1
EXHIBIT 4.2
______________________________
SAFECO CORPORATION
______________________________
INDENTURE
Dated as of July 15, 1997
______________________________
THE CHASE MANHATTAN BANK
as Trustee
______________________________
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
2
TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as
of July 15, 1997 between SAFECO Corporation and The Chase Manhattan Bank, as
Trustee:
ACT SECTION INDENTURE SECTION
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310(a)(1) . . . . . . . . . . . . . . . . . . . . 6.09
(a)(2) . . . . . . . . . . . . . . . . . . . . 6.09
310(a)(3) . . . . . . . . . . . . . . . . . . . . N/A
(a)(4) . . . . . . . . . . . . . . . . . . . . N/A
310(a)(5) . . . . . . . . . . . . . . . . . . . . 6.10, 6.11
310(b) . . . . . . . . . . . . . . . . . . . . . N/A
310(c) . . . . . . . . . . . . . . . . . . . . . 6.13
311(a) and (b) . . . . . . . . . . . . . . . . . N/A
311(c) . . . . . . . . . . . . . . . . . . . . . 4.01, 4.02(a)
312(a) . . . . . . . . . . . . . . . . . . . . . 4.02
312(b) and (c) . . . . . . . . . . . . . . . . . 4.04
313(a) . . . . . . . . . . . . . . . . . . . . . 4.04
313(b)(1) . . . . . . . . . . . . . . . . . . . . 4.04
313(b)(2) . . . . . . . . . . . . . . . . . . . . 4.04
313(c) . . . . . . . . . . . . . . . . . . . . . 4.04
313(d) . . . . . . . . . . . . . . . . . . . . . 4.04
314(a) . . . . . . . . . . . . . . . . . . . . . 4.03
314(b) . . . . . . . . . . . . . . . . . . . . . N/A
314(c)(1) and (2) . . . . . . . . . . . . . . . . 6.07
314(c)(3) . . . . . . . . . . . . . . . . . . . . N/A
314(d) . . . . . . . . . . . . . . . . . . . . . N/A
314(e) . . . . . . . . . . . . . . . . . . . . . 6.07
314(f) . . . . . . . . . . . . . . . . . . . . . N/A
315(a)(c) and (d) . . . . . . . . . . . . . . . . 6.01
315(b) . . . . . . . . . . . . . . . . . . . . . 5.08
315(e) . . . . . . . . . . . . . . . . . . . . . 5.09
316(a)(1) . . . . . . . . . . . . . . . . . . . . 5.07
316(a)(2) . . . . . . . . . . . . . . . . . . . . N/A
316(a) last sentence . . . . . . . . . . . . . . 2.09
316(b) . . . . . . . . . . . . . . . . . . . . . 9.02
317(a) . . . . . . . . . . . . . . . . . . . . . 5.05
317(b) . . . . . . . . . . . . . . . . . . . . . 6.05
318(a) . . . . . . . . . . . . . . . . . . . . . 13.08
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THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
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CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1 Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Form and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.8 Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.9 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.10 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.11 Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE III PARTICULAR COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.1 Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.2 Offices for Notices and Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.3 Appointments to Fill Vacancies in Trustee's Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.4 Provision as to Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.5 Certificate to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.6 Compliance with Consolidation Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.7 Limitation on Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.8 Covenants as to SAFECO Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.9 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.10 Payment Upon Resignation or Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE . . . . . . . . . . . . . . . . . . . . 20
4.1 Securityholders' Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.2 Preservation and Disclosure of Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.3 Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.4 Reports by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 22
5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.2 Payment of Securities on Default; Suit Therefor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.3 Application of Moneys Collected by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.4 Proceedings by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.5 Proceedings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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5.6 Remedies Cumulative and Continuing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.7 Direction of Proceedings and Waiver of Defaults by Majority of Securityholders . . . . . . . . . . . . . 27
5.8 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.9 Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VI CONCERNING THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.1 Duties and Responsibilities of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.2 Reliance on Documents, Opinions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.3 No Responsibility for Recitals, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.4 Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own Securities . . . . . 31
6.5 Moneys to be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.6 Compensation and Expenses of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.7 Officers' Certificate as Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.8 Conflicting Interest of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.9 Eligibility of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.10 Resignation or Removal of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.11 Acceptance by Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.12 Succession by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.13 Limitation on Rights of Trustee as a Creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.14 Authenticating Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VII CONCERNING THE SECURITYHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.1 Action by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.2 Proof of Execution by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.3 Who Are Deemed Absolute Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.4 Securities Owned by Company Deemed Not Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.5 Revocation of Consents; Future Holders Bound . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VIII SECURITYHOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.1 Purposes of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.2 Call of Meetings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.3 Call of Meetings by Company or Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.4 Qualifications for Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.5 Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.6 Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE IX AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.1 Without Consent of Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.2 With Consent of Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.3 Compliance with Trust Indenture Act; Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . 42
9.4 Notation on Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.5 Evidence of Compliance of Supplemental Indenture to be Furnished Trustee . . . . . . . . . . . . . . . . 42
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ARTICLE X CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.1 Company May Consolidate, etc., on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.2 Successor Corporation to be Substituted for Company . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.3 Opinion of Counsel to be Given Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE XI SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.1 Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.2 Deposited Moneys and U.S. Government Obligations to be Held in Trust by Trustee . . . . . . . . . . . . 44
11.3 Paying Agent to Repay Moneys Held . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.4 Return of Unclaimed Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.5 Defeasance Upon Deposit of Moneys or U.S. Government Obligations . . . . . . . . . . . . . . . . . . . 45
ARTICLE XII IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS . . . . . . . . . . . . . . . . . . . . . 46
12.1 Indenture and Securities Solely Corporate Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE XIII MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
13.1 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
13.2 Official Acts by Successor Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
13.3 Surrender of Company Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
13.4 Addresses for Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
13.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
13.6 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
13.7 Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
13.8 Trust Indenture Act to Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
13.9 Table of Contents, Headings, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
13.10 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
13.11 Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
13.12 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
13.13 Acknowledgement of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XIV REDEMPTION OF SECURITIES -- MANDATORY AND OPTIONAL SINKING FUND . . . . . . . . . . . . . . . . . . . . . 49
14.1 Special Event Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
14.2 Optional Redemption by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
14.3 No Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
14.4 Notice of Redemption; Selection of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
14.5 Payment of Securities Called for Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE XV SUBORDINATION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
15.1 Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
15.2 Default on Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
15.3 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
15.4 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
15.5 Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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15.6 Notice by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
15.7 Rights of the Trustee; Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 56
15.8 Subordination May Not Be Impaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE XVI EXTENSION OF INTEREST PAYMENT PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
16.1 Extension of Interest Payment Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
16.2 Notice of Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
EXHIBIT A (FORM FACE .........................................................................................A-1
Testimonium
Signatures
Acknowledgements
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THIS INDENTURE, dated as of July 15, 1997, between SAFECO Corporation,
a Washington corporation (hereinafter sometimes called the "Company"), and The
Chase Manhattan Bank, a New York banking corporation, as trustee (hereinafter
sometimes called the "Trustee"),
W I T N E S S E T H :
In consideration of the premises, and the purchase of the Securities
by the holders thereof, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of the respective holders from time to time
of the Securities, as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS
The terms defined in this Section 1.1 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes
of this Indenture shall have the respective meanings specified in this Section
1.1. All other terms used in this Indenture which are defined in the Trust
Indenture Act, or which are by reference therein defined in the Securities Act,
shall (except as herein otherwise expressly provided or unless the context
otherwise requires) have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date of this
Indenture as originally executed. The following terms have the meanings given
to them in the Declaration: (i) Clearing Agency; (ii) Delaware Trustee; (iii)
Property Trustee; (iv) Administrative Trustees; (v) Direct Action; (vi)
Purchase Agreement; (vii) Distributions; (viii) Series A Capital Securities and
(ix) Series B Capital Securities. All accounting terms used herein and not
expressly defined shall have the meanings assigned to such terms in accordance
with generally accepted accounting principles and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other subdivision.
Headings are used for convenience of reference only and do not affect
interpretation. The singular includes the plural and vice versa.
"Additional Interest" shall have the meaning set forth in Section
2.6(c).
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to (i) the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Maturity Date (if no maturity is within
three months before or after the Maturity Date, yields for the two published
maturities most closely corresponding to the Maturity Date shall be
interpolated, and the Adjusted Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
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(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date plus, in either case, (a) 1.23% if such
redemption date occurs on or prior to July 15, 1998, and (b) 0.50% in all other
cases.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding the power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (d) a partnership in which the specified Person is a
general partner, (e) any officer or director of the specified Person, and (f)
if the specified Person is an individual, any entity of which the specified
Person is an officer, director or general partner.
"Authenticating Agent" shall mean any agent or agents of the Trustee
which at the time shall be appointed and acting pursuant to Section 6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of that board.
"Board Resolution" shall mean 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.
"Business Day" shall mean, with respect to any series of Securities,
any day other than a Saturday or a Sunday or a day on which banking
institutions in The City of New York or in The City of Seattle, Washington are
authorized or required by law or executive order to close.
"Capital Securities" shall mean undivided beneficial interests in the
assets of SAFECO Trust which rank pari passu with the Common Securities issued
by SAFECO Trust; provided, however, that if an Event of Default has occurred
and is continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the holders of the Capital Securities shall be paid in full
the Distributions and the liquidation, redemption and other payments to which
they are entitled. References to "Capital Securities" shall include
collectively any Series A Capital Securities and Series B Capital Securities.
"Capital Securities Guarantee" shall mean any guarantee that the
Company may enter into with The Chase Manhattan Bank in its capacity as trustee
of the SAFECO Trust or other Persons that operates directly or indirectly for
the benefit of holders of Capital Securities of SAFECO Trust and shall include
a Series A Capital Securities Guarantee and a Series B Capital Securities
Guarantee with respect to the Series A Capital Securities and the Series B
Capital Securities, respectively.
"Commission" shall mean the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any
time after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
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"Common Securities" shall mean undivided beneficial interests in the
assets of SAFECO Trust which rank pari passu with Capital Securities issued by
SAFECO Trust; provided, however, that if an Event of Default has occurred and
is continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the holders of the Capital Securities shall be paid in full
the Distributions and the liquidation, redemption and other payments to which
they are entitled.
"Common Securities Guarantee" shall mean any guarantee that the
Company may enter into with any Person or Persons that operates directly or
indirectly for the benefit of holders of Common Securities of SAFECO Trust.
"Common Stock" shall mean the Common Stock, no par value, of the
Company or any other class of stock resulting from changes or reclassifications
of such Common Stock consisting solely of changes in par value, or from par
value to no par value, or from no par value to par value.
"Company" shall mean SAFECO Corporation, a Washington corporation,
and, subject to the provisions of Article X, shall include its successors and
assigns.
"Company Request" or "Company Order" shall mean a written request or
order signed in the name of the Company by the Chairman, the Chief Executive
Officer, the President, the Chief Financial Officer, a Vice President, the
Treasurer or an Assistant Treasurer, the Controller or an Assistant Controller,
the Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Maturity Date that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities with a maturity date corresponding to the Maturity
Date. If no United States Treasury security has a maturity date which is
within three months before or after the Maturity Date, the two most closely
corresponding United States Treasury securities shall be used as the Comparable
Treasury Issue, and the calculation of the Adjusted Treasury Rate pursuant to
clause (ii) of the definition thereof shall be interpolated or extrapolated on
a straight-line basis, rounding to the nearest month.
"Comparable Treasury Price" means, with respect to any redemption date
pursuant to Section 14.1, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such redemption date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (A) the average of five Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Compounded Interest" shall have the meaning set forth in Section
16.1.
"Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
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"Declaration" means the Amended and Restated Declaration of Trust of
SAFECO Trust, dated as of the Issue Date.
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in Section 16.1.
"Definitive Securities" shall mean those securities issued in fully
registered certificated form not otherwise in global form.
"Depositary" shall mean, with respect to Securities of any series, for
which the Company shall determine that such Securities will be issued as a
Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to Section 2.5(d).
"Dissolution Event" means the liquidation of the Trust pursuant to the
Declaration, and the distribution of the Securities held by the Property
Trustee to the holders of the Trust Securities issued by the Trust pro rata in
accordance with the Declaration.
"Event of Default" shall mean any event specified in Section 5.1,
continued for the period of time, if any, and after the giving of the notice,
if any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Company to exchange Series B
Securities for Series A Securities and to exchange a Series B Capital
Securities Guarantee for a Series A Capital Securities Guarantee and (ii) by
SAFECO Trust to exchange Series B Capital Securities for Series A Capital
Securities.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 16.1.
"Federal Reserve" shall mean the Board of Governors of the Federal
Reserve System.
"Global Security" means, with respect to the Securities, a Security
executed by the Company and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with the Indenture,
which shall be registered in the name of the Depositary or its nominee.
