CALENERGY COMPANY INC.,
as Issuer
TO
THE BANK OF NEW YORK,
as Trustee
Indenture
Dated as of ______ __, 1997
Subordinated Debentures
TABLE OF CONTENTS(1)
PAGE
RECITALS OF THE COMPANY.....................................................1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION......................................................1
SECTION 1.1 Definitions...........................................1
Trust Securities .............................................11
Voting Stock .............................................12
SECTION 1.2 Compliance Certificates and Opinions.................12
SECTION 1.3 Form of Documents Delivered to Trustee...............13
SECTION 1.4 Acts of Holders......................................14
SECTION 1.5 Notices, Etc., to Trustee and Company................17
SECTION 1.6 Notice to Holders of Debentures; Waiver..............18
SECTION 1.7 Language of Notices, Etc.............................19
SECTION 1.8 Conflict with Trust Indenture Act....................19
SECTION 1.9 Effect of Headings and Table of Contents.............19
SECTION 1.10 Successors and Assigns..............................19
SECTION 1.11 Separability Clause.................................20
SECTION 1.12 Benefits of Indenture...............................20
SECTION 1.13 Governing Law.......................................20
SECTION 1.14 Legal Holidays......................................20
SECTION 1.15 Judgment Currency...................................21
SECTION 1.16 Immunity of Incorporators, Shareholders, Officers,
Directors and Employees.............................21
--------------
1 NOTE: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
ARTICLE II
DEBENTURE FORMS............................................................22
SECTION 2.1 Forms Generally......................................22
SECTION 2.2 Form of Trustee's Certificate of Authentication......23
SECTION 2.3 Debentures in Global Form............................24
SECTION 2.4 Form of Legend for Book-Entry Debentures.............25
SECTION 2.5 Form of Conversion Notice............................25
ARTICLE III
THE DEBENTURES.............................................................25
SECTION 3.1 Amount Unlimited; Issuable in Series.................25
SECTION 3.2 Denominations........................................30
SECTION 3.3 Execution, Authentication, Delivery and Dating.......30
SECTION 3.4 Temporary Debentures.................................33
SECTION 3.5 Registration, Registration of Transfer and Exchange..36
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen Debentures and
Coupons....................................................................40
SECTION 3.7 Payment of Interest; Interest Rights Preserved.......41
SECTION 3.8 Persons Deemed Owners................................43
SECTION 3.9 Cancellation.........................................44
SECTION 3.10 Computation of Interest.............................45
SECTION 3.11 Electronic Debenture Issuance.......................45
SECTION 3.12 CUSIP Numbers.......................................45
SECTION 3.13 Right of Set Off....................................45
ARTICLE IV
SATISFACTION AND DISCHARGE.................................................46
SECTION 4.1 Satisfaction and Discharge of Indenture..............46
SECTION 4.2 Application of Trust Money...........................47
SECTION 4.3 Company's Option to Effect Defeasance or
Covenant Defeasance..................................48
SECTION 4.4 Discharge and Defeasance.............................48
SECTION 4.5 Covenant Defeasance..................................49
SECTION 4.6 Conditions to Defeasance or Covenant Defeasance.....49
ii
ARTICLE V
REMEDIES...................................................................53
SECTION 5.1 Events of Default....................................53
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment...56
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Trustee...............................57
SECTION 5.4 Trustee May File Proofs of Claim.....................58
SECTION 5.5 Trustee May Enforce Claims Without Possession of
Debentures or Coupons................................59
SECTION 5.6 Application of Money Collected.......................59
SECTION 5.7 Limitation on Suits..................................60
SECTION 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest and Convert.....................61
SECTION 5.9 Restoration of Rights and Remedies...................61
SECTION 5.10 Rights and Remedies Cumulative.......................61
SECTION 5.11 Delay or Omission Not Waiver.........................62
SECTION 5.12 Control by Holders of Debentures.....................62
SECTION 5.13 Waiver of Past Defaults..............................62
SECTION 5.14 Undertaking for Costs................................63
SECTION 5.15 Waiver of Stay or Extension Laws.....................64
SECTION 5.16 Enforcement by Holders of Preferred Securities.......64
ARTICLE VI
THE TRUSTEE................................................................65
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. ......................................65
SECTION 6.2 Notice of Defaults...................................66
SECTION 6.3 Certain Rights of Trustee............................66
SECTION 6.4 Not Responsible for Recitals or Issuance of
Debentures...........................................67
SECTION 6.5 May Hold Debentures..................................68
SECTION 6.6 Money Held in Trust..................................68
SECTION 6.7 Compensation and Reimbursement.......................68
SECTION 6.8 Disqualification; Conflicting Interests..............69
SECTION 6.9 Corporate Trustee Required; Eligibility..............69
iii
SECTION 6.10 Resignation and Removal; Appointment of Successor....70
SECTION 6.11 Acceptance of Appointment by Successor...............72
SECTION 6.12 Preferential Collection of Claims Against Company....73
SECTION 6.13 Merger, Conversion Consolidation or Succession to
Business.............................................73
SECTION 6.14 Appointment of Authenticating Agent..................74
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..........................76
SECTION 7.2 Preservation of Information; Communications to
Holders..............................................76
SECTION 7.3 Reports by Trustee...................................77
SECTION 7.4. Reports by Company...................................77
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE..................................78
SECTION 8.1 Company May Consolidate, Etc. on Certain Terms.......78
SECTION 8.2 Successor Corporation Substituted....................79
ARTICLE IX
SUPPLEMENTAL INDENTURES....................................................80
SECTION 9.1 Supplemental Indentures Without Consent of Holders...80
SECTION 9.2 Supplemental Indentures with Consent of Holders......82
SECTION 9.3 Execution of Supplemental Indentures.................84
SECTION 9.4 Effect of Supplemental Indentures....................84
SECTION 9.5 Conformity with Trust Indenture Act..................85
SECTION 9.6 Reference in Debentures to Supplemental Indentures...85
ARTICLE X
COVENANTS..................................................................85
SECTION 10.1 Payment of Principal, Premium and Interest..........85
SECTION 10.2 Maintenance of Office or Agency.....................86
SECTION 10.3 Money for Debentures Payments to Be Held in Trust...87
SECTION 10.4 Limitation on Dividends; Transactions with
Affiliates..........................................89
SECTION 10.5 Covenants as to CalEnergy Trusts....................90
iv
SECTION 10.6 Additional Amounts..................................90
SECTION 10.7 Existence...........................................91
SECTION 10.8 Purchase of Debentures by Company or Subsidiary.....92
SECTION 10.9 Statement by Officers as to Default.................92
SECTION 10.10 Calculation of Original Issue Discount.............92
ARTICLE XI
REDEMPTION OF DEBENTURES...................................................93
SECTION 11.1 Applicability of Article............................93
SECTION 11.2 Election to Redeem; Notice to Trustee...............93
SECTION 11.3 Selection by Trustee of Debentures to Be Redeemed...93
SECTION 11.4 Notice of Redemption................................94
SECTION 11.5 Deposit of Redemption Price.........................96
SECTION 11.6 Debentures Payable on Redemption Date...............96
SECTION 11.7 Debentures Redeemed in Part.........................97
ARTICLE XII
SINKING FUNDS..............................................................97
SECTION 12.1 Applicability of Article............................97
SECTION 12.2 Satisfaction of Sinking Fund Payments with
Debentures..........................................98
SECTION 12.3 Redemption of Debentures for Sinking Fund...........98
ARTICLE XIII
MEETINGS OF HOLDERS OF DEBENTURES..........................................99
SECTION 13.1 Purposes for Which Meetings May be Called...........99
SECTION 13.2 Call, Notice and Place of Meetings..................99
SECTION 13.3 Persons Entitled to Vote at Meetings...............100
SECTION 13.4 Quorum; Action.....................................100
SECTION 13.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings............................102
SECTION 13.6 Counting Votes and Recording Action of Meetings....103
ARTICLE XIV
CONVERSION OF DEBENTURES..................................................103
v
SECTION 14.1 Applicability of Article...........................103
SECTION 14.2 Exercise of Conversion Privilege...................104
SECTION 14.3 No Fractional Shares...............................105
SECTION 14.4 Adjustment of Conversion Price.....................106
SECTION 14.5 Notice of Certain Corporate Actions................106
SECTION 14.6 Reservation of Shares of Common Stock..............108
SECTION 14.7 Payment of Certain Taxes upon Conversion...........108
SECTION 14.8 Nonassessability...................................108
SECTION 14.9 Effect of Consolidation or Merger on Conversion
Privilege..........................................108
SECTION 14.10 Duties of Trustee Regarding Conversion............110
SECTION 14.11 Repayment of Certain Funds upon Conversion........110
ARTICLE XV
SUBORDINATION OF DEBENTURES......................................111
SECTION 15.1 Debentures Subordinate to Senior Indebtedness.....111
SECTION 15.2 Payment Over of Proceeds Upon Dissolution, Etc....111
SECTION 15.3 Prior Payment to Senior Indebtedness Upon
Acceleration of Debentures........................113
SECTION 15.4 No Payment When Senior Indebtedness in Default....113
SECTION 15.5 Payment Permitted in Certain Situations...........114
SECTION 15.6 Subrogation to Rights of Holders of Senior
Indebtedness......................................115
SECTION 15.7 Provisions Solely to Define Relative Rights.......115
SECTION 15.8 Trustee to Effectuate Subordination...............116
SECTION 15.9 No Waiver of Subordination Provisions.............116
SECTION 15.10 Notice to Trustee.................................117
SECTION 15.11 Reliance on Judicial Order or Certificate of
Liquidating Agent.................................117
SECTION 15.12 Trustee Not Fiduciary for Holders of Senior
Indebtedness......................................118
SECTION 15.13 Rights of Trustee as Holder of Senior
Indebtedness, Pres ervation of Trustee's Rights...118
SECTION 15.14 Article Applicable to Paying Agents...............118
SECTION 15.15 Certain Conversions Deemed Payment................119
vi
INDENTURE, dated as of ______ ___, 1997, between CalEnergy Company,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 000
Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000, and The Bank of New York,
a New York banking corporation having its principal corporate trust office at
000 Xxxxxxx Xxxxxx, Xxxxx 21 West, New York, New York 10286, as trustee (herein
called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its secured or
unsecured subordinated debentures, notes or other evidences of indebtedness
(herein called the "Debentures"), to be issued in one or more series as in this
Indenture provided.
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Debentures or of a series thereof,
as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America, and,
except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United
States of America at the date of such computation; and
(d) The words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Debenture, has the
meaning specified in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Debentures of one or more series.
"Authorized Newspaper" means a newspaper, in the English language or
in an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place, in connection with which the term is
used, or in the financial community of such place. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
city meeting the foregoing requirements and in each case on any Business Day.
"Bearer Debenture" means any Debenture in the form established
pursuant to Section 2.1 which is payable to bearer.
2
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Debenture" means a Debenture bearing the legend specified
in Section 2.4, evidencing all or part of a series of Debentures, issued to
the Depository for such series or its nominee, and registered in the name of
such Depository or nominee. Book-Entry Debentures shall not be deemed to be
securities in global form for purposes of Sections 2.1 and 2.3 and Article III
of this Indenture.
"Business Day", when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Debentures,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in that Place of Payment or other location are
authorized or obligated by law or executive order to close.
"CalEnergy Trust" means each of CalEnergy Capital Trust IV, V and VI,
each, a Delaware statutory business trust.
"Cedel S.A." means Cedel Bank, Societe Anonyme, or its successor.
"Commission" means the United States Securities and Exchange
Commission.
"Common Depository" has the meaning specified in Section 3.4.
"Common Securities" means undivided beneficial interests in the assets
of a CalEnergy Trust which rank pari passu with Preferred Securities issued by
such CalEnergy Trust; provided, however, that upon the occurrence of an Event
of Default, the rights of holders of Common Securities to payment in respect
to distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
3
"Common Securities Guarantee" means any Guarantee that the Company
enters into with The Bank of New York or other Persons that operates directly
or indirectly for the benefit of holders of Common Securities of a CalEnergy
Trust.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company. Subject to the
anti-dilution provisions of any convertible Debenture, however, shares of
CalEnergy Common Stock issuable on conversion of a Debenture shall include only
shares of the class designated as Common Stock of the Company at the date of
any supplemental indenture, Board Resolution or other instrument authorizing
such Debenture or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of the payment of dividends or the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company; provided, that if at
any time there shall be more than one such resulting class, the shares of each
such class then so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from all such reclassifications
bears to the total num ber of shares of such classes resulting from all such
reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice President, its Treasurer or its
Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Coupon" means any interest coupon appertaining to a Bearer Debenture.
4
"Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 3.5.
"Debentures" has the meaning stated in the first recital of this
Indenture and more particularly means any Debentures authenticated and
delivered under this Indenture.
"Declaration", with respect to a CalEnergy Trust, means the Amended
and Restated Declaration of Trust of such CalEnergy Trust.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Defeasance" has the meaning specified in Section 4.4.
"Depository" means, with respect to the Debentures of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Debentures of such series, the clearing agency registered under the Exchange
Act specified for that purpose as contemplated by Section 3.1.
"Direct Action" means a proceeding instituted by a holder of Preferred
Securities of a CalEnergy Trust directed against the Company to enforce rights
under the Debentures issued to such CalEnergy Trust in certain circumstances,
as specified in Section 5.16.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal
tender for the payment of public and private debts.
"Euro-clear" means Xxxxxx Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euro-clear System.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time.
"Exchange Date" has the meaning specified in Section 3.4.
5
"Guarantor" means CalEnergy Company Inc., a Delaware corporation, in
its capacity as guarantor under any Trust Securities Guarantees.
"Holder", when used with respect to any Debenture, means, in the case
of a Registered Debenture, the Person in whose name the Debenture is registered
in the Debenture Register and, in the case of a Bearer Debenture, the bearer
thereof and, when used with respect to any Coupon, the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of Debentures of any series established as
contemplated by Section 3.1.
"Interest", when used with respect to any Original Issue Discount
Debenture which by its terms bears interest only at Maturity, means interest
payable at Maturity.
"Interest Payment Date", when used with respect to any Debenture,
means the Stated Maturity of an installment of interest on such Debenture.
"Maturity", when used with respect to any Debenture, means the date on
which the principal of such Debenture or an installment of such principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption, notice of
option to elect repayment or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the President, a Vice President, the
Treasurer or the Secretary of the Company and delivered to the Trustee. The
officer signing an Officer's Certificate given pursuant to Section 10.9 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Debenture" means any Debenture which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
6
"Outstanding", when used with respect to Debentures of any series,
means, as of the date of determination, all Debentures of such series
theretofore authenticated and delivered under this Indenture, except:
(i) Debentures of such series theretofore cancelled by the
Trustee or any Paying Agent or delivered to the Trustee for
cancellation or that have previously been cancelled;
(ii) Debentures of such series for whose payment or redemption of
which money or United States Government Obligations in the
necessary amount has been theretofore deposited in accordance
with Article IV with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for
the Holders of Debentures of such series and any Coupons
appertaining thereto; provided that, if Debentures of such
series or portions of Debentures of such series are to be
redeemed prior to the Maturity thereof, notice of such redemption
has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Debentures of such series which have been paid pursuant to
Section 3.6 or in exchange for or in lieu of which other
Debentures of such series have been authenticated and delivered
pursuant to this Indenture, other than any Debentures of such
series in respect of which there shall have been presented to the
Trustee proof satisfactory to it that Debentures of such series
are held by a bona fide purchaser in whose hands Debentures of
such series are valid obligations of the Company; and
(iv) Debentures of such series as to which Defeasance has been
effected pursuant to Section 4.4;
provided, however, that in determining whether the Holders of the requisite
aggregate principal amount of the Outstanding Debentures of such series have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder or whether a quorum is present at a meeting of Holders of Debentures
of such series (A) the principal amount of an Original Issue Discount Debenture
of such series that shall be deemed to be Outstanding shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon acceleration of
7
the Maturity thereof pursuant to Section 5.2, (B) the principal amount of a
Debenture of such series denominated in a foreign currency or currencies shall
be the U.S. dollar equivalent, determined on the date of original issuance of
such Debenture, of the principal amount (or, in the case of an Original Issue
Discount Debenture of such series, the U.S. dollar equivalent on the date of
original issuance of such Debenture of the amount determined as provided in (A)
above) of such Debenture, and (C) Debentures of such series owned by the
Company or any other obligor upon such Debentures, or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, or upon any such determination as to the presence of a
quorum, only Debentures of such series which the Trustee actually knows to be
so owned shall be so disregarded. Debentures of such series so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debentures and that the pledgee is not the Company or any
other obligor upon such Debentures or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of and any premium and interest on any Debentures or any Coupons
appertaining thereto on behalf of the Company.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, trust, association, joint stock company,
limited liability company, unincorporated association or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Place of Payment", when used with respect to the Debentures of any
series, means the place or places where, subject to the provisions of Section
10.2, the principal of and any premium and interest on Debentures of such
series are payable as specified as contemplated by Section 3.1.
"Predecessor Debenture" of a Debenture of any series means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such Debenture; and, for the purposes of this definition, a
Debenture of any series authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, de stroyed, lost or stolen Debenture or
a Debenture to which a mutilated, destroyed, lost or stolen Coupon appertains
shall be deemed to evidence the same debt as the muti-
8
lated, destroyed, lost or stolen Debenture or the Debenture to which the
mutilated, destroyed, lost or stolen Coupon appertains, as the case may be.
"Preferred Securities" means undivided beneficial interests in the
assets of a CalEnergy Trust which rank pari passu with Common Securities issued
by such CalEnergy Trust; provided, however, that upon the occurrence of an
Event of Default, the rights of holders of Common Securities to payment in
respect to distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any Guarantee that the
Guarantor may enter into with The Bank of New York or other Persons that
operates directly or indirectly for the benefit of the holders of the
Preferred Securities of such CalEnergy Trust.
"Property Trustee" has the meaning set forth in the Declaration of the
applicable CalEnergy Trust.
