption. (a) In case the Company shall desire
to exercise such right to redeem all or, as the case may be, a portion of the
Debentures of any series in accordance with the right reserved so to do, it
shall give notice of such redemption to the Trustee. The Trustee shall then
notify holders of the Debentures of such series who are to be redeemed by
mailing, first class postage prepaid, by a notice of such redemption not less
than 30 days and not more than 60 days before the date fixed for redemption of
that series to such holders at their last addresses as they shall appear upon
the Debenture Register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly to give such
notice to the holder of any Debenture of any series designated for redemption in
whole or in part, or any defect in the notice, shall not affect the validity of
the proceedings for the redemption of any other Debentures of such series or any
other series. In the case of any redemption of Debentures prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall identify the Debentures to be redeemed
(including CUSIP number) and shall specify: (i) the date fixed for redemption,
(ii) the redemption price at which Debentures of that series are to be redeemed,
(iii) the place or places where Debentures are to be surrendered for payment of
the redemption price, (iv) that payment of the redemption price will be made
upon presentation and surrender of such Debentures, at such place or places, (v)
that interest accrued to the date fixed for redemption will be paid as specified
in said notice, (vi) that from and after said date interest will cease to accrue
and (vii) that the redemption is for a sinking fund, if such is the case. If
less than all the Debentures of a series are to be redeemed, the notice to the
holders of Debentures of that series to be redeemed in whole or in part shall
specify the particular Debentures to be so redeemed. In case any Debenture is to
be redeemed in part only, the notice which relates to such Debenture shall state
the portion of the principal amount thereof to be redeemed, and shall state that
on and after the redemption date, upon surrender of such Debenture, a new
Debenture or Debentures of such series in principal amount equal to the
unredeemed portion thereof will be issued.
(b) In the event of a partial redemption of a series of Debentures, the
Company shall give the Trustee at least 45 days' notice in advance of the date
fixed for redemption as to the aggregate principal amount of Debentures of the
series to be redeemed and the other information set forth in the immediately
preceding paragraph, and thereupon the Trustee shall select, by lot or in such
other manner as it shall deem appropriate and fair in its discretion and which
may provide for the selection
19
of a portion or portions (equal to $25 or any integral multiple thereof) of the
principal amount of such Debentures of a denomination larger than $25, the
Debentures to be redeemed and shall thereafter promptly notify the Company in
writing of the numbers of the Debentures to be redeemed, in whole or in part.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Debentures shall relate, in the case of
any Debenture redeemed or to be redeemed only in part, to the portion of the
principal amount of such Debenture which has been or is to be redeemed. If the
Company shall so direct, Debentures registered in the name of the Company, any
Affiliate or any Subsidiary thereof shall not be included in the Debentures
selected for redemption.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the
Debentures of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Debenture Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
Section 3.03. Payment Upon Redemption. (a) If the giving of notice of
redemption shall have been completed as above provided and funds deposited as
required, the Debentures or portions of Debentures of the series to be redeemed
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 interest on such
Debentures or portions of Debentures shall cease to accrue on and after the date
fixed for redemption, unless the Company shall default in the payment of such
redemption price and accrued interest with respect to any such Debenture or
portion thereof. On presentation and surrender of such Debentures on or after
the date fixed for redemption at the place of payment specified in the notice,
said Debentures shall be paid and redeemed at the applicable redemption price
for such series, together with interest accrued thereon to, but excluding, the
date fixed for redemption (but if the date fixed for redemption is an interest
payment date, the interest installment payable on such date shall be payable to
the registered holder at the close of business on the applicable record date
pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debenture is presented shall
make available for delivery to the holder thereof, at the expense of the
Company, a new Debenture or Debentures of the same series, of authorized
denominations in principal amount equal to the unredeemed portion of the
Debenture so presented.
20
Section 3.04. Sinking Funds for Debentures. The provisions of Sections
3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement
of Debentures of a series, except as otherwise specified as contemplated by
Section 2.01 for Debentures of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Debentures 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 Debentures of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Debentures for any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 3.05. Each sinking fund payment shall be applied to the redemption
of Debentures of any series as provided for by the terms of Debentures of such
series.
Section 3.05. Satisfaction of Sinking Fund Payments With Debentures. The
Company (i) may deliver outstanding Debentures of a series (other than any
previously called for redemption) and (ii) may apply as a credit Debentures of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Debentures or through the application of permitted optional
sinking fund payments pursuant to the terms of such Debentures, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Debentures of such series required to be made pursuant to the terms of such
Debentures as provided for by the terms of such series; provided that such
Debentures have not been previously so credited. Such Debentures shall be
received and credited for such purpose by the Trustee at the redemption price
specified in such Debentures for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 3.06. Redemption of Debentures for Sinking Fund. Not less than 45
days prior to each sinking fund payment date for any series of Debentures, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series pursuant to the
terms for that series, the portion thereof, if any, which is to be satisfied by
delivering and crediting Debentures of that series pursuant to Section 3.05 and
the basis for such credit and will, together with such Officers' Certificate,
deliver to the Trustee any Debentures to be so delivered. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the
Debentures to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.02 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 3.02. Such notice having been duly given, the redemption of such
Debentures shall be made upon the terms and in the manner stated in Section
3.03.
ARTICLE 4
Particular Covenants of the Company
The Company covenants and agrees for each series of the Debentures as follows:
21
Section 4.01. Payment of Principal of (and Premium, if any) and Interest
on Debentures. The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Debentures of that series
at the time and place and in the manner provided herein and established with
respect to such Debentures.
Section 4.02. Maintenance of Office or Agent for Payment of Debentures,
Designation of Office or Agency for Payment, Registration, Transfer and Exchange
of Debentures. So long as any series of the Debentures remain outstanding, the
Company agrees to maintain an office or agency in each Place of Payment, with
respect to each such series and at such other location or locations as may be
designated as provided in this Section 4.02, where (i) Debentures of that series
may be presented for payment, (ii) Debentures of that series may be presented as
hereinabove authorized for registration of transfer and exchange, and (iii)
notices and demands to or upon the Company in respect of the Debentures of that
series and this Indenture may be given or served, such designation to continue
with respect to such office or agency until the Company shall, by written notice
signed by its President or a Vice President and delivered to the Trustee,
designate some other office or agency for such purposes or any of them. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, notices and demands.
Section 4.03. Duties of Paying Agent; Company as Payment Agent; and
Holding Sums In Trust. (a) If the Company shall appoint one or more paying
agents for all or any series of the Debentures, other than the Trustee, the
Company will cause each such paying agency 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:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on the
Debentures of that series (whether such sums have been paid to it by
the Company or by any other obligor of such Debentures) in trust for
the benefit of the persons entitled thereto;
(2) that it will give the Trustee written notice of any failure by the
Company (or by any other obligor of such Debentures) to make any
payment of the principal of (and premium, if any) or interest on the
Debentures of that series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set forth
in this Indenture.
22
(b) If the Company shall act as its own paying agent with respect to any
series of the Debentures, it will on or before each due date of the principal of
(and premium, if any) or interest on Debentures of that series, set aside,
segregate and hold in trust for the benefit of the persons entitled thereto a
sum sufficient to pay such principal (and premium, if any) or interest so
becoming due on Debentures of that series until such sums shall be paid to such
persons or otherwise disposed of as herein provided and will promptly notify in
writing the Trustee of such action, or any failure (by it or any other obligor
on such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of Debentures, it will, prior to 11:00 a.m.
New York City time on each due date of the principal of (and premium, if any) or
interest on any Debentures of that series, deposit with the paying agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the persons entitled to
such principal, premium or interest, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
(c) Anything in this Section to the contrary notwithstanding, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.05, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.