"Indebtedness for Money Borrowed" shall mean any obligation of, or any
obligation guaranteed by, the Company for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, but shall not include (i) any trade accounts payable in the
ordinary course of business, (ii) any such indebtedness that by its terms ranks
pari passu with or junior in right of payment to the Securities, (iii) all
other debt securities, and guarantees in respect of those debt securities,
issued to any other trust, or a trustee of such trust, partnership or other
entity affiliated with the Company that is a financing vehicle of the Company
(a "financing entity") in connection with the issuance by such financing entity
of equity securities or other securities guaranteed by the Company pursuant to
an instrument that ranks pari passu with or junior in right of payment to
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the Guarantee, and (iv) any other indebtedness that would otherwise qualify as
"Indebtedness for Money Borrowed" to the extent that such indebtedness by its
terms ranks pari passu with or junior in right of payment to any of the
indebtedness described in clauses (i), (ii) or (iii) above.
"Indenture" shall mean this instrument as originally executed or, if
amended as herein provided, as so amended.
"Initial Optional Redemption Date" means July 15, 2007.
"Interest Payment Date" shall have the meaning set forth in Section
2.6.
"Issue Date" means July 15, 1997.
"Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement.
"Maturity Date" shall mean July 15, 2037.
"Merger Termination Event" shall mean the termination on or prior to
December 31, 1997 of the Agreement and Plan of Merger, dated as of June 6,
1997, by and among American States Financial Corporation, the Company and ASFC
Acquisition Co. pursuant to Article 12 thereof.
"Mortgage" shall mean and include any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Non Book-Entry Capital Securities" shall have the meaning set forth
in Section 2.5.
"Officers" shall mean any of the Chairman, the Chief Executive
Officer, the President, the Chief Financial Officer, a Vice President, the
Treasurer, any Assistant Treasurer, the Controller or the Secretary of the
Company.
"Officers' Certificate" shall mean a certificate signed by two
Officers and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be an employee of the Company, and who shall be acceptable to the Trustee.
"Optional Redemption Price" shall have the meaning set forth in
Section 14.2.
"Other Debentures" means all junior subordinated debentures issued by
the Company from time to time and sold to trusts to be established by the
Company (if any), in each case similar to the SAFECO Trust.
"Other Guarantees" means all guarantees issued by the Company with
respect to capital securities (if any) and issued to other trusts established
by the Company (if any), in each case similar to the SAFECO Trust.
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The term "outstanding" when used with reference to Securities, shall,
subject to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or
the Authenticating Agent or delivered to the Trustee for cancellation;
(b) Securities for whose payment moneys in the necessary
amount shall have been deposited in trust with the Trustee or with any paying
agent (other than the Company) or shall have been set aside and segregated in
trust by the Company (if the Company shall act as its own paying agent);
provided that, if such Securities, or portions thereof, are to be redeemed
prior to maturity thereof, notice of such redemption shall have been given as
provided in Article XIV or provision satisfactory to the Trustee shall have
been made for giving such notice; and
(c) Securities in lieu of or in substitution for which
other Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.8 unless proof satisfactory to the Company and the Trustee
is presented that any such Securities are held by bona fide holders in due
course.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.8 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost,
destroyed or stolen Security.
"Principal Office of the Trustee", or other similar term, shall mean
the office of the Trustee, at which at any particular time its corporate trust
business shall be principally administered.
"Property Trustee" shall have the same meaning as set forth in the
Declaration.
"Purchase Agreement" shall mean the Purchase Agreement dated July 10,
1997 among the Company, SAFECO Trust and the initial purchasers named therein.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Redemption Price" means the Special Event Redemption Price or the
Optional Redemption Price, as the context requires.
"Reference Treasury Dealer" means (i) Xxxxx Xxxxxx Inc. and its
respective successors; provided, however, that if the foregoing shall cease to
be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the
Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date pursuant to Section 14.1, the average,
as determined by the Trustee, of the bid
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and asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer at 5:00 p.m., New York City time on the third
Business Day preceding such redemption date.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company, the SAFECO
Trust and the Initial Purchasers named therein as such agreement may be
amended, modified or supplemented from time to time.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any vice-president,
any assistant vice-president, any assistant secretary, the treasurer, any
assistant treasurer or other officer of the Corporate Trust Office of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Restricted Security" shall mean Securities that bear or are required
to bear the Securities Act legends set forth in Exhibit A hereto.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
"SAFECO Trust" shall mean SAFECO Capital Trust I, a Delaware business
trust created for the purpose of issuing its undivided beneficial interests in
connection with the issuance of Securities under this Indenture.
"Securities" means, collectively, the Series A Securities and the
Series B Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholder", "holder of Securities", or other similar terms,
shall mean any person in whose name at the time a particular Security is
registered on the register kept by the Company or the Trustee for that purpose
in accordance with the terms hereof.
"Security Register" shall mean (i) prior to a Dissolution Event, the
list of holders provided to the Trustee pursuant to Section 4.1, and (ii)
following a Dissolution Event, any security register maintained by a security
registrar for the Securities appointed by the Company following the execution
of a supplemental indenture providing for transfer procedures as provided for
in Section 2.7(a).
"Senior Indebtedness" shall mean, all Indebtedness for Money Borrowed,
whether outstanding on the date of execution of this Indenture or thereafter
created, assumed or incurred, unless the terms thereof specifically provide
that it is not superior in right of payment to the Securities, and any
deferrals, renewals or extensions thereof.
"Series A Securities" means the Company's 8.072% Series A Junior
Subordinated Deferrable Interest Debentures due July 15, 2037, as authenticated
and issued under this Indenture.
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"Series B Securities" means the Company's Series B 8.072% Junior
Subordinated Deferrable Interest Debentures due July 15, 2037, as authenticated
and issued under this Indenture.
"Special Event Redemption Price" shall mean, with respect to any
redemption of the Securities pursuant to Section 14.1 hereof, an amount in cash
equal to the greater of (i) 100% of the principal amount to be redeemed or (ii)
the sum, as determined by a Quotation Agent, of the present values of the
remaining scheduled payments of principal and interest on the Securities to the
Maturity Date, together with scheduled payments of interest on the Securities
from the redemption date to and including the Initial Optional Redemption Date,
discounted to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus,
in each case, any accrued and unpaid interest thereon, including Compounded
Interest and Additional Interest, if any, to the date of such redemption.
"Subsidiary" shall mean with respect to any Person, (i) any
corporation at least a majority of whose outstanding voting stock is owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries,
or by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be owned by such
Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries and (iii) any limited partnership of which such Person
or any of its Subsidiaries is a general partner. For the purposes of this
definition, "voting stock" means shares, interests, participations or other
equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the
equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.
"Tax Event" shall mean the receipt by SAFECO Trust and the Company of
an opinion of counsel experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the United States or any
political subdivision or taxing authority thereof or therein or any amendment
to or change in an interpretation or application of such laws or regulations by
any legislative body, court, governmental agency or regulatory agency, which
amendment or change is effective or announced after the Issue Date (including
the enactment of any legislation and the publication of any judicial decision
or regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the SAFECO Trust would be subject to United States
federal income tax with respect to income received or accrued on the Securities
(ii) interest payable to the SAFECO Trust on the Securities would not be
deductible by the Company for United States federal income tax purposes or
(iii) the SAFECO Trust will be subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder. The term
"Trustee" as used with respect to a particular series of the Securities shall
mean the trustee with respect to that series.
"Trust Indenture Act of 1939" shall mean the Trust Indenture Act of
1939 as in force at the date of execution of this Indenture, except as provided
in Section 9.3.
"Trust Securities" shall mean the Capital Securities and the Common
Securities, collectively.
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"U.S. Government Obligations" shall mean securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (i) or (ii) are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or
trust company as custodian with respect to any such U.S. Government Obligation
or a specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
ARTICLE II
SECURITIES
2.1 FORMS GENERALLY
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A, the terms of which are incorporated
in and made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject or usage. Each Security shall be dated the date
of its authentication. The Securities shall be issued in denominations of
$1,000 and integral multiples thereof.
2.2 EXECUTION AND AUTHENTICATION
Two Officers shall sign the Securities for the Company by manual or
facsimile signature in the manner set forth in Exhibit A. If an Officer whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Trustee. The signature of the
Trustee shall be conclusive evidence that the Security has been authenticated
under this Indenture. The form of Trustee's certificate of authentication to
be borne by the Securities shall be substantially as set forth in Exhibit A
hereto.
The Trustee shall, upon a Company Order, authenticate for original
issue up to, and the aggregate principal amount of Securities outstanding at
any time may not exceed the sum of $850,000,000 principal amount of the
Securities, except as provided in Sections 2.7, 2.8, 2.9 and 14.5. The series
of Securities to be initially issued hereunder shall be the Series A
Securities.
2.3 FORM AND PAYMENT
Except as provided in Section 2.5, the Securities shall be issued in
fully registered certificated form without interest coupons. Principal of,
premium, if any, and interest on the Securities issued in certificated form
will be payable, the transfer of such Securities will be registrable and such
Securities
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will be exchangeable for Securities bearing identical terms and provisions at
the office or agency of the Company maintained for such purpose under Section
3.2; provided, however, that payment of interest with respect to the Securities
may be made at the option of the Company (i) by check mailed to the holder at
such address as shall appear in the Security Register or (ii) by transfer to an
account maintained by the Person entitled thereto, provided that proper
transfer instructions have been received in writing by the relevant record
date. Notwithstanding the foregoing, so long as the holder of any Securities
is the Property Trustee, the payment of the principal of, premium, if any, and
interest (including Compounded Interest and Additional Interest, if any) on
such Securities held by the Property Trustee will be made at such place and to
such account as may be designated by the Property Trustee.
2.4 LEGENDS
(a) Except as permitted by subsection (b) of this Section 2.4 or
as otherwise determined by the Company in accordance with applicable law, each
Security shall bear the applicable legends relating to restrictions on transfer
pursuant to the securities laws in substantially the form set forth on Exhibit
A hereto.
(b) The Company shall issue and the Trustee shall authenticate
Series B Securities in exchange for Series A Securities accepted for exchange
in the Exchange Offer, which Series B Securities shall not bear the legends
required by subsection (a) above, in each case unless the holder of such Series
A Securities is either (A) a broker-dealer who purchased such Series A
Securities directly from the Company for resale pursuant to Rule 144A or any
other available exemption under the Securities Act, (B) a Person participating
in the distribution of the Series A Securities or (C) a Person who is an
affiliate (as defined in Rule 144 under the Securities Act) of the Company.
2.5 GLOBAL SECURITY
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in book-entry
form, the related Definitive Securities shall be presented to the Trustee (if
an arrangement with the Depositary has been maintained) by the Property Trustee
in exchange for one or more Global Securities (as may be required pursuant to
Section 2.7) in an aggregate principal amount equal to the aggregate principal
amount of all outstanding Securities, to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the Depositary for
crediting to the accounts of its participants pursuant to the instructions of
the Administrative Trustees; the Company upon any such presentation shall
execute one or more Global Securities in such aggregate principal amount and
deliver the same to the Trustee for authentication and delivery in accordance
with this Indenture; and payments on the Securities issued as a Global Security
will be made to the Depositary; and
(ii) if any Capital Securities are held in certificated
form, the related Definitive Securities may be presented to the Trustee by the
Property Trustee and any Capital Security certificate which represents Capital
Securities other than Capital Securities in book- entry form ("Non Book-Entry
Capital Securities") will be deemed to represent beneficial interests in
Securities presented to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the Non
Book-Entry Capital Securities until such Capital Security certificates are
presented to the Security registrar for transfer or reissuance, at which time
such Capital Security
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certificates will be cancelled and a Security, registered in the name of the
holder of the Capital Security certificate or the transferee of the holder of
such Capital Security certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Capital
Security certificate cancelled, will be executed by the Company and delivered
to the Trustee for authentication and delivery in accordance with the
Indenture. Upon the issuance of such Securities, Securities with an equivalent
aggregate principal amount that were presented by the Property Trustee to the
Trustee will be deemed to have been cancelled.
(b) The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; provided, that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee, in accordance with instructions given by
the Company as required by this Section 2.5.
(c) The Global Securities may be transferred, in whole but not in
part, only to the Depositary, another nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a nominee of
such successor Depositary.
(d) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or the Depositary has ceased to
be a clearing agency registered under the Exchange Act, and a successor
Depositary is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as the case may be,
the Company will execute, and the Trustee, upon written notice from the
Company, will authenticate and make available for delivery the Definitive
Securities, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such
Global Security. If there is an Event of Default, the Depositary shall have
the right to exchange the Global Securities for Definitive Securities. In
addition, the Company may at any time determine that the Securities shall no
longer be represented by a Global Security. In the event of such an Event of
Default or such a determination, the Company shall execute, and subject to
Section 2.7, the Trustee, upon receipt of an Officers' Certificate evidencing
such determination by the Company, will authenticate and make available for
delivery the Definitive Securities, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global
Security, in exchange for such Global Security. Upon the exchange of the
Global Security for such Definitive Securities, in authorized denominations,
the Global Security shall be cancelled by the Trustee. Such Definitive
Securities issued in exchange for the Global Security shall be registered in
such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Definitive Securities to
the Depositary for delivery to the Persons in whose names such Definitive
Securities are so registered.