"Redemption Date", when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Debenture to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Debenture" means any Debenture in the form established
pursuant to Section 2.1 which is registered in the Debenture Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on Registered Debentures of any series means the date specified for that
purpose as contemplated by Section 3.1, whether or not such day is a Business
Day.
"Responsible Officer" means, when used with respect to the Trustee,
the chairman of the board of directors, the executive committee of the board
of directors, the chairman of the trust committee, the president, any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a
9
particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Senior Indebtedness" means, with respect to Debentures of any series,
in respect of the Company (i) the principal, premium, if any, and interest in
respect of (A) indebtedness of such obligor for money borrowed and (B)
indebtedness evidenced by securities, debentures, bonds or other similar
instruments issued by such obligor, (ii) all capital lease obligations of such
obligor, (iii) all obligations of such obligor issued or assumed as the
deferred purchase price of property, all conditional sale obligations of such
obligor and all obligations of such obligor under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business), (iv) all obligations of such obligor for the reimbursement of any
letter of credit, banker's acceptance, security purchase facility or similar
credit transaction, (v) all obligations of the type referred to in clauses (i)
through (iv) above of other Persons for the payment of which such obligor is
responsible or liable as obligor, guarantor or otherwise, and (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
Persons secured by any lien on any property or asset of such obligor (whether
or not such obligation is assumed by such obligor), except for (1) any such
indebtedness issued after the date of original issuance of the Debentures of
such series that is by its terms subordinated to or pari passu with the
Debentures of such series and (2) any indebtedness (including all other debt
securities and guarantees in respect of those debt securities) initially
issued to any other trust, or a trustee of such trust, partnership, or other
entity affiliated with the Company that is, directly or indirectly, a
financing vehicle of the Company (a "Financing Entity") in connection with the
issuance by such Financing Entity of preferred securities or other securities
which by their terms rank pari passu with, or junior to, the Preferred
Securities of the CalEnergy Trust that is the holder of the Debentures of such
series.
"Special Record Date" for the payment of any Defaulted Interest on
Registered Debentures of any series means a date fixed by the Trustee pursuant
to Section 3.7.
"Stated Maturity", when used with respect to any Debenture or any
installment of principal thereof or interest thereon, means the date specified
in such Debenture or a Coupon representing such installment of interest as the
fixed date on which the principal of such Debenture or such installment of
principal or interest is due and payable, as such date may, in the case of the
stated maturity of the principal on any Debenture, be shortened as provided
pursuant to the terms of such Debenture and, in the
10
case of any installment of interest, subject to the deferral of such date in
the case of the Company's election to defer payments of interest on Debentures
of such series by extending the interest payment period.
"Subsidiary" of any Person means (i) a corporation more than 50% of
the outstanding Voting Stock of which is owned, directly or indirectly, by
such Person or by one or more other Subsidiaries of such Person or by such
Person and one or more Subsidiaries thereof or (ii) any other Person (other
than a corporation) in which such Person, or one or more other Subsidiaries of
such Person or such Person and one or more other Subsidiaries thereof, directly
or indirectly, has at least a majority ownership and power to direct the
policies, management and affairs thereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Securities" means Common Securities and Preferred Securities
of a CalEnergy Trust.
"Trust Securities Guarantees" means the Common Stock Guarantee and the
Convertible Preferred Securities Guarantee.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this - Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to Debentures of any series shall mean the Trustee with respect to
Debentures of such series.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the
11
members of which is, for United States federal income tax purposes, a foreign
corporation, a non-resident alien individual or a nonresident alien fiduciary
of a foreign estate or trust or a foreign partnership.
"U.S. Government Obligations" means direct obligations of the United
States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States and the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended)
as custodian with respect to any such U.S. Government Obligations or a specific
payment of principal of or interest on any such U.S. Government Obligations
held by such custodian for the account of the holder of such depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligations or the specific payment of principal of or interest
on the U.S. Government Obligations evidenced by such depository receipt.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Voting Stock," of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Yield to Maturity" means the yield to maturity on Debentures of any
series, calculated at the time of issuance of such series, or, if applicable,
at the most recent redetermination of interest on such series, and calculated
in accordance with accepted financial practice.
SECTION 1.2 Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of
12
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, 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, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion by or on behalf of the Company with
respect to compliance with a condition or covenant provided for in this
Indenture, except for certificates provided for in Section 10.9, shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, the
individual has made such examination or investigation as is
necessary to enable such individual to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
13
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. If Debentures of any series are issuable as Bearer
Debentures of such series, any request, demand, authorization, direction,
notice, consent, waiver or other action provided or permitted by this
Indenture to be given or taken by Holders of Debentures of such series may,
alternatively, be embodied in and evidenced by the record of Holders of
Debentures of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Debentures of
such series duly called and held in accordance with the provisions of Article
XIII, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments and so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent or
proxy, or of the holding by any Person of a Debenture of any series, shall be
sufficient for any purpose of this Indenture and (subject to Section 6.3)
14
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section. The record of any meeting of Holders of Debentures of
any series shall be proved in the manner provided in Section 13.6.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such notary public or other such
officer the execution thereof. Where such execution is by a signer acting in a
capacity other than the signer's individual capacity, such certificate or
affidavit shall also constitute sufficient proof of the signer's authority. The
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which the Trustee reasonably deems sufficient.
(c) The principal amount and serial numbers of Registered Debentures
of any series held by any Person, and the date of holding the same, shall be
proved by the Debenture Register.
(d) The principal amount and serial numbers of Bearer Debentures of
any series held by any Person, and the date of holding the same, may be proved
by the production of such Bearer Debentures or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhibited to it, the Bearer Debentures therein
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Debentures, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee and the Company may
assume that such ownership of any Bearer Debenture continues until (i) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Debenture is produced, or (ii) such Bearer Debenture is produced to the
Trustee by some other Person, or (iii) such Bearer Debenture is surrendered in
exchange for a Registered Debenture of such series, or (iv) such Bearer
Debenture is no longer Outstanding. The principal amount and serial numbers of
Bearer Debentures held by any Person, and the date of holding the same, may
also be proved in any other manner which the Trustee deems sufficient.
15
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of a Debenture of any series shall bind every
future Holder of the same Debenture and the Holder of every Debenture issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Debenture.
(f) With respect to the Debentures of any series, upon receipt by the
Trustee of (i) any written notice directing the time, method or place of
conducting any proceeding or exercising any trust or power pursuant to Section
5.1 with respect to Debentures of such series or (ii) any written demand,
request or notice with respect to any matter on which the Holders of Debentures
of such series are entitled to act under this Indenture, in each case from
Holders of less than, or proxies representing less than, the requisite
principal amount of Outstanding Debentures of such series entitled to give such
demand, request or notice, the Trustee shall establish a record date for
determining Holders of Outstanding Debentures of such series entitled to join
in such demand, request or notice, which record date shall be the close of
business on the day the Trustee received such demand, request or notice. The
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such demand, request or notice whether or
not such Holders remain Holders after such record date; provided, however, that
unless the Holders of the requisite principal amount of Outstanding Debentures
of such series shall have joined in such demand, request or notice prior to
the day which is the ninetieth day after such record date, such demand, request
or notice shall automatically and without further action by any Holder be
canceled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, (i) after the expiration of such
90-day period, a new demand, request or notice identical to a demand, request
or notice which has been canceled pursuant to the proviso to the preceding
sentence or (ii) during any such 90-day period, a new demand, request or notice
which has been canceled pursuant to the proviso to the preceding sentence or
(iii) during any such 90-day period, a new demand, request or notice contrary
to or different from such demand, request or notice, in either of which events
a new record date shall be established pursuant to the provisions of this
clause.
(g) The Company may set any day as the record date for the purpose of
determining the Holders of Outstanding Debentures of any series entitled to
give or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of Xxxxx-
00
tures of such series. With regard to any record date set pursuant to this
paragraph, the Holders of Outstanding Debentures of such series on such record
date (or their duly appointed agents), and only such Persons, shall be entitled
to give or take the relevant action, whether or not such Holders remain
Holders after such record date. With regard to any action that may be given or
taken hereunder only by Holders of a requisite principal amount of Outstanding
Debentures of any series (or their duly appointed agents) and for which a
record date is set pursuant to this paragraph, the Company may, at its option,
set an expiration date after which no such action purported to be given or
taken by any Holder shall be effective hereunder unless given or taken on or
prior to such expiration date by Holders of the requisite principal amount of
Outstanding Debentures of such series on such record date (or their duly
appointed agents). On or prior to any expiration date set pursuant to this
paragraph, the Company may, on one or more occasions at its option, extend such
date to any later date. Nothing in this paragraph shall prevent any Holder (or
any duly appointed agent thereof) from giving or taking, after any expiration
date, any action identical to, or, at any time, contrary to or different from,
any action given or taken, or purported to have been given or taken, hereunder
by a Holder on or prior to such date, in which event the Company may set a
record date in respect thereof pursuant to this clause. Notwithstanding the
foregoing or the Trust Indenture Act, the Company shall not set a record date
for, and the provisions of this clause shall not apply with respect to, any
action to be given or taken by Holders pursuant to Section 5.1, 5.2 or 5.12.
SECTION 1.5 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Trustee Administration, or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this
Indenture, to the attention of its Treasurer, or at any
17
other address previously furnished in writing to the Trustee by
the Company.
SECTION 1.6 Notice to Holders of Debentures; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Debentures of any event:
(a) such notice shall be sufficiently given to Holders of
Registered Debentures of any series if in writing and mailed,
first-class postage prepaid, to each Holder of a Registered
Debenture affected by such event, at the address of such Holder
as it appears in the Debenture Register, not earlier than the
earliest date, and not later than the latest date, prescribed for
the giving of such notice; and
(b) such notice shall be sufficiently given to Holders of Bearer
Debentures of any series if published in an Authorized Newspaper
in The City of New York, The City of London and in such other
city or cities as may be specified in such Debentures on a
Business Day at least twice, the first such publication to be not
earlier than the earliest date, and the second such publication
to be not later than the latest date, prescribed for the giving
of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Registered Debentures by mail, then such notification as shall be
made with the approval of the Trustee shall constitute sufficient notice to
such Holders for every purpose hereunder. In any case where notice to Holders
of Registered Debentures is given by mail, neither the failure to mail such
notice, nor any defect in any notice mailed to any particular Holder of a
Registered Debenture shall affect the sufficiency of such notice with respect
to other Holders of Registered Debentures or the sufficiency of any notice to
Holders of Bearer Debentures given as provided herein.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Debentures as provided
above, then such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice to such Holders for every purpose
hereunder. Neither the failure to give
18
notice by publication to Holders of Bearer Debentures as provided above, nor
any defect in any notice so published, shall affect the sufficiency of any
notice to Holders of Registered Debentures given as provided herein.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Debentures shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 1.7 Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of
the country of publication.
SECTION 1.8 Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required to be included in this Indenture by any of Sections 310 to 318,
inclusive, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 1.9 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.10 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
19
SECTION 1.11 Separability Clause.
In case any provision in this Indenture or the Debentures or Coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.12 Benefits of Indenture.
Nothing in this Indenture or the Debentures or Coupons, express or
implied, shall give to any Person, other than the parties hereto, any
Authenticating Agent, any Paying Agent, any Debentures Registrar and their
successors hereunder and the Holders of Debentures and coupons, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.13 Governing Law.
THIS INDENTURE AND THE DEBENTURES AND COUPONS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 1.14 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, sinking
fund payment date, Maturity or Stated Maturity of a Debenture of any series or
the last date on which a Holder has the right to convert a Debentures of any
series shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Debentures or
Coupons other than a provision in Debentures of any series which specifically
states that such provision shall apply in lieu of this Section) payment of
interest or principal (and premium, if any) or conversion of the Debentures
need not be made at such Place of Payment on such date, but may be made on the
next succeeding Business Day (except that, if such Business Day is in the next
succeeding calendar year, such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, shall be the immediately preceding Business Day)
at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity or on such
last day for conversion, provided that no interest shall accrue on the amount
so payable for
20
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to such succeeding Business Day.
SECTION 1.15 Judgment Currency.
The Company agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due on Debentures of any series
from the currency in which such sum is payable in accordance with the terms of
such Debentures (the "Required Currency") into a currency in which a judgment
will be rendered (the "Judgment Currency"), the rate of exchange used shall be
the rate at which in accordance with normal banking procedures the Trustee
could purchase in The City of New York the Required Currency with the Judgment
Currency on the New York Banking Day preceding that on which a final
unappealable judgment is rendered and (b) its obligations under this Indenture
to make payments in the Required Currency (i) shall not be discharged or
satisfied by any tender, or any recovery pursuant to any judgment (whether or
not entered in accordance with subsection (a)), in any currency other than the
Required Currency, except to the extent that such tender or recovery shall
result in the actual receipt, by the payee, of the full amount of the Required
Currency expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose of
recovering in the Required Currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
SECTION 1.16 Immunity of Incorporators, Shareholders, Officers, Directors and
Employees.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of a Debenture of any series, or for any claim based
thereon or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer, director or employee, as such, past, present or future,
of the Company or of any successor corporation, either directly or through the
Company, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or other-
21
wise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations of the Company, and that no
such personal liability whatever shall attach to, or is or shall be incurred
by, the incorporators, shareholders, officers, directors or employees, as such,
of the Company or of any successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations or agreements contained in this Indenture or in any of the
Debentures or implied therefrom; and that any and all such personal liability,
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, shareholder,
officer, director or employee, as such, because of the creation of the
indebtedness hereby authorized, or under of by reason of the obligations 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 issue of such
Debentures.
All payments of interest and other amounts, if any, to be made by the
Trustee hereunder shall be made only from the money deposited with the Trustee
and only to the extent that the Trustee shall have sufficient income or
proceeds to make such payments in accordance with the terms of this Indenture,
and each Holder thereof, by its acceptance of a Debenture, agrees that it will
look solely to the income and proceeds deposited with the Trustee to the
extent available for distribution to such Holder as provided and that the
Trustee is not personally liable in any manner to such Holder for any amounts
payable or any liability under this Indenture or any Debenture.
ARTICLE II
DEBENTURE FORMS
SECTION 2.1 Forms Generally.
The Registered Debentures, if any, of each series and the Bearer
Debentures, if any, of each series and related Coupons shall be in such form
(including temporary or permanent global form) as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of iden-
22
tification and such legends or endorsements placed thereon as may be required
to comply with the rules of any securities exchange or as may, consistently
herewith, be determined by the officers executing such Debentures or Coupons,
as evidenced by their execution of the Debentures or Coupons. If temporary
Debentures of any series are issued in global form as permitted by Section 3.4,
the form thereof shall be established as provided in the preceding sentence. If
the forms of Debentures or Coupons of any series (or any such temporary global
Debenture) 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 any Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by
Section 3.3 for the authentication and delivery of such Debentures (or any such
temporary global Debenture) or Coupons.
Unless otherwise specified as contemplated by Section 3.1, Debentures
in bearer form shall have interest Coupons attached.
The definitive Debentures and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Debentures or
Coupons, as evidenced by their execution of such Debentures or Coupons.
SECTION 2.2 Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
The Bank of New York,
As Trustee
By:
---------------------------
Authorized Signatory
23
SECTION 2.3 Debentures in Global Form.
If Debentures of any series are issuable in global form, as specified
as contemplated by Section 3.1, then, notwithstanding clause (e) of Section
3.1 and the provisions of Section 3.2, any such Debenture shall represent such
of the Outstanding Debentures of such series as shall be specified therein and
may provide that it shall represent the aggregate amount of Outstanding
Debentures of such series from time to time endorsed thereon and that the
aggregate amount of Outstanding Debentures of such series represented thereby
may from time to time be reduced to reflect exchanges. Any endorsement of a
Debenture in global form to reflect the amount, or any increase or decrease in
the amount, of Outstanding Debentures of such series represented thereby shall
be made by the Trustee in such manner and upon instructions given by such
Person or Persons as shall be specified therein or in the Company Order to be
delivered to the Trustee pursuant to Section 3.3 or Section 3.4. Subject to the
provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee shall
deliver and redeliver any Debenture in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Debenture in global form
shall be in writing but need not comply with Section 1.2 and need not be
accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall apply to any
Debenture represented by a Debenture in global form if such Debenture was never
issued and sold by the Company and the Company delivers to the Trustee the
Debenture in global form together with written instructions (which need not
comply with Section 1.2 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Debentures represented
thereby, together with the written statement contemplated by the last sentence
of Section 3.3.
Notwithstanding the provisions of Sections 2.1 and 3.7, unless
otherwise specified as contemplated by Section 3.1, payment of principal of
and any premium and interest on any Debenture in permanent global form shall be
made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the
24
Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Debentures represented by a permanent global Debenture as shall be
specified in a written statement of the Holder of such permanent global
Debenture or, in the case of a permanent global Debenture in bearer form, of
Euro-clear or Cedel S.A. which is provided to the Trustee by such Person.
SECTION 2.4 Form of Legend for Book-Entry Debentures.
Any Book-Entry Debenture authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Debenture is a Book-Entry Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depository
or a nominee of a Depository. This Debenture is exchangeable for Debentures
registered in the name of a Person other than the Depository or its nominee
only in the limited circumstances described in the Indenture, and no transfer
of this Debenture (other than a transfer of this Debenture as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except
in such limited circumstances."
SECTION 2.5 Form of Conversion Notice.
The Form of conversion notice for the conversion of Debentures into
shares of Common Stock or other securities of the Company (the "Conversion
Notice") shall be in substantially the form included with the applicable form
of Debentures as shall be established pursuant to Section 2.1 hereinabove.
ARTICLE III
THE DEBENTURES
SECTION 3.1 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is unlimited.