Section 4.04. Appointment to Fill Vacancy in Office of Trustee. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 7.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
ARTICLE 5
Debentureholders Lists and Reports by the Company and the Trustee
Section 5.01. Company to Furnish Trustee Information as to Names and
Addresses of Debentureholders. The Company will furnish or cause to be furnished
to the Trustee (a) on each regular record date (as defined in Section 2.03) a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the holders of each series of Debentures as of such regular record
date, provided, that the Company shall not be obligated to furnish or cause to
be furnished such list at any time that the list shall not differ in any respect
from the most recent list furnished to the Trustee by the Company and (b) at
such other times as the Trustee may request in writing within 30 days after the
receipt by the Company of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time such list is furnished;
provided, however, no such list need be furnished for any series for which the
Trustee shall be the Debenture Registrar.
23
Section 5.02. Trustee to Preserve Information as to Names and Addresses of
Debentureholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debentures contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Debentures received by the Trustee in its capacity as Debenture Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in Section
5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Debentures of a series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Debenture for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Debentures of such series or holders of all Debentures with respect to their
rights under this Indenture or under such Debentures, and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall within five Business Days after the receipt
of such application, at its election, either:
(1) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a)
of this Section 5.02; or
(2) inform such applicants as to the approximate number of holders of
Debentures of such series or of all Debentures, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a) of this
Section 5.02, and as to the approximate cost of mailing to such
Debentureholders the form of proxy or other communication, if any,
specified in such application.
(d) If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each holder of such series or of all Debentures, as the case may be,
whose name and address appears in the information preserved at the time by the
Trustee in accordance with the provisions of subsection (a) of this Section
5.02, a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the Securities and Exchange
Commission (the "Commission"), together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the Trustee,
such mailing would be contrary to the best interests of the holders of
Debentures of such series or of all Debentures, as the case may be, or would be
in violation of applicable law. Such written statement shall specify the basis
of such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the
24
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise, the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debentures in accordance with the provisions of
subsection (c) of this Section 5.02, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(c).
Section 5.03. Annual and Other Reports to Be Filed by Company With the
Trustee. (a) The Company covenants and agrees to file with the Trustee, within
15 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act, in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations. 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,
including the Company's compliance with any of its covenants hereunder (as to
which the Trustee is entitled to rely exclusively on Officers' Certificates).
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable over-night delivery service which provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports
25
required to be filed by the Company pursuant to subsections (a) and (b) of this
Section as may be required by rules and regulations prescribed from time to time
by the Commission.
(d) The Company covenants and agrees to furnish to the Trustee, on or
before May 15 in each calendar year in which any of the Debentures are
outstanding, or on or before such other day in each calendar year as the Company
and the Trustee may from time to time agree upon, a Certificate as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
(e) The Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default, an Officers' Certificate setting forth the details of such
Event of Default and the action which the Company proposes to take with respect
thereto.
Section 5.04. Trustee to Transmit Annual Report to Debentureholders. (a)
The Trustee shall transmit to Debentureholders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
60 days after each January 15 following the date of this Indenture, commencing
January 15, 2000, deliver to Debentureholders a brief report, dated as of such
January 15, which complies with the provisions of such Section 313(a).
(b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust
Indenture Act.
(c) A copy of each such report shall, at the time of such transmission to
Debentureholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Debentures are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Debentures become
listed on any stock exchange and of any delisting thereof.
ARTICLE 6
Remedies of the Trustee and Debentureholders on Event of Default
Section 6.01. Events of Default Defined. (a) Whenever used herein with
respect to Debentures of a particular series, "Event of Default" means any one
or more of the following events which has occurred and is continuing:
(1) default in the payment of any installment of interest upon any of
the Debentures of that series, as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; provided,
however, that a valid extension of an interest payment period by the
Company in accordance with the
26
terms of any indenture supplemental hereto, shall not constitute a
default in the payment of interest for this purpose;
(2) default (i) in the payment of the principal of (and premium, if
any, on) any of the Debentures of that series as and when the same
shall become due and payable whether at maturity, upon redemption, by
declaring or otherwise, or (ii) in any payment required by any sinking
or analogous fund established with respect to that series, and in the
case of this clause (ii) only, continuance of such default for a
period of 30 days;
(3) failure on the part of the Company duly to observe or perform, in
any material respect, any other of the covenants or agreements on the
part of the Company with respect to that series contained in such
Debentures or otherwise established with respect to that series of
Debentures pursuant to Section 2.01 hereof or contained in this
Indenture (other than a covenant or agreement which has been expressly
included in this Indenture solely for the benefit of one or more
series of Debentures other than such series) for a period of 90 days
after the date on which written notice of such failure, requiring the
same to be remedied and stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Company by the
Trustee, by registered or certified mail, or to the Company and the
Trustee by the holders of at least 25% in principal amount of the
Debentures of that series at the time Outstanding;
(4) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company as bankrupt or
insolvent, or approving as properly filed a petition seeking
liquidation or reorganization of the Company under the Federal
Bankruptcy Code or any other similar applicable Federal or State law,
and such decree or order shall have continued unvacated and unstayed
for a period of 90 days; or an involuntary case shall be commenced
under such Code in respect of the Company and shall continue
undismissed for a period of 90 days or an order for relief in such
case shall have been entered; or a decree or order of a court having
jurisdiction in the premises shall have been entered for the
appointment on the ground of insolvency or bankruptcy of a receiver or
custodian or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, and such decree or order shall have
remained in force unvacated and unstayed for a period of 90 days;
(5) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking liquidation or reorganization under the Federal Bankruptcy
Code or any other similar applicable Federal or State law, or shall
consent to the filing of any such petition, or shall consent to the
appointment on the ground of insolvency or bankruptcy of a receiver or
custodian or liquidator or
27
trustee or assignee in bankruptcy or insolvency of it or of its
property, or shall make an assignment for the benefit of creditors; or
(6) any other Event of Default provided with respect to Debentures of
that series.
(b) In each and every such case, unless the principal of all the Debentures
of that 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 Debentures
of that series then Outstanding hereunder, by notice in writing to the Company
(and to the Trustee if given by such Debentureholders), may declare the
principal of all the Debentures of that series to be due and payable immediately
and upon any such declaration the same shall become and shall be immediately due
and payable, anything contained in this Indenture or in the Debentures of that
series or established with respect to that series pursuant to Section 2.01
hereof to the contrary notwithstanding. Payment of principal and interest on
such Debentures shall remain subordinated to the extent provided in Article 14
notwithstanding that such amount shall become immediately due and payable as
herein provided.
(c) Section 6.01(b), however, is subject to the condition that if, at any
time after the principal of the Debentures of that series shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Debentures of that series and the
principal of (and premium, if any, on) any and all Debentures of that series
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the
rate per annum expressed in the Debentures of that series to the date of such
payment or deposit) and the amount payable to the Trustee under Section 7.06,
and any and all defaults under the Indenture, other than the nonpayment of
principal on Debentures of that series which shall not have become due by their
terms, shall have been remedied or waived as provided in Section 6.06 then and
in every such case the holders of a majority in aggregate principal amount of
the Debentures of that series then outstanding (subject to, in the case of any
series of Debentures held as trust assets of an HI Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of the
holders of the Preferred Securities and the Common Securities of such HI Trust
as may be required under the Declaration of Trust of such HI Trust), by written
notice to the Company and to the Trustee, may rescind and annul such declaration
and its consequences with respect to that series of Debentures; but no such
rescission and annulment shall extend to or shall affect any subsequent default,
or shall impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of that series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and
28
powers of the Company and the Trustee shall continue as though no such
proceedings had been taken.
(e) If, prior to a Security Exchange with respect to the Debentures of any
series, a Default with respect to the Debentures of such series shall have
occurred, the Company expressly acknowledges that under the circumstances set
forth in the applicable Declaration of Trust, any holder of Preferred Securities
of the applicable HI Trust may, to the fullest extent permitted by law, enforce
directly against the Company the applicable Property Trustee's rights hereunder.