2.6 INTEREST
(a) Each Security will bear interest at the rate of 8.072% per
annum from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for, from the
Issue Date, until the principal thereof becomes due and payable, and at the
rate of 8.072% per annum on any overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under applicable law)
on any overdue installment of interest, compounded semi-annually, payable
(subject to the provisions of Article XVI) semi-annually in arrears on
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January 15 and July 15 of each year (each, an "Interest Payment Date")
commencing on January 15, 1998, to the Person in whose name such Security or
any Predecessor Security is registered, at the close of business on the regular
record date for such interest installment, which shall be the fifteenth day of
the month immediately preceding the month in which the relevant Interest
Payment Date occurs.
(b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days lapsed in such month. In the event that any
Interest Payment Date falls on a day that is not a Business Day, then payment
of interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), with the same force and effect as if made on such date.
(c) During such time as the Property Trustee is the holder of any
Securities, the Company shall pay any additional amounts on the Securities as
may be necessary in order that the amount of Distributions then due and payable
by the SAFECO Trust on the outstanding Capital Securities shall not be reduced
as a result of any additional taxes, duties and other governmental charges to
which the SAFECO Trust has become subject as a result of a Tax Event
("Additional Interest").
(d) Notwithstanding Section 2.6(c) above, neither the Company nor
the Trust will be responsible for, nor will the Company or the Trust be
required to compensate holders of or investors in the Capital Securities (or
Securities that may be distributed by the Trust) for, any withholding taxes
that are imposed on interest payments on the Securities or on distributions
with respect to the Capital Securities.
2.7 TRANSFER AND EXCHANGE
(a) Transfer Restrictions. The Series A Securities, and those
Series B Securities with respect to which any Person described in Section
2.4(b)(A), (B) or (C) is the beneficial owner, may not be transferred except in
compliance with the legend contained in Exhibit A unless otherwise determined
by the Company in accordance with applicable law. Upon any distribution of the
Securities following a Dissolution Event, the Company and the Trustee shall
enter into a supplemental indenture pursuant to Section 9.1 to provide for the
transfer restrictions and procedures with respect to the Securities
substantially similar to those contained in the Declaration to the extent
applicable in the circumstances existing at such time.
(b) General Provisions Relating to Transfers and Exchanges. Upon
surrender for registration of transfer of any Security at the office or agency
of the Company maintained for the purpose pursuant to Section 3.2, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the
same series, of any authorized denominations and of a like aggregate principal
amount.
At the option of the holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the holder making the exchange is entitled to
receive.
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Every Security presented or surrendered for registration of transfer
or exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security registrar duly executed by the
holder thereof or such holder's attorney duly authorized in writing.
All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Securities or Global Securities surrendered upon such registration of transfer
or exchange.
No service charge shall be made to a holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith.
The Company shall not be required to (i) issue, register the transfer
of or exchange Securities during a period beginning at the opening of business
15 days before the day of mailing of a notice of redemption or any notice of
selection of Securities for redemption under Article XIV hereof and ending at
the close of business on the day of such mailing; or (ii) register the transfer
of or exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.
(c) Exchange of Series A Securities for Series B Securities. The
Series A Securities may be exchanged for Series B Securities pursuant to the
terms of the Exchange Offer. The Trustee shall make the exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Securities, the
transactions contemplated by the Exchange Offer have been consummated; and
(B) the principal amount of Series A Securities properly
tendered in the Exchange Offer that are represented by a Global Security and
the principal amount of Series A Securities properly tendered in the Exchange
Offer that are represented by Definitive Securities, the name of each holder of
such Definitive Securities, the principal amount properly tendered in the
Exchange Offer by each such holder and the name and address to which Definitive
Securities for Series B Securities shall be registered and sent for each such
holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Securities have been
registered under Section 5 of the Securities Act and the Indenture has been
qualified under the Trust Indenture Act and (y) with respect to the matters set
forth in Section 3(p) of the Registration Rights Agreement and (iii) a Company
Order, shall authenticate (A) a Global Security for Series B Securities in
aggregate principal amount equal to the aggregate principal amount of Series A
Securities represented by a Global Security indicated in such Officers'
Certificate as having been properly tendered and (B) Definitive Securities
representing Series B Securities registered in the names of, and in the
principal amounts indicated in, such Officers' Certificate.
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If the principal amount of the Global Security for the Series B
Securities is less than the principal amount of the Global Security for the
Series A Securities, the Trustee shall make an endorsement on such Global
Security for Series A Securities indicating a reduction in the principal amount
represented thereby.
The Trustee shall deliver such Definitive Securities for Series B
Securities to the holders thereof as indicated in such Officers' Certificate.
2.8 REPLACEMENT SECURITIES
If any mutilated Security is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
for replacements of Securities are met. An indemnity bond must be supplied by
the holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any agent thereof or any authenticating agent
from any loss that any of them may suffer if a Security is replaced. The
Company or the Trustee may charge for its expenses in replacing a Security.
Every replacement Security is an obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
2.9 TEMPORARY SECURITIES
Pending the preparation of Definitive Securities, the Company may
execute, and upon receipt of a Company Order the Trustee shall authenticate and
make available for delivery, temporary Securities that are printed,
lithographed, typewritten or otherwise reproduced, in any authorized
denomination, substantially of the tenor of the Definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company shall cause Definitive
Securities to be prepared without unreasonable delay. The Definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
officers executing such Definitive Securities. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at the office
or agency maintained by the Company for such purpose pursuant to Section 3.2
hereof, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities, the Company shall execute, and the Trustee
shall authenticate and make available for delivery, in exchange therefor the
same aggregate principal amount of Definitive Securities of authorized
denominations. Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Securities.
2.10 CANCELLATION
The Company at any time may deliver Securities to the Trustee for
cancellation. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall retain or dispose of cancelled Securities in accordance
with its
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normal practices (subject to the record retention requirement of the Exchange
Act) unless the Company directs them to be returned to it. The Company may not
issue new Securities to replace Securities that have been redeemed or paid or
that have been delivered to the Trustee for cancellation.
2.11 DEFAULTED INTEREST
Any interest on any Security that 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 shall be paid by the Company, at its election, as provided
in clause (a) or clause (b) below:
(a) The Company may make payment of any Defaulted Interest on
Securities to the Persons in whose names such Securities (or their respective
Predecessor Securities) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner: the Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each such Security 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 record date for the payment of such
Defaulted Interest which shall not be more than 15 nor less than 10 days prior
to the date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at his or her address as it
appears in the Security Register, not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names such Securities (or their
respective Predecessor Securities) are registered on such special record date
and shall be no longer payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on any
Securities in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities 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.
2.12. CUSIP NUMBERS
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Securityholders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
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ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
3.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST
The Company covenants and agrees for the benefit of the holders of the
Securities that it will duly and punctually pay or cause to be paid the
principal of and premium, if any, and interest on the Securities at the place,
at the respective times and in the manner provided herein. Except as provided
in Section 2.3, each installment of interest on the Securities may be paid by
mailing checks for such interest payable to the order of the holders of the
Securities entitled thereto as they appear in the Security Register. The
Company further covenants to pay any and all amounts including, without
limitation, Liquidated Damages, if any, on the dates and in the manner required
under the Registration Rights Agreement.
3.2 OFFICES FOR NOTICES AND PAYMENTS, ETC.
So long as any of the Securities remain outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where the Securities may be presented for payment, an office or agency where
the Securities may be presented for registration of transfer and for exchange
as in this Indenture provided and an office or agency where notices and demands
to or upon the Company in respect of the Securities or of this Indenture may be
served. The Company will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. Until
otherwise designated from time to time by the Company in a notice to the
Trustee, any such office or agency for all of the above purposes shall be the
Principal Office of the Trustee. In case the Company shall fail to maintain
any such office or agency in the Borough of Manhattan, The City of New York, or
shall fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at the
Principal Office of the Trustee.
In addition to any such office or agency, the Company may from time to
time designate one or more offices or agencies outside the Borough of
Manhattan, The City of New York, where the Securities may be presented for
payment, registration of transfer and for exchange in the manner provided in
this Indenture, and the Company may from time to time rescind such designation,
as the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City of New York, for the purposes above mentioned. The Company will give
to the Trustee prompt written notice of any such designation or rescission
thereof.
3.3 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 6.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
3.4 Provision as to Paying Agent
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(a) If the Company shall appoint a paying agent other than the
Trustee with respect to the Securities, it will cause such paying agent to
execute and deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provision of this Section 3.4,
(1) that it will hold all sums held by it as such agent
for the payment of the principal of and premium, if any, or interest on the
Securities (whether such sums have been paid to it by the Company or by any
other obligor on the Securities of such series) in trust for the benefit of the
holders of the Securities;
(2) that it will give the Trustee notice of any failure
by the Company (or by any other obligor on the Securities) to make any payment
of the principal of and premium or interest on the Securities when the same
shall be due and payable; and
(3) that it will at any time during the continuance of
any such failure, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by it as such paying agent.
(b) If the Company shall act as its own paying agent, it will, on
or before each due date of the principal of and premium, if any, or interest on
the Securities, set aside, segregate and hold in trust for the benefit of the
holders of the Securities a sum sufficient to pay such principal, premium or
interest so becoming due and will notify the Trustee of any failure to take
such action and of any failure by the Company (or by any other obligor under
the Securities) to make any payment of the principal of and premium, if any, or
interest on the Securities when the same shall become due and payable.
(c) Anything in this Section 3.4 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Securities hereunder, or for any other reason,
pay or cause to be paid to the Trustee all sums held in trust for any such
series by the Trustee or any paying agent hereunder, as required by this
Section 3.4, such sums to be held by the Trustee upon the trusts herein
contained.
(d) Anything in this Section 3.4 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 3.4 is subject
to Sections 11.3 and 11.4.
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3.5 CERTIFICATE TO TRUSTEE
The Company will deliver to the Trustee on or before 120 days after
the end of each fiscal year, commencing with the first fiscal year ending after
the date hereof, so long as Securities are outstanding hereunder, an Officers'
Certificate, one of the signers of which shall be the principal executive,
principal financial or principal accounting officer of the Company stating that
in the course of the performance by the signers of their duties as officers of
the Company they would normally have knowledge of any default by the Company in
the performance of any covenants contained herein, stating whether or not they
have knowledge of any such default and, if so, specifying each such default of
which the signers have knowledge and the nature thereof.
3.6 COMPLIANCE WITH CONSOLIDATION PROVISIONS
The Company will not, while any of the Securities remain outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other Person unless the provisions of
Article X hereof are complied with.
3.7 LIMITATION ON DIVIDENDS
The Company will not (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect
to, any of the Company's capital stock (which includes common and preferred
stock) or (ii) make any payment of principal, interest or premium, if any, on
or repay or repurchase or redeem any debt securities of the Company (including
any Other Debentures) that rank pari passu with or junior in right of payment
to the Securities or (iii) make any guarantee payments with respect to any
guarantee by the Company of any securities of any Subsidiary of the Company
(including any Other Guarantees) if such guarantee ranks pari passu or junior
in right of payment to the Securities (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, Common Stock of the Company; (b) any declaration of a
dividend in connection with the implementation of a shareholder's rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto; (c) payments under the
Capital Securities Guarantee; (d) as a direct result of, and only to the extent
required in order to avoid the issuance of fractional shares of capital stock,
following a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock; and (e) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged) if at such time (i) an Event of Default shall have
occurred and be continuing, (ii) there shall have occurred any event of which
the Company has actual knowledge that (a) is, or with the giving of notice or
the lapse of time, or both, would constitute an Event of Default and (b) in
respect of which the Company shall not have taken reasonable steps to cure,
(iii) the Company shall be in default with respect to its payment obligations
under the Capital Securities Guarantee or (iv) the Company shall have given
notice of its election of the exercise of its right to extend the interest
payment period, or any extension thereof, pursuant to Section 16.1 and shall
not have rescinded such notice, and such exercise of its right to extend the
interest payment period, or any extension thereof, shall have commenced.
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3.8 COVENANTS AS TO SAFECO TRUST
In the event Securities are issued to SAFECO Trust or a trustee of
such trust in connection with the issuance of Trust Securities by SAFECO Trust,
for so long as such Trust Securities remain outstanding, the Company will (i)
maintain 100% direct ownership of the Common Securities of SAFECO Trust;
provided, however, that any successor of the Company, permitted pursuant to
Article X, may succeed to the Company's ownership of such Common Securities,
(ii) not cause, as sponsor of SAFECO Trust or permit, as a holder of Common
Securities, the dissolution, winding up or termination of the Trust, except in
connection with a distribution of the Securities to holders of Trust
Securities, as provided in the Declaration; (iii) use its reasonable efforts to
cause SAFECO Trust (a) to remain a business trust, except in connection with a
distribution of Securities, the redemption of all of the Trust Securities or
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration and (b) to otherwise continue to be treated as a grantor trust and
not an association taxable as a corporation for United States federal income
tax purposes and (iv) use its reasonable efforts to cause each holder of Trust
Securities to be treated as owning an undivided beneficial interest in the
Securities.