25
The Debentures may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth, or determined in the manner provided, in an Officers' Certificate,
or established in one or more indentures supplemental hereto, prior to the
issuance of Debentures of any series:
(a) the title of the Debentures of the series (which shall distinguish the
Debentures of the series from all other series of Debentures);
(b) any limit upon the aggregate principal amount of the
Debentures of the series which may be authenticated and delivered
under this Indenture (except for Debentures of the series
authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Debentures of the series
pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7 and except for
any Debentures of the series which, pursuant to Section 3.3, are
deemed never to have been authenticated and delivered hereunder);
(c) whether Debentures of the series are to be issuable as
Registered Debentures, Bearer Debentures or both, whether any
Debentures of the series are to be issuable initially in
temporary global form and whether any Debentures of the series
are to be issuable in permanent global form with or without
coupons and, if so, whether beneficial owners of interests in
any such permanent global Debenture may exchange such interests
for Debentures of the series and of like tenor of any authorized
form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in
Section 3.5;
(d) the Person to whom any interest on any Registered Debenture
of the series shall be payable, if other than the Person in whose
name that Debenture (or one or more Predecessor Debentures) is
registered at the close of business on the Regular Record Date
for such interest, the manner in which, or the Person to whom,
any interest on any Bearer Debenture of the series shall be
payable, if otherwise than upon presentation and surrender of the
coupons appertaining thereto as they severally mature, and the
extent to which, or the manner in which, any interest payable on
a temporary global Debenture on an Interest Payment Date will be
paid if other than in the manner provided in Section 3.4;
26
(e) the date or dates, or the method by which such date or dates
will be determined or extended, on which the principal of the
Debentures of the series is payable;
(f) the rate or rates at which the Debentures of the series shall
bear interest, if any, or the formula pursuant to which such
rate or rates shall be determined, the date or dates from which
any such interest shall accrue, the Interest Payment Dates on
which any such interest shall be payable, and the Regular Record
Date for any interest payable on any Registered Debentures on any
Interest Payment Date and the basis upon which interest shall be
calculated if other than that of a 360-day year consisting of
twelve 30-day months;
(g) the place or places where, subject to the provisions of
Sections 11.4 and 10.2, the principal of and any premium and
interest on Debentures of the series shall be payable, any
Registered Debentures of the series may be surrendered for
registration of transfer, Debentures of the series may be
surrendered for conversion or exchange, notices and demands to or
upon the Company in respect of the Debentures of the series and
this Indenture may be served and where notices to Holders of
Bearer Debentures of the series pursuant to Section 1.6 will be
published;
(h) the right, if any, to extend the interest payment periods in
respect of the Debentures of the series and the duration of such
extension;
(i) 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;
(j) the obligation, if any, of the Company to redeem, repay or
purchase Debentures of the series, or any Debentures within the
series, pursuant to any sinking fund or analogous provisions and
the period or periods within which, the price or prices at which
and the terms and conditions upon which such Debentures shall be
redeemed, repaid or purchased, in whole or in part, pursuant to
such obligation;
(k) the terms of any right to convert or exchange Debentures of
the series, either at the election of the Holder thereof or the
Company, into or
27
for shares of Common Stock of the Company or other securities or
property, including, without limitation, the period or periods
within which and the price or prices (including adjustments
thereto) at which any Debentures of the series shall be
converted or exchanged, in whole or in part and any other
provision in addition to or in lieu of those set forth in this
Indenture;
(l) the denominations in which any Registered Debentures of the
series shall be issuable, if other than denominations of $1,000
and any integral multiple thereof, and the denomination or
denominations in which any Bearer Debentures of the series shall
be issuable, if other than the denomination of $5,000;
(m) the currency or currencies, including composite currencies,
in which payment of the principal of and any premium and interest
on the Debentures of the series shall be payable if other than
the currency of the United States of America;
(n) if the principal of and any premium or interest on the
Debentures of the series are to be payable, at the election of
the Holder thereof or the Company, in a currency or currencies,
including composite currencies, other than that or those in which
the Debentures of the series are stated to be payable, the
currency or currencies in which payment of the principal of and
any premium and interest on Debentures of the series as to which
such election is made shall be payable, and the periods within
which and the terms and conditions upon which such election is to
be made;
(o) if the amount of payments of principal of and any premium or
interest on the Debentures of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(p) if other than the principal amount thereof, the portion of
the principal amount of any Debentures of the series which shall
be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 5.2;
28
(q) the Person who shall be the Debenture Registrar, if other
than the Trustee;
(r) whether the Debentures of the series shall be issued upon
original issuance in whole or in part in the form of one or more
Book-Entry Debentures and, in such case, (a) the Depository with
respect to such Book-Entry Debenture or Debentures; and (b) the
circumstances under which any such Book-Entry Debenture may be
exchanged for Debentures registered in the name of, and any
transfer of such Book-Entry Debenture may be registered to, a
Person other than such Depository or its nominee, if other than
as set forth in Section 3.5;
(s) if the provisions of Section 4.4 or 4.5 are applicable to the
Debentures of the series;
(t) provisions, if any, granting special rights to the Holders of
Debentures of the series upon the occurrence of such events as
may be specified;
(u) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to
Debentures of the series, whether or not such Events of Default
or covenants are consistent with the Events of Default or
covenants set forth herein;
(v) whether and under what conditions additional amounts will be
payable to Holders of Debentures of the series pursuant to
Section 10.6;
(w) the terms and conditions, if any, pursuant to which
Debentures of the series are secured;
(x) the subordination terms of the Debentures of the series; and
(y) any other terms of the Debentures of the series.
All Debentures of any series and the coupons appertaining to any
Bearer Debentures of such series shall be substantially identical except, in
the case of Registered Debentures of such series, as to denomination and except
as may otherwise be provided in or pursuant to the Board Resolution referred
to above and (subject to Sec-
29
tion 3.3) set forth in, or determined in the manner provided in, the Officers'
Certificate referred to above or in any such indenture supplemental hereto.
Not all Debentures of any series need be issued at the same time, and, unless
otherwise provided, a series may be reopened for issuances of additional
Debentures of such series.
If any of the terms of the Debenture of any 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 of the Company and delivered to
the Trustee at or prior to the delivery of the Officers' Certificate setting
forth the terms, or the manner of determining the terms, of the series.
SECTION 3.2 Denominations.
Unless otherwise provided as contemplated by Section 3.1 with respect
to Debentures of any series, any Registered Debentures shall be issuable in
denominations of $1,000 and any integral multiple thereof and any Bearer
Debentures shall be issuable in the denomination of $5,000.
SECTION 3.3 Execution, Authentication, Delivery and Dating.
Debentures and Coupons shall be signed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents. The signature of any of these officers on Debentures may
be manual or facsimile.
Debentures and Coupons bearing the manual or facsimile signatures of
individu als who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Debentures or did not hold such offices at the date of such Debentures.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series, together
with any Coupons appertaining thereto executed by the Company to the Trustee
for authentication, together with a Company Order for the authentication and
delivery of Debentures of such series, and the Trustee in accordance with the
Company Order shall authenticate and make Debentures of such series available
for delivery; provided, however, that, in connection with its original
issuance, no Bearer Debenture of such series shall be
30
mailed or otherwise delivered to any location in the United States; and
provided, further, that a Bearer Debenture of such series may be delivered in
connection with its original issuance only if the Person entitled to receive
such Bearer Debenture shall have furnished a certificate in the form specified
in the Debenture of such series as to certain tax matters in respect of United
States citizens, dated no earlier than 15 days prior to the earlier of the date
on which the Bearer Debenture of such series is delivered and the date on which
any temporary global Debenture first becomes exchangeable for such Bearer
Debenture of such series in accordance with the terms of such temporary global
Debenture and this Indenture. If any Debenture of such series shall be
represented by a permanent global Bearer Debenture of such series, then, for
purposes of this Section and Section 3.4, the notation of a beneficial owner's
interest therein upon original issuance of such Debenture or upon exchange of a
portion of a temporary global Debenture shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such permanent global Debenture. Except as permitted by Section 3.6, the
Trustee shall not authenticate and deliver any Bearer Debenture of such series
unless all appurtenant Coupons for interest then matured have been detached and
cancelled.
If all the Debentures of any series are not to be issued at one time
and if the Board Resolution and indenture supplement establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the
Trustee for the issuance of Debentures of such series and determining the
terms of such series, such as interest rate, maturity date, date of issuance
and date from which interest shall accrue.
If the forms or terms of the Debentures of any series, together with
any Coupons appertaining thereto, have been established in or pursuant to one
or more Board Resolutions as permitted by Sections 2.1 and 3.1, in
authenticating Debentures of such series, and accepting the additional
responsibilities under this Indenture in relation to such Debentures of such
series, the Trustee shall be entitled to receive, and (subject to Section 6.3)
shall be fully protected in relying upon, an Opinion of Counsel stating:
(a) that such forms have been established in conformity with the
provisions of this Indenture;
(b) that such terms, or the manner of determining such terms,
have been established in conformity with the provisions of this
Indenture;
31
(c) that Debentures of such series, together with any Coupons
appertaining thereto, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting the enforcement of creditors' rights generally
and general equity principles (regardless of whether
enforceability is considered in a proceeding at law or equity);
and
(d) that all laws and requirements in respect of the execution
and delivery by the Company of Debentures of such series have
been complied with.
If such forms or terms have been so established, the Trustee shall not
be required to authenticate Debentures of such series if the issue of such
Debentures pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under such Debentures and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the two preceding
paragraphs, if all Debentures of any series are not to be originally issued at
one time, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 3.1 or the Company Order and Opinion of
Counsel otherwise required pursuant to such preceding paragraphs at or prior to
the time of authentication of each Debenture of such series if such documents
are delivered at or prior to the authentication upon original issuance of the
first Debenture of such series to be issued.
Each Registered Debenture of any series shall be dated the date of its
authentication; and each Bearer Debenture shall be dated as of the date of
original issuance of the first Debenture of such series to be issued.
No Debenture of any series or any Coupon appertaining thereto shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on the Debenture, or the Coupon appertaining to
such Debenture, a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Debenture shall be
32
conclusive evidence, and the only evidence, that such Debenture has been duly
authenticated and delivered hereunder. 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 3.9 together with a written
statement (which need not comply with Section 1.2 and need not be accompanied
by an Opinion of Counsel) stating that such Debenture has never been issued
and sold by the Company, 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.
SECTION 3.4 Temporary Debentures.
Pending the preparation of definitive Debentures of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Debentures of such series which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Debentures of such series in lieu of which they are issued, in registered form
or, if authorized, in bearer form with one or more coupons or without coupons,
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Debentures or Coupons may determine,
as evidenced by their execution of such Debentures or Coupons. In the case of
Debentures of any series issuable as Bearer Debentures, such temporary
Debentures may be in global form. A temporary Bearer Debenture shall be
delivered only in compliance with the conditions set forth in Section 3.3.
Except in the case of temporary Debentures in global form issued in a
transaction exempt from registration under the Securities Act of 1933, as
amended, pursuant to Regulation S thereunder (a "Regulation S Debenture")(which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Debentures of any series are issued, the Company
will cause definitive Debentures of such series to be prepared without
unreasonable delay. After the preparation of definitive Debentures of such
series, the temporary Debentures of such series shall be exchangeable for
definitive Debentures of such series upon surrender of the temporary Debentures
of such series at the office or agency of the Company maintained pursuant to
Section 10.2 in a Place of Payment for such series for the purpose of ex-
changes of Debentures of such series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Debentures of any
series (accompa-
33
xxxx by any unmatured Coupons appertaining thereto) the Company shall execute
and the Trustee shall authenticate and make available for delivery in exchange
therefor a like aggregate principal amount of definitive Debentures of such
series and of like tenor of authorized denominations; provided, however, that
no definitive Bearer Debenture shall be delivered in exchange for a temporary
Registered Debenture.
If temporary Regulation S Debentures of any series are issued in
global form, any such temporary global Regulation S Debenture shall, unless
otherwise provided therein, be delivered to the London office of a depositary
or common depositary (the "Common Depositary"), for the benefit of Euro-clear
and Cedel S.A., for credit to the respective accounts of the beneficial owners
of such Debentures (or to such other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Regulation S Debenture of any series (the "Exchange Date"), the Company shall
deliver to the Trustee definitive Debentures of such series, in aggregate
principal amount equal to the principal amount of such temporary global
Regulation S Debenture, executed by the Company. On or after the Exchange Date
such temporary global Regulation S Debenture shall be surrendered by the Common
Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Debentures of
such series without charge and the Trustee shall authenticate and make
available for delivery, in exchange for each portion of such temporary global
Regulation S Debenture, a like aggregate principal amount of definitive
Debentures of such series of authorized denominations and of like tenor as the
portion of such temporary global Regulation S Debenture to be exchanged;
provided, however, that, unless otherwise specified in such temporary global
Regulation S Debenture, upon such presentation by the Common Depositary, such
temporary global Regulation S Debenture is accompanied by a certificate dated
the Exchange Date or a subsequent date and signed by Euro-clear as to the
portion of such temporary global Regulation S Debenture held for its account
then to be exchanged and a certificate dated the Exchange Date or a subsequent
date and signed by Cedel S.A. as to the portion of such temporary global
Regulation S Debenture held for its account then to be exchanged, each in the
form or in such form as shall be specified in such Regulation S Debenture. The
definitive Debentures of such series to be delivered in exchange for any such
temporary global Regulation S Debenture shall be in bearer form, registered
form, permanent global bearer form or permanent global registered form, or any
combination thereof, as specified as contemplated by Section 3.1, and,
34
if any combination thereof is so specified, as requested by the beneficial
owner thereof; provided, however, that definitive Bearer Debentures of such
series shall be delivered in exchange for a portion of a temporary global
Regulation S Debenture of such series only in compliance with the requirements
of Section 3.3.
Unless otherwise specified in such temporary global Regulation S
Debenture, the interest of a beneficial owner of Debentures of any series in a
temporary global Regulation S Debenture shall be exchanged for definitive
Debentures of such series and of like tenor following the Exchange Date when
the account holder instructs Euro-clear or Cedel S.A., as the case may be, to
request such exchange on the Holder's behalf and delivers to Euro-clear or
Cedel S.A., as the case may be, a certificate in such form as shall be
specified in the Regulation S Debenture of such series, dated no earlier than
15 days prior to the Exchange Date, copies of which certificate shall be
available from the offices of Euro-clear and Cedel S.A., the Trustee, any
Authenticating Agent appointed for the Debentures of such series and each
Paying Agent. Unless otherwise specified in such temporary global Regulation S
Debenture, any such exchange shall be made free of charge to the beneficial
owners of such temporary global Regulation S Debenture, except that a Person
receiving definitive Debentures of such series must bear the cost of insurance,
postage, transportation and the like in the event that such Person does not
take delivery of such definitive Debentures of such series in person at the
offices of Euro-clear or Cedel S.A. Definitive Debentures of such series in
bearer form to be delivered in exchange for any portion of a temporary global
Regulation S Debenture of such series shall be delivered only outside the
United States.
Until exchanged in full as hereinabove provided, the temporary
Regulation S Debentures of any series shall in all respects be entitled to such
benefits under this Indenture as definitive Debentures of such series and of
like tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 3.1, interest payable on a temporary
global Regulation S Debenture of such series on an Interest Payment Date for
Debentures of such series occurring prior to the applicable Exchange Date shall
be payable to Euro-clear and Cedel S.A. on such Interest Payment Date upon
delivery by Euro-clear and Cedel S.A. to the Trustee of a certificate or
certificates in such form as shall be specified in the Debenture of such
series, for credit without further interest on or after such Interest Payment
Date to the respective accounts of the Persons who are the beneficial owners of
such temporary global Regulation S Debenture on such Interest Payment Date and
who have each delivered to Euro-clear or Cedel S.A., as the case may be, a
certificate in such form
35
as shall be specified in the Debenture of such series. Any interest so received
by Euro-clear and Cedel S.A. and not paid as herein provided shall be returned
to the Trustee immediately prior to the expiration of two years after such
Interest Payment Date in order to be repaid to the Company in accordance with
Section 10.3.
SECTION 3.5 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at an office or agency to be
maintained by the Company in accordance with Section 10.2 a register (the
"Debenture Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Registered
Debentures and the registration of transfers of Registered Debentures. The
Trustee is hereby appointed "Debenture Registrar" for the purpose of
registering Registered Debentures and transfers of Regis tered Debentures as
herein provided.
Upon due surrender for registration of transfer of any Registered
Debenture of any series at the office or agency of the Company maintained
pursuant to Section 10.2 for such purpose in a Place of Payment for such
series, the Company shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or
transferees, one or more new Registered Debentures of such series of any
authorized denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Registered Debentures of any series may
be exchanged for other Registered Debentures of such series of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Debentures to be exchanged at any such office or agency.
Whenever any Debentures are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and make available for delivery,
the Debentures which the Holder making the exchange is entitled to receive.
Registered Debentures may not be exchanged for Bearer Debentures.
At the option of the Holder, Bearer Debentures of any series may be
exchanged for Registered Debentures of such series of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Bearer Debentures of such series to be exchanged at any such
office or agency, with all unmatured Coupons, and all matured Coupons in
default appertaining thereto. If the Holder of a Bearer Debenture of such
series is unable to produce any such unmatured Coupon or
36
Coupons or matured Coupon or Coupons in default, such exchange may be effected
if the Bearer Debentures of such series are accompanied by payment in funds
acceptable to the Company in an amount equal to the face amount of such
missing Coupon or Coupons, or the surrender of such missing Coupon or Coupons
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Debentures of such series
shall surrender to any Paying Agent any such missing Coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of such payment; provided, however, that, except as otherwise
provided in Section 10.2, interest represented by Coupons shall be payable
only upon presentation and surrender of those Coupons at an office or agency
located outside the United States. Notwithstanding the foregoing, in case a
Bearer Debenture of any series is surrendered at any such office or agency in
exchange for a Registered Debenture of such series and of like tenor after the
close of business at such office or agency on (i) any Regular Record Date and
before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening
of business at such office or agency on the related proposed date for payment
of Defaulted Interest, the Bearer Debenture of such series shall be surrendered
without the Coupon relating to such Interest Payment Date or proposed date for
payment, as the case may be, and interest or Defaulted Interest, as the case
may be, will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of the Registered Debenture of such
series issued in exchange for such Bearer Debenture, but will be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture.