In furtherance of the foregoing and for the avoidance of any doubt, the Company
acknowledges that, under the circumstances described in the applicable
Declaration of Trust, any such holder of Preferred Securities, in its own name,
in the name of the applicable HI Trust or in the name of the holders of the
Preferred Securities issued by such HI Trust, may institute or cause to be
instituted a proceeding, including, without limitation, any suit in equity, an
action at law or other judicial or administrative proceeding, to enforce the
applicable Property Trustee's rights hereunder directly against the Company as
issuer of the applicable series of Debentures, and may prosecute such proceeding
to judgment or final decree, and enforce the same against the Company.
Section 6.02. Covenant of Company to Pay to Trustee Whole Amount Due on
Debentures on Default in Payment of Interest or Principal (and Premiums, if
any). (a) The Company covenants that (1) in case default shall be made in the
payment of any installment of interest on any of the Debentures of a series, or
any payment required by any sinking or analogous fund established with respect
to that series as and when the same shall have become due and payable, and such
default shall have continued for a period of 30 days, or (2) in case default
shall be made in the payment of the principal of (or premium, if any, on) any of
the Debentures of a series when the same shall have become due and payable,
whether upon maturity of the Debentures of a series or upon redemption or upon
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Debentures of that series,
the whole amount that then shall have become due and payable on all such
Debentures for principal (and premium, if any) or interest, or both, as the case
may be, with interest upon the overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under applicable law and
without duplication of any other amounts paid by the Company or the applicable
HI Trust in respect thereof) upon overdue installments of interest at the rate
per annum expressed in the Debentures of that series; and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, and the amount payable to the Trustee under Section 7.06.
(b) In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the
Debentures of that series and collect in the manner provided by law out of the
property of the Company or other obligor upon the Debentures of that series
wherever situated the moneys adjudged or decreed to be payable.
29
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or other judicial
proceedings affecting the Company, any other obligor on such Debentures, or the
creditors or property of either, the Trustee shall have the power to intervene
in such proceedings and take any action therein that may be permitted by the
court and shall (except as may be otherwise provided by law) be entitled to file
such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of
Debentures of such series allowed for the entire amount due and payable by the
Company or such other obligor under the Indenture at the date of institution of
such proceedings and for any additional amount which may become due and payable
by the Company or such other obligor after such date, and to collect and receive
any moneys or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Debentures of such
series to make such payments to the Trustee, and, in the event that the Trustee
shall consent to the making of such payments directly to such Debentureholders,
to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture, or
under any of the terms established with respect to Debentures of that series,
may be enforced by the Trustee without the possession of any of such Debentures,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall,
after provision for payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Debentures of such
series.
In case of an Event of Default hereunder, 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.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Debentureholder in any such
proceeding.
Section 6.03. Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to this Article with respect to a particular
series of Debentures shall be applied in the order following, at the date or
dates fixed by the Trustee and, in case of the distribution of such moneys on
account of principal (or premium, if any) or interest, upon presentation of the
several
30
Debentures of that series, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of all Senior Debt of the Company if and to
the extent required by Article 14;
THIRD: To the payment of the amounts then due and unpaid upon
Debentures of such series for principal (and premium, if any) and
interest in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Debentures for
principal (and premium, if any) and interest, respectively; and
FOURTH: The balance, if any, to the Person or Persons entitled
thereto.
Section 6.04. Limitation on Suits by Holders of Debentures. No holder of
any Debenture of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(i) such holder previously shall have given to the Trustee written notice of an
Event of Default and of the continuance thereof with respect to Debentures of
such series specifying such Event of Default, as hereinbefore provided, (ii) the
holders of not less than 25% in aggregate principal amount of the Debentures of
such series then outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as trustee hereunder,
(iii) shall have offered to the Trustee indemnity satisfactory to it against the
costs, expenses and liabilities to be incurred therein or thereby, (iv) the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity, shall have failed to institute any such action, suit or proceeding;
and (v) during such 60 day period, the holders of a majority in principal amount
of the Debentures of that series do not give the Trustee a direction
inconsistent with the request; it being understood and intended, and being
expressly covenanted by the taker and holder of every Debenture of such series
with every other such taker and holder and Trustee, that no one or more holders
of Debentures of such series shall have any right in any manner whatsoever by
virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other of such Debentures, 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
Debentures of such series. For the protection and enforcement of the provisions
of this Section, each and every Debentureholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
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Notwithstanding any other provisions of this Indenture, however, the right
of any holder of any Debenture to receive payment of the principal of (and
premium, if any) and interest on such Debenture, as therein provided, on or
after the respective due dates expressed in such Debenture (or in the case of
redemption, on the redemption date), or to institute suit for the enforcement of
any such payment on or after such respective dates or redemption date, shall not
be impaired or affected without the consent of such holder.
Section 6.05. Remedies Cumulative; Delay or Omission in Exercise of Rights
Not Waiver of Default.
(a) All powers and remedies given by this Article 6 to the Trustee or to
the Debentureholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any others thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce performance or observance of the covenants
and agreements contained in this Indenture or otherwise established with respect
to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures 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 default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
Section 6.06. Rights of Holders of Majority in Principal Amount of
Debentures to Direct Trustee and to Waive Defaults. The holders of a majority in
aggregate principal amount of the Debentures of any series at the time
Outstanding, determined in accordance with Section 8.04 (with, in the case of
any series of Debentures held as trust assets of an HI Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of holders
of the Preferred Securities and the Common Securities of such HI Trust as may be
required under the Declaration of Trust of such HI Trust), 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 such series; provided, however, that such direction
shall not be in conflict with any rule of law or with this Indenture or unduly
prejudicial to the rights of holders of Debentures of any other series at the
time Outstanding determined in accordance with Section 8.04 not parties thereto.
Subject to the provisions of Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceeding so
directed would involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Debentures of any series at the
time Outstanding affected thereby, determined in accordance with section 8.04
(with, in the case of any series of Debentures held as trust assets of an HI
Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of holders of the Preferred Securities
32
and the Common Securities of such HI Trust as may be required under the
Declaration of Trust of such HI Trust), may on behalf of the holders of all of
the Debentures of such series waive any past default in the performance of any
of the covenants contained herein or established pursuant to Section 2.01 with
respect to such series and its consequences, except a default in the payment of
the principal of, or premium, if any, or interest on, any of the Debentures of
that series as and when the same shall become due by the terms of such
Debentures otherwise than by acceleration (unless such default has been cured
and a sum sufficient to pay all matured installments of interest and principal
and any premium has been deposited with the Trustee (in accordance with Section
6.01(c)), or a call for redemption of Debentures of that series. Upon any such
waiver, the default covered thereby shall be deemed to be cured for all purposes
of this Indenture and the Company, the Trustee and the holders of the Debentures
of such series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.
Section 6.07. Trustee to Give Notice of Defaults Known To It, But May
Withhold in Certain Circumstances. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series, transmit by mail,
first class postage prepaid, to the holders of Debentures of that series, as
their names and addresses appear upon the Debenture Register, notice of all
defaults with respect to that series known to the Trustee, unless such defaults
shall have been cured before the giving of such notice (the term "defaults" for
the purposes of this Section being hereby defined to be the events specified in
subsections (1), (2), (3), (4) and (5) of Section 6.01(a), not including any
periods of grace provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided, that, except in
the case of default in the payment of the principal of (or premium, if any) or
interest on any of the Debentures of that series or in the payment of any
sinking fund installment established with respect to that series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers, of the Trustee in good faith determine that the
withholding of such notice is in the interests of the holders of Debentures of
that series; provided further, that in the case of any default of the character
specified in Section 6.01(a)(3) with respect to Debentures of such series no
such notice to the holders of the Debentures of that series shall be given until
at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any default, except
(i) a default under subsection (a)(1) or (a)(2) of Section 6.01 as long as the
Trustee is acting as paying agent for such series of Debentures or (ii) any
default as to which a Responsible Officer of the Trustee shall have received
written notice.