3.9 PAYMENT OF EXPENSES
In connection with the offering, sale and issuance of the Securities
to the SAFECO Trust and in connection with the sale of the Trust Securities by
the SAFECO Trust, the Company, in its capacity as borrower with respect to the
Securities, shall:
(a) pay all costs and expenses relating to the offering,
sale and issuance of the Securities, including commissions to the initial
purchasers payable pursuant to the Purchase Agreement, fees and expenses in
connection with any exchange offer or other action to be taken pursuant to the
Registration Rights Agreement and compensation of the Trustee in accordance
with the provisions of Section 6.6;
(b) pay all costs and expenses of the SAFECO Trust
(including, but not limited to, costs and expenses relating to the organization
of the SAFECO Trust, the offering, sale and issuance of the Trust Securities
(including commissions to the initial purchasers payable pursuant to the
Purchase Agreement), the fees and expenses of the Property Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of the
SAFECO Trust, including without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying agent(s), registrar(s),
transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of assets of the SAFECO Trust;
(c) be primarily and fully liable for any indemnification
obligations arising with respect to the Declaration;
(d) pay any and all taxes (other than United States
withholding taxes attributable to the SAFECO Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the SAFECO Trust;
and
(e) pay all other fees, expenses, debts and obligations
(other than payments of principal of, premium, if any, or interest on the Trust
Securities) related to the SAFECO Trust.
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3.10 PAYMENT UPON RESIGNATION OR REMOVAL
Upon termination of this Indenture or the removal or resignation of
the Trustee, unless otherwise stated, the Company shall pay to the Trustee all
amounts accrued and owing to the date of such termination, removal or
resignation. Upon termination of the Declaration or the removal or resignation
of the Delaware Trustee or the Property Trustee, as the case may be, pursuant
to Section 5.7 of the Declaration, the Company shall pay to the Delaware
Trustee or the Property Trustee, as the case may be, all amounts accrued and
owing to the date of such termination, removal or resignation.
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
4.1 SECURITYHOLDERS' LISTS
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:
(a) on a semi-annual basis on each regular record date
for the Securities, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Securityholders as of such record date; 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 with respect to the Securityholders as of a
date not more than 15 days prior to the time such list is furnished, except
that, no such lists need be furnished so long as the Trustee is in possession
thereof by reason of its acting as Security registrar.
4.2 PRESERVATION AND DISCLOSURE OF LISTS
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, all information as to the names and addresses of the
holders of the Securities (1) contained in the most recent list furnished to it
as provided in Section 4.1 or (2) received by it in the capacity of Securities
registrar (if so acting) hereunder. The Trustee may destroy any list furnished
to it as provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more holders of Securities
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Securities or with holders of all Securities
with respect to their rights under this Indenture and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall within 5 Business Days after the receipt of
such application, at its election, either:
(1) afford such applicants access to the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, or
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(2) inform such applicants as to the approximate
number of holders of all Securities, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, and as to the approximate
cost of mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder whose name and address appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy or
other communication which is specified in such request with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders of
Securities of such series or all Securities, as the case may be, or would be in
violation of applicable law. Such written statement shall specify the basis of
such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies
of such material to all such Securityholders with reasonable promptness after
the entry of such order and the renewal of such tender; otherwise the Trustee
shall be relieved of any obligation or duty to such applicants respecting their
application.
(c) Each and every holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any paying agent shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the holders of Securities in accordance with the provisions of subsection
(b) of this Section 4.2, regardless of the source from which such information
was derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under said subsection (b).
4.3 REPORTS BY COMPANY
(a) The Company covenants and agrees to file with the Trustee,
within 15 days after the date on which the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as said Commission may from time to time by rules and regulations prescribe)
which the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of such
sections, then to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
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(b) The Company covenants and agrees to file with the Trustee and
the Commission, in accordance with the rules and regulations prescribed from
time to time by said Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to time
by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail to all
holders of Securities, as the names and addresses of such holders appear upon
the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to
be filed by the Company pursuant to subsections (a) and (b) of this Section 4.3
as may be required by rules and regulations prescribed from time to time by the
Commission.
(d) 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 hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(e) So long as is required for an offer or sale of the Securities
to qualify for an exemption under Rule 144A under the Securities Act, the
Company shall, upon request, provide the information required by clause (d)(4)
thereunder to each Holder and to each beneficial owner and prospective
purchaser of Securities identified by any holder of Restricted Securities,
unless such information is furnished to the Commission pursuant to Section 13
or 15(d) of the Exchange Act.
4.4 REPORTS BY THE TRUSTEE
(a) The Trustee shall transmit to Securityholders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the Trust Indenture Act,
the Trustee shall, within 60 days after each December 31 following the date of
this Indenture, commencing December 31, 1997, deliver to Securityholders a
brief report which complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange, if any, upon which the Securities are listed, with the Commission and
with the Company. The Company will promptly notify the Trustee when the
Securities are listed on any stock exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
5.1 EVENTS OF DEFAULT
One or more of the following events of default shall constitute an
"Event of Default" hereunder (whatever the reason for such Event of Default and
whether it shall be voluntary or be
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effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(a) default in the payment of any interest upon any
Security or any Other Debentures when it becomes due and payable, and
continuance of such default for a period of 30 days; provided, however, that a
valid extension of an interest payment period by the Company in accordance with
the terms hereof shall not constitute a default in the payment of interest for
this purpose; or
(b) default in the payment of all or any part of the
principal of (or premium, if any, on) any Security or any Other Debentures as
and when the same shall become due and payable either at maturity, upon
redemption, by declaration or otherwise; or
(c) 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), 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 aggregate principal amount of the outstanding
Securities 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
(d) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Company or for any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs and such decree or order shall remain unstayed and in effect for a
period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or of any substantial
part of its property, or shall make any general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due.
If an Event of Default with respect to Securities at the time
outstanding occurs and is continuing, then in every such case the Trustee or
the holders of not less than 25% in aggregate principal amount of the
Securities then outstanding may declare the principal amount of all Securities
to be due and payable immediately, by a notice in writing to the Company (and
to the Trustee if given by the holders of the outstanding Securities), 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 of the Securities shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, (i)
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
(A) all matured installments of interest upon all the Securities and the
principal of and premium, if any, on any and all Securities which shall have
become due otherwise than by acceleration (with interest upon such
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principal and premium, if any, 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 specified in the Securities to the date
of such payment or deposit) and (B) 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 (ii) any
and all Events of Default under the Indenture, other than the non-payment of
the principal of the Securities which shall have become due solely by such
declaration of acceleration, shall have been cured, waived or otherwise
remedied as provided herein, then, in every such case, the holders of a
majority in aggregate principal amount of the Securities then outstanding, by
written notice to the Company and to the Trustee, may rescind and annul such
declaration and its consequences, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right 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, the Trustee and the holders of the Securities shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the
Securities shall continue as though no such proceeding had been taken.
5.2 PAYMENT OF SECURITIES ON DEFAULT; SUIT THEREFOR
The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Securities as and when
the same shall become due and payable, and such default shall have continued
for a period of 30 days, or (b) in case default shall be made in the payment of
the principal of or premium, if any, on any of the Securities as and when the
same shall have become due and payable, whether at maturity of the Securities
or upon redemption or by declaration or otherwise, then, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Securities, the whole amount that then shall have become due and payable on
all such Securities for principal and premium, if any, or interest, or both, as
the case may be, with interest upon the overdue principal and premium, if any,
and (to the extent that payment of such interest is enforceable under
applicable law and, if the Securities are held by SAFECO Trust or a trustee of
such trust, without duplication of any other amounts paid by SAFECO Trust or a
trustee in respect thereof) upon the overdue installments of interest at the
rate borne by the Securities; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than
through its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Securities and collect in the manner provided by law out of the property of the
Company or any other obligor on the Securities wherever situated the moneys
adjudged or decreed to be payable.
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In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Securities under
Xxxxx 00, Xxxxxx Xxxxxx Code, or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the Company
or such other obligor, or in the case of any other similar judicial proceedings
relative to the Company or other obligor upon the Securities, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 5.2, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of the principal, premium, if any, and interest owing and unpaid in
respect of the Securities and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee, except as a result of negligence or bad faith) and of the
Securityholders allowed in such judicial proceedings relative to the Company or
any other obligor on the Securities, or to the creditors or property of the
Company or such other obligor, unless prohibited by applicable law and
regulations, to vote on behalf of the holders of the Securities in any election
of a trustee or a standby trustee in arrangement, reorganization, liquidation
or other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses; and any receiver,
assignee or trustee in bankruptcy or reorganization is hereby authorized by
each of the Securityholders 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 Securityholders, to pay to the Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Trustee, each predecessor Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith.
Nothing herein contained shall be construed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any holder thereof or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof on any trial or
other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall be for the ratable benefit of the holders of
the Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Securities, and it shall not be necessary to make any holders of
the Securities parties to any such proceedings.
5.3 APPLICATION OF MONEYS COLLECTED BY TRUSTEE
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Any moneys collected by the Trustee shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the Securities in respect of which moneys
have been collected, and stamping thereon the payment, if only partially paid,
and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection applicable
to the Securities and reasonable compensation to the Trustee, its agents,
attorneys and counsel, and of all other expenses and liabilities incurred, and
all advances made, by the Trustee except as a result of its negligence or bad
faith;
Second: To the payment of all Senior Indebtedness of the Company if
and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon
Securities for principal of (and premium, if any) and interest on the
Securities, in respect of which or for the benefit of which money has been
collected, ratably, without preference of priority of any kind, according to
the amounts due on such Securities for principal (and premium, if any) and
interest, respectively; and
Fourth: To the Company.
5.4 PROCEEDINGS BY SECURITYHOLDERS
No holder of any Security shall have any right by virtue of or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof with
respect to the Securities specifying such Event of Default, as hereinbefore
provided, and unless also the holders of not less than 25% in aggregate
principal amount of the Securities then outstanding shall have made written
request upon the Trustee to institute such action, suit or proceeding in its
own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action, suit or proceeding, it being understood
and intended, and being expressly covenanted by the taker and holder of every
Security with every other taker and holder and the Trustee, that no one or more
holders of Securities shall have any right in any manner whatever by virtue of
or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any other holder of Securities, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Securities.
Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Security to receive payment of the principal of
(premium, if any) and interest on such Security, on or after the same shall
have become due and payable, or to institute suit for the enforcement of any
such payment, shall not be impaired or affected without the consent of such
holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security with every
other such taker and holder and the Trustee, that no one or more holders of
Securities shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of the holders of any other Securities, or to
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obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of
Securities. For the protection and enforcement of the provisions of this
Section, each and every Securityholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
The Company and the Trustee acknowledge that pursuant to the
Declaration, the holders of Capital Securities are entitled, in the
circumstances and subject to the limitations set forth therein, to commence a
Direct Action with respect to any Event of Default under this Indenture and the
Securities.
5.5 PROCEEDINGS BY TRUSTEE
In case an Event of Default occurs with respect to Securities and is
continuing, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either by suit in equity or by action at law or by proceeding
in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in this Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
5.6 REMEDIES CUMULATIVE AND CONTINUING
All powers and remedies given by this Article V to the Trustee or to
the Securityholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any other powers and remedies available to the Trustee or
the holders of the Securities, by judicial proceedings or otherwise, to enforce
the performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to the Securities, and no delay
or omission of the Trustee or of any holder of any of the Securities to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.4, every power and remedy given by this
Article V or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Securityholders.
5.7 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF
SECURITYHOLDERS
The holders of a majority in aggregate principal amount of the
Securities at the time outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that (subject to the provisions of Section 6.1) the Trustee shall have
the right to decline to follow any such direction if the Trustee shall
determine that the action so directed would be unjustly prejudicial to the
holders not taking part in such direction or if the Trustee being advised by
counsel determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith by its board of directors or trustees,
executive committee, or a trust committee of directors or trustees and/or
Responsible Officers shall determine that the action or proceedings so directed
would involve the Trustee in personal liability. Prior to any declaration
accelerating the maturity of the Securities, the holders of a majority in
aggregate principal amount of the Securities at
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the time outstanding may on behalf of the holders of all of the Securities
waive any past default or Event of Default and its consequences except a
default (a) in the payment of principal of or premium, if any, or interest on
any of the Securities or (b) in respect of covenants or provisions hereof which
cannot be modified or amended without the consent of the holder of each
Security affected; provided, however, that if the Securities are held by the
Property Trustee, such waiver or modification to such waiver shall not be
effective until the holders of a majority in aggregate liquidation amount of
Trust Securities shall have consented to such waiver or modification to such
waiver; provided further, that if the consent of the holder of each outstanding
Security is required, such waiver shall not be effective until each holder of
the Trust Securities shall have consented to such waiver. Upon any such
waiver, the default covered thereby shall be deemed to be cured for all
purposes of this Indenture and the Company, the Trustee and the holders of the
Securities 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. Whenever any default or Event
of Default hereunder shall have been waived as permitted by this Section 5.7,
said default or Event of Default shall for all purposes of the Securities and
this Indenture be deemed to have been cured and to be not continuing.