Whenever any Debentures of any series are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and make
available for delivery, the Debentures of such series which the Holder making
the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent global Debenture of any series shall
be exchangeable only as provided in this paragraph. If the beneficial owners of
interests in a permanent global Debenture of any series are entitled to
exchange such interests for Debentures of such series and of like principal
amount and tenor of another authorized form and denomination, as specified as
contemplated by Section 3.1, then without unnecessary delay but in any event
not later than the earliest date on which such interests
37
may be so exchanged, the Company shall deliver to the Trustee definitive
Debentures of such series in aggregate principal amount equal to the principal
amount of such permanent global Debenture, executed by the Company. On or after
the earliest date on which such interests may be so exchanged, such permanent
global Debenture of any series shall be surrendered by the Common Depositary or
such other depositary or Common Depositary as shall be specified in the Company
Order with respect thereto to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Debentures of such series without charge and the Trustee shall authenticate and
make available for delivery, in exchange for each portion of such permanent
global Debenture, a like aggregate principal amount of definitive Debentures
of such series of authorized denominations and of like tenor as the portion of
such permanent global Debenture of such series to be exchanged which, unless
the Debentures of such series are not issuable both as Bearer Debentures and as
Registered Debentures of such series, as specified as contemplated by Section
3.1, shall be in the form of Bearer Debentures or Registered Debentures of such
series, or any combination thereof, as shall be specified by the beneficial
owner thereof; provided, however, that no Bearer Debenture of such series
delivered in exchange for a portion of a permanent global Debenture of such
series shall be mailed or otherwise delivered to any location in the United
States. If a Registered Debenture of such series is issued in exchange for any
portion of a permanent global Debenture of such series after the close of
business at the office or agency where such exchange occurs on (i) any Regular
Record Date and before the opening of business at such office or agency on the
relevant Interest Payment Date, or (ii) any Special Record Date and before the
opening of business at such office or agency on the related proposed date for
payment of Defaulted Interest, interest or Defaulted Interest, as the case may
be, will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of the Registered Debenture of such
series, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Debenture of such series is payable in
accordance with the provisions of this Indenture.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
38
Every Registered Debenture presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company or the Trustee
or any transfer agent) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Debenture
Registrar or any transfer agent duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Debentures, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Debentures of any series during a period beginning at the
opening of business 15 days before any selection of Debentures of such series
to be redeemed and ending at the close of business on (A) if Debentures of such
series are issuable only as Registered Debentures, the day of the mailing of
the relevant notice of redemption and (B) if Debentures of such series are
issuable as Bearer Debentures, the day of the first publication of the relevant
notice of redemption or, if Debentures of such series are also issuable as
Registered Debentures and there is no publication, the mailing of the relevant
notice of redemption, (ii) to register the transfer of or exchange any
Registered Debenture so selected for redemption, in whole or in part, except the
unredeemed portion of any Debenture being redeemed in part, or (iii) to
exchange any Bearer Debenture so selected for redemption except that such a
Bearer Debenture may be exchanged for a Registered Debenture of such series and
like tenor, provided that such Registered Debenture shall be simultaneously
surrendered for redemption.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 3.1, any Book-Entry Debenture shall be exchangeable
pursuant to this Section 3.5 or Sections 3.4, 9.6 and 11.7 for Debentures
registered in the name of, and a transfer of a Book-Entry Debenture of any
series may be registered to, any Person other than the Depository for such
Debenture or its nominee only if (i) such Depository notifies the Company that
it is unwilling or unable to continue as Depository for such Book-Entry
Debenture or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, (ii) the Company executes and delivers to
the Trustee a Company Order that such Book-Entry Debenture shall be so
exchangeable and the transfer thereof so registerable or (iii) there shall have
occurred and be continuing an Event of Default, or an event which after notice
or lapse of time
39
would be an Event of Default, with respect to the Debentures of such series.
Upon the occurrence in respect of any Book-Entry Debenture of any series of any
one or more of the conditions specified in clauses (i), (ii) or (iii) or the
preceding sentence or such other conditions as may be specified as contemplated
by Section 3.1 for such series, such Book-Entry Debenture may be exchanged for
Debentures registered in the names of, and the transfer of such Book-Entry
Debenture may be registered to, such Persons (including Persons other than the
Depository with respect to such series and its nominees) as such Depository
shall direct. Notwithstanding any other provision of this Indenture, any
Debenture authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, any Book-Entry Debenture shall also be a
Book-Entry Debenture and shall bear the legend specified in Section 2.4 except
for any Debenture authenticated and delivered in exchange for, or upon
registration of transfer of, Book-Entry Debenture pursuant to the preceding
sentence.
Notwithstanding anything in this Indenture or in the terms of a
Debenture to the contrary, the exchange of Bearer Debentures for Registered
Debentures will be subject to satisfaction of the provisions of the United
States federal income tax laws in effect at the time of such exchange. None of
the Company, the Trustee or any Authenticating Agent of the Company or the
Trustee (any of which, other than the Company, shall rely on an Officers'
Certificate and an Opinion of Counsel) shall be required to exchange any Bearer
Debenture for a Registered Debenture if as a result thereof and in the
Company's reasonable judgment, the Company would incur adverse consequences
under then applicable United States federal income tax laws.
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen Debentures and Coupons.
If any mutilated Debenture of any series or a Debenture of any series
with a mutilated Coupon appertaining thereto is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and make available
for delivery in exchange therefor a new Debenture of such series and of like
principal amount and tenor and bearing a number not contemporaneously
outstanding, with Coupons corresponding to the Coupons, if any, appertaining to
the surrendered Debenture and such mutilated Debenture or a Debenture with a
mutilated Coupon, if any, shall be cancelled by the Trustee in accordance with
the Indenture.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture of any series or any Coupon appertaining thereto and (ii) such
security or indemnity as may be required
40
by them, then, in the absence of notice to the Company or the Trustee that such
Debenture or Coupon has been acquired by a bona fide purchaser, the Company
shall, subject to the following paragraph, execute, and the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Debenture or in exchange for the Debenture to which a destroyed,
lost or stolen Coupon appertains (with all appurtenant Coupons not destroyed,
lost or stolen), a new Debenture of such series and of like principal amount
and tenor and bearing a number not contempora neously outstanding, with Coupons
corresponding to the Coupons, if any, appertaining to such destroyed, lost or
stolen Debenture or to the Debenture to which such destroyed, lost or stolen
Coupon appertains.
In case any such mutilated, destroyed, lost or stolen Debenture or
Coupon appertaining thereto has become or is about to become due and payable,
the Company in its discretion may, instead of issuing a new Debenture, pay
such Debenture or Coupon; provided, however, that principal of and any premium
and interest on Bearer Debentures shall, except as otherwise provided in
Section 10.2, be payable only at an office or agency located outside the United
States.
Upon the issuance of any new Debenture under this Section, the Company
may require 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.
Every new Debenture of any series, with any Coupons appertaining
thereto, issued pursuant to this Section in lieu of any destroyed, lost or
stolen Debenture or in exchange for a Debenture to which a destroyed, lost or
stolen Coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Debenture and any Coupons appertaining thereto, or the destroyed, lost or
stolen Coupon shall be at any time enforceable by anyone, and any such new
Debenture and Coupons, if any, shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Debentures of such
series and Coupons appertaining thereto, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debentures or
Coupons.
SECTION 3.7 Payment of Interest; Interest Rights Preserved.
41
Unless otherwise provided as contemplated by Section 3.1 with respect
to any series of Debentures, interest on any Registered Debenture which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Debenture (or one or more
Predecessor Debentures) is registered at the close of business on the Regular
Record Date for such interest.
Unless otherwise provided as contemplated by Section 3.1 with respect
to any series of Debentures, any interest on any Registered Debenture of any
series which is payable, but is not punctually paid or duly provided for, on
any Interest Payment Date (herein called "Defaulted Interest") shall forthwith
cease to be payable to the Holder on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in Clause (a) and (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Debentures
of such series (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 Registered Debenture of such series and the date of the
proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Re cord Date for the
payment of such Defaulted Interest which shall be not more than
15 days and not 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 Holder of Registered Debentures of such series
at the address of such Holder as it appears in the Debenture
Register, not less than 10 days prior to such Special Record
42
Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names
the Registered Debentures of such series (or their respective
Predecessor Debentures) are registered at the close of business
on such Special Record Date and shall no longer be payable
pursuant to the following Clause (b); and
(b) The Company may make payment of any Defaulted Interest on the
Registered Debentures of any series in any other lawful manner
not inconsistent with the requirements of any securities
exchange on which such Debentures may be listed, 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.
Subject to the foregoing provisions of this Section and Section 3.5,
each Debenture delivered under this Indenture upon registration of, transfer
of or in exchange for or in lieu of any other Debenture shall carry the rights
to interest accrued and unpaid, and to accrue, which were carried by such other
Debenture.
In the case of any Debenture which is converted into Common Stock of
the Company after any Regular Record Date and on or prior to the next
succeeding Interest Payment Date (other than any Debenture whose Maturity is
prior to such Interest Payment Date), interest whose Stated Maturity is on such
Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Debenture (or one or more Predecessor Debentures) is registered at the close
of business on such Regular Record Date. Except as otherwise expressly provided
in the immediately preceding sentence, in the case of any Debenture which is
converted, interest whose Stated Maturity is after the date of conversion of
such Debenture shall not be payable.
SECTION 3.8 Persons Deemed Owners.
Prior to due presentment of a Registered Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Debenture is registered as
the owner of such Registered Debenture for the purpose of receiving payment of
principal of (and pre-
43
mium, if any) and (subject to Sections 3.5 and 3.7) any interest on such
Debenture and for all other purposes whatsoever, whether or not such Debenture
shall be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
Title to any Bearer Debenture and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of any Bearer Debenture and the bearer of
any coupon as the absolute owner of such Debenture or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Debenture or coupon shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 3.9 Cancellation.
All Debentures and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee. All Registered Debentures and matured coupons so
delivered shall be promptly cancelled by the Trustee. All Bearer Debentures and
unmatured coupons so delivered shall be cancelled. All Bearer Debentures and
unmatured coupons held by the Trustee pending such cancellation or reissuance
shall be deemed to be delivered for cancellation for all purposes of this
Indenture and the Debentures. The Company may at any time deliver to the
Trustee for cancellation any Debentures previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Debentures previously authenticated hereunder which the
Company has not issued and sold, and all Debentures so delivered shall be
promptly cancelled by the Trustee. No Debentures shall be authenticated in lieu
of or in exchange for any Debentures cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Debentures and
coupons held by the Trustee shall be returned to the Company.
Notwithstanding the foregoing, with respect to any Book-Entry
Debenture, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by a Depository or impair, as between a
Depository and holders of
44
beneficial interests in any Book-Entry Debenture, the operation of customary
practices governing the exercise of the rights of the Depositary (or its
nominee) as Holder of such Book-Entry Debenture.
SECTION 3.10 Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Debentures of any series, interest on the Debentures of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11 Electronic Debenture Issuance.
The Debentures may, pursuant to a Board Resolution and Officers'
Certificate complying with Section 3.1 hereof, be issued by means of an
electronic issuance system. Any such Debenture issuance instructions may
specify the name, address and taxpayer identification number of the Holder, the
principal amount and Maturity of the Debenture, the interest rate to be borne
by the Debenture and any other terms not inconsistent with such Board
Resolution and Officers' Certificate. Nothing in this Section 3.11 shall be
construed as prohibiting the Company from issuing Debentures by any means not
inconsistent with the provisions of this Indenture.
SECTION 3.12 CUSIP Numbers.
The Company in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
SECTION 3.13 Right of Set Off.
Notwithstanding anything to the contrary in this Indenture, with
respect to Debentures of any series, the Company shall have the right to set
off any payment it is otherwise required to make hereunder to the extent the
Company has theretofore
45
made, or is concurrently on the date of such payment making, a payment under
the Trust Securities Guarantees relating to Debentures of such series.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of conversion, registration of
transfer or exchange of Debentures herein expressly provided for, and any
right to receive additional amounts, as provided in Section 10.4), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when:
(a) either
(1) all Debentures theretofore authenticated and delivered and
all coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Debentures surrendered for
exchange for Registered Debentures and maturing after such
exchange, whose surrender is not required or has been waived as
provided in Section 3.5, (ii) Debentures and coupons which have
been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 3.6, (iii) coupons appertaining to
Debentures called for redemption and maturing after the relevant
Redemption Date, whose surrender has been waived as provided in
Section 11.6, and (iv) Debentures and coupons for whose payment
money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation; or
(2) all such Debentures and, in the case of (i) or (ii) below,
any coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation,
(i) have become due and payable, or
46
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose, an amount sufficient to pay and
discharge the entire indebtedness on such Debentures and coupons
not theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and any interest to the date of
such deposit (in the case of Debentures which have become due and
payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Company to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to clause (a)(2) of this
Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive .
SECTION 4.2 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money and U.S. Government Obligations deposited with the Trustee pursuant to
Section 4.1 or 4.3 and all money received by the Trustee in respect of such
U.S. Government Obligations shall be held in trust and applied by it, in
accordance with the provisions of the Debentures, the Coupons and this
Indenture, to the payment, either directly or
47
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and any interest for whose payment such money and U.S.
Government Obligations has been deposited with or received by the Trustee.
Money deposited pursuant to this Section not in violation of this Indenture
shall not be subject to claims of the holders of Senior Indebtedness under
Article XV.
SECTION 4.3 Company's Option to Effect Defeasance or Covenant Defeasance.
If applicable to Debentures of any series, the Company may elect, at
its option at any time, to have Section 4.4 or Section 4.5 applied to any such
series of Debentures or any Debentures of such series, as the case may be,
designated pursuant to Section 3.1 as being defeasible pursuant to such Section
4.4 or 4.5, in accordance with any applicable requirements provided pursuant to
Section 3.1 and upon compliance with the conditions set forth below in this
Article. Any such election shall be evidenced by a Board Resolution or in
another manner specified as contemplated by Section 3.1 for such Debentures.
SECTION 4.4 Discharge and Defeasance.
If this Section 4.4 is specified, as contemplated by Section 3.1, to
be applicable to Debentures of any series, then notwithstanding Section 4.1 and
upon compliance with the applicable conditions set forth in Section 4.6: (1)
the Company shall be deemed to have paid and discharged the entire indebtedness
on all the Outstanding Debentures of such series ("Defeasance"); and (2) the
provisions of this Indenture as it relates to Outstanding Debentures of such
series shall no longer be in effect (except as to the rights of Holders of
Debentures of such series to receive, solely from the trust fund described in
Section 4.6, payment of (a) the principal of (and premium, if any) and any
installment of principal of (and premium, if any) or interest on Debentures of
such series on the Stated Maturity of such principal (and premium, if any) or
installment of principal (and premium, if any) or interest or upon optional
redemption and/or (b) any mandatory sinking fund payments or analogous payments
applicable to the Debentures of such series on that day on which such payments
are due and payable in accordance with the terms of the Indenture and of
Debentures of such series, the Company's obligations with respect to Debentures
of such series under Sections 3.4, 3.5, 3.6, 10.2, 10.3, and 10.4 and the
rights, powers, trusts, duties and immunities of the Trustee hereunder,
including those under Section 6.9 hereof);
48
SECTION 4.5 Covenant Defeasance.
If this Section 4.5 is specified, as contemplated by Section 3.1, to
be applicable to any series of Debentures or any Debentures of such series, as
the case may be, (a) the Company shall be released from its obligations under
Sections 10.4 through 10.7, inclusive, and any covenants provided pursuant to
Section 3.1(u) or 9.1(b) for the benefit of the Holders of Debentures of such
series that pursuant to the terms of such Debentures of such series are
defeasible pursuant to this Section 4.5 and (b) the occurrence of any event
specified in Sections 5.1(d) (with respect to any of Sections 10.3 through
10.7, inclusive, and any such covenants provided pursuant to Section 3.1(u),
9.1(b), or 9.1(f) and 5.1(g) (if pursuant to the terms of the Debentures of
such series this Section 4.5 is applicable to any such event specified in
Section 5.1(g)) shall be deemed not to be or result in an Event of Default, in
each case with respect to the Debentures of such series as provided in this
Section on and after the date the conditions set forth in Section 4.6 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that, with respect to the Debentures of such series,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section (to
the extent so specified in the case of Section 5.1(d) and 5.1(g)), whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this Indenture
and the Debentures of such series shall be unaffected thereby.
SECTION 4.6 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section
4.4 or Section 4.5 to any series of Debentures or any Debentures of such
series, as the case may be.
(a) either
(1) with respect to all Outstanding Debentures of such series or
such Debentures of such Series, as the case may be, with
reference to this Section 4.6, the Company has deposited or
caused to be deposited with the Trustee irrevocably (but subject
to the provisions of Section 4.2 and the last paragraph of
Section 10.3), 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) lawful money of the United
49
States in an amount, or (ii) U.S. Government Obligations which
through the payment of interest and principal in respect thereof
in accordance with their terms will provide not later than the
opening of business on the due dates of any payment referred to
in clause (i) or (ii) of this subparagraph (a)(1) lawful money of
the United States in an amount, 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 and
discharge (A) the principal of (and premium, if any) and each
installment of principal (and premium, if any) and interest on
such Debentures of such series on the Stated Maturity of such
principal or installment of principal or interest or upon
optional redemption and (B) any mandatory sinking fund payments
or analogous payments applicable to the Debentures of such series
on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of the Debentures
of such series; or
(2) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by
Section 3.1, to be applicable to the Debentures of such series;
(b) the Company has paid or caused to be paid all other sums
payable with respect to the Debentures of such series;
(c) such deposit for the benefit of Holders of Debentures of such
series will not result in a breach or violation of, or constitute
a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is
bound;
(d) no Event of Default or event which with the giving of notice
or lapse of time, or both, would become an Event of Default with
respect to the Debentures of such series shall have occurred and
be continuing on the date of such deposit and no Event of Default
under Section 5.1(e) or Section 5.1(f) or event which with the
giving of notice or lapse of time, or both, would become an Event
of Default under Section 5.1(e) or Section 5.1(f) shall have
occurred and be continuing on the 91st day after such date;
50
(e) in the event of an election to have Section 4.4 apply to the
Debentures of any series, the Company has delivered to the
Trustee an Opinion of Counsel to the effect that (i) the Company
has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in applicable federal income
tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of
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;
(f) in the event of an election to have Section 4.5 apply to
Debentures of any series, the Company shall have delivered to the
Trustee an Opinion of Counsel, to the effect that the Holders of
Debentures of such series will not recognize gain or loss for
United States federal income tax purposes as a result of the
deposit and Covenant Defeasance to be effected with respect to
the Debentures of such series and will be subject to United
States federal income tax on the same amount, in the same manner
and at the same times as would be the case if such deposit and
Covenant Defeasance were not to occur;
(g) if the Debentures of such series are then listed on any
domestic or foreign securities exchange, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that
such deposit, defeasance and discharge will not cause the
Debentures of such series to be delisted;
(h) no default in the payment of the principal of (and premium,
if any) or any interest on any Senior Indebtedness beyond any
applicable grace period shall have occurred and be continuing;
(i) no other default with respect to any Senior Indebtedness
shall have occurred and be continuing and shall have resulted in
the acceleration of such Senior Indebtedness; and
(j) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein
51
provided for relating to the Defeasance or Covenant Defeasance
with respect to such Debentures of such series have been complied
with and an Opinion of Counsel to the effect that either (i) as a
result of such deposit and the related exercise of the Company's
option under this Article, registration is not required under the
Investment Company Act of 1940, as amended, by the Company, the
trust funds representing such deposit or the Trustee or (ii) all
necessary registrations under said Act have been effected.