Section 6.08. Requirements of an Undertaking to Pay Costs in Certain Suits
Under Indenture or Against Trustee. All parties to this Indenture agree, and
each holder of any Debentures by his or her 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 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
33
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding more than 10% in aggregate principal amount of the
outstanding Debentures of any series, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established pursuant to this
Indenture.
ARTICLE 7
Concerning the Trustee
Section 7.01. Upon Event of Default Occurring and Continuing, Trustee
Shall Exercise Powers Vested In It, and Use Same Degree of Care and Skill In
Their Exercise, as Prudent Individual Would Use. (a) The Trustee, prior to the
occurrence of an Event of Default with respect to Debentures of a series and
after the curing of all Events of Default with respect to Debentures of that
series which may have occurred, shall undertake to perform with respect to
Debentures of such series such duties and only such duties as are specifically
set forth in this Indenture, and no implied covenants shall be read into this
Indenture against the Trustee. In case an Event of Default with respect to
Debentures of a series has occurred (which has not been cured or waived), the
Trustee shall exercise with respect to Debentures of that series 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 his or her own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect to
Debentures of a series and after the curing or waiving of all such
Events of Default with respect to that series which may have occurred:
(i) the duties and obligations of the Trustee shall with respect
to Debentures of such series be determined solely by the express
provisions of this Indenture and the Trust Indenture Act and the
Trustee shall not be liable with respect to Debentures of such
series 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 with respect to Debentures of such series
conclusively
34
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or
opinions which by any 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 but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein;
(2) 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;
(3) 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 of not less than a majority in principal
amount of the Debentures of any series at the time outstanding
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 with respect to
the Debentures of that series;
(4) 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 is
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not reasonably
assured to it; and
(5) whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of
or affording protection to the Trustee shall be subject to the
provisions of this Article 7.
Section 7.02. Certain Rights of the Trustee. Except as otherwise provided
in Section 7.01:
(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, 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;
35
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution
or an instrument signed in the name of the Company by the President or
any Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer (unless other evidence in
respect thereof is specifically prescribed herein);
(c) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken
or suffered or omitted hereunder in good faith and in reliance
thereon;
(d) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Debentureholders, pursuant to the
provisions of this Indenture, unless such Debentureholders shall have
offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing herein contained shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of
Default with respect to a series of the Debentures (which has not been
cured or waived) to exercise with respect to Debentures of that series
such of the rights and powers vested in it by this Indenture, and to
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;
(e) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture; nothing herein contained shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of
Default with respect to a series of the Debentures (which has not been
cured or waived) to exercise with respect to Debentures of that series
such of the rights and powers vested in it by this Indenture, and to
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;
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond, security, or other papers or documents, unless
requested in writing so to do by the holders of not less than a
majority in principal amount of the outstanding Debentures of the
particular series affected thereby (determined as provided in Section
8.04); provided, however, 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
36
to it by the terms of this Indenture, the Trustee may require
indemnity satisfactory to it against such costs, expenses or
liabilities as a condition to so proceeding. The reasonable expense of
every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company 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 and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) 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 to each agent, custodian and
other Person employed to act hereunder.
Section 7.03. Trustee Not Liable for Recitals In Indenture or In
Debentures. (a) The recitals contained herein and in the Debentures (other than
the Certificate of Authentication on the Debentures) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.
(b) The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application by the
Company of any of the Debentures or of the proceeds of such Debentures, or for
the use or application of any moneys paid over by the Trustee in accordance with
any provision of this Indenture or established pursuant to Section 2.01, or for
the use or application of any moneys received by any paying agent other than the
Trustee.
Section 7.04. Trustee, Paying Agent or Debenture Registrar May Own
Debentures. The Trustee or any paying agent or Debenture Registrar, in its
individual or any other capacity, may become the owner or pledgee of Debentures
and, subject to Sections 7.08 and 7.13, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, paying agent or Debenture
Registrar.
Section 7.05. Moneys Received by Trustee to Be Held In Trust Without
Interest. Subject to the provisions of Section 11.05, 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 law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree in writing to pay thereon.
37
Section 7.06. Trustee Entitled to Compensation, Reimbursement and
Indemnity. (a) The Company covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as the Company
and the Trustee shall from time to time agree in writing (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution of the trusts
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the reasonable expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify each of the
Trustee or any predecessor Trustee and their officers, agents, directors and
employees for, and to hold them harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based upon, measured
by or determined by the income of the Trustee) incurred without negligence or
bad faith on the part of the Trustee and arising out of or in connection with
the acceptance or administration of this trust, including the reasonable costs
and expenses of defending itself against any claim (whether asserted by the
Company, any Debentureholder or any other Person) of liability in the premises.
The provisions of this Section 7.06 shall survive the termination of this
Indenture and resignation or removal of the Trustee.
(b) The obligations of the Company under this Section to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Debentures 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
Debentures. When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.01(4) or Section 6.01(5), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
Section 7.07. Right of Trustee to Rely on Certificate of Officers of
Company Where No Other Evidence Specifically Prescribed. Except as otherwise
provided in Sections 7.01 and 7.02, whenever in the administration of the
provisions 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
to take 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 to be taken by it under the provisions of this Indenture upon the faith
thereof.
38
Section 7.08. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Trustee and the Company shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of said Section 310(b).
Section 7.09. Requirements for Eligibility of Trustee. There shall at all
times be a Trustee with respect to the Debentures issued hereunder which shall
at all times be a corporation or banking association organized and doing
business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars, and subject to supervision or examination by
Federal, State, territorial, or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. The Company may not, nor
may any person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as a Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
Section 7.10. Resignation of Trustee and Appointment of Successor.
(a) The Trustee or any successor hereafter appointed, may at any time
resign with respect to the Debentures of one or more series by giving written
notice thereof to the Company and by transmitting notice of resignation by mail,
first class postage prepaid, to the Debentureholders of such series, as their
names and addresses appear upon the Debenture Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
with respect to Debentures of such series by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 60 days after the mailing of such
notice of resignation, the resigning Trustee may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
trustee with respect to Debentures of such series, or any Debentureholder of
that series who has been a bona fide holder of a Debenture or Debentures for at
least six months may, subject to the provisions of Section 6.08, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon after such notice,
if any, as it may deem proper and prescribe, appoint a successor trustee.
39
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section
7.08 after written request therefor by the Company or by any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, the
Company may remove the Trustee with respect to all Debentures and appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of removal, the
Trustee so removed may petition, at the expense of the Company, any court
of competent jurisdiction for the appointment of a successor trustee with
respect to Debentures of such series, or any Debentureholder of that series
who has been a bona fide holder of a Debenture or Debentures for at least
six months may, subject to the provisions of Section 6.08, on behalf of
himself and all others similarly situated, petition any such court for the
removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures of any series at the time outstanding may at any time remove the
Trustee with respect to such series and appoint a successor trustee. If no
successor Trustee shall have been so appointed and have accepted appointment
within 60 days after the mailing of such notice of removal, the Trustee being
removed may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Debentures of such series.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures of a series pursuant to any of
the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debentures of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
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Section 7.11. Acceptance by Successor to Trustee.