5.8 NOTICE OF DEFAULTS
The Trustee shall, within 90 days after the occurrence of a default
with respect to the Securities mail to all Securityholders, as the names and
addresses of such holders appear upon the Security register, notice of all
defaults known to the Trustee, unless such defaults shall have been cured
before the giving of such notice (the term "defaults" for the purpose of this
Section 5.8 being hereby defined to be the events specified in clauses (a),
(b), (c), (d) and (e) of Section 5.1, not including periods of grace, if any,
provided for therein, and irrespective of the giving of written notice
specified in clause (c) of Section 5.1); and provided that, except in the case
of default in the payment of the principal of or premium, if any, or interest
on any of the Securities, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of the
Securityholders; and provided further, that in the case of any default of the
character specified in Section 5.1(c) no such notice to Securityholders shall
be given until at least 60 days after the occurrence thereof but shall be given
within 90 days after such occurrence.
5.9 UNDERTAKING TO PAY COSTS
All parties to this Indenture agree, and each holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken
or omitted by it as Trustee, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.9 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in aggregate principal
amount of the Securities outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security against the Company on or after
the same shall have become due and payable.
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ARTICLE VI
CONCERNING THE TRUSTEE
6.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE
With respect to the holders of the Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default has occurred (which has not been cured
or waived) the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default which may have occurred
(1) the duties and obligations of the Trustee
shall be determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and
(2) in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.7, relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
6.2 RELIANCE ON DOCUMENTS, OPINIONS, ETC.
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Except as otherwise provided in Section 6.1:
(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, consent, order, bond, note,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the
Company mentioned herein may be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein specifically
prescribed), and any Board Resolution may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection
and any advice or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered to be taken or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders, pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture; nothing
contained herein shall, however, relieve the Trustee of the obligation, upon
the occurrence of an Event of Default (that has not been cured or waived), to
exercise such of the rights and powers vested in it by this Indenture, and to
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, coupon or other paper or document, unless requested
in writing to do so by the holders of a majority in aggregate principal amount
of the outstanding Securities; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it
by the terms of this Indenture, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents (including any Authenticating Agent) or attorneys, and the Trustee shall
not be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed by it with due care.
6.3 NO RESPONSIBILITY FOR RECITALS, ETC.
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The recitals contained herein and in the Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent) shall
be taken as the statements of the Company and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the same.
The Trustee and the Authenticating Agent make no representations as to the
validity or sufficiency of this Indenture or of the Securities. The Trustee
and the Authenticating Agent shall not be accountable for the use or
application by the Company of any Securities or the proceeds of any Securities
authenticated and delivered by the Trustee or the Authenticating Agent in
conformity with the provisions of this Indenture.
6.4 TRUSTEE, AUTHENTICATING AGENT, PAYING AGENTS, TRANSFER AGENTS OR
REGISTRAR MAY OWN SECURITIES
The Trustee or any Authenticating Agent or any paying agent or any
transfer agent or any Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it
would have if it were not Trustee, Authenticating Agent, paying agent, transfer
agent or Security registrar.
6.5 MONEYS TO BE HELD IN TRUST
Subject to the provisions of Section 11.4, all moneys received by the
Trustee or any paying agent shall, until used or applied as herein provided, be
held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
and any paying agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the
Company. So long as no Event of Default shall have occurred and be continuing,
all interest allowed on any such moneys shall be paid from time to time upon
the written order of the Company, signed by the Chairman of the Board of
Directors, the President, the Chief Financial Officer or a Vice President or
the Treasurer or an Assistant Treasurer of the Company.
6.6 COMPENSATION AND EXPENSES OF TRUSTEE
The Company, as borrower, covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing between the Company and the Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and the Company will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify each of the
Trustee or any predecessor Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense including taxes (other than taxes based on the
income of the Trustee) incurred without negligence or bad faith on the part of
the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises. The obligations of the
Company under this Section 6.6 to compensate and indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness
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shall be secured by a lien prior to that of the Securities upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Securities.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d) or Section
5.1(e), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
6.7 OFFICERS' CERTIFICATE AS EVIDENCE
Except as otherwise provided in Sections 6.1 and 6.2, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or omitting any action hereunder, such matter (unless other evidence in respect
thereof is herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted
by it under the provisions of this Indenture upon the faith thereof.
6.8 CONFLICTING INTEREST OF TRUSTEE
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
6.9 ELIGIBILITY OF TRUSTEE
The Trustee hereunder shall at all times be a corporation organized
and doing business under the laws of the United States of America or any state
or territory thereof or of the District of Columbia or a corporation or other
Person permitted to act as trustee by the Commission authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000) and subject to supervision or
examination by federal, state, territorial, or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 6.9 the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.9, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
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6.10 RESIGNATION OR REMOVAL OF TRUSTEE
(a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign by giving written notice of such resignation to the
Company and by mailing notice thereof to the holders of the Securities at their
addresses as they shall appear on the Security register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
or trustees by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 60 days after the mailing of such notice of
resignation to the Securityholders, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee, or
any Securityholder who has been a bona fide holder of a Security for at least
six months may, subject to the provisions of Section 5.9, on behalf of himself
and all others similarly situated, petition any such court for the appointment
of a successor trustee. Such court may thereupon, after such notice, if any,
as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions
of Section 6.8 after written request therefor by the Company or by any
Securityholder who has been a bona fide holder of a Security or Securities for
at least six months, or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and shall fail to resign after written
request therefor by the Company or by any such Securityholder, 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 Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, the
Company may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee, or, subject to
the provisions of Section 5.9, any Securityholder who has been a bona fide
holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after such nomination the Company objects thereto
or if no successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after such removal, in which case the Trustee so
removed or any Securityholder, upon the terms and conditions and otherwise as
in subsection (a) of this Section 6.10 provided, may petition any court of
competent jurisdiction for an appointment of a successor trustee.
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(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 6.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.11.
6.11 ACCEPTANCE BY SUCCESSOR TRUSTEE
Any successor trustee appointed as provided in Section 6.10 shall
execute, acknowledge and deliver to the Company and to its predecessor trustee
an instrument accepting such appointment hereunder, 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, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee herein; but,
nevertheless, on the written request of the Company or of the successor
trustee, the trustee ceasing to act shall, upon payment of any amounts then due
it pursuant to the provisions of Section 6.6, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act and shall duly assign, transfer and deliver to such successor
trustee all property and money held by such retiring trustee thereunder. Upon
request of any such successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming
to such successor trustee all such rights and powers. Any trustee ceasing to
act shall, nevertheless, retain a lien upon all property or funds held or
collected by such trustee to secure any amounts then due it pursuant to the
provisions of Section 6.6.
No successor trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 6.8 and eligible under the
provisions of Section 6.9.
Upon acceptance of appointment by a successor trustee as provided in
this Section 6.11, the Company shall mail notice of the succession of such
trustee hereunder to the holders of Securities at their addresses as they shall
appear on the Security Register. If the Company fails to mail such notice
within 10 days after the acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of
the Company.
6.12 SUCCESSION BY MERGER, ETC.
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 of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
the successor trustee; and in all such cases such certificates shall have the
full force which the Securities or this Indenture elsewhere provides that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of
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any predecessor Trustee or authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
6.13 LIMITATION ON RIGHTS OF TRUSTEE AS A CREDITOR
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
6.14 AUTHENTICATING AGENTS
There may be one or more Authenticating Agents appointed by the
Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentication and delivery of Securities
issued upon exchange or transfer thereof as fully to all intents and purposes
as though any such Authenticating Agent had been expressly authorized to
authenticate and deliver Securities; provided, that the Trustee shall have no
liability to the Company for any acts or omissions of the Authenticating Agent
with respect to the authentication and delivery of Securities. Any such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States or of any state or territory
thereof or of the District of Columbia authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of at least
$5,000,000 and being subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such corporation publishes
reports of condition at least annually pursuant to law or the requirements of
such authority, then for the purposes of this Section 6.14 the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If
at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the
successor of such Authenticating Agent hereunder, if such successor corporation
is otherwise eligible under this Section 6.14 without the execution or filing
of any paper or any further act on the part of the parties hereto or such
Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at
any time terminate the agency of any Authenticating Agent by giving written
notice of termination 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 any Authenticating Agent shall cease to be eligible under this
Section 6.14, the Trustee may, and upon the request of the Company shall,
promptly appoint a successor Authenticating Agent eligible under this Section
6.14, shall give written notice of such appointment to the Company and shall
mail notice of such appointment to all Securityholders as the names and
addresses of such holders appear on the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent
herein.
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The Company, as borrower, agrees to pay to any Authenticating Agent
from time to time reasonable compensation for its services. Any Authenticating
Agent shall have no responsibility or liability for any action taken by it as
such in accordance with the directions of the Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
7.1 ACTION BY SECURITYHOLDERS
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Securities may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the holders of such specified percentage
have joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by such Securityholders in person or by
agent or proxy appointed in writing, or (b) by the record of such holders of
Securities voting in favor thereof at any meeting of such Securityholders duly
called and held in accordance with the provisions of Article VIII, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of such Securityholders.
If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or
other action or to revoke any such action, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
may be given before or after the record date, but only the Securityholders of
record at the close of business on the record date shall be deemed to be
Securityholders for the purposes of determining whether Securityholders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Outstanding Securities shall
be computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
7.2 PROOF OF EXECUTION BY SECURITYHOLDERS
Subject to the provisions of Sections 6.1, 6.2 and 8.5, proof of the
execution of any instrument by a Securityholder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The ownership of Securities shall be proved by the Security
Register or by a certificate of the Security registrar. The Trustee may
require such additional proof of any matter referred to in this Section as it
shall deem necessary.
The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.6.
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7.3 WHO ARE DEEMED ABSOLUTE OWNERS
Prior to due presentment for registration of transfer of any Security,
the Company, the Trustee, any Authenticating Agent, any paying agent, any
transfer agent and any Security registrar may deem the person in whose name
such Security shall be registered upon the Security Register to be, and may
treat him or her as, the absolute owner of such Security (whether or not such
Security shall be overdue) for the purpose of receiving payment of or on
account of the principal of and premium, if any, and (subject to Section 2.6)
interest on such Security and for all other purposes; and neither the Company
nor the Trustee nor any Authenticating Agent nor any paying agent nor any
transfer agent nor any Security registrar shall be affected by any notice to
the contrary. All such payments so made to any holder for the time being or
upon his order shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Security.
7.4 SECURITIES OWNED BY COMPANY DEEMED NOT OUTSTANDING
In determining whether the holders of the requisite aggregate
principal amount of Securities have concurred in any direction, consent or
waiver under this Indenture, Securities which are owned by the Company or any
other obligor on the Securities or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any other obligor on the Securities shall be disregarded and
deemed not to be outstanding for the purpose of any such determination;
provided that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver, only Securities
which the Trustee actually knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section 7.4 if the pledgee shall establish
to the satisfaction of the Trustee the pledgee's right to vote such Securities
and that the pledgee is not the Company or any such other obligor or person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor. In the case of a
dispute as to such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee.
7.5 REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.1, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor),
subject to Section 7.1, the serial number of which is shown by the evidence to
be included in the Securities the holders of which have consented to such
action may, by filing written notice with the Trustee at its principal office
and upon proof of holding as provided in Section 7.2, revoke such action so far
as concerns such Security (or so far as concerns the principal amount
represented by any exchanged or substituted Security). Except as aforesaid any
such action taken by the holder of any Security shall be conclusive and binding
upon such holder and upon all future holders and owners of such Security, and
of any Security issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon such Security or any
Security issued in exchange or substitution therefor.
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ARTICLE VIII
SECURITYHOLDERS' MEETINGS
8.1 PURPOSES OF MEETINGS
A meeting of Securityholders may be called at any time and from time
to time pursuant to the provisions of this Article VIII for any of the
following purposes:
(a) to give any notice to the Company or to the Trustee,
or to give any directions to the Trustee, or to consent to the waiving of any
default hereunder and its consequences, or to take any other action authorized
to be taken by Securityholders pursuant to any of the provisions of Article V;
(b) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article VI;
(c) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section 9.2; or
(d) to take any other action authorized to be taken by or
on behalf of the holders of any specified aggregate principal amount of such
Securities under any other provision of this Indenture or under applicable law.
8.2 CALL OF MEETINGS BY TRUSTEE
The Trustee may at any time call a meeting of Securityholders to take
any action specified in Section 8.1, to be held at such time and at such place
in the Borough of Manhattan, The City of New York, as the Trustee shall
determine. Notice of every meeting of the Securityholders, 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 mailed to holders of Securities at their
addresses as they shall appear on the Securities Register. Such notice shall
be mailed not less than 20 nor more than 180 days prior to the date fixed for
the meeting.
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8.3 CALL OF MEETINGS BY COMPANY OR SECURITYHOLDERS
In case at any time the Company pursuant to a resolution of the Board
of Directors, or the holders of at least 10% in aggregate principal amount of
the Securities then outstanding, shall have requested the Trustee to call a
meeting of Securityholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall
not have mailed the notice of such meeting within 20 days after receipt of such
request, then the Company or such Securityholders may determine the time and
the place in said Borough of Manhattan for such meeting and may call such
meeting to take any action authorized in Section 8.1, by mailing notice thereof
as provided in Section 8.2.