Any deposits with the Trustee referred to in Section 4.6(a)(1) above
shall be irrevocable and shall be made under the terms of an escrow/trust
agreement in form and substance satisfactory to the Trustee. If any Outstanding
Debentures of such series are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with
any mandatory sinking fund requirement, the applicable escrow trust agreement
shall provide therefor and the Company shall make such arrangements as are
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
Upon Defeasance with respect to all the Debentures of any series, the
terms and conditions of the Debentures of such series, including the terms and
conditions with respect thereto set forth in this Indenture, shall no longer be
binding upon, or applicable to, the Company; provided that the Company shall
not be discharged from any payment obligations in respect of Debentures of such
series which are deemed not to be Outstanding under clause (iii) of the
definition thereof if such obligations continue to be valid obligations of the
Company under applicable law.
Notwithstanding the cessation, termination and discharge of all
obligations, cove nants and agreements (except as provided above in this
Section 4.6) of the Company under this Indenture with respect to the Debentures
of any series, the obligations of the Company to the Trustee under Section 6.7,
and the obligations of the Trustee under Section 4.2 and the last paragraph of
Section 10.3 shall survive with respect to the Debentures of such series.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in this Section 4.6
with respect to Debentures of any series which, in the opinion of a nationally
recognized firm of in-
52
dependent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to Debentures of such series.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to this Section 4.6 or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of Outstanding Debentures.
ARTICLE V
REMEDIES
SECTION 5.1 Events of Default.
"Event of Default", wherever used herein with respect to Debentures of
any series, unless otherwise provided in the applicable supplemental
indenture, means any one or more of the following events (whatever the reason
for such Event of Default and whether it shall be occasioned by the provisions
of Article XV or be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of the principal of (or premium, if
any, on) any Debenture of such series as and when the same shall
become due and payable and continuance of such default for a
period of 30 days whether at maturity, upon redemption, by
declaration or otherwise, or in any payment required by any
sinking or analogous fund established with respect to that series
(whether or not such payment is prohibited by the subordination
provisions set forth in Article XV hereof); provided, however,
that a valid extension of the maturity of the Debentures of such
series in accordance with the terms of any indenture supplemental
hereto shall not constitute a default in the payment of principal
or premium, if any; or
53
(b) default in the payment of any interest upon or any additional
amounts payable in respect of any Debenture of such series when
it becomes due and payable, and continuance of such default for a
period of 30 days (whether or not such payment is prohibited by
the subordination provisions set forth in Article XV hereof);
provided, however, that a valid extension of an interest payment
period by the Company in accordance with the terms of any
indenture supplemental hereto, shall not constitute a default in
the payment of interest for this purpose; or
(c) if the Debentures of such series are convertible or
exchangeable into or for shares of Common Stock of the Company or
other securities, cash or other property pursuant to any
supplemental indenture, Board Resolution or other instrument
authorizing Debentures of such series, failure by the Company to
convert such Debentures (whether or not such conversion or
exchange is prohibited by the subordination provisions set forth
in Article XV); or
(d) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant
or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit
of any series of Debentures other than such series), and
continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the
Outstanding Debentures of such series, a written notice
specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default, hereunder;
or
(e) entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law
or (B) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law,
or appointing a custodian, receiver, liquidator, assignee,
trustee,
54
sequestrator or other similar official of the Company or of
substantially all of the property of the Company, or ordering the
winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 60 consecutive
days; or
(f) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by the Company to the entry of a decree or order for
relief in respect of itself in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against the
Company, or the filing by the Company of a petition or answer or
consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by the Company to the filing
of such petition or to the appointment of or taking possession by
a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of
substantially all of the property of the Company, or the making
by the Company of an assignment for the benefit of creditors, or
the admission by the Company in writing of its inability to pay
its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such
action; or
(g) in the event Debentures of any series are issued to a
CalEnergy Trust or a trustee of such trust in connection with the
issuance of Trust Securities by such CalEnergy Trust, such
CalEnergy Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its
existence except in connection with (i) the distribution of
Debentures of such series to holders of Trust Securities in
liquidation of their interest in such CalEnergy Trust, (ii) the
redemption of all of the outstanding Trust Securities of such
CalEnergy Trust or (iii) certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such
CalEnergy Trust; or
(h) any other Event of Default provided with respect to
Debentures of such series.
55
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then, and in each and
every such case, unless the principal of all of the Debentures of such series
shall have already become due and payable, either the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Debentures of such
series then Outstanding hereunder (each such series voting as a separate
class), by notice in writing to the Company (and to the Trustee if given by
the Holders of Debentures of such series), may declare the entire principal
(or, if the Debentures of such series are Original Issue Discount Debentures,
such portion of the principal amount as may be specified in the terms of such
series) of all Debentures of such series and the interest accrued thereon, if
any, to be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if any Debentures are Original Issue
Discount Debentures, such portion of the principal as may be specified in the
terms thereof) of the Debentures of any series then Outstanding shall have been
so declared due and payable, and before any judgment or decree for the payment
of such moneys 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 such series and the
principal of (and premium, if any, on) the Debentures of such series which
shall have become due otherwise than by acceleration (with interest upon such
principal and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest, at the same rate as
the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Debentures) specified in the Debentures of such series, to the date of
such payment or deposit) and any other amounts payable in respect of all the
Debentures of such series and such amount as shall be sufficient to cover
reasonable compensation to the Trustee, and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith, and if any
and all Events of Default under the Indenture, other than the non-payment of
the principal of Debentures of such series (or, if any Debentures are Original
Issue Discount Debentures, such portion of the principal as may be specified in
the terms thereof) which shall have become due by acceleration, shall have been
cured, waived or otherwise remedied as provided herein -- then and in every
such case the Holders of a majority in aggregate principal amount of all the
Debentures of
56
such series, each series voting as a separate class, then Outstanding, by
written notice to the Company and to the Trustee, may waive all such defaults
with respect to the Debentures of such and rescind and annul such declaration
and its consequence, but no such waiver or rescission and annulment shall
extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of such 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 powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if,
(a) default is made in the payment of any interest on any
Debenture of any series, or any payment required by any sinking
or analogous fund established with respect to Debentures of such
series as and when the same shall have become due and payable and
such default continues for a period of 30 days; provided, that a
valid extension of the interest payment period by the Company
pursuant to this Indenture shall not constitute a default in the
payment of any interest for this purpose, or
(b) default is made in the payment of the principal of (or
premium, if any, on) any Debenture of any series when the same
shall have become due and payable, whether upon maturity of the
Debentures of such series or upon redemption or upon declaration
or otherwise,
the Company will, upon written demand of the Trustee, pay to it, for the
benefit of the Holders of Debentures of such series and any Coupons
appertaining thereto, the whole amount then due and payable on Debentures of
such series and Coupons for principal and any premium and interest and, to the
extent that payment of such interest shall be legally enforceable under
applicable law, interest on any overdue principal and on the premium, if any,
and overdue interest, at the rate or rates prescribed therefor in Debentures of
such series; and in addition thereto, such further amount as
57
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon Debentures of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon Debentures of
such series, wherever situated.
If an Event of Default with respect to Debentures of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Debentures of such series
and any Coupons appertaining thereto by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any such
rights, either at law or in equity or in bankruptcy or otherwise whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.4 Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Debentures of any series), its property or its
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders of Debentures of such
series and Coupons appertaining thereto and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder of Debentures of such series and
Coupons appertaining thereto to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders of Debentures of such series and Coupons appertaining thereto, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and ad-
58
vances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Debenture of any series or any Coupon appertaining thereto any plan of
reorganization, arrangement, adjustment or composition affecting the
Debentures of such series or Coupons appertaining thereto or the rights of any
Holder thereof or to authorize the Trustee to vote in respect of the claim of
any Holder of Debentures of any series or any Coupon appertaining thereto in
any such proceeding.
SECTION 5.5 Trustee May Enforce Claims Without Possession of Debentures or
Coupons.
All rights of action and claims under this Indenture or under any of
the terms established with respect to the Debentures of any series or Coupons
appertaining thereto may be prosecuted and enforced by the Trustee without the
possession of any of the Debentures of such series or Coupons appertaining
thereto or the production thereof in any proceeding relating thereto, and any
such 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 the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel due under
Section 6.7, be for the ratable benefit of the Holders of the Debentures of
such series and Coupons appertaining thereto in respect of which such judgment
has been recovered.
SECTION 5.6 Application of Money Collected.
Subject to Article XV, any money collected by the Trustee pursuant to
this Article with respect to Debentures of any series shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or any premium or interest,
upon presentation of the Debentures of such series or any Coupons appertaining
thereto, or both, as the case may be, and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.7; and
59
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Debentures of
such series and Coupons appertaining thereto 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 Debentures of such series and
Coupons appertaining thereto for principal and any premium and
interest, respectively.
SECTION 5.7 Limitation on Suits.
No Holder of any Debenture of any series or any Coupons appertaining
thereto shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless;
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Debentures of such series and of the continuance thereof with
respect to the Debentures of such series specifying such Event of
Default, as hereinbefore provided;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Debentures of such series shall have made written
request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities
to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Debentures of
such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this
60
Indenture to affect, disturb or prejudice the rights of any other of such
Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 5.8 Unconditional Right of Holders to Receive Principal, Premium
and Interest and Convert.
Notwithstanding any other provision in this Indenture, but subject to
Article XV of this Indenture, the Holder of any Debenture of any series or any
Coupon appertaining thereto shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to (i) any right of the Company to extend interest payment periods as
provided in Section 3.1(h) and (ii) Section 3.7) interest on Debentures of such
series, and any additional amounts contemplated by Section 10.4 in respect of
Debentures of such series or payment of any Coupons appertaining thereto on the
Stated Maturity or Maturities expressed in the Debentures of such series or any
Coupons appertaining thereto (or, in the case of redemption, on the Redemption
Date) and to convert such Debenture in accordance with its terms and to
institute suit for the enforcement of any such payment and right to convert,
and such rights shall not be impaired without the consent of such Holder.
SECTION 5.9 Restoration of Rights and Remedies.
If the Trustee or any Holder of Debentures of any series or any Coupon
appertaining thereto has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders of Debentures of such
series and any Coupons appertaining thereto shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures or Coupons in the
last paragraph of Section 3.6, no right or remedy herein conferred upon or
reserved to the Trustee or to
61
the Holders of Debentures or Coupons is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Debenture
or Coupon to exercise any right or remedy accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Subject to the provisions of Section 5.7, every right and remedy given by this
Article or by law to the Trustee or to the Holders of Debentures or Coupons may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Debentures or Coupons, as the case may be.
SECTION 5.12 Control by Holders of Debentures.
The Holders of a majority in aggregate principal amount of the
Outstanding Debentures of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debentures of such series, provided that,
(a) such direction shall not be in conflict with any rule of law
or with this Indenture; and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13 Waiver of Past Defaults.
Subject to Section 9.2 hereof, the Holders of not less than a majority
in principal amount of the Outstanding Debentures of any series may on behalf
of the Holders of all the Debentures of such series and any Coupons
appertaining thereto waive any
62
past default hereunder with respect to the Debentures of such series and its
consequences, except a default
(a) in the payment of the principal of (or premium, if any) or
any interest on any Debenture of such series as and when the
same shall become due by the terms of Debentures of such series
otherwise than by acceleration (unless such default has been
cured and sums sufficient to pay all matured installments of
interest and principal and any premium has been deposited with
the Trustee (in accordance with Section 5.2); or
(b) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of
the Holder of each Outstanding Debenture of such series affected;
provided, however, that if the Debentures of such series are held by a
CalEnergy Trust or a trustee of such trust, such waiver or modification to such
waiver shall not be effective until the holders of a majority in liquidation
preference of Trust Securities of the applicable CalEnergy Trust shall have
consented to such waiver or modification to such waiver; provided further, that
if the consent of the Holder of each Outstanding Debenture of such series is
required, such waiver shall not be effective until each holder of the Trust
Securities of the applicable CalEnergy Trust shall have consented to such
waiver.
Upon any such waiver, the default covered thereby shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose 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 5.14 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Debenture
or Coupon by such Holder's acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement
of any right or remedy under this Indenture, or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess rea-
63
sonable costs, including reasonable attorneys' fees and expenses in the manner
and to the extent provided in the Trust Indenture Act, 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; provided, that neither this
Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit
instituted by the Company or the Trustee or in any suit for the enforcement of
the right to receive the principal of and interest on any Debenture or to
convert any Debenture in accordance with its terms.
SECTION 5.15 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.16 Enforcement by Holders of Preferred Securities.
Notwithstanding anything to the contrary contained herein, if the
Property Trustee of a CalEnergy Trust, as Holder of Debentures of a series
issued to such CalEnergy Trust, fails to enforce its rights under the Debentures
of such series (other than rights arising from an Event of Default described in
Section 5.16(b)) after any holder of Preferred Securities of such CalEnergy
Trust shall have made a written request to such Property Trustee to enforce
such rights, such holder of Preferred Securities may, to the fullest extent
permitted by law, institute a Direct Action to enforce such Property Trustee's
rights as Holder of the Debentures of such series, without first instituting
any legal proceeding against such Property trustee or any other Person.
Notwithstanding anything to the contrary contained herein, if an Event
of Default with respect to a series of Debentures has occurred and is
continuing and such Event of Default is attributable to the failure of the
Company to pay interest (subject to the right of the Company, if any, to extend
the interest payment periods in
64
respect of the Debentures of such series) or principal on the Debentures of
such series on the date such interest or principal is otherwise payable, the
Company acknowledges that, in such event, a holder of Preferred Securities of
the CalEnergy Trust which is the Holder of Debentures of such series may
institute a Direct Action for enforcement of payment to such holder of the
principal of or interest on the Debentures of such series having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such holder, on or after the respective due date specified in the Debentures of
such series, without first instituting any legal proceeding against the
Property Trustee of such CalEnergy Trust or any other Person.
Notwithstanding any payment made to such holder of Preferred
Securities by the Company in connection with a Direct Action, the Company shall
remain obligated to pay the principal of or interest on the Debentures of such
series held by such CalEnergy Trust or the Property Trustee of such CalEnergy
Trust and the Company shall be subrogated to the rights of the holder of such
Preferred Securities with respect to payments on the Preferred Securities to
the extent of any payments made by the Company to such holder in any Direct
Action.
ARTICLE VI
THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior
to Default.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
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 Section.
65
SECTION 6.2 Notice of Defaults.
The Trustee shall give the Holders of any series of Debentures issued
hereunder notice of any default hereunder with respect to such series as and to
the extent provided by the Trust Indenture Act; provided, however, that in the
case of any default of the character specified in Section 5.1(d), no such
notice to such Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
SECTION 6.3 Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon, other
evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company
Order or as otherwise expressly provided herein and any
resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely
upon an Officers' Certificate;
(d) 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, suffered or omitted by it hereunder in good faith
and in reliance thereon;
66
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Debentures of any
series or any Coupons appertaining thereto pursuant to this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(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,
direction, consent, order, bond, debenture, note, coupon, other
evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to reasonable examination of
the books, records and premises of the Company, personally or by
agent or attorney;
(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 Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without
negligence or willful misconduct, and reasonably believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture.
SECTION 6.4 Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures (except the
Trustee's certificates of authentication) and in any Coupons shall be taken as
the statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of any
Debentures or Coupons. The Trustee or any Authenticating Agent shall not be
accountable for the use or application by the Company of Debentures or the
proceeds thereof.
67
SECTION 6.5 May Hold Debentures.
The Trustee, any Authenticating Agent, any Paying Agent, any Debenture
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Debentures and Coupons and,
subject to Section 6.10 and 6.12, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Debenture Registrar or such other agent.
SECTION 6.6 Money Held in Trust.
Money held by the Trustee in trust hereunder 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 money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 6.7 Compensation and Reimbursement..
The Company agrees:
(a) to pay to the Trustee or any predecessor Trustee from time to
time such reasonable compensation as the Company and the Trustee
shall from time to time agree in writing for all services
rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustee or any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee and any predecessor Trustee for, and
to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of the
trust or trusts hereunder, includ-
68
ing the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Debentures as to all
property and funds held by it hereunder for any amount owing it pursuant to
this Section 6.7, except with respect to funds held in trust for the benefit of
the Holders of the Debentures.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(e) or Section 5.1(f), 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 laws.
The provisions of this Section 6.7 shall survive the termination of
this Indenture.
SECTION 6.8 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.9 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and has its
Corporate Trust Office in New York, New York. If such Person publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
69
SECTION 6.10 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the Debentures
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Debentures of such series.