(a) In case of the appointment hereunder of a successor trustee with
respect to all Debentures, every such successor trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor trustee with respect to the Debentures of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and which shall (1)
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debentures of that
or those series to which the appointment of such successor trustee relates, (2)
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Debentures of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust, that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; and upon the
execution and delivery of such supplemental indenture the resignation or removal
of the retiring Trustee shall become effective to the extent provided therein,
such retiring Trustee shall with respect to the Debentures of that or those
series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, and each such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of that or those series
to which the appointment of such successor trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Debentures of that or those series to
which the appointment of such successor trustee relates.
41
(c) Upon request of any such successor trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor trustee all such rights, power and trusts referred to in
paragraph (a) or (b) of this Section 7.11, as the case may be.
(d) No successor trustee shall accept its appointment unless at the time of
such acceptance such successor trustee shall be qualified and eligible under
this Article.
(e) Upon acceptance of appointment by a successor trustee as provided in
this Section 7.11, the successor trustee shall transmit notice of the succession
of such trustee hereunder by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register.
Section 7.12. Successor to Trustee by Merger, Consolidation or Succession
to Business. Any corporation or banking association into which the Trustee may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. In case any Debentures shall have been authenticated,
but not made available for delivery, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and make available for delivery the Debentures so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Debentures.
Section 7.13. Preferential Collection of Claims Against the Company. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship described in Section 311(b) of the Trust Indenture
Act. A Trustee who has resigned or been removed shall be subject to Section
311(a) of the Trust Indenture Act to the extent included therein as though such
resignation or removal, as the case may be, had not occurred.
ARTICLE 8
Concerning the Debentures
Section 8.01. Evidence of Action by Debentureholders. Whenever in this
Indenture it is provided that the holders of a majority or specified percentage
in aggregate principal amount of the Debentures of a particular series may take
any action (including the making of any demand or request, the giving of any
notice consent or waiver or the taking of any other action) the fact that at the
time of taking any such action the holders of such majority or specified
percentage of that series have joined therein may be evidenced by any instrument
or any number of instruments of similar tenor executed by such holders of
Debentures of that series in person or by agent or proxy appointed in writing.
42
If the Company shall solicit from the Debentureholders of any series any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of Outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
Section 8.02. Proof of Execution of Instruments and of Holding of
Debentures. Subject to the provisions of Sections 7.01 and 7.02, proof of the
execution of any instrument by a Debentureholder (such proof will not require
notarization) or his agent or proxy and proof of the holding by any person of
any of the Debentures shall be sufficient if made in the following manner;
(a) The fact and date of the execution by any such person of any
instrument may be proved in any reasonable manner acceptable to the
Trustee.
(b) The ownership of Debentures shall be proved by the Debenture
Register of such Debentures or by a certificate of the Debenture Registrar
thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
Section 8.03. Who May Be Deemed Owners of Debentures. Prior to the due
presentment for registration of transfer of any Debenture, the Company, the
Trustee, any paying agent and any Debenture Registrar may deem and treat the
person in whose name such Debenture shall be registered upon the books of the
Company as the absolute owner of such Debenture (whether or not such Debenture
shall be overdue and notwithstanding any notice of ownership or writing thereon
made by anyone other than the Debenture Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to
Section 2.03) interest on such Debenture and for all other purposes; and neither
the Company nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.
Section 8.04. Debentures Owned by the Company or Controlled or Controlling
Companies Disregarded for Certain Purposes. In determining whether the holders
of the requisite aggregate principal amount of Debentures of a particular series
have concurred in any direction, consent or
43
waiver under this Indenture, Debentures of that series which are owned by the
Company or any other obligor on the Debentures of that series or by any
Subsidiary of the Company or of such other obligor on the Debentures of that
series 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 Debentures of such series which a Responsible Officer of the Trustee
actually knows are so owned shall be so disregarded. Debentures so owned which
have been pledged in good faith may be regarded as outstanding for the purposes
of this Section, if the pledgee shall establish to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Debentures and that
the pledgee is not a person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any such other
obligor. In case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee.
Section 8.05. Instruments Executed by Debentureholders Bind Future
Holders. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures of a
particular series specified in this Indenture in connection with such action,
any holder of a Debenture of that series which is shown by the evidence to be
included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 8.02, revoke such action so far as concerns such Debenture.
Except as aforesaid any such action taken by the holder of any Debenture shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Debenture, and of any Debenture issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Debenture. Any action taken
by the holders of the majority or percentage in aggregate principal amount of
the Debentures of a particular series specified in this Indenture in connection
with such action shall be conclusively binding upon the Company, the Trustee and
the holders of all the Debentures of that series.
ARTICLE 9
Supplemental Indentures
Section 9.01. Purposes for Which Supplemental Indenture May Be Entered
Into Without Consent of Debentureholders. In addition to any supplemental
indenture otherwise authorized by this Indenture, the Company and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect), without the consent of the Debentureholders,
for one or more of the following purposes:
(a) to evidence the succession of another corporation or other entity
to the Company, and the assumption by any such successor of the obligations
of the Company contained herein or otherwise established with respect to
the Debentures;
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(b) to add further covenants, restrictions, conditions or provisions
for the protection of the holders of the Debentures of all or any series as
the Board of Directors and the Trustee shall consider to be for the
protection of the holders of Debentures of all or any series, and to make
the occurrence, or the occurrence and continuance, of a default in any of
such additional covenants, restrictions, conditions or provisions a default
or an Event of Default with respect to such series permitting the
enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided, however, 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 default or may limit the remedies available to the Trustee upon such
default or may limit the right of the holders of a majority in aggregate
principal amount of the Debentures of such series to waive such default;
(c) 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 as shall not be
inconsistent with the provisions of this Indenture and shall not materially
adversely affect the interests of the holders of the Debentures of any
series;
(d) to add to, change or eliminate any of the provisions of this
Indenture, provided that any such addition, change or elimination shall
become effective only when there is no Debenture outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision;
(e) to provide for the issuance under this Indenture of Debentures in
coupon form (including Debentures registrable as to principal only) and to
provide for exchangeability of such Debentures with the Debentures issued
hereunder in fully registered form and to make all appropriate changes for
such purposes;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Debentures;
(g) to qualify or maintain qualification of this Indenture under the
Trust Indenture Act;
(h) to establish the form or terms of Debentures of any series as
permitted by Section 2.01; or
45
(i) to make any addition, change or elimination of any provision of
this Indenture that does not adversely affect the rights of any
Debentureholder in any material respect.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, and to make any further appropriate
agreements and stipulations which may be therein contained, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section may
be executed by the Company and the Trustee without the consent of the holders of
any of the Debentures at the time outstanding, notwithstanding any of the
provisions of Section 9.02.
Section 9.02. Modification of Indenture with Consent of Debentureholders.
With the consent (evidenced as provided in Section 8.01) of the holders of not
less than a majority in aggregate principal amount of the Debentures of each
series affected by such supplemental indenture or indentures at the time
outstanding (and, in the case of any series of Debentures held as trust assets
of an HI Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of holders of the Preferred Securities and the Common
Securities of such HI Trust as may be required under the Declaration of Trust of
such HI Trust), the Company and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as then in effect) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures of such
series under this Indenture; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Debentures of any series,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, without the consent of the holder of each Debenture so affected or (ii)
reduce the aforesaid percentage of Debentures, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of each Debenture (and, in the case of any series of Debentures held as
trust assets of an HI Trust and with respect to which a Security Exchange has
not theretofore occurred, such consent of the holders of the Preferred
Securities and the Common Securities of such HI Trust as may be required under
the Declaration of Trust of such HI Trust) then outstanding and affected
thereby.