8.4 QUALIFICATIONS FOR VOTING
To be entitled to vote at any meeting of Securityholders a person
shall (a) be a holder of one or more Securities or (b) a person appointed by an
instrument in writing as proxy by a holder of one or more Securities. The only
persons who shall be entitled to be present or to speak at any meeting of
Securityholders 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.
8.5 REGULATIONS
Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting
of Securityholders, in regard to proof of the holding of Securities 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 think fit.
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 Securityholders as provided in Section 8.3, in which case the
Company or the Securityholders 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 majority vote of the
meeting.
Subject to the provisions of Section 8.4, at any meeting each holder
of Securities or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be
not outstanding. The chair of the meeting shall have no right to vote other
than by virtue of Securities held by him or her or instruments in writing as
aforesaid duly designating him as the person to vote on behalf of other
Securityholders. Any meeting of Securityholders duly called pursuant to the
provisions of Section 8.2 or 8.3 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
8.6 VOTING
The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them. The
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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 triplicate of all votes cast at the meeting. A record in duplicate
of the proceedings of each meeting of Securityholders 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
mailed as provided in Section 8.2. The record shall show the serial numbers of
the Securities voting in favor of or against any resolution. The record shall
be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting. The holders of the
Series A Securities and the Series B Securities shall vote for all purposes as
a single class.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE IX
AMENDMENTS
9.1 WITHOUT CONSENT OF SECURITYHOLDERS
The Company and the Trustee may from time to time and at any time
amend the Indenture, without the consent of the Securityholders, for one or
more of the following purposes:
(a) to evidence the succession of another corporation to
the Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company
pursuant to Article X;
(b) to add to the covenants of the Company such further
covenants, restrictions or conditions for the protection of the Securityholders
as the Board of Directors and the Trustee shall consider to be for the
protection of the Securityholders, and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional covenants,
restrictions or conditions a default or an Event of Default permitting the
enforcement of all or any of the remedies provided in this Indenture as herein
set forth; provided, however, that in respect of any such additional covenant,
restriction or condition such amendment may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default;
(c) to provide for the issuance under this Indenture of
Securities in coupon form (including Securities registrable as to principal
only) and to provide for exchangeability of such Securities with the Securities
issued hereunder in fully registered form and to make all appropriate changes
for such purpose;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other
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provision contained herein or in any supplemental indenture, or to make such
other provisions in regard to matters or questions arising under this
Indenture; provided that any such action shall not materially adversely affect
the interests of the holders of the Securities;
(e) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the Securities;
(f) to make provision for transfer procedures,
certification, book-entry provisions, the form of restricted securities
legends, if any, to be placed on Securities, minimum denominations and all
other matters required pursuant to Section 2.7 or otherwise necessary,
desirable or appropriate in connection with the issuance of Securities to
holders of Capital Securities in the event of a distribution of Securities by
SAFECO Trust following a Dissolution Event;
(g) to qualify or maintain qualification of this Indenture
under the Trust Indenture Act; or
(h) to make any change that does not adversely affect the
rights of any Securityholder in any material respect.
The Trustee is hereby authorized to join with the Company in the
execution of any supplemental indenture to effect such amendment, to make any
further appropriate agreements and stipulations which may be therein contained
and to accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any amendment to the Indenture authorized by the provisions of this
Section 9.1 may be executed by the Company and the Trustee without the consent
of the holders of any of the Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.2.
9.2 WITH CONSENT OF SECURITYHOLDERS
With the consent (evidenced as provided in Section 7.1) of the holders
of a majority in aggregate principal amount of the Securities at the time
outstanding, the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time amend the Indenture 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 the Securities; provided, however, that no such
amendment shall without the consent of the holders of each Security then
outstanding and affected thereby (i) extend the Maturity Date of any Security,
or reduce the rate or extend the time of payment of interest thereon (except as
contemplated by Article XVI), or reduce the principal amount thereof, or reduce
any amount payable on redemption thereof, or make the principal thereof or any
interest or premium thereon payable in any coin or currency other than that
provided in the Securities, or impair or affect the right of any Securityholder
to institute suit for payment thereof, or (ii) reduce the aforesaid percentage
of Securities the holders of which are required to consent to any such
amendment to the Indenture, provided, however, that if the Securities are held
by SAFECO Trust, such amendment shall not be effective until the holders of a
majority in liquidation amount of Trust Securities shall have consented to such
amendment; provided, further, that if the
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consent of the holder of each outstanding Security is required, such amendment
shall not be effective until each holder of the Trust Securities shall have
consented to such amendment.
Upon the request of the Company accompanied by a copy of a resolution
of the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any supplemental indenture affecting such
amendment, and upon the filing with the Trustee of evidence of the consent of
Securityholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Security Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
9.3 COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF SUPPLEMENTAL INDENTURES
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Securities shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
9.4 NOTATION ON SECURITIES
Securities authenticated and delivered after the execution of any
supplemental indenture affecting such series pursuant to the provisions of this
Article IX may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee
shall so determine, new Securities so modified as to conform, in the opinion of
the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by
the Company, authenticated by the Trustee or the Authenticating Agent and
delivered in exchange for the Securities then outstanding.
9.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED
TRUSTEE
The Trustee, subject to the provisions of Sections 6.1 and 6.2, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article IX.
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The Trustee may receive an Opinion of Counsel as conclusive evidence
that any supplemental indenture executed pursuant to this Article is authorized
or permitted by, and conforms to, the terms of this Article and that it is
proper for the Trustee under the provisions of this Article to join in the
execution thereof.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
10.1 COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other
Person (whether or not affiliated with the Company, as the case may be), or
successive consolidations or mergers in which the Company, or its successor or
successors, as the case may be, shall be a party or parties, or shall prevent
any sale, conveyance, transfer or lease of the property of the Company, or its
successor or successors, as the case may be, as an entirety, or substantially
as an entirety, to any other Person (whether or not affiliated with the
Company, or its successor or successors, as the case may be) authorized to
acquire and operate the same; provided, that (a) the Company is the surviving
Person, or the Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, conveyance, transfer or
lease of property is made is a Person organized and existing under the laws of
the United States or any State thereof or the District of Columbia, and (b)
upon any such consolidation, merger, sale, conveyance, transfer or lease, the
due and punctual payment of the principal of (and premium, if any) and interest
on the Securities according to their tenor and the due and punctual performance
and observance of all the covenants and conditions of this Indenture to be kept
or performed by the Company shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act, as
then in effect) satisfactory in form to the Trustee executed and delivered to
the Trustee by the Person formed by such consolidation, or into which the
Company, shall have been merged, or by the Person which shall have acquired
such property, as the case may be, and (c) after giving effect to such
consolidation, merger, sale, conveyance, transfer or lease, no Default or Event
of Default shall have occurred and be continuing.
10.2 SUCCESSOR CORPORATION TO BE SUBSTITUTED FOR COMPANY
In case of any such consolidation, merger, conveyance or transfer and
upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the due and punctual payment of the principal of and premium, if any, and
interest on all of the Securities and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, such successor Person shall succeed to
and be substituted for the Company, with the same effect as if it had been
named herein as the party of the first part, and the Company thereupon shall be
relieved of any further liability or obligation hereunder or upon the
Securities. Such successor Person thereupon may cause to be signed, and may
issue either in its own name or in the name of SAFECO Corporation, any or all
of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee or the Authenticating Agent;
and, upon the order of such successor Person instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee or the Authenticating Agent shall authenticate and deliver any
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Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee or the Authenticating Agent for
authentication, and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Trustee or the Authenticating Agent for
that purpose. All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Indentures had been issued at the date of the execution hereof.
10.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE
The Trustee, subject to the provisions of Sections 6.1 and 6.2, may
receive an Opinion of Counsel as conclusive evidence that any consolidation,
merger, sale, conveyance, transfer or lease, and any assumption, permitted or
required by the terms of this Article X complies with the provisions of this
Article X.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
11.1 DISCHARGE OF INDENTURE
When (a) the Company shall deliver to the Trustee for cancellation all
Securities theretofore authenticated (other than any Securities which shall
have been destroyed, lost or stolen and which shall have been replaced or paid
as provided in Section 2.8) and not theretofore cancelled, or (b) all the
Securities not theretofore cancelled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, funds
sufficient to pay on the Maturity Date or upon redemption all of the Securities
(other than any Securities which shall have been destroyed, lost or stolen and
which shall have been replaced as provided in Section 2.8) not theretofore
cancelled or delivered to the Trustee for cancellation, including principal and
premium, if any, and interest due or to become due to the Maturity Date or
redemption date, as the case may be, but excluding, however, the amount of any
moneys for the payment of principal of or premium, if any, or interest on the
Securities (1) theretofore repaid to the Company in accordance with the
provisions of Section 11.4, or (2) paid to any State or to the District of
Columbia pursuant to its unclaimed property or similar laws, and if in either
case the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of further
effect except for the provisions of Sections 2.2, 2.7, 2.8, 3.1, 3.2, 3.4, 6.6,
6.10 and 11.4 hereof, which shall survive until such Securities shall mature
and be paid. Thereafter, Sections 6.6, 6.10 and 11.4 shall survive, and the
Trustee, on demand of the Company accompanied by any Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company, shall execute
proper instruments acknowledging satisfaction of and discharging this
Indenture, the Company, however, hereby agreeing to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the
Trustee in connection with this Indenture or the Securities.
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11.2 DEPOSITED MONEYS AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST
BY TRUSTEE
Subject to the provisions of Section 11.4, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Section 11.1 or
11.5 shall be held in trust and applied by it to the payment, either directly
or through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Securities for the payment of which
such moneys or U.S. Government Obligations have been deposited with the
Trustee, of all sums due and to become due thereon for principal, premium, if
any, and interest.
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 Section 11.5 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 Securities.
11.3 PAYING AGENT TO REPAY MONEYS HELD
Upon the satisfaction and discharge of this Indenture all moneys then
held by any paying agent of the Securities (other than the Trustee) shall, upon
written demand of the Company, be repaid to it or paid to the Trustee, and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
11.4 RETURN OF UNCLAIMED MONEYS
Any moneys deposited with or paid to the Trustee or any paying agent
for payment of the principal of or premium, if any, or interest on Securities
and not applied but remaining unclaimed by the holders of Securities for two
years after the date upon which the principal of or premium, if any, or
interest on such Securities, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee or such paying agent on
Company Request; and the holder of any of the Securities shall thereafter look
only to the Company for any payment which such holder may be entitled to
collect and all liability of the Trustee or such paying agent with respect to
such moneys shall thereupon cease.
11.5 DEFEASANCE UPON DEPOSIT OF MONEYS OR U.S. GOVERNMENT OBLIGATIONS
The Company shall be deemed to have been Discharged (as defined below)
from its obligations with respect to the Securities on the 91st day after the
conditions set forth below have been satisfied:
(1) The Company shall have deposited or caused to be
deposited irrevocably with the Trustee or the Defeasance Agent (as defined
below) as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the holders of the Securities (i) money 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 one day before the due date of any payment, money in an
amount, or (iii) a combination of (i) and (ii), sufficient, in the opinion
(with respect to (ii) and (iii)) of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee and the Defeasance Agent, if any, to pay and discharge each
installment of principal of and interest and premium, if any, on the
outstanding Securities on the dates such installments of principal, interest or
premium are due;
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(2) if the Securities are then listed on any national
securities exchange, the Company shall have delivered to the Trustee and the
Defeasance Agent, if any, an Opinion of Counsel to the effect that the exercise
of the option under this Section 11.5 would not cause such Securities to be
delisted from such exchange;
(3) no Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such deposit;
and
(4) the Company shall have delivered to the Trustee and
the Defeasance Agent, if any, an Opinion of Counsel to the effect that holders
of the Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of the exercise of the option under
this Section 11.5 and will be subject to United States 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 option had not been exercised, and such opinion shall be based
on a statute so providing or be accompanied by a private letter ruling to that
effect received from the United States Internal Revenue Service or a revenue
ruling pertaining to a comparable form of transaction to that effect published
by the United States Internal Revenue Service.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except (A) the rights
of holders of Securities to receive, from the trust fund described in clause
(1) above, payment of the principal of and premium, if any, and the interest on
the Securities when such payments are due; (B) the Company's obligations with
respect to the Securities under Sections 2.2, 2.7, 2.8, 3.2, 3.4, 6.10 and
11.4; and (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder.
"Defeasance Agent" means another financial institution which is
eligible to act as Trustee hereunder and which assumes all of the obligations
of the Trustee necessary to enable the Trustee to act under this Article. In
the event such a Defeasance Agent is appointed pursuant to this Section, the
following conditions shall apply:
(1) The Trustee shall have approval rights over the
document appointing such Defeasance Agent and the document setting forth such
Defeasance Agent's rights and responsibilities;
(2) The Defeasance Agent shall provide verification to
the Trustee acknowledging receipt of sufficient money and/or U. S. Government
Obligations to meet the applicable conditions set forth in this Section 11.5.