(c) The Trustee may be removed at any time with respect to the
Debentures of any series by Act of the Holders of a majority in principal
amount of the Outstanding Debentures of such series delivered to the Trustee
and to the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.11 shall not have been delivered to the Trustee within 30
days after the delivery of such Act of removal, the Trustee being removed may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Debentures of such series.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after
written request therefor by the Company or by any Holder of a
Debenture who has been a bona fide Holder of a Debenture for at
least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the
Company or by any Holder of a Debenture who has been a bona fide
Holder of a Debenture for at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a 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
70
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by Company Order may remove the Trustee
with respect to all Debentures, or (ii) subject to Section 5.14 any Holder of a
Debenture who has been a bona fide Holder of a Debenture for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Debentures and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Debentures of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Debentures of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Debentures of one
or more or all of such series and that at any time there shall be only one
Trustee with respect to the Debentures of any particular series) and shall
comply with the applicable requirements of Section 6.11. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Debentures of any series shall
be appointed by Act of the Holders of a majority in principal amount of
Outstanding Debentures of such series delivered to the Company and the retiring
Trustee, the suc cessor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 6.11, become the successor Trustee with respect to the Debentures
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Debentures of any
series shall have been so appointed by the Company or the Holders of Debentures
of such series and accepted appointment in the manner required by Section 6.11,
any Holder of a Debenture of such series who has been a bona fide Holder of a
Debenture of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Debentures of such
series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Debentures of any series and each
appointment of a successor Trustee with respect to the Debentures of any
series in the manner provided in
71
Section 1.6. Each notice shall include the name of the successor Trustee with
respect to the Debentures of such series and the address of its Corporate Trust
Office.
SECTION 6.11 Acceptance of Appointment by Successor.
(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 written
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
such series shall execute and deliver an indenture supplemental hereto wherein
each successor Trustee shall accept such appointment and which (i) shall
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
such series to which the appointment of such successor Trustee relates, (ii) if
the retiring Trustee is not retiring with respect to all Debentures, shall
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 such series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (iii)
shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees as co-trustees of
the same trust and 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 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 and each such successor
Trustee, without any further act, deed or
72
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of such series to which
the appointment of such successor Trustee relates; but, on the written request
of the Company or any successor Trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder with respect to the Debentures of such
series to which the appointment of such successor Trustee relates.
(c) Upon the written 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, powers
and trusts referred to in paragraph (a) or (b) of this Section, 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.
SECTION 6.12 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Debentures), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 6.13 Merger, Conversion Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all 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. In case any Debentures shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated such Debentures.
73
SECTION 6.14 Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to Debentures of one or more series which shall be authorized to act on behalf
of the Trustee to authenticate Debentures of each such series issued upon
original issue or upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 3.6, and Debentures of such series so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Debentures by the Trustee or the Trustee's certificate of
authentication such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or such Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company
74
and shall promptly give notice of such appointment to all Holders of Debentures
pursuant to Section 1.6. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to Debentures of one or more series is
made pursuant to this Section, the Debentures of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
The Bank of New York,
As Trustee
By
--------------------------
Authenticating Agent
By
--------------------------
Authorized Signatory
If all of the Debentures of any series may not be originally issued at
one time, and if the Company has an Affiliate eligible to be appointed as an
Authenticating Agent hereunder or the Trustee does not have an office capable
of authenticating Debentures of such series upon original issuance located in a
Place of Payment where the Company wishes to have Debentures of such series
authenticated upon original issuance, the Trustee, if so requested by the
Company in writing (which writing need not comply with Section 1.2 and need
not be accompanied by an Opinion of Counsel), shall
75
appoint in accordance with this Section an Authenticating Agent (which if so
requested by the Company, shall be such Affiliate of the Company) having an
office in a Place of Payment designated by the Company with respect to such
series of Debentures.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1 Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than February 15 and August 15 in
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of a date not more than
15 days prior to the delivery thereof, 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;
excluding from any such list names and addresses received by the Trustee in its
capacity as Debenture Registrar.
SECTION 7.2 Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Debentures contained in the
most recent list furnished to the Trustee as provided in Section 7.1 and the
names and addresses of Holders received by the Trustee in its capacity as
Debenture Registrar. The Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so furnished.
76
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Debentures, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Debentures or Coupons, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any agent of either of them shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders of Debentures made pursuant to the Trust Indenture Act.
SECTION 7.3 Reports by Trustee.
(a) Within 60 days after May 15 of each year, the Trustee shall
transmit by mail to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act in
the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Debentures are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Debentures are listed on any stock exchange.
SECTION 7.4. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to such Act; provided, that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 business days after the same is so required to
be filed with the Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereun der (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
77
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 Company May Consolidate, Etc. on Certain Terms.
The Company shall not consolidate with or merge with or into any other
Person or, directly or indirectly, sell, convey, transfer or lease all or
substantially all of its properties and assets on a consolidated basis to any
Person, unless:
(a) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by purchase,
conveyance, transfer or lease, all or substantially all of the
properties and assets of the Company on a consolidated basis shall be
a corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, 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 reasonably satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest on all
the Debentures, according to their tenor, and the performance or
observance of every covenant of this Indenture on the part of the
Company to be performed or observed and shall have provided for
conversion rights in accordance with Article XIV;
(b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company
or a Subsidiary as a result of such transaction as having been
incurred by the Company or such Subsidiary at the time of 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
happened and be continuing; and
(c) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
78
This Section shall only apply to a merger or consolidation in which
the Company is not the surviving corporation and to conveyances, leases and
transfers by the Company as transferor or lessor.
SECTION 8.2 Successor Corporation Substituted.
In case of any such consolidation, merger, sale, conveyance, transfer
or lease, of all or substantially all of the properties and assets of the
Company on a consolidated basis in accordance with Section 8.1, and following
such an assumption by the successor corporation, such successor corporation
shall succeed to and be substituted for the Company, with the same effect as if
it had been named herein. Such successor corporation may cause to be signed,
and may issue either in its own name or in the name of the Company prior to
such succession any or all of the Debentures issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation instead of the
Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
securities which previously shall have been signed and delivered by the
officers of the Company, to the Trustee for authentication, and any Debentures
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All of the Debentures so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Debentures theretofore or thereafter issued in accordance with the terms
or this Indenture as though all of such Debentures had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Company or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Debentures and may be liquidated and dissolved.
79
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Debentures or Coupons, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the
Company herein and in the Debentures; or
(b) to add to the covenants of the Company for the benefit of the
Holders of Debentures of all or any series (and if such covenants are
to be for the benefit of Debentures of less than all series, stating
that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(c) to add any additional Events of Default (and if such Events
of Default are to be for the benefit of Debentures of less than all
series, stating that such Events of Default are expressly being
included solely for the benefit of such series); or
(d) to add to or change any of the provisions of this Indenture
to provide that Bearer Debentures may be registerable as to principal,
to change or eliminate any restrictions on the payment of principal of
or any premium or interest on Bearer Debentures, to permit Bearer
Debentures to be issued in exchange for Registered Debentures, to
permit Bearer Debentures to be issued in exchange for Bearer
Debentures of other authorized denominations or to permit or
facilitate the issuance of Debentures in uncertificated form,
provided that any such action shall not adversely affect the interests
of the Holders of Debentures of any series or any related Coupons in
any material respect; or
80
(e) to change or eliminate any of the provisions of this
Indenture, provided that any such 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; or
(f) to establish the form or terms of Debentures of any series
and any related coupons as permitted by Sections 2.1 and 3.1; or
(g) to evidence and provide for the acceptance of appointment
thereunder by a successor Trustee with respect to the Debentures of
one or more series and to add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 6.11(b); or
(h) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIV, including
providing for the conversion of the Debentures into any security or
property (other than the Common Stock of the Company); or
(i) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions
arising under this Indenture, provided that such action shall not
adversely affect the interests of the Holders of Debentures of any
series or any related Coupons or, for so long as any Preferred
Securities shall remain Outstanding, the holders of the Preferred
Securities in any material respect; or
(j) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(k) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if
any, to be placed on Debentures, and all other matters required
pursuant to Section 3.5 or otherwise necessary, desirable or
appropriate in connection with the issu-
81
ance of Debentures to holders of Preferred Securities in the
event of a distribution of Debentures by a CalEnergy Trust.
SECTION 9.2 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debentures of each series
affected by such supplemental indenture, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Debentures of such series
and any related coupons under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of each Holder of each
Outstanding Debenture of the series affected thereby,
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debenture of any
series, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or change
any obligation of the Company to pay additional amounts pursuant to
Section 10.6 (except as contemplated by Section 8.1 and permitted by
Section 9.1(a)), or reduce the amount of the principal of an Original
Issue Discount Debenture that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to
Section 5.2 or change the coin or currency in which any Debenture or
any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or
(b) reduce the percentage in principal amount of the Outstanding
Debentures of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders
is required for any waiver of certain defaults hereunder and their
consequences provided for in this Indenture, or reduce the
requirements of Section 13.4 for quorum or voting, or
82
(c) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 10.2,
or
(d) modify any of the provisions of this Section or Section 5.13,
except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Debenture of the
series affected thereby; provided, however, that this clause shall
not be deemed to require the consent of any Holder of a Debenture of
such series or Coupon appertaining thereto with respect to changes in
the references to "the Trustee" and concomitant changes in this
Section or the deletion of this proviso, in accordance with the
requirements of Sections 6.8(b) and 9.1(h), or
(e) make any change that adversely affects the right to convert any
Debenture of any series as provided in Article XIV or pursuant to
Section 3.1 (except as permitted by Section 9.1) or decrease the
conversion rate or increase the conversion price of any such Debenture
of such series, or
(f) if the Debentures of any series are secured, change the terms and
conditions pursuant to which the Debentures of such series are secured
in a manner adverse to the Holders of the secured Debentures of such
series, or
(g) make any change in Article XV that adversely affects the rights of
any Holders of Outstanding Debentures of such series.
If the Debentures of such series are held by a CalEnergy Trust or a trustee of
such trust, such supplemental indenture shall not be effective until the
holders of a majority in liquidation preference of Trust Securities of the
applicable Trust shall have consented to such supplemental indenture;
provided, that if the consent of the Holder of each Outstanding Debenture of
such series is required, such supplemental indenture shall not be effective
until each holder of the Trust Securities of the applicable CalEnergy Trust
shall have consented to such supplemental indenture.
So long as any Preferred Securities are outstanding, no supplemental
indenture shall, without the consent of each holder of Preferred Securities,
amend Section 5.16 so as to eliminate or materially impair the right of such
holders to institute Direct Actions in the circumstances set forth therein.
83
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of Debentures of one or more series, or which modifies the rights
of the Holders of Debentures of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under this Indenture
of the Holders of Debentures of any other series.
It shall not be necessary for any Act of Holders of Debentures of any
series under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such
Holders remain Holders after such record date; provided, that unless such
consent shall have become effective by virtue of the requisite percentage
having been obtained prior to the date which is 90 days after such record date,
any such consent previously given shall automatically and without further
action by any Holder be cancelled and of no further effect.
SECTION 9.3 Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.3) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Debentures theretofore or thereafter authenticated and
delivered hereunder and of any Coupons apper-
84
taining thereto shall be bound thereby. No such supplemental indenture shall
directly or indirectly modify the provisions of Article XV in any manner which
might terminate or impair the rights of the Senior Indebtedness pursuant to
such subordination provisions.
SECTION 9.5 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act of 1939, as amended, in
effect on such date.
SECTION 9.6 Reference in Debentures to Supplemental Indentures.
Debentures of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Debentures of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Debentures of such series.
ARTICLE X
COVENANTS
SECTION 10.1 Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of Debentures of any
series that it will duly and punctually pay the principal of and any premium
and interest on the Debentures of such series in accordance with the terms of
the Debentures of such series, any Coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 3.1 with
respect to Debentures of such series, any interest due on Bearer Debentures of
such series on or before Maturity shall be payable only upon presentation and
surrender outside the United States of the several Coupons for such interest
installments as are evidenced thereby as they severally mature.
85
SECTION 10.2 Maintenance of Office or Agency.
If Debentures of any series are issuable only as Registered
Debentures, the Company will maintain in each Place of Payment for Debentures
of such series an office or agency where Debentures of such series may be
presented or surrendered for payment, where Debentures of such series may be
surrendered for registration of transfer, exchange, or conversion and where
notices and demands to or upon the Company in respect of Debentures of such
series and this Indenture may be served. If Debentures of any series are
issuable as Bearer Debentures, the Company will maintain (a) in The City of New
York, an office or agency where any Registered Debentures of such series may
be presented or surrendered for payment, where any Registered Debentures of
such series may be surrendered for registration of transfer, where Debentures
of such series may be surrendered for conversion or exchange, where notices and
demands to or upon the Company in respect of Debentures of such series and
this Indenture may be served and where Bearer Debentures of such series and
related Coupons may be presented or surrendered for payment in the
circumstances described in the following paragraph (and not otherwise), (b)
subject to any laws or regulations applicable thereto, in a Place of Payment
for such series which is located outside the United States, an office or agency
where Debentures of such series and related Coupons may be presented and
surrendered for payment (including payment of any additional amounts payable
on Debentures of such series pursuant to Section 10.4); provided, however, that
if Debentures of such series are listed on The Stock Exchange of the United
Kingdom and the Republic of Ireland, the Luxembourg Stock Exchange or any other
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent for Debentures of such
series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as Debentures of such series are
listed on such exchange, and (c) subject to any laws or regulations applicable
thereto in a Place of Payment for Debentures of such series located outside the
United States an office or agency where any Registered Debentures of such
series may be surrendered for registration of transfer, where Debentures of
such series may be surrendered for conversion or exchange and where notices
and demands to or upon the Company in respect of the Debentures of such series
and this Indenture may be served. The Company will give prompt notice to the
Trustee and to the Holders as provided in Sections 1.5 and 1.6, respectively,
of the location and any change in the location, of any such office or agency.
If at any time the Company shall fail to maintain any such required office or
agency in respect of Debentures of any series or shall fail to furnish the
Trustee with the address thereof, such presentations and surrenders of
Debentures of
86
such series may be made and notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Debentures of such
series and the related Coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Bearer Debentures of
such series pursuant to Section 10.4) at the office of the Trustee for such
series located outside the United States, and the Company hereby appoints the
same as its agent to receive such respective presentations, surrenders, notices
and demands.
No payment of principal, premium or interest on Bearer Debentures
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to any account
maintained with a bank located in the United States; provided, however, that
if the Debentures of any series are denominated and payable in Dollars, payment
of principal of and any premium and interest on any Bearer Debenture of such
series (including any additional amounts payable on Debentures of such series
pursuant to Section 10.4) shall be made at the office of the Company's Paying
Agent in The City of New York, if (but only if) payment in Dollars of the full
amount of such principal, premium, interest or additional amounts, as the case
may be, at all offices or agencies outside the United States maintained for the
purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Debentures of
any series for such purposes. The Company will give prompt written notice to
the Trustee and the Holders of Debentures of such series of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 10.3 Money for Debentures Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to Debentures of any series, it will, on or before each due date of the
principal of and any premium or interest on any of the Debentures of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium or interest so
becoming due until such sums shall be paid to such
87
Persons or otherwise disposed of as herein provided and will promptly notify
the Trustee of its action or failure to act.
Whenever the Company shall have one or more Paying Agents for
Debentures of any series it will, prior to each due date of the principal of
and any premium or interest on any Debentures of such series, deposit with a
Paying Agent a sum sufficient to pay the principal and any premium 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 to act.
The Company will cause each Paying Agent for Debentures of any series
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying
Agent will:
(a) hold all sums held by it for the payment of the principal of
and any premium or interest on Debentures of such series in trust
for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Debentures of such series) in the making
of any payment of principal of and any premium or interest on the
Debentures of such series;
(c) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
(d) otherwise comply with the provisions of the Trust Indenture
Act applicable to it as a Paying Agent.
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
by Company Order 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 trusts as those upon
88
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.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of and any premium or
interest on any Debenture of any series and remaining unclaimed for two years
after such principal and any premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of the Debenture
of such series or any Coupon appertaining thereto shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money and all liability of the Company as trustee thereof shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper in each Place of Payment, notice
that such money remains unclaimed and that after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 10.4 Limitation on Dividends; Transactions with Affiliates.
If Debentures of any series are issued to a CalEnergy Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such CalEnergy Trust and (a) there shall have occurred any event that would
constitute an Event of Default, (b) the Guarantor shall be in default with
respect to its payment of any obligations under the Preferred Securities
Guarantee or the Common Securities Guarantee relating to such CalEnergy Trust
or (c) the Company shall have given notice of its election to defer payments of
interest on Debentures of such series by extending the interest payment period
and such period, or any extension thereof, shall be continuing, then (y) the
Company shall not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase or make a liquidation payment with respect to,
any of its capital stock (other than (i) purchases or acquisitions of shares of
Common Stock of the Company in connection with the satisfaction by the Company
of its obligations under any employee benefit plans, (ii) as a result of a
reclassification of capital stock of the Company or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of capital stock of the Company, (iii) the pur chase of fractional
interests in shares of the Company's capital stock pursuant to the
89
conversion or exchange provisions of such capital stock of the Company or the
security being converted or exchanged, or (iv) payment of stock dividends by
the Company which consist of stock of the same class as that on which the
dividend is being paid) or make any guarantee payments with respect to the
foregoing, other than pursuant to the Preferred Securities Guarantee and the
Common Securities Guarantee), and (z) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Company which rank pari
passu with or junior to Debentures of such series.
SECTION 10.5 Covenants as to CalEnergy Trusts.
In the event Debentures of such series are issued to a CalEnergy Trust
or a trustee of such trust in connection with the issuance of Trust Securities
by such CalEnergy Trust, for so long as such Trust Securities remain
outstanding, the Company will (a) maintain 100% direct or indirect ownership of
the Common Securities of such CalEnergy Trust; provided, however, that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of the Common Securities, (b) use its reasonable efforts
to cause such CalEnergy Trust (i) to remain a statutory business trust, except
in connection with a distribution of Debentures of such series to the holders
of Trust Securities in liquidation of such CalEnergy Trust, the redemption of
all of the Trust Securities of such CalEnergy Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration of such
CalEnergy Trust, and (ii) to continue to be classified as a grantor trust for
United States federal income tax purposes and (c) to use its reasonable efforts
to cause each holder of Trust Securities to be treated as owning an undivided
beneficial interest in the Debentures of such series.