Upon the request of the Company, and upon the filing with the Trustee of
evidence of the consent of Debentureholders (and, in the case of any series of
Debentures held as trust assets of an HI Trust and with respect to which a
Security Exchange has not theretofore occurred, such consent of holders of the
Preferred Securities and the Common Securities of such HI Trust as may be
required under the Declaration of Trust of such HI Trust) required to consent
thereto as aforesaid, the Trustee shall join with the Company in the execution
of such supplemental indenture unless such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture
46
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 Debentureholders of any
series affected thereby under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article or of Section
10.01, this Indenture shall, with respect to such series, be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Debentures of the 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 9.04. Debentures May Bear Notation of Changes By Supplemental
Indentures. Debentures of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, may bear a
notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed or traded, as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Debentures of that series so modified as to conform, in the
opinion of the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures of
that series then outstanding.
Section 9.05. Opinion of Counsel. The Trustee, subject to the provisions
of Sections 7.01 and 7.02, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article 9.
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ARTICLE 10
Consolidation, Merger, Sale or Conveyance
Section 10.01. Company May Consolidate, etc. on Certain Terms. The Company
shall not consolidate with or merge into any other Person or convey, transfer or
lease its properties and assets substantially as an entirety to any other
Person, and the Company shall not permit any other Person to consolidate with or
merge into the Company, unless:
(a) either the Company shall be the continuing corporation, or
the corporation (if other than the Company) formed by such consolidation or
into which the Company is merged or to which the properties and assets of
the Company substantially as an entity are transferred or leased shall be a
corporation, limited liability company, partnership or trust organized and
existing under the laws of the United States of America or any state
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company under
the Debentures and this Indenture; and
(b) immediately after giving effect to such transaction no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing.
Section 10.02. Successor Corporation Substituted. The successor
corporation formed by such consolidation or into which the Company is merged or
to which such transfer or lease is made shall succeed to and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor corporation had been named as the Company
herein, and thereafter (except in the case of a lease to another Person) the
predecessor corporation shall be relieved of all obligations and covenants under
the Indenture and the Debentures and, in the event of such conveyance, or
transfer, any such predecessor corporation may be dissolved and liquidated.
Section 10.03. Opinion of Counsel. The Trustee, subject to the provisions
of Sections 7.01 and 7.02, may receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
other disposition, and any such assumption, comply with the provisions of this
Article.
ARTICLE 11
Satisfaction and Discharge of Indenture; Unclaimed Moneys
Section 11.01. Satisfaction and Discharge of Indenture. (A) If at any time
(a) the Company shall have paid or caused to be paid the principal of, premium,
if any, and interest on all the Debentures of any series Outstanding hereunder
(other than Debentures of such series which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.07) as and when
the same shall have become due and payable, or (b) the Company shall have
delivered to the Trustee for cancellation all Debentures of any series
theretofore authenticated (other than any Debentures of such series which shall
have
48
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.07) or (c) (i) all the Debentures of any series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or by their terms will become due and payable within one year or are to
be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and (ii) the Company shall have
irrevocably deposited or caused to be deposited with the Trustee as trust funds
the entire amount in cash (other than moneys repaid by the Trustee or any paying
agent to the Company in accordance with Section 11.04) or Government
Obligations, maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash, or a combination thereof,
sufficient in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay (A) the principal of, premium, if any, and interest on all
Debentures of such series on each date that such principal or interest is due
and payable and (B) any mandatory sinking fund payments on the dates on which
such payments are due and payable in accordance with the terms of the Indenture
and the Debentures of such series; and if, in any such case, the Company shall
also pay or cause to be paid all other sums payable hereunder by the Company,
then this Indenture shall cease to be of further effect (except as to (i) rights
of registration of transfer and exchange of Debentures of such series and the
Company's right of optional redemption, if any, (ii) substitution of mutilated,
defaced, destroyed lost or stolen Debentures, (iii) rights of holders of
Debentures to receive payments of principal thereof and interest thereon, upon
the original stated due dates therefor (but not upon acceleration), and
remaining rights of the Debentureholders to receive mandatory sinking fund
payments, if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, (v) the rights of the holders of Debentures of such series as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them and (vi) the obligations of the Company under
Section 4.02) and the Trustee, on demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel and at the cost and expense of
the Company, shall execute proper instruments acknowledging such satisfaction of
and discharging this Indenture; provided, that the rights of the
Debentureholders to receive amounts in respect of principal of, premium, if any,
and interest on the Debentures held by them shall not be delayed longer than
required by then-applicable mandatory rules or policies of any securities
exchange or automated quotation system upon which the Debentures are listed or
traded. The Company agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred and to compensate the Trustee for
any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Debentures of such series.
(B) The following provisions shall apply to the Debentures of each series
unless specifically otherwise provided in a Board Resolution or indenture
supplemental hereto provided pursuant to Section 2.01. In addition to discharge
of the Indenture pursuant to the next preceding paragraph, the Company shall be
deemed to have paid and discharged the entire indebtedness on all the Debentures
of a series on the date of the deposit referred to in subparagraph (a) below,
and the
49
provisions of this Indenture with respect to the Debentures of such series shall
no longer be in effect (except as to (i) rights of registration of transfer and
exchange of Debentures of such series and the Company's right of optional
redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost or
stolen Debentures, (iii) rights of holders of Debentures to receive payments of
principal thereof and interest thereon, upon the original stated due dates
therefor (but not upon acceleration), and remaining rights of the holders of
Debentures to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) the rights of
the Holders of Debentures as beneficiaries hereof with respect to the property
so deposited with the Trustee payable to all or any of them and (vi) the
obligations of the Company under Section 4.02) and the Trustee, at the expense
of the Company, shall at the Company's request, execute proper instruments
acknowledging the same, if
(a) with reference to this provision the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as
trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the holders of the Debentures of
such series (i) cash in an amount, or (ii) Governmental Obligations
maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash or (iii) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal of,
premium, if any, and interest on all Debentures of such series on each
date that such principal or interest is due and payable and (B) any
mandatory sinking fund payments on the dates on which such payments
are due and payable in accordance with the terms of the Indenture and
the Debentures of such series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the
Company is a party or by which it is bound;
(c) the Company has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (y) since
the date hereof, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and such opinion
shall confirm that, the holders of the Debentures of such series will
not recognize income, gain or loss for Federal income tax purposes as
a result of such deposit, defeasance and discharge and will be subject
to Federal income tax on the same amount and in the same manner and at
the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred;
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to the defeasance contemplated by this provision
have been complied with; and
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(e) no event or condition shall exist that, pursuant to the provisions
of Section 14.02 or 14.03, would prevent the Company from making
payments of the principal of, premium, if any, or interest on the
Debentures of such series on the date of such deposit.
Section 11.02. Application by Trustee of Funds Deposited For Payment of
Debentures. Subject to Section 11.04, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 11.01 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including the
Company acting as its own paying agent), to the Holders of the particular
Debentures 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.
Section 11.03. Repayment of Moneys Held by the Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to Debentures
of any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Debentures shall, upon demand of
the Company, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.
Section 11.04. Repayment of Moneys Held by the Trustee. Any moneys
deposited with or paid to the Trustee or any paying agent for the payment of the
principal of or interest on any Debenture of any series and not applied but
remaining unclaimed for two years after the date upon which such principal or
interest shall have become due and payable, shall, upon the written request of
the Company and unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Company by the
Trustee for such series or such paying agent, and the Holder of the Debentures
of such series shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Company for any payment which such holder may be entitled to collect, and
all liability of the Trustee or any paying agent with respect to such moneys
shall thereupon cease; provided, however, that the Trustee or such paying agent,
before being required to make any such repayment with respect to moneys
deposited with it for any payment series, shall at the expense of the Company,
mail by first-class mail to holders of such Debentures at their addresses as
they shall appear on the Debenture Register, notice, that such moneys remain and
that, after a date specified therein, which shall not be less than 30 days from
the date of such mailing or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 11.05. Indemnification Relating to Governmental Obligations. The
Company shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the Governmental Obligations deposited pursuant
to Section 11.01 or the principal or interest received in respect of such
obligations.