ARTICLE XII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
12.1 INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS
No recourse for the payment of the principal of or premium, if any, or
interest on any Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or
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upon any obligation, covenant or agreement of the Company in this Indenture, or
in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Company or of any successor
Person to the Company, either directly or through the Company or any successor
Person to the Company, whether by virtue of any constitution, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that all such liability is hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issue of the Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 SUCCESSORS
All the covenants, stipulations, promises and agreements in this
Indenture contained by the Company shall bind its successors and assigns
whether so expressed or not.
13.2 OFFICIAL ACTS BY SUCCESSOR CORPORATION
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
13.3 SURRENDER OF COMPANY POWERS
The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power
so surrendered shall terminate both as to the Company, as the case may be, and
as to any successor Person.
13.4 ADDRESSES FOR NOTICES, ETC.
Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders of
Securities on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the
purpose) to the Company, SAFECO Plaza, 0000 Xxxxxxxx Xxx. X.X., Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Chief Financial Officer, Treasurer or Secretary.
Any notice, direction, request or demand by any Securityholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made in writing at the office of the Trustee, The Chase
Manhattan Bank, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Global Trust Services (unless another address is
provided by the Trustee to the Company for the purpose).
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Any notice or communication to a Holder shall be mailed by first class
mail to his or her address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
13.5 GOVERNING LAW
This Indenture and each Security shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be governed
by and construed in accordance with the laws of said State, without regard to
conflicts of laws principles thereof.
13.6 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that in the opinion of
the signers 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 have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture (except pursuant to Section 3.5) shall
include (1) a statement that the person making such certificate or opinion has
read such covenant or condition; (2) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (3) a statement that, in
the opinion of such person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and (4) a statement as to
whether or not, in the opinion of such person, such condition or covenant has
been complied with.
13.7 BUSINESS DAYS
In any case where the date of payment of principal of or premium, if
any, or interest on the Securities will not be a Business Day, the payment of
such principal of or premium, if any, or interest on the Securities need not be
made on such date but may be made on the next succeeding Business Day, with the
same force and effect as if made on the date of payment and no interest shall
accrue for the period from and after such date.
13.8 TRUST INDENTURE ACT TO CONTROL
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act of 1939, such imposed duties shall
control.
13.9 TABLE OF CONTENTS, HEADINGS, ETC.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
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13.10 EXECUTION IN COUNTERPARTS
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
13.11 SEPARABILITY
In case any one or more of the provisions contained in this Indenture
or in the Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Securities,
but this Indenture and the Securities shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
13.12 ASSIGNMENT
The Company will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any such
assignment, the Company will remain primarily liable for all its obligations.
Subject to the foregoing, the Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns.
This Indenture may not otherwise be assigned by the parties thereto.
13.13 ACKNOWLEDGEMENT OF RIGHTS
The Company acknowledges that, with respect to any Securities held by
SAFECO Trust or a trustee of such trust, if the Property Trustee of such Trust
fails to enforce its rights under this Indenture as the holder of the
Securities held as the assets of SAFECO Trust any holder of Capital Securities
may institute legal proceedings directly against the Company to enforce such
Property Trustee's rights under this Indenture without first instituting any
legal proceedings against such Property Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
principal of or premium, if any, or interest on the Securities when due, the
Company acknowledges that a holder of Capital Securities may directly institute
a proceeding for enforcement of payment to such holder of the principal of or
premium, if any, or interest on the Securities having a principal amount equal
to the aggregate liquidation amount of the Capital Securities of such holder on
or after the respective due date specified in the Securities.
ARTICLE XIV
REDEMPTION OF SECURITIES -- MANDATORY AND OPTIONAL SINKING FUND
14.1 SPECIAL EVENT REDEMPTION
If a Merger Termination Event or a Tax Event has occurred and is
continuing then, notwithstanding Section 14.2(a) , the Company shall have the
right at any time prior to March 31, 1998 (in the case of a Merger Termination
Event) or the Initial Optional Redemption Date (in the case of a Tax Event),
upon (i) not less than 45 days written notice to the Trustee, which notice
shall be accompanied
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by an Officers' Certificate certifying that a Merger Termination Event or a Tax
Event entitling the Company to redeem the Securities pursuant to this Section,
has occurred and (ii) not less than 30 days nor more than 60 days written
notice to the Securityholders, to redeem the Securities, in whole (but not in
part), within 90 days following the occurrence of such Merger Termination Event
or Tax Event at the Special Event Redemption Price. Following a Merger
Termination Event or a Tax Event, the Company shall take such action as is
necessary to promptly determine the Special Event Redemption Price, including
without limitation the appointment by the Company of a Quotation Agent. The
Special Event Redemption Price shall be paid prior to 12:00 noon, New York
time, on the date of such redemption or such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Special Event Redemption Price by 10:00 a.m., New York
time, on the date such Special Event Prepayment Price is to be paid. The
Company shall provide the Trustee with written notice of the Special Event
Redemption Price promptly after the calculation thereof, which notice shall
include any calculation made by the Quotation Agent in connection with the
determination of the Special Event Redemption Price.
14.2 OPTIONAL REDEMPTION BY COMPANY
Subject to the provisions of this Article XIV, the Company shall have
the right to redeem the Securities, in whole or in part, from time to time, on
or after the Initial Optional Redemption Date at a redemption price (the
"Optional Redemption Price") equal to the percentage of the outstanding
principal amount of the Securities specified below, plus, in each case, accrued
interest thereon to the date of redemption if redeemed during the 12-month
period beginning July 15 of the years indicated below.
YEAR PERCENTAGE
2007 104.036%
2008 103.632%
2009 103.229%
2010 102.825%
2011 102.422%
2012 102.018%
2013 101.614%
2014 101.211%
2015 100.807%
2016 100.404%
2017 and thereafter 100.000%
If the Securities are only partially redeemed pursuant to this Section
14.2, the Securities will be redeemed pro rata or by lot or by any other method
utilized by the Trustee; provided, that if at the time of redemption the
Securities are registered as a Global Security, the Depositary shall determine,
in accordance with its procedures, the principal amount of such Securities held
for the account of its participants to be redeemed. The Optional Redemption
Price shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or at such earlier time as the Company determines, provided that the
Company shall deposit with the Trustee an amount sufficient to pay the Optional
Redemption Price by 10:00 a.m., New York time, on the date such Optional
Redemption Price is to be paid.
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14.3 NO SINKING FUND
The Securities are not entitled to the benefit of any sinking fund.
14.4 NOTICE OF REDEMPTION; SELECTION OF SECURITIES
In case the Company shall desire to exercise the right to redeem all,
or, as the case may be, any part of the Securities in accordance with their
terms, it shall fix a date for redemption and shall mail a notice of such
redemption at least 30 and not more than 60 days prior to the date fixed for
redemption to the holders of Securities so to be redeemed as a whole or in part
at their last addresses as the same appear on the Security Register. Such
mailing shall be by first class mail. The notice if mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the holder receives such notice. In any case, failure to give such
notice by mail or any defect in the notice to the holder of any Security
designated for redemption as a whole or in part shall not affect the validity
of the proceedings for the redemption of any other Security.
Each such notice of redemption shall specify the CUSIP number of the
Securities to be redeemed, the date fixed for redemption, the redemption price
at which the Securities are to be redeemed (or the method by which such
redemption price is to be calculated), the place or places of payment, that
payment will be made upon presentation and surrender of the Securities, that
interest accrued to the date fixed for redemption will be paid as specified in
said notice, and that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue. If less than all the
Securities are to be redeemed the notice of redemption shall specify the
numbers of the Securities to be redeemed. In case any Security is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will be
issued.
By 10:00 a.m. New York time on the redemption date specified in the
notice of redemption given as provided in this Section, the Company will
deposit with the Trustee or with one or more paying agents an amount of money
sufficient to redeem on the redemption date all the Securities so called for
redemption at the appropriate Redemption Price, together with accrued interest
to the date fixed for redemption.
The Company will give the Trustee notice not less than 45 days prior
to the redemption date as to the aggregate principal amount of Securities to be
redeemed and the Trustee shall select, in such manner as in its sole discretion
it shall deem appropriate and fair, the Securities or portions thereof (in
integral multiples of $1,000, except as otherwise set forth in the applicable
form of Security) to be redeemed.
14.5 PAYMENT OF SECURITIES CALLED FOR REDEMPTION
If notice of redemption has been given as provided in Section 14.4,
the Securities or portions of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Redemption Price, together with
interest accrued to the date fixed for redemption (subject to the rights of
holders of Securities on the close of business on a regular record date in
respect of an Interest Payment Date occurring on or prior to the redemption
date), and on and after said date (unless the Company shall default in the
payment of
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such Securities at the Redemption Price, together with interest accrued to said
date) interest on the Securities or portions of Securities so called for
redemption shall cease to accrue. On presentation and surrender of such
Securities at a place of payment specified in said notice, the said Securities
or the specified portions thereof shall be paid and redeemed by the Company at
the applicable Redemption Price, together with interest accrued thereon to the
date fixed for redemption (subject to the rights of holders of Securities on
the close of business on a regular record date in respect of an Interest
Payment Date occurring on or prior to the redemption date).
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Security
or Securities of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
ARTICLE XV
SUBORDINATION OF SECURITIES
15.1 AGREEMENT TO SUBORDINATE
The Company covenants and agrees, and each holder of Securities issued
hereunder likewise covenants and agrees, that the Securities shall be issued
subject to the provisions of this Article XV; and each holder of a Security,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment by the Company of the principal of (including redemption
payments), premium, if any, and interest on all Securities issued hereunder
shall, to the extent and in the manner hereinafter set forth, be subordinated
and junior in right of payment to all Senior Indebtedness, whether outstanding
at the date of this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence of any
Default or Event of Default hereunder.
15.2 DEFAULT ON SENIOR INDEBTEDNESS
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, in the event that any applicable grace period with respect
to such default has ended and such default has not been cured or waived or
ceased to exist, or in the event that the maturity of any Senior Indebtedness
has been accelerated because of a default, then, in any of these cases, no
payment shall be made by the Company with respect to the principal (including
redemption payments) of or premium, if any, or interest on the Securities.
In the event of the acceleration of the maturity of the Securities,
then no payment shall be made by the Company with respect to the principal
(including redemption payments) of or premium, if any, or interest on the
Securities until the holders of all Senior Indebtedness outstanding at the time
of such acceleration shall receive payment in full.
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In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraphs of this Section 15.2, 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 such Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of such Senior Indebtedness.
15.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution, winding-up, liquidation, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in connection
with any insolvency or bankruptcy proceeding of the Company, all Senior
Indebtedness of the Company must 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 on
the Securities; 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 Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XV, 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 Securityholders
or by the Trustee under the Indenture if received by them 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 all
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
Securityholders 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 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, as their respective interests may appear, as calculated by the Company,
for application to the payment of all Senior Indebtedness remaining unpaid to
the extent necessary to pay all 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 XV, 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
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or any other corporation provided for by a plan of reorganization or
readjustment, the payment of which is subordinated at least to the extent
provided in this Article XV with respect to the Securities to the payment of
Senior Indebtedness that may at the time be outstanding, 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 sale, conveyance, transfer or lease of
its property as an entirety, or substantially as an entirety, to another Person
upon the terms and conditions provided for in Article X of this Indenture shall
not be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 15.3 if such other Person shall, as a part of such
consolidation, merger, sale, conveyance, transfer or lease, comply with the
conditions stated in Article X of this Indenture.
15.4 SUBROGATION
Subject to the payment in full of all Senior Indebtedness, the rights
of the Securityholders shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Company, as the case may be, applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Securities shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Securityholders or the Trustee would
be entitled except for the provisions of this Article XV, and no payment over
pursuant to the provisions of this Article XV to or for the benefit of the
holders of such Senior Indebtedness by Securityholders or the Trustee, shall,
as between the Company, its creditors other than holders of Senior Indebtedness
of the Company, and the holders of the Securities, be deemed to be a payment by
the Company to or on account of such Senior Indebtedness. It is understood
that the provisions of this Article XV are and are intended solely for the
purposes of defining the relative rights of the holders of the Securities, on
the one hand, and the holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Securities and creditors
of the Company, as the case may be, other than the holders of Senior
Indebtedness of the Company, as the case may be, nor shall anything herein or
therein prevent the Trustee or the holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under the
Indenture, subject to the rights, if any, under this Article XV of the holders
of such Senior Indebtedness in respect of cash, property or securities of the
Company, as the case may be, received upon the exercise of any such remedy.
15.5 TRUSTEE TO EFFECTUATE SUBORDINATION
Each Securityholder by such Securityholder's acceptance thereof
authorizes and directs the Trustee on such Securityholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XV and appoints the Trustee such Securityholder's
attorney-in-fact for any and all such purposes.
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15.6 NOTICE BY THE COMPANY
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article XV. Notwithstanding the provisions
of this Article XV or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XV, unless and until a
Responsible Officer of the Trustee assigned to its Principal Office shall have
received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the
notice provided for in this Section 15.6 at least two Business Days prior to
the date (i) 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 Security), or (ii) moneys and/or U.S.
Government Obligations are deposited in trust pursuant to Article XI, then
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and U.S. Government
Obligations 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.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company (or a trustee or representative on behalf of such
holder), as the case may be, to establish that such notice has been given by a
holder of such Senior Indebtedness or a trustee or representative on behalf of
any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XV, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of such 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 XV, 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.
Upon any payment or distribution of assets of the Company referred to
in this Article XV, the Trustee and the Securityholders shall be entitled to
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, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the
Securityholders, 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, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.
15.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS
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The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XV in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness and, subject to
the provisions of Article VI of this Indenture, the Trustee shall not be liable
to any holder of Senior Indebtedness if it shall pay over or deliver to
Securityholders, the Company or any other Person money or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this Article XV or
otherwise.
Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.6.
15.8 SUBORDINATION MAY NOT BE IMPAIRED
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 that any such holder may have or
otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Securityholders, without
incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
such Senior Indebtedness, or otherwise amend or supplement in any manner such
Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any
manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
16.1 EXTENSION OF INTEREST PAYMENT PERIOD
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term
of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding 10
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consecutive semi-annual periods, including the first such semi-annual period
during such extension period (the "Extended Interest Payment Period"), during
which Extended Interest Payment Period no interest shall be due and payable;
provided that no Extended Interest Payment Period shall end on a date other
than an Interest Payment Date or extend beyond the Maturity Date. To the
extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 16.1, will bear interest thereon at the annual rate of ________%
compounded semi-annually for each semi-annual period of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all interest accrued and unpaid on the
Securities, including any Additional Interest and Compounded Interest
(together, "Deferred Interest") that shall be payable to the holders of the
Securities in whose names the Securities are registered in the Security
Register on the first record date preceding the end of the Extended Interest
Payment Period. Before the termination of any Extended Interest Payment
Period, the Company may further defer payments of interest by further extending
such period, provided that such period, together with all such previous and
further extensions within such Extended Interest Payment Period, shall not
exceed 10 consecutive semi-annual periods, including the first such semi-annual
period during such Extended Interest Payment Period, or extend beyond the
Maturity Date. Upon the termination of any Extended Interest Payment Period
and the payment of all Deferred Interest then due, the Company may commence a
new Extended Interest Payment Period, subject to the foregoing requirements.
No interest shall be due and payable during an Extended Interest Payment
Period, except at the end thereof, but the Company may prepay at any time all
or any portion of the interest accrued during an Extended Interest Payment
Period.
16.2 NOTICE OF EXTENSION
(a) If the Property Trustee is the only registered holder
of the Securities at the time the Company selects an Extended Interest Payment
Period, the Company shall give written notice to the Administrative Trustees,
the Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period five Business Days before the earlier of (i) the next succeeding
date on which Distributions on the Trust Securities issued by SAFECO Trust are
payable, or (ii) the date SAFECO Trust is required to give notice of the record
date, or the date such Distributions are payable, to any national securities
exchange or to holders of the Capital Securities issued by SAFECO Trust, but in
any event at least five Business Days before such record date.
(b) If the Property Trustee is not the only holder of the
Securities at the time the Company selects an Extended Interest Payment Period,
the Company shall give the holders of the Securities and the Trustee written
notice of its selection of such Extended Interest Payment Period at least 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to any national securities exchange.
(c) The semi-annual period in which any notice is given
pursuant to paragraphs (a) or (b) of this Section 16.2 shall be counted as one
of the 10 semi-annual periods permitted in the maximum Extended Interest
Payment Period permitted under Section 16.1.
The Chase Manhattan Bank, as Trustee, hereby accepts the trusts in
this Indenture declared and provided, upon the terms and conditions hereinabove
set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written.
SAFECO CORPORATION
By /s/ X.X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
THE CHASE MANHATTAN BANK
as Trustee
By /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: Trust Officer
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EXHIBIT A
(FORM OF FACE OF SECURITY)
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: - THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3)
66
OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE COMPANY PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO THE COMPANY, AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE COMPANY. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
No. ___________ CUSIP No. ______________
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SAFECO CORPORATION
8.072% SERIES __ JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE JULY 15, 2037
SAFECO Corporation, a Washington corporation (the "Company", which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to SAFECO Capital Trust I, or
registered assigns, the principal sum of (__________) on July 15, 2037 (the
"Maturity Date"), unless previously redeemed, and to pay interest on the
outstanding principal amount hereof from July 15, 1997, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, semi-annually (subject to deferral
as set forth herein) in arrears on January 15 and July 15 of each year,
commencing January 15, 1998 at the rate of 8.072% per annum until the principal
hereof shall have become due and payable, and at the same rate per annum on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum compounded
semi-annually. The amount of interest payable on any Interest Payment Date
shall be computed on the basis of a 360-day year of twelve 30-day months and,
for any period less than a full calendar month, the number of days elapsed in
such month. In the event that any date on which the principal of (or premium,
if any) or interest on this Security is payable is not a Business Day, then the
payment payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), with the same force and effect as if made on such date. Pursuant to
the Registration Rights Agreement, in certain limited circumstances the Company
will be required to pay Liquidated Damages (as defined in the Registration
Rights Agreement) with respect to this Security.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Security (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of
business on the regular record date for such interest installment, which shall
be the January 1 or July 1 immediately preceding the relevant interest payment
date. Any such interest installment not punctually paid or duly provided for
shall forthwith cease to be payable to the holders on such regular record date
and may be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the holders of Securities not less
than 10 days prior to such special record date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture.
The principal of and premium, if any, and interest on this Security
shall be payable at the office or agency of the Trustee maintained for that
purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that, payment of interest may be made at the option of the
Company by (i) check mailed to the holder at such address as shall appear in
the Security Register or (ii) by transfer to an account maintained by the
Person entitled thereto, provided that proper written transfer instructions
have been received by the relevant record date. Notwithstanding the foregoing,
so long as the Holder of this Security is the Property Trustee, the payment of
the principal of and premium, if any, and
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interest on this Security will be made at such place and to such account as may
be designated by the Property Trustee.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
This Security shall not be entitled to any benefit under the Indenture
hereinafter referred to, or be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on behalf
of the Trustee.
The provisions of this Security are continued on the reverse side
hereof and such provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
SAFECO CORPORATION
By _____________________________________
Name: Boh X. Xxxxxx
Title: President
Attest:
By: ____________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
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(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated __________
THE CHASE MANHATTAN BANK
as Trustee
By____________________________________
Authorized Officer
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(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of July 15,
1997 (the "Indenture"), duly executed and delivered between the Company and The
Chase Manhattan Bank, as Trustee (the "Trustee"), to which Indenture reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities.
Upon the occurrence and continuation of a Merger Termination Event or
a Tax Event, the Company shall have the right at any time, within 90 days
following the occurrence of a Merger Termination Event or a Tax Event, prior to
March 31, 1998 (in the case of a Merger Termination Event) or July 15, 2007
(the "Initial Optional Redemption Date") (in the case of a Tax Event), to
redeem this Security in whole (but not in part) at the Special Event Redemption
Price. "Special Event Redemption Price" shall mean, with respect to any
redemption of the Securities following a Merger Termination Event or a Tax
Event, an amount in cash equal to the greater of (i) 100% of the principal
amount to be redeemed or (ii) the sum, as determined by a Quotation Agent, of
the present values of the remaining scheduled payments of principal and
interest on the Securities to Maturity Date, discounted to the redemption date
on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate, plus, in each case, any accrued and
unpaid interest thereon, including Compounded Interest and Additional Interest,
if any, to the date of such redemption.
In addition, the Company shall have the right to redeem this Security,
in whole or in part, at any time on or after the Initial Optional Redemption
Date (an "Optional Redemption"), at a redemption price (the "Optional
Redemption Price") equal to the percentage of the outstanding principal amount
of the Debentures specified below, plus, in each case, accrued interest thereon
to the date of redemption if redeemed during the 12-month period beginning July
15 of the years indicated below.
YEAR PERCENTAGE
2007 104.036%
2008 103.632%
2009 103.229%
2010 102.825%
2011 102.422%
2012 102.018%
2013 101.614%
2014 101.211%
2015 100.807%
2016 100.404%
2017 and thereafter 100.000%
The Optional Redemption Price or the Special Event Redemption Price,
as the case requires, shall be paid prior to 12:00 noon, New York time, on the
date of such redemption or at such earlier time as the Company determines,
provided, that the Company shall deposit with the Trustee an amount sufficient
to pay the applicable Redemption Price by 10:00 a.m., New York City time, on
the date such Redemption Price is to be paid. Any redemption pursuant to this
paragraph will be made upon not less than 30 days nor more than 60 days notice.
If the Securities are only partially redeemed by
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the Company pursuant to an Optional Redemption, the Securities will be redeemed
pro rata or by lot or by any other method utilized by the Trustee; provided
that if, at the time of redemption, the Securities are registered as a Global
Security, the Depositary shall determine in accordance with its procedures the
principal amount of such Securities held for the account of its participants to
be redeemed.
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any redemption of Securities by the
Company shall be subject to the receipt by the Company of any required
regulatory approval.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Securities at the time outstanding, as defined in the Indenture,
to execute supplemental indentures for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of modifying in any manner the rights of the holders of the Securities;
provided, however, that no such supplemental indenture shall, without the
consent of each holder of Securities then outstanding and affected thereby, (i)
extend the Maturity Date of any Securities, or reduce the principal amount
thereof, or reduce any amount payable on redemption thereof, or reduce the rate
or extend the time of payment of interest thereon (subject to Article XVI of
the Indenture), or make the principal of, premium, if any, or interest on, the
Securities payable in any coin or currency other than U.S. dollars, or impair
or affect the right of any holder of Securities to institute suit for the
payment thereof, or (ii) reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture.
The Indenture also contains provisions permitting the holders of a majority in
aggregate principal amount of the Securities at the time outstanding, on behalf
of all of the holders of the Securities, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture, and its consequences, except a default in the
payment of the principal of or premium, if any, or interest on any of the
Securities or a default in respect of any covenant or provision under which the
Indenture cannot be modified or amended without the consent of each holder of
Securities then outstanding. Any such consent or waiver by the holder of this
Security (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future holders and owners of this
Security and of any Security issued in exchange herefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the time and place and at the rate and in the
money herein prescribed.
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The Company shall have the right, at any time and from time to time
during the term of the Securities, to defer payments of interest by extending
the interest payment period of such Securities for a period not exceeding 10
consecutive semi-annual periods, including the first such semi-annual period
during such extension period, and not to extend beyond the Maturity Date of the
Securities (an "Extended Interest Payment Period"), at the end of which period
the Company shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Securities to the extent that
payment of such interest is enforceable under applicable law). Before the
termination of any such Extended Interest Payment Period, the Company may
further defer payments of interest by further extending such Extended Interest
Payment Period, provided that such Extended Interest Payment Period, together
with all such previous and further extensions within such Extended Interest
Payment Period, shall not exceed 10 consecutive semi-annual periods, including
the first semi-annual period during such Extended Interest Payment Period shall
not end on any date other than an Interest Payment Date, or extend beyond the
Maturity Date of the Securities. Upon the termination of any such Extended
Interest Payment Period and the payment of all accrued and unpaid interest and
any additional amounts then due, the Company may commence a new Extended
Interest Payment Period, subject to the foregoing requirements.
The Company has agreed that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) or (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Company that rank pari passu with or junior in right of
payment to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Company of any securities or any Subsidiary of the Company
(including any Other Guarantees) if such guarantee ranks pari passu or junior
in right of payment to the Securities (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, Common Stock of the Company; (b) any declaration of a
dividend in connection with the implementation of a stockholder's rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto; (c) payments under the
Capital Securities Guarantee; (d) as a direct result of, and only to the extent
required in order to avoid the issuance of fractional shares of capital stock,
following a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock; and (e) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
exchange or conversion of such capital stock or the security being exchanged or
converted) if at such time (i) an Event of Default shall have occurred and be
continuing, (ii) there shall have occurred any event of which the Company has
actual knowledge that (a) is, or with the giving of notice or the lapse of
time, or both, would be, an Event of Default and (b) in respect of which the
Company shall not have taken reasonable steps to cure, (iii) the Company shall
be in default with respect to its payment obligations under the Capital
Securities Guarantee or (iv) the Company shall have given notice of its
election of the exercise of its right to extend the interest payment period, or
any extension thereof, pursuant to Section 16.1 of the Indenture and shall not
have rescinded such notice, and such exercise of its right to extend the
interest payment period, or any extension thereof, shall have commenced.
The Securities are issuable only in registered form without coupons in
denominations of $1,000.00 and any integral multiple thereof. As provided in
the Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Security is transferable
by the holder hereof on the Security Register of the Company, upon surrender of
this Security for registration of transfer at the office or agency of the
Company in the City and State of
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New York accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Security registrar duly executed by the
holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Security, the Company, the Trustee, any authenticating agent, any paying agent,
any transfer agent and the registrar may deem and treat the holder hereof as
the absolute owner hereof (whether or not this Security shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Security registrar) for the purpose of receiving payment of or on
account of the principal hereof and premium, if any, and (subject to the
Indenture) interest due hereon and for all other purposes, and neither the
Company nor the Trustee nor any authenticating agent nor any paying agent nor
any transfer agent nor any registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this Security, or for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor Person,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
All terms used in this Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.
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