SECTION 10.6 Additional Amounts.
If the Debentures of any series provide for the payment of additional
amounts, the Company will pay to the Holder of any Debenture of such series or
any Coupon appertaining thereto additional amounts as provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of any Debenture
of any series or payment of any related Coupon or the net proceeds received on
the sale or exchange of any Debenture of any series, such mention shall be
deemed to include mention of the payment of additional amounts provided for in
this Section to the extent that, in such context additional amounts are, were
or would be payable in respect thereof pursuant to the provisions of
90
this Section and express mention of the payment of additional amounts (if
applicable) in any provisions hereof shall not be construed as excluding
additional amounts in those provisions hereof where such express mention is not
made.
If the Debentures of any series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to Debentures of such series (or if the Debentures of such series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Debentures of such
series shall be made to Holders of Debentures of such series or any Coupons
appertaining thereto who are United States Aliens without withholding for or on
account of any tax assessment or other governmental charge described in the
Debentures of such series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Debentures of such series or
any Coupons appertaining thereto and the Company will pay to the Trustee or
such Paying Agent the additional amounts required by this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or willful misconduct on their part arising out of or in connection
with actions taken or omitted by any of them in reliance on any Officers'
Certificate furnished pursuant to this Section.
SECTION 10.7 Existence.
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
91
SECTION 10.8 Purchase of Debentures by Company or Subsidiary.
If and so long as the Debentures of any series are listed on The Stock
Exchange of the United Kingdom and the Republic of Ireland and such stock
exchange shall so require, the Company will not, and will not permit any of its
Subsidiaries to, purchase any Debentures of such series by private treaty at a
price (exclusive of expenses and accrued interest) which exceeds 120% of the
mean of the nominal quotations of the Debentures of such series as shown in The
Stock Exchange Daily Official List for the last trading day preceding the date
of purchase.
SECTION 10.9 Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate signed by its principal executive officer, principal financial
officer or principal accounting officer stating whether or not to the best
knowledge of the signer thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder), and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
The Company shall file with the Trustee an Officer's Certificate
specifying any default or Event of Default within five Business Days of its
becoming aware of any such default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.
SECTION 10.10 Calculation of Original Issue Discount
The Company shall file with the Trustee promptly at the end of each
year a written notice specifying the amount of Original Issue Discount
(including daily rates and accrual periods) accrued on Outstanding Debentures
as of the end of such year.
92
ARTICLE XI
REDEMPTION OF DEBENTURES
SECTION 11.1 Applicability of Article.
Debentures of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Debentures of any
series) in accordance with this Article.
SECTION 11.2 Election to Redeem; Notice to Trustee.
The election of the Company to redeem Debentures of any series shall
be evidenced by a Company Order. In the case of any redemption, at the
election of the Company, the Company shall, at least 60 days and no more than
90 days prior to the Redemption Date fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Debentures of such series to be
redeemed and provide a copy of the notice of redemption given to Holders of
Debentures to be redeemed pursuant to Section 11.3. In the case of any
redemption of Debentures of such series (a) prior to the expiration of any
restriction on such redemption provided in the terms of Debentures of such
series or elsewhere in this Indenture, or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of Debentures of
such series, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction or condition.
SECTION 11.3 Selection by Trustee of Debentures to Be Redeemed.
If less than all the Debentures of any series and of like tenor are to
be redeemed (unless such redemption affects only a single Debenture), the
particular Debentures of such series to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Debentures of such series and of like tenor not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection, for redemption of portions (equal to the
minimum authorized denomination for Debentures of such series or any integral
multiple thereof) of the principal amount of Registered Debentures of such
series of a denomination larger than the minimum authorized denomination
93
for Debentures of such series. If so specified in the Debentures of any series,
partial redemptions must be in an amount not less than $1,000,000 principal
amount of Debentures.
If Debentures of any series selected for partial redemption are
converted in part before termination of the conversion right with respect to
the portion of the Debentures of such series so selected, the converted
portion of the Debentures of such series shall be deemed (so far as may be) to
be the portion selected for redemption. Debentures (or portions thereof) which
have been converted during a selection of Debentures of such series to be
redeemed shall be treated by the Trustee as Outstanding for the purpose of such
selection. In any case where more than one Debenture of such series is
registered in the same name, the Trustee in its discretion may treat the
aggregate principal amount so registered as if it were represented by one
Debenture of such series.
The Trustee shall promptly notify the Company in writing of the
Debentures of such series selected for redemption and, in the case of any
Debentures of such series selected for partial redemption, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Debenture, whether such
Debenture is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Debenture shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Debenture.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures of any series
shall relate, in the case of any Debentures of such series redeemed or to be
redeemed only in part, to the portion of the principal amount of the Debentures
of such series which has been or is to be redeemed.
SECTION 11.4 Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
1.6 to the Holders of Debentures to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date.
94
All notices of redemption shall identify the Debentures (including the
CUSIP or ISIN number) to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all the Outstanding Debentures of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Debentures
of such series to be redeemed, and a statement to the effect
that on or after the Redemption Date upon surrender of such
Debenture a new Debenture of such series in the principal amount
equal to the unredeemed portion will be issued;
(d) that on the Redemption Date the Redemption Price will become
due and payable upon each such Debenture of such series to be
redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date;
(e) the place or places where such Debentures of such series,
together in the case of Bearer Debentures of such series with all
Coupons appertaining thereto, if any maturing after the
Redemption Date, are to be surrendered for payment of the
Redemption Price;
(f) that the redemption is for a sinking fund, if such is the
case; and
(g) if applicable, the conversion rate or price, the date on
which the right to convert the Debentures of such series to be
redeemed will terminate and the place or places where such
Debentures may be surrendered for conversion.
A notice of redemption published as contemplated by Section 1.6 need
not identify particular Registered Debentures of such series to be redeemed.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
95
SECTION 11.5 Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Debentures
which are to be redeemed on that date.
If any Debenture called for redemption is converted into Common Stock
of the Company, any money deposited with the Trustee or with any Paying Agent
or so segregated and held in trust for the redemption of such Debenture shall
(subject to any right of the Holder of such Debenture or any Predecessor
Debenture to receive interest as provided in the last paragraph of Section 3.7)
be paid to the Company upon Company Request or, if then held by the Company,
shall be discharged from such trust.
SECTION 11.6 Debentures Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Debentures so
to be redeemed shall on the Redemption Date become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Debentures shall cease to bear interest and the Coupons for such
interest appertaining to any Bearer Debentures so to be redeemed except to the
extent provided below, shall be void. Upon surrender of any such Debenture for
redemption in accordance with said notice together with all Coupons, if any,
appertaining thereto maturing after the Redemption Date, such Debenture shall
be paid by the Company at the Redemption Price together with accrued interest
(including Additional Payments, if any) to the Redemption Date; provided,
however, that installments of interest on Bearer Debentures whose Stated
Maturity is on or prior to the Redemption Date shall be payable only at an
office or agency located outside the United States (except as otherwise
provided in Section 10.2) and, unless otherwise specified as contemplated by
Section 3.1, only upon presentation and surrender of Coupons for such interest;
and provided, further, that, unless otherwise specified as contemplated by
Section 3.1, installments of interest on Registered Debentures whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Debentures or one or more Predecessor Debentures, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 3.7.
96
If any Bearer Debenture surrendered for redemption shall not be
accompanied by all appurtenant Coupons maturing after the Redemption Date, such
Debenture may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save
each of them and any Paying Agent harmless. If thereafter the Holder of such
Debenture shall surrender to the Trustee or any Paying Agent any such missing
Coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by Coupons shall be payable only
at an office or agency located outside the United States (except as otherwise
provided in Section 10.2) and unless otherwise specified as contemplated by
Section 3.1 only upon presentation and surrender of those Coupons.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Debenture.
SECTION 11.7 Debentures Redeemed in Part.
Any Registered Debenture of any series which is to be redeemed only in
part shall be surrendered at a Place of Payment therefor (with, if the Company
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and make available for
delivery to the Holder of such Debenture without service charge, a new
Registered Debenture or Debentures of such series and of like tenor of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Debenture of such series so surrendered.
ARTICLE XII
SINKING FUNDS
SECTION 12.1 Applicability of Article.
97
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Debentures of any series except as otherwise specified as
contemplated by Section 3.1 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 of any
series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 12.2. 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 12.2 Satisfaction of Sinking Fund Payments with Debentures.
The Company (a) may deliver Outstanding Debentures of any series
(other than any previously called for redemption), together in the case of any
Bearer Debentures of such series with all unmatured Coupons appertaining
thereto, and (b) may apply as a credit Debentures of such series which have
been redeemed either at the election of the Company pursuant to the terms of
the Debentures of such series or through the application of permitted optional
sinking fund payments pursuant to the terms of the Debentures of such series,
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 the Debentures of such series; provided that the Debentures of
such series have not been previously so credited. The Debentures of such series
shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in the Debentures of such series for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 12.3 Redemption of Debentures for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
Debentures of any series, 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 of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Debentures of such series
pursuant to Section 12.2 and will also deliver to the
98
Trustee any Debentures of such series to be so delivered. Not less than 45 days
before each such sinking fund payment date the Trustee shall select the
Debentures of such series to be redeemed upon such sinking fund payment date in
the manner specified in Section 11.3 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 11.4. Such notice having been duly given, the redemption
of such Debentures of such series shall be made upon the terms and in the
manner stated in Sections 11.6 and 11.7.
ARTICLE XIII
MEETINGS OF HOLDERS OF DEBENTURES
SECTION 13.1 Purposes for Which Meetings May be Called.
If Debentures of any series are issuable as Bearer Debentures, a
meeting of Holders of Debentures of such series may be called at any time and
from time to time pur suant to this Article to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of Debentures
of such series.
SECTION 13.2 Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Debentures of any series for any purpose specified in Section 13.1, to be held
at such time and at such place in the Borough of Manhattan, The City of New
York, or in London as the Trustee shall determine. Notice of every meeting of
Holders of Debentures of such setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided in Section 1.6, not less than 21 nor
more than 180 days prior to the date fixed for the meeting (or, in the case of
a meeting of Holders with respect to Debentures of any series all or part of
which are represented by a Book-Entry Debenture, not less than 20 nor more than
40 days).
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 25% in principal amount of the Outstanding
Debentures of any series shall have requested the Trustee to call a meeting of
the Holders of Debentures of such series for any purpose specified in Section
13.1, by written request setting forth
99
in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first publication of the notice of such meeting
within 21 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company or the
Holders of Debentures of such series in the amount above specified, as the
case may be, may determine the time and the place in the Borough of Manhattan,
The City of New York or in London for such meeting and may call such meeting
for such purposes by giving notice thereof as provided in subsection (a) of
this Section.
SECTION 13.3 Persons Entitled to Vote at Meetings.
Upon the calling of a meeting of Holders with respect to the
Debentures of any series all or part of which are represented by a Book-Entry
Debenture, a record date shall be established for determining Holders of
Outstanding Debentures of such series entitled to vote at such meeting, which
record date shall be the close of business on the day the notice of the meeting
of Holders is given in accordance with Section 13.2. The Holders on such record
date, and their designated proxies, and only such Persons, shall be entitled to
vote at any meeting of Holders. To be entitled to vote at any meeting of
Holders a Person shall (a) be a Holder of one or more Debentures of such series
or (b) be a Person appointed by an instrument in writing as proxy by a Holder
of one or more Debentures of such series; provided, however, that in the case
of any meeting of Holders with respect to the Debentures of any series all or
part of which are represented by a Book-Entry Debenture, only Holders, or their
designated proxies, of record on the record date established pursuant to
Section 13.3 hereof shall be entitled to vote at such meeting. The only Persons
who shall be entitled to be present or to speak at any meeting of Holders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 13.4 Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Debentures of any series shall constitute a quorum for a meeting of
Holders of Debentures of such series; provided, however, that if any action is
to be taken at such meet ing with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of a specified
percentage in aggregate principal amount of Outstanding Debentures of such
series that is less or greater than a majority in principal amount of the
Outstanding Debentures of such series, then, with respect to such
100
action (and only such action) the Persons entitled to vote such lesser or
greater percentage in principal amount of the Outstanding Debentures of such
series shall constitute a quorum. In the absence of a quorum within 30 minutes
of the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Debentures of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such adjourned meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided in Section 13.2 (a), except that such notice need be
given only once not less than five days prior to the date on which the meeting
is scheduled to be reconvened. Notice of the reconvening of an adjourned
meeting shall state expressly the percentage, as provided above, of the
principal amount of the outstanding Debentures of such series which shall
constitute a quorum. Notwithstanding the foregoing, no meeting of Holders with
respect to Debentures of any series which is represented in whole or in part by
a Book-Entry Debenture, shall be adjourned to a date more than 90 days after
the record date for such meeting unless the Trustee shall send out a new notice
of meeting and establish, in accordance with Section 13.3, a new record date
for Holders entitled to vote at such meeting.
Except as limited by the proviso to Section 9.2, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum
is present as aforesaid may be adopted by the affirmative vote of the Holders
of a majority in principal amount of the Outstanding Debentures of such series;
provided, however, that, except as limited by the proviso to Section 9.2, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of a specified percentage in aggregate
principal amount of Outstanding Debentures of such series that is less or
greater than a majority in principal amount of the Outstanding Debentures of
such series may be adopted at a meeting or an adjourned meeting duly convened
and at which a quorum is present as aforesaid only by the affirmative vote of
the Holders of such specified percentage in principal amount of the Outstanding
Debentures of such series.
Any resolution passed or decision taken at any meeting of Holders of
Debentures of any series duly held in accordance with this Section shall be
binding on all the Holders of Debentures of such series and the Coupons
appertaining thereto, whether or not present or represented at the meeting.
101
SECTION 13.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Debentures of any series in regard to proof of the
holding of Debentures of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission
and examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it shall
deem appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Debentures of such series shall be proved in the
manner specified in Section 1.4 and the appointment of any proxy shall be
proved in the manner specified in Section 1.4 or by having the signature of the
person executing the proxy witnessed or guaranteed by any trust company, bank
or banker authorized by Section 1.4 to certify to the holding of Bearer
Debentures of such series. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid
and genuine without the proof specified in Section 1.4 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Debentures of such series as provided in Section
13.2(b), in which case the Company or the Holders of Debentures of such series
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Persons enti tled to vote a majority in
principal amount of the Outstanding Debentures of such series represented at
the meeting.
(c) At any meeting each Holder of a Debenture of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Debentures of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Debenture challenged as not Outstanding and ruled by the chairman of the
meeting to be not Outstanding. The chairman of the meeting shall have no right
to vote, except as a Holder of a Debenture of such series or proxy.
(d) Any meeting of Holders of Debentures of any series duly called
pursuant to Section 13.2 at which a quorum is present may be adjourned from
time to time by
102
Persons entitled to vote a majority in principal amount of the Outstanding
Debentures of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.
SECTION 13.6 Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Debentures of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Debentures of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Debentures of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Debentures of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 13.2 and, if
applicable, Section 13.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE XIV
CONVERSION OF DEBENTURES
SECTION 14.1 Applicability of Article.
The provisions of this Article shall be applicable to the Debentures
of any series which are convertible into shares of Common Stock of the Company,
and the issuance of such shares of Common Stock upon the conversion of
Debentures of such series, except as otherwise specified as contemplated by
Section 3.1 for the Debentures of
103
such series. The terms and provisions applicable to the conversion of
Debentures of any series into securities of the Company (other than Common
Stock) shall, if applicable, be set forth in an Officers' Certificate or
established in one or more indentures supplemental hereto, prior to the
issuance of Debentures of such series in accordance with Section 3.1.
SECTION 14.2 Exercise of Conversion Privilege.
In order to exercise a conversion privilege, the Holder of a Debenture
of any series with such a privilege shall surrender such Debenture to the
Company at the office or agency maintained for that purpose pursuant to Section
10.2, accompanied by written notice to the Company that the Holder elects to
convert such Debenture or a specified portion thereof. Such notice shall also
state, if different from the name and address of such Holder, the name or names
(with address) in which the certificate or certificates for shares of Common
Stock which shall be issuable on such conversion shall be issued. Debentures
of such series surrendered for conversion shall (if so required by the Company
or the Trustee) be duly endorsed by or accompanied by instruments of transfer
in forms satisfactory to the Company and the Trustee duly executed by the
registered Holder or its attorney duly authorized in writing; and, if expressly
specified, as contemplated by Section 3.1, to be applicable to any series of
Debentures, Debentures of such series so surrendered for conversion during the
period from the close of business on any Regular Record Date to the opening of
business on the next succeeding Interest Payment Date (excluding Debentures or
portions thereof called for redemption during such period) shall also be
accompanied by payment in funds acceptable to the Company of an amount equal
to the interest payable on such Interest Payment Date on the principal amount
of such Debenture then being converted, and such interest shall be payable to
such registered Holder notwithstanding the conversion of such Debenture,
subject to the provisions of Section 3.7 relating to the payment of Defaulted
Interest by the Company. As promptly as practicable after the receipt of such
notice and of any payment required pursuant to a Board Resolution and, subject
to Section 3.1, set forth, or determined in the manner provided, in an
Officers' Certificate, or established in one or more indentures supplemental
hereto setting forth the terms of the Debentures and the surrender of such
Debentures in accordance with such reasonable regulations as the Company may
prescribe, the Company shall issue and shall deliver, at the office or agency
at which such Debenture is surrendered, to such Holder or on its written order,
a certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Debenture (or specified portion thereof),
in accordance with the provisions of such Board Resolution, Of-
104
ficers' Certificate or supplemental indenture, and cash as provided therein in
respect of any fractional share of such Common Stock otherwise issuable upon
such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such notice and
such payment, if required, shall have been received in proper order for
conversion by the Company and such Debenture shall have been surrendered as
aforesaid (unless such Holder shall have so surrendered such Debenture and
shall have instructed the Company to effect the conversion on a particular date
following such surrender and such Holder shall be entitled to convert such
Debenture on such date, in which case such conversion shall be deemed to be
effected immediately prior to the close of business on such date) and at such
time the rights of the Holder of such Debenture as such Debenture Holder shall
cease and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock of the Company shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby. Except as set forth above and subject to the
final paragraph of Section 3.7, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Debentures of such series
surrendered for conversion or on account of any dividends on the Common Stock
of the Company issued upon such conversion.