51
ARTICLE 12
Immunity of Incorporators, Stockholders, Officers and Directors
Section 12.01. Incorporators, Stockholders, Officers and Directors of
Company Exempt From Individual Liability. No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Debenture, or for
any claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, stockholder, officer or director, past, present or future as
such, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Debentures or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Debentures.
ARTICLE 13
Miscellaneous Provisions
Section 13.01. Successors and Assigns of Company Bound by Indenture. All
the covenants, stipulations, promises and agreements in this Indenture contained
by or on behalf of the Company shall bind its successors and assigns, whether so
expressed or not.
Section 13.02. Acts of Board, Committee or Officer of Successor Company
Valid. Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.
Section 13.03. Surrender of Powers of the Company. The Company by
instrument in writing executed by authority of two-thirds of its Board of
Directors and delivered to the Trustee may surrender any of the powers reserved
to the Company and thereupon such power so surrendered shall terminate both as
to the Company and as to any successor corporation.
52
Section 13.04. Required Notices or Demands May be Served by Mail. Except
as otherwise expressly provided herein, 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 Debentures to or on the Company may be given or
served by being deposited first class postage prepaid in a post-office letterbox
addressed (until another address is filed in writing by the Company with the
Trustee), as follows: Houston Industries Incorporated, 0000 Xxxxxxxxx, Xxxxxxx,
Xxxxx 00000, Attention: Corporate Secretary. Any notice, election, request or
demand by the Company or any Debentureholder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the Corporate Trust Office of the Trustee.
Section 13.05. Indenture and Debentures to Be Construed in Accordance with
Laws of the State of New York. This Indenture and each Debenture shall be deemed
to be a contract made under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State (without
regard to principles of conflicts of laws thereof).
Section 13.06. Officer's Certificate and Opinion of Counsel to be
Furnished Upon Application or Demands by Company; Statements To Be Included In
Each Certificate or Opinion With Respect to Compliance With Condition or
Covenant.
(a) Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an 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.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture (other than the certificate provided pursuant to Section
5.03(d) of this Indenture) shall include (1) a statement that the person making
such certificate or opinion has read such covenant or condition; (2) 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; (3) 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 (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 13.07. Payments Due on Sundays or Holidays. Except as provided
pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in an
Officers' Certificate, or established in one or more indentures supplemental to
the Indenture, in any case where the date of maturity of interest or principal
of any Debenture or the date of redemption of any Debenture shall
53
not be a Business Day then payment of interest or principal (and premium, if
any) may be made on the next succeeding Business Day, with the same force and
effect as if made on the nominal date of maturity or redemption, and no interest
shall accrue for the period after such nominal date.
Section 13.08. Provisions Required by Trust Indenture Act of 1939 to
Control. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 13.09. Indenture May Be Executed by its 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 13.10 Separability of Indenture Provisions. In case any one or
more of the provisions contained in this Indenture or in the Debentures of any
series shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Indenture or of such Debentures, but this Indenture
and such Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
Section 13.11 Assignment by Company to a Subsidiary or Affiliate. The
Company will have the right at all times to assign any of its rights or
obligations under this Indenture to a Subsidiary or an Affiliate; provided that,
in the event of any such assignment, the Company will remain jointly and
severally liable for all such obligations. Subject to the foregoing, this
Indenture is binding upon and inures to the benefit of the parties thereto and
their respective successors and assigns. This Indenture may not otherwise be
assigned by the parties hereto (other than pursuant to Article 10).
Section 13.12. Holders of Preferred Securities as Third Party
Beneficiaries of the Indenture; Holders of Preferred Securities May Institute
Legal Proceedings Against the Company in Certain Cases. The Company acknowledges
that, prior to a Security Exchange with respect to Debentures of any series held
as trust assets of an HI Trust, if the Property Trustee of such HI Trust fails
to enforce its rights under this Indenture as the holder of the Debentures of a
series held as trust assets of such HI Trust, any holder of the Preferred
Securities of such HI Trust may, to the fullest extent permitted by law,
institute legal proceedings directly against the Company to enforce such
Property Trustee's rights under this Indenture without first instituting any
legal proceedings against such Property Trustee or any other Person; provided
that, if an Event of Default has occurred and is continuing and such event is
attributed to the failure of the Company to pay interest or principal on the
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a holder of Preferred
Securities of such HI Trust may directly institute a proceeding for enforcement
of payment to such holder of the principal of or interest on the Debentures
having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such holder (a "Holder Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Holder
Direct Action, the Company will be subrogated to the rights of such holder of
Preferred Securities to the extent of any payment made
54
by the Company to such holders of Preferred Securities in such Holder Direct
Action. Except as provided in the preceding sentences, the holders of Preferred
Securities of such HI Trust will not be able to exercise directly any other
remedy available to the holders of the Debentures.
ARTICLE 14
Subordination of debentures
Section 14.01. Agreement to Subordinate. The Company covenants and agrees,
and each Debentureholder issued hereunder by his acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject to the
provisions of this Article 14; and each person holding any Debenture, whether
upon original issue or upon transfer, assignment or exchange thereof accepts and
agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
all Senior Debt, whether outstanding at the date of this Indenture or thereafter
incurred.
No provision of this Article 14 shall prevent the occurrence of any Default
or Event of Default hereunder.
Section 14.02. Default on Senior Debt. In the event and during the
continuation of any default by the Company in the payment of principal, premium,
interest or any other payment due on any Senior Debt, or in the event that the
maturity of any Senior Debt has been accelerated because of a default, then, in
either case, no payment shall be made by the Company with respect to the
principal (including redemption payments) of or premium, if any, or interest on
the Debentures until such default shall have been cured or waived in writing or
shall have ceased to exist or such Senior Debt shall have been discharged or
paid in full.
In the event of the acceleration of the maturity of the Debentures, then no
payment shall be made by the Company with respect to the principal (including
redemption payments) of or premium, if any, or interest on the Debentures until
the holders of all Senior Debt outstanding at the time of such acceleration
shall receive payment in full of such Senior Debt (including any amounts due
upon acceleration).
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Debentureholder when such payment is prohibited
by the preceding paragraphs of this Section 14.02, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear.
55
Section 14.03. Liquidation; Dissolution; Bankruptcy. Upon any payment by
the Company or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any liquidation,
dissolution, winding up, receivership, reorganization, assignment for the
benefit of creditors, marshaling of assets and liabilities or any bankruptcy,
insolvency or similar proceedings of the Company, all amounts due or to become
due upon all Senior Debt shall first be paid in full, in cash or cash
equivalents, or payment thereof provided for in accordance with its terms,
before any payment is made on account of the principal of, premium, if any, or
interest on the indebtedness evidenced by the Debentures, and upon any such
liquidation, dissolution, winding up, receivership, reorganization, assignment,
marshaling or proceeding, any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to which the
Debentureholders or the Trustee under this Indenture would be entitled, except
for the provisions of this Article 14, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Debentureholders or by the
Trustee under this Indenture if received by them or it, directly to the holders
of Senior Debt (pro rata to such holders on the basis of the respective amounts
of Senior Debt held by such holders) or their respective representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Debt may have been issued, as their respective
interests may appear, to the extent necessary to pay all Senior Debt in full
(including, without limitation, except to the extent, if any, prohibited by
mandatory provisions of law, post-petition interest, in any such proceedings),
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt, before any payment or distribution is made to the
holders of the indebtedness evidenced by the Debentures or to the Trustee under
this Indenture.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee under this Indenture or the holders of the Debentures before all Senior
Debt is paid in full or provision is made for such payment 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 such Senior Debt or
their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of all Senior Debt remaining unpaid until all such Senior Debt
shall have been paid in full in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior
Debt.