In the case of any Debenture of any series which is converted in part
only, upon such conversion the Company shall execute and the Trustee shall
authenticate and make available for delivery to or on the order of the Holder
thereof, at the expense of the Company, a new Debenture or Debentures of such
series, of authorized denominations, in aggregate principal amount equal to
the unconverted portion of such Debenture.
SECTION 14.3 No Fractional Shares.
No fractional share of Common Stock of the Company shall be issued
upon conversions of Debentures of any series. If more than one Debenture of
such series shall be surrendered for conversion at one time by the same Holder,
the number of full shares which shall be issuable upon conversion shall be
computed on the basis of the aggregate principal amount of the Debentures of
such series (or specified portions thereof to the extent permitted hereby) so
surrendered. If, except for the provisions of this Section 14.3, any Holder of
a Debenture or Debentures of such series would be entitled to a fractional
share of Common Stock of the Company upon the conversion of such Debenture or
Debentures, or specified portions thereof, the Company shall pay to such Holder
an amount in cash equal to the current market value of such frac-
105
tional share computed, (a) if such Common Stock is listed or admitted to
unlisted trading privileges on a national securities exchange, on the basis of
the last reported sale price regular way on such exchange on the last trading
day prior to the date of conversion upon which such a sale shall have been
effected, or (b) if such Common Stock is not at the time so listed or admitted
to unlisted trading privileges on a national securities exchange, on the basis
of the average of the bid and asked prices of such Common Stock in the
over-the-counter market, on the last trading day prior to the date of
conversion, as reported by the National Quotation Bureau, Incorporated or
similar organization if the National Quotation Bureau, Incorporated is no
longer reporting such information, or if not so available, the fair market
price as determined by the Board of Directors. For purposes of this Section,
"trading day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
other than any day on which the Common Stock is not traded on the New York
Stock Exchange, or if the Common Stock is not traded on the New York Stock
Exchange, on the principal exchange or market on which the Common Stock is
traded or quoted.
SECTION 14.4 Adjustment of Conversion Price.
The conversion price of Debentures of any series that is convertible
into Common Stock of the Company shall be adjusted for any stock dividends,
stock splits, reclassification, combinations or similar transactions in
accordance with the terms of the sup plemental indenture or Board Resolutions
setting forth the terms of the Debentures of such series.
Whenever the conversion price is adjusted, the Company shall compute
the adjusted conversion price in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable detail
the facts upon which such adjustment is based, and such certificate shall
forthwith be filed at each office or agency maintained for the purpose of
conversion of Debentures of such series pursuant to Section 10.2 and, if
different, with the Trustee. The Company shall forthwith cause a notice setting
forth the adjusted conversion price to be mailed, first class postage prepaid,
to each Holder of Debentures of such series at its address appearing on the
Debenture Register and to any conversion agent other than the Trustee.
SECTION 14.5 Notice of Certain Corporate Actions.
In case:
106
(a) Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its
retained earnings (other than a dividend for which approval of
any shareholders of the Company is required); or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for
or purchase any shares of capital stock of any class or of any
other rights (other than any such grant for which approval of any
shareholders of the Company is required); or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding
shares of Common Stock or a change in par value, or from par
value to no par value, or from no par value to par value) or of
any consolidation, merger or share exchange to which the Company
is a party and for which approval of any shareholders of the
Company is required, or of the sale of all or substantially all
of the assets of the Company or of any compulsory share exchange
whereby the Common Stock is converted into other securities, cash
or other property; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; then the Company shall cause to be
filed with the Trustee, and, if any Preferred Securities are
outstanding, shall cause to be filed with the transfer agent for
the Preferred Securities and shall cause to be mailed to all
Holders at their last addresses as they shall appear in the
Debenture Register, at least 15 days (or 10 days in any case
specified in clause (a) or (b) above) prior to the applicable
record date hereinafter specified, a notice stating (i) the date
on which a record is to be taken for the purpose of such
dividend, distribution, rights, options or warrants, or, if a
record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend,
distribution, rights, options or warrants are to be determined,
or (ii) the date on which such reclassification, consolidation,
merger, share exchange, sale, dissolution, liquidation or winding
up is expected to become effective, and the date as of which it
is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification,
consolidation,
107
merger, share exchange, sale, dissolution, liquidation or winding
up (but no failure to mail such notice or any defect therein or
in the mailing thereof shall affect the validity of such
corporate action required to be specified in such notice). If at
any time the Trustee shall not be the conversion agent, a copy of
such notice shall also forthwith be filed by the Company with the
Trustee.
SECTION 14.6 Reservation of Shares of Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock or treasury
shares, for the purpose of effecting the conversion of Debentures, the full
number of shares of Com mon Stock of the Company then issuable upon the
conversion of all outstanding Debentures of any series that has conversion
rights.
SECTION 14.7 Payment of Certain Taxes upon Conversion.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of its Common Stock on conversion of
Debentures pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of its Common Stock in a name other than that of the
Holder of the Debenture or Debentures to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid.
SECTION 14.8 Nonassessability.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debentures will upon issue in accordance with the
terms hereof be duly and validly issued and fully paid and nonassessable.
SECTION 14.9 Effect of Consolidation or Merger on Conversion Privilege.
Unless otherwise provided as contemplated by Section 3.1 with respect
to Debentures of any series, in case of any consolidation of the Company with,
or merger of the Company into or with any other Person, or in case of any sale
of all or substantially all of the assets of the Company, the Company or the
Person formed by such xxxxxxx-
108
dation or the Person into which the Company shall have been merged or the
Person which shall have acquired such assets, as the case may be, shall execute
and deliver to the Trustee a supplemental indenture providing that the Holder
of each Debenture then outstanding of any series that is convertible into
Common Stock shall have the right, which right shall be the exclusive
conversion right thereafter available to said Holder (until the expiration of
the conversion right of such Debenture), to convert such Debenture into the
kind and amount of shares of stock or other securities or property (including
cash) receivable upon such consolidation, merger or sale by a holder of the
number of shares of Common Stock into which such Debenture might have been
converted immediately prior to such consolidation, merger or sale, subject to
compliance with the other provisions of this Indenture, such Debenture and such
supplemental indenture. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in such Debenture. The above provisions of this
Section shall similarly apply to successive consolidations, mergers or sales.
Unless otherwise provided as contemplated by Section 3.1 with respect to
Debentures of any series, it is expressly agreed and understood that anything
in this Indenture to the contrary notwithstanding, if, pursuant to such
merger, consolidation or sale, holders of outstanding shares of Common Stock do
not receive shares of common stock of the surviving corporation but receive
other securities, cash or other property or any combination thereof, Holders of
Debentures shall not have the right to thereafter convert their Debentures into
common stock of the surviving corporation or the corporation which shall have
acquired such assets, but rather, shall have the right upon such conversion to
receive the other securities, cash or other property receivable by a holder of
the number of shares of Common Stock into which the Debentures held by such
Holder might have been converted immediately prior to such consolidation,
merger or sale, all as more fully provided in the first sentence of this
Section 14.9. Anything in this Section 14.9 to the contrary notwithstanding,
the provisions of this Section 14.9 shall not apply to a merger or
consolidation of another corporation with or into the Company pursuant to which
both of the following conditions are applicable: (i) the Company is the
surviving corporation and (ii) the outstanding shares of Common Stock are not
changed or converted into any other securities or property (including cash) or
changed in number or character or reclassified pursuant to the terms of such
merger or consolidation.
As evidence of the kind and amount of shares of stock or other
securities or property (including cash) into which Debentures may properly be
convertible after any such consolidation, merger or sale, or as to the
appropriate adjustments of the conversion prices applicable with respect
thereto, the Trustee shall be furnished with and
109
may accept the certificate or opinion of an independent certified public
accountant with respect thereto; and, in the absence of bad faith on the part
of the Trustee, the Trustee may conclusively rely thereon, and shall not be
responsible or accountable to any Holder of Debentures for any provision in
conformity therewith or approved by such independent certified accountant which
may be contained in said supplemental indenture.
SECTION 14.10 Duties of Trustee Regarding Conversion.
Neither the Trustee nor any conversion agent shall at any time be
under any duty or responsibility to any Holder of Debentures of any series that
is convertible into Common Stock to determine whether any facts exist which may
require any adjustment of the conversion price, or with respect to the nature
or extent of any such adjustment when made, or with respect to the method
employed, whether herein or in any supplemental indenture (or whether a
supplemental indenture need be entered into), any resolutions of the Board of
Directors or written instrument executed by one or more officers of the Company
provided to be employed in making the same. Neither the Trustee nor any
conversion agent shall be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Debentures and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property upon the surrender of any Debenture for the purpose of conversion or
to comply with any of the covenants of the Company contained in this Article
XIV or in the applicable supplemental indenture, resolutions of the Board of
Directors or written instrument executed by one or more duly authorized
officers of the Company. All Debentures delivered for conversion shall be
delivered to the Trustee to be cancelled by or at the direction of the Trustee,
which shall dispose of the same as provided in Section 3.9.
SECTION 14.11 Repayment of Certain Funds upon Conversion.
Any funds which at any time shall have been deposited by the Company
or on its behalf with the Trustee or any other paying agent for the purpose of
paying the principal of, and premium, if any, and interest, if any, on any of
the Debentures (including
110
funds deposited for the sinking fund referred to in Article III hereof) and
which shall not be required for such purposes because of the conversion of such
Debentures as provided in this Article XIV shall after such conversion be
repaid to the Company by the Trustee upon the Company's written request.
ARTICLE XV
SUBORDINATION OF DEBENTURES
SECTION 15.1 Debentures Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Debenture, by
the Holder's acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article, the
indebtedness represented by the Debenture and the payment of the principal of
(and premium, if any) and interest on each and all of the Debentures are hereby
expressly made subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, whether outstanding at the
date of this Indenture or thereafter incurred. No provision of this Article
shall prevent the occurrence of any default or Event of Default hereunder.
SECTION 15.2 Payment Over of Proceeds Upon Dissolution, Etc.
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 dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company
on account of the principal (and premium, if any) or interest (including
Additional Payments) on the Debentures; and upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Holders of the Debentures or the
Trustee would be entitled to receive from the Company, except for the
provisions of this Article, 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 Holders of the Debentures or by the Trustee
under the Indenture if received by them
111
or it, directly to the holders of Senior Indebtedness of the Company (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been
issued, as their respective interests may appear, to the extent necessary to
pay such Senior Indebtedness in full, in money or money's worth, after giving
effect to any concurrent payment or distribution to or for the holders of such
Senior Indebtedness, before any payment or distribution is made to the Holders
of the Debentures or to the Trustee.
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 before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of
the Company, as the case may be, remaining unpaid to the extent necessary to
pay such Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
benefit of the holders of such Senior Indebtedness.
For purposes of this Article only, 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 reorganization or readjustment which are
subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to substantially the same extent as, or to a greater
extent than, the Debentures are so subordinated as provided in this Article;
provided, that (i) such Senior Indebtedness is assumed by the new corporation,
if any, resulting from any such reorganization or readjustment, and (ii) the
rights of the holders of such Senior Indebtedness are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions
112
set forth in Article VIII shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the purposes of this
Section if the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer such properties
and assets substantially as an entirety, as the case may be, shall, as a part
of such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article VIII.
SECTION 15.3 Prior Payment to Senior Indebtedness Upon Acceleration of
Debentures.
In the event that any Debentures are declared due and payable before
their Stated Maturity, then and in such event the holders of Senior
Indebtedness shall be entitled to receive payment in full of all amounts due or
to become due on or in respect of all Senior Indebtedness or provision shall be
made for such payment in cash, before the Holders of the Debentures are
entitled to receive any payment (including any payment which may be payable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Debentures) by the Company on account of the
principal of (or premium, if any) or interest on the Debentures or on account
of the purchase or other acquisition of Debentures; provided, however, that
nothing in this Section shall prevent the satisfaction of any sinking fund
payment in accordance with Article XII by delivering and crediting pursuant to
Section 12.2 Debentures which have been acquired (upon redemption or
otherwise) prior to such declaration of acceleration or which have been
converted pursuant to Article XIV.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Debenture prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the
case may be, such Holder, then and in such event such payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 14.2 would be applicable.
SECTION 15.4 No Payment When Senior Indebtedness in Default.
113
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 Indebtedness of the Company, as the case may be, beyond any applicable
grace period with respect thereto, or in the event that the maturity of any
Senior Indebtedness of the Company, as the case may be, has been accelerated
because of a default, or in the event and during the continuation of any
default under the New Credit Agreement or any refinancing of the New Credit
Agreement in the bank credit market (including institutional participants
therein) that would permit the lenders under the New Credit Agreement or such
refinancing to accelerate the maturity thereof or demand payment in full, then,
in any such case, no payment shall be made by the Company with respect to the
principal (including redemption and sinking fund payments) of, or premium, if
any, or interest on the Debentures until such default is cured or waived or
ceases to exist or any such acceleration or demand for payment has been
rescinded.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 15.4, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 15.5 Payment Permitted in Certain Situations.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Debentures shall prevent (a) the Company, at any time except during
the pendency of any dissolution, winding-up, liquidation or reorganization of
the Company, whether voluntary or involuntary or any bankruptcy, insolvency,
receivership or other proceedings of the Company referred to in Section 15.2 or
under the conditions described in Section 15.3 or 15.4, from making payments
at any time of principal of, or premium, if any, or interest on the Debentures,
or (b) the application by the Trustee of any money deposited with it hereunder
to the payment of or on account of the principal of, or premium, if any, or
interest on the Debentures or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, it did not have
114
knowledge that such payment would have been prohibited by the provisions of
this Article.
SECTION 15.6 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness or the
provision for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness, the rights of the Holders
of Debentures shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article (equally and ratably with the holders of
indebtedness of the Company which by its express terms is subordinated to
indebtedness of the Company to substantially the same extent as the Debentures
are subordinated to the Senior Indebtedness and is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to the Senior Indebtedness until the principal of (and premium, if any) and
interest on the Debentures shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of
Debentures or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to or
for the benefit of the holders of Senior Indebtedness by Holders of Debentures
or the Trustee, shall, as among the Company, its creditors other than holders
of Senior Indebtedness and the Holders of Debentures, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Indebtedness.
SECTION 15.7 Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defin ing the relative rights of the Holders of Debentures on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Debentures
is intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of Debentures, the
obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the holders of Senior Indebtedness,
is intended to rank equally with all other general obligations of the Company),
to pay to the Holders of Debentures the principal of (and premium, if any) and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of
115
Debentures and creditors of the Company, as the case may be, other than the
holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 15.8 Trustee to Effectuate Subordination.
Each Holder of a Debenture by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article and appoints the Trustee such Holder's attorney-in-fact for any
and all such purposes.
SECTION 15.9 No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of Debentures,
without incurring responsibility to the Holders of Debentures and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of Debentures to the holders of Senior
Indebtedness do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (d) exercise or refrain from exercising any rights against
the Company and any other Person.
116
SECTION 15.10 Notice to Trustee.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company which would prohibit the making
of any payment to or by the Trustee in respect of any Debentures pursuant to
the provisions of this Article. Notwithstanding the provisions of this Article
or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of any Debentures pursuant to the
provisions of this Article, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof at the Corporate Trust
Office of the Trustee from the Company or a holder or holders of Senior
Indebtedness or from any trustee therefor; and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Section 6.3,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall have not received the notice provided for in
this Section at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest on
any Debentures), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purposes for which they were received,
and shall not be affected by any notice to the contrary that may be received by
it within two Business Days prior to such date.
Subject to the provisions of Section 6.3, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 15.11 Reliance on Judicial Order or Certificate of Liquidating Agent.
117
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 6.3, and
the Holders of Debentures shall be entitled to conclusively rely upon any order
or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Debentures, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, as the case may be, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 15.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into the Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness and shall not be
liable to any such holders or creditors if it shall in good faith pay over or
distribute to Holders of Debentures or to the Company or to any other Person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article or otherwise.
SECTION 15.13 Rights of Trustee as Holder of Senior Indebtedness, Preservation
of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
SECTION 15.14 Article Applicable to Paying Agents.
118
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; provided,
however, that Section 14.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 15.15 Certain Conversions Deemed Payment.
For the purposes of this Article only, (a) the issuance and delivery
of junior securities (or cash paid in lieu of fractional shares) upon
conversion of Debentures in accordance with Article XIV, or pursuant to the
terms set forth in an Officers' Certificate or established in one or more
indentures supplemental hereto in accordance with Section 3.1, shall not be
deemed to constitute a payment or distribution on account of the principal of
or premium or interest on Debentures or on account of the purchase or other
acquisition of Debentures, and (b) the payment, issuance or delivery of cash,
property or securities (other than junior securities and cash paid in lieu of
fractional shares) upon conversion of a Debenture shall be deemed to constitute
payment on account of the principal of such Debenture. For the purposes of this
Section, the term "junior securities" means (i) shares of any stock of any
class of the Company and (ii) securities of the Company which are subordinated
in right of payment to all Senior Indebtedness which may be outstanding at the
time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Debentures are so subordinated as
provided in this Article. Nothing contained in this Article or elsewhere in
this Indenture or in the Debentures is intended to or shall impair, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders of Debentures, the right, which is absolute and unconditional, of the
Holder of any Debenture to convert such Debenture in accordance with Article
XIV.
119
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
CALENERGY COMPANY, INC.
By
-------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
-------------------------------
Name:
Title:
120