For purposes of this Article 14, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of arrangement, reorganization or readjustment, the payment of which
is subordinated (at least to the extent provided in this Article 14 with respect
to the Debentures) to the payment of all Senior Debt which may at the time be
outstanding; provided, that (i) the Senior Debt is assumed by the new
corporation, if any, resulting from any such arrangement, reorganization or
56
readjustment, and (ii) the rights of the holders of the Senior Debt are not,
without the consent of such holders, altered by such arrangement, reorganization
or readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article 10 shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such other
Person shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions stated in Article 10. Nothing in Section 14.02 or
this Section 14.03 shall apply to claims of, or payments to, the Trustee under
or pursuant to Article 7, except as provided therein. This Section shall be
subject to the further provisions of Section 14.06.
Section 14.04. Subrogation of Debentures. Subject to the payment in full
of all Senior Debt, the rights of the holders of the Debentures shall be
subrogated to the rights of the holders of Senior Debt to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Debt until the principal of, premium, if any, and interest on the
Debentures shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the holders of the Debentures or the Trustee on
their behalf would be entitled except for the provisions of this Article 14 and
no payment over pursuant to the provisions of this Article 14 to the holders of
Senior Debt by holders of the Debentures or the Trustee on their behalf shall,
as between the Company, its creditors other than holders of Senior Debt and the
holders of the Debentures, be deemed to be a payment by the Company to or on
account of the Senior Debt; and no payments or distributions of cash, property
or securities to or for the benefit of the Debentureholders pursuant to the
subrogation provisions of this Article, which would otherwise have been paid to
the holders of Senior Debt shall be deemed to be a payment by the Company to or
for the account of the Debentures. It is understood that the provisions of this
Article 14 are and are intended solely for the purpose of defining the relative
rights of the holders of the Debentures, on the one hand, and the holders of the
Senior Debt, on the other hand.
Nothing contained in this Article 14 or elsewhere in this Indenture or in
the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of, premium, if any, and
interest on the Debentures 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 Debentures and creditors of the Company other than
the holders of the Senior Debt, nor shall anything herein or therein prevent the
holder of any Debenture or the Trustee on his behalf from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article 14 of the holders
of Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article 14, the Trustee, subject to the provisions of Article 7, and the
holders of the Debentures shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such liquidation,
57
dissolution, winding up, receivership, reorganization, assignment or marshaling
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 Debentures, for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 14.
Section 14.05. Authorization by Debentureholders. Each holder of a
Debenture 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 14 and appoints the Trustee his attorney-
in-fact for any and all such purposes.
Section 14.06. Notice to Trustee. The Company shall give prompt written
notice to the Trustee and to any paying agent of any fact known to the Company
which would prohibit the making of any payment of moneys to or by the Trustee or
any paying agent in respect of the Debentures pursuant to the provisions of this
Article 14. Regardless of anything to the contrary contained in this Article 14
or elsewhere in this Indenture, the Trustee shall not be charged with knowledge
of the existence of any Senior Debt or of any default or event of default with
respect to any Senior Debt or of any other facts which would prohibit the making
of any payment of moneys to or by the Trustee, unless and until the Trustee
shall have received notice in writing at its principal Corporate Trust Office to
that effect signed by an officer of the Company, or by a holder or agent of a
holder of Senior Debt who shall have been certified by the Company or otherwise
established to the reasonable satisfaction of the Trustee to be such holder or
agent, or by the trustee under any indenture pursuant to which Senior Debt shall
be outstanding, and, prior to the receipt of any such written notice, the
Trustee shall, subject to the provisions of Article 7, be entitled to assume
that no such facts exist; provided, however, that if on a date at least three
Business Days prior to the date upon which by the terms hereof any such moneys
shall become payable for any purpose (including, without limitation, the payment
of the principal of, or interest on any Debenture) the Trustee shall not have
received with respect to such moneys the notice provided for in this Section
14.06, then, regardless of anything herein to the contrary, the Trustee shall
have full power and authority to receive such moneys and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such prior date.
The Trustee shall be entitled to conclusively rely on the delivery to it of
a written notice by a Person representing himself to be a holder of Senior Debt
(or a trustee on behalf of such holder) to establish that such notice has been
given by a holder of Senior Debt or a trustee on behalf of any such holder. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article 14, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt 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 14, and if such evidence is not furnished
58
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
Section 14.07. Trustee's Relation to Senior Debt. The Trustee and any
agent of the Company or the Trustee shall be entitled to all the rights set
forth in this Article 14 with respect to any Senior Debt which may at any time
be held by it in its individual or any other capacity to the same extent as any
other holder of Senior Debt and nothing in this Indenture shall deprive the
Trustee or any such agent, of any of its rights as such holder. Nothing in this
Article shall apply to claims of, or payments to, the Trustee under or pursuant
to Article 7.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 14, and no implied covenants or
obligations with respect to the holders of Senior Debt 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 Debt and, subject to the provisions of
Article 7, the Trustee shall not be liable to any holder of Senior Debt if it
shall pay over or deliver to holders of Debentures, the Company or any other
person moneys or assets to which any holder of Senior Debt shall be entitled by
virtue of this Article 14 or otherwise.
Nothing in this Article 14 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.06.
Section 14.08. No Impairment to Subordination. No right of any present or
future holder of any Senior Debt to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt of the Company may, at any time and from time to time,
without the consent of or notice to the Trustee or the Debentureholders, without
incurring responsibility to the Debentureholders and without impairing or
releasing the subordination provided in this Article 14 or the obligations
hereunder of the holders of the Debentures to the holders of such Senior Debt,
do any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, such Senior Debt,
or otherwise amend or supplement in any manner such Senior Debt or any
instrument evidencing the same or any agreement under which such Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Debt; (iii) release any
Person liable in any manner for the collection of such Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Company, as the case
may be, and any other Person.
59
Section 14.09. Article Applicable to Paying Agents. In case at any time
any paying agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such paying agent within its meaning as fully for all intents
and purposes as if such paying agent were named in this Article in addition to
or in place of the Trustee.
Section 14.10. Trust Moneys Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Section 11.02 of this Indenture by
the Trustee for the payment of principal of and interest on the Debentures shall
not be subordinated to the prior payment of any Senior Debt or subject to the
restrictions set forth in this Article 14, and none of the Debentureholders
shall be obligated to pay over any such amount to the Company or any holder of
Senior Debt of the Company or any other creditor of the Company.
The Bank of New York, a New York banking corporation, as Trustee, hereby
accepts the trust in this Indenture declared and provided, upon the terms and
conditions herein above set forth.
60
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
HOUSTON INDUSTRIES INCORPORATED
By: _________________________________
Name:
Title:
THE BANK OF NEW YORK, AS TRUSTEE
By: _________________________________
Name:
Title:
61
STATE OF )
)
COUNTY OF )
BEFORE ME, the undersigned authority, on this day of _____________, ____,
personally appeared ________________________ (on behalf of Houston Industries
Incorporated), known to me (or proved to me by introduction upon the oath of a
person known to me) to be the person and officer, as the case may be, whose name
is subscribed to the foregoing instrument, and acknowledged to me that he or she
executed the same as the act of such and for the purposes and consideration
herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS _____ day of _________, ____.
_________________________________
NOTARY PUBLIC, STATE OF
Print Name:
Commission Expires:
STATE OF )
)
COUNTY OF )
BEFORE ME, the undersigned authority, on this day of _____________, ____,
personally appeared _______________________ of The Bank of New York, a New York
banking corporation, known to me (or proved to me by introduction upon the oath
of a person known to me) to be the person and officer whose names are subscribed
to the foregoing instrument, and acknowledged to me that he or she executed the
same as the act of such trust for the purposes and consideration herein
expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS _____ day of _________, ____.
(SEAL)
_________________________________
NOTARY PUBLIC, STATE OF
Print Name:
Commission Expires:
