TELEBANC FINANCIAL CORPORATION
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INDENTURE
DATED AS OF JUNE 9, 1997
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WILMINGTON TRUST COMPANY
AS DEBENTURE TRUSTEE
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JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
Tie Sheet of provisions of Trust Indenture Act of 1939 with Indenture
dated as of June 9, 1997 between TeleBanc Financial Corporation and Wilmington
Trust Company, as Debenture Trustee:
ACT SECTION INDENTURE SECTION
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.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.....................................................................................9
Additional Sums................................................................................................9
Adjusted Treasury Rate........................................................................................10
Affiliate.....................................................................................................10
Authenticating Agent..........................................................................................10
Bankruptcy Law................................................................................................10
Board of Directors............................................................................................10
Board Resolution..............................................................................................10
Business Day..................................................................................................11
Capital Securities............................................................................................11
Capital Securities Guarantee..................................................................................11
Commission....................................................................................................11
Common Securities.............................................................................................11
Common Securities Guarantee...................................................................................11
Common Stock..................................................................................................11
Comparable Treasury Issue.....................................................................................12
Comparable Treasury Price.....................................................................................12
Corporation...................................................................................................12
Corporation Request...........................................................................................12
Compounded Interest...........................................................................................12
Custodian.....................................................................................................12
Debenture.....................................................................................................12
Declaration...................................................................................................12
Default.......................................................................................................13
Deferred Interest.............................................................................................13
Definitive Securities.........................................................................................13
Depositary....................................................................................................13
Dissolution Event.............................................................................................13
Event of Default..............................................................................................13
Exchange Act..................................................................................................13
Exchange Offer................................................................................................13
Exchange Securities...........................................................................................13
Extended Interest Payment Period..............................................................................13
Federal Reserve...............................................................................................14
Global Security...............................................................................................14
Indebtedness..................................................................................................14
Indebtedness Ranking on a Parity with the Securities..........................................................14
Indebtedness Ranking Junior to the Securities.................................................................15
Indenture.....................................................................................................15
Initial Optional Prepayment Date..............................................................................15
Initial Securities............................................................................................15
Interest Payment Date.........................................................................................15
Liquidated Damages............................................................................................15
Make Whole Amount.............................................................................................15
Maturity Date.................................................................................................16
Non Book-Entry Capital Securities.............................................................................16
Officers......................................................................................................16
Officers' Certificate.........................................................................................16
Opinion of Counsel............................................................................................16
Optional Prepayment Price.....................................................................................16
Other Debentures..............................................................................................16
Other Guarantees..............................................................................................16
outstanding...................................................................................................16
Person........................................................................................................17
Predecessor Security..........................................................................................17
Prepayment Price..............................................................................................17
Principal Office of the Debenture Trustee.....................................................................17
Purchase Agreement............................................................................................17
Quotation Agent...............................................................................................17
Reference Treasury Dealer.....................................................................................17
Reference Treasury Dealer Quotations..........................................................................17
Registration Rights Agreement.................................................................................18
Regulatory Capital Event......................................................................................18
Responsible Officer...........................................................................................18
Restricted Security...........................................................................................18
Rule 144A.....................................................................................................18
Securities....................................................................................................18
Securityholder................................................................................................18
holder of Securities..........................................................................................18
Security Register.............................................................................................19
Senior Indebtedness...........................................................................................19
Special Event.................................................................................................19
Special Event Prepayment Price................................................................................19
Subsidiary....................................................................................................19
Tax Event.....................................................................................................19
TeleBanc Capital Trust........................................................................................20
Trust Securities..............................................................................................20
U.S. Government Obligations...................................................................................20
ARTICLE II
SECURITIES
SECTION 2.01. Forms Generally................................................................................21
SECTION 2.02. Execution and Authentication...................................................................21
SECTION 2.03. Form and Payment...............................................................................21
SECTION 2.04. Legends........................................................................................22
SECTION 2.05. Global Security................................................................................22
SECTION 2.06 Interest........................................................................................24
SECTION 2.07. Transfer and Exchange..........................................................................24
SECTION 2.08. Replacement Securities.........................................................................27
SECTION 2.09. Temporary Securities...........................................................................27
SECTION 2.10. Cancellation...................................................................................28
SECTION 2.11. Defaulted Interest.............................................................................28
SECTION 2.12. CUSIP Numbers..................................................................................29
ARTICLE III
PARTICULAR COVENANTS OF THE CORPORATION
SECTION 3.01. Payment of Principal, Premium and Interest.....................................................29
SECTION 3.02. Offices for Notices and Payments, etc..........................................................30
SECTION 3.03. Appointments to Fill Vacancies in Debenture Trustee'...........................................30
SECTION 3.04. Provision as to Paying Agent...................................................................30
SECTION 3.05. Certificate to Debenture Trustee...............................................................31
SECTION 3.06. Compliance with Consolidation Provisions.......................................................32
SECTION 3.07. Limitation on Dividends........................................................................32
SECTION 3.08. Covenants as to TeleBanc Capital Trust.........................................................33
SECTION 3.09. Payment of Expenses............................................................................33
SECTION 3.10. Payment Upon Resignation or Removal............................................................34
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE CORPORATION AND
THE DEBENTURE TRUSTEE
SECTION 4.01. Securityholders' Lists.........................................................................34
SECTION 4.02. Preservation and Disclosure of Lists...........................................................35
SECTION 4.03. Reports by the Corporation.....................................................................37
SECTION 4.04. Reports by the Debenture Trustee...............................................................38
ARTICLE V
REMEDIES OF THE DEBENTURE TRUSTEE AND SECURITY HOLDERS ON
EVENT OF DEFAULT
SECTION 5.01. Events of Default..............................................................................38
SECTION 5.02. Payment of Securities on Default; Suit Therefor................................................41
SECTION 5.03. Application of Moneys Collected by Debenture Trustee...........................................43
SECTION 5.04. Proceedings by Securityholders.................................................................43
SECTION 5.05. Proceedings by Debenture Trustee...............................................................45
SECTION 5.06. Remedies Cumulative and Continuing.............................................................45
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by M...........................................45
SECTION 5.08. Notice of Defaults.............................................................................46
SECTION 5.09. Undertaking to Pay Costs.......................................................................47
ARTICLE VI
CONCERNING THE DEBENTURE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Debenture Trustee...............................................47
SECTION 6.02. Reliance on Documents, Opinions, etc...........................................................49
SECTION 6.03. No Responsibility for Recitals, etc............................................................51
SECTION 6.04. Debenture Trustee, Authenticating Agent, Paying Agent..........................................51
SECTION 6.05. Moneys to be Held in Trust.....................................................................51
SECTION 6.06. Compensation and Expenses of Debenture Trustee.................................................51
SECTION 6.07. Officers' Certificate as Evidence..............................................................52
SECTION 6.08. Conflicting Interest of Debenture Trustee......................................................53
SECTION 6.09. Eligibility of Debenture Trustee...............................................................53
SECTION 6.10. Resignation or Removal of Debenture Trustee....................................................53
SECTION 6.11. Acceptance by Successor Debenture Trustee......................................................55
SECTION 6.12. Succession by Merger, etc......................................................................56
SECTION 6.13. Limitation on Rights of Debenture Trustee as a Creditor........................................56
SECTION 6.14. Authenticating Agents..........................................................................57
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders......................................................................58
SECTION 7.02. Proof of Execution by Securityholders..........................................................59
SECTION 7.03. Who Are Deemed Absolute Owners.................................................................59
SECTION 7.04. Securities Owned by Corporation Deemed Not Outstanding.........................................59
SECTION 7.05. Revocation of Consents; Future Holders Bound...................................................60
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings...........................................................................60
SECTION 8.02. Call of Meetings by Debenture Trustee..........................................................61
SECTION 8.03. Call of Meetings by Corporation or Securityholders.............................................61
SECTION 8.04. Qualifications for Voting......................................................................61
SECTION 8.05. Regulations....................................................................................62
SECTION 8.06. Voting.........................................................................................62
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Securityholders.............................................................63
SECTION 9.02. With Consent of Securityholders................................................................65
SECTION 9.03. Compliance with Trust Indenture Act; Effect of Supplemental Indentures.........................66
SECTION 9.04. Notation on Securities.........................................................................66
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to be Furnished to Debentures Trustees........66
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Corporation May Consolidate, etc., on Certain Terms...........................................67
SECTION 10.02. Successor Corporation to be Substituted for Corporation.......................................67
SECTION 10.03. Opinion of Counsel to be Given Debenture Trustee..............................................68
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture........................................................................68
SECTION 11.02. Deposited Moneys and U.S. Government Obligations to
be Held in Trust by Debentures Trustees......................................................69
SECTION 11.03. Paying Agent to Repay Moneys Held.............................................................70
SECTION 11.04. Return of Unclaimed Moneys....................................................................70
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government..........................................70
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate Obligation..........................................72
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors....................................................................................72
SECTION 13.02. Official Acts by Successor Corporation........................................................72
SECTION 13.03. Surrender of Corporation Powers...............................................................73
SECTION 13.04. Addresses for Notices, etc....................................................................73
SECTION 13.05. Governing Law.................................................................................73
SECTION 13.06. Evidence of Compliance with Conditions Precedent..............................................73
SECTION 13.07. Business Days.................................................................................74
SECTION 13.08. Trust Indenture Act to Control................................................................74
SECTION 13.09. Table of Contents, Headings, etc..............................................................74
SECTION 13.10. Execution in Counterparts.....................................................................74
SECTION 13.11. Separability..................................................................................75
SECTION 13.12. Assignment....................................................................................75
SECTION 13.13. Acknowledgement of Rights.....................................................................75
ARTICLE XIV
PREPAYMENT OF SECURITIES; MANDATORY AND
OPTIONAL SINKING FUND
SECTION 14.01. Special Event Prepayment......................................................................76
SECTION 14.02. Optional Prepayment by Corporation............................................................76
SECTION 14.03. No Sinking Fund...............................................................................77
SECTION 14.04. Notice of Prepayment; Selection of Securities.................................................77
SECTION 14.05. Payment of Securities Called for Prepayment...................................................78
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate......................................................................79
SECTION 15.02. Default on Senior Indebtedness................................................................79
SECTION 15.03. Liquidation; Dissolution; Bankruptcy..........................................................80
SECTION 15.04. Subrogation...................................................................................82
SECTION 15.05. Debenture Trustee to Effectuate Subordination.................................................83
SECTION 15.06. Notice by the Corporation.....................................................................83
SECTION 15.07. Rights of the Debenture Trustee; Holders of Senior............................................84
SECTION 15.08. Subordination May Not Be Impaired.............................................................85
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period..........................................................85
SECTION 16.02. Notice of Extension...........................................................................86
THIS INDENTURE, dated as of June 9, 1997, between TeleBanc
Financial Corporation, a Delaware corporation (hereinafter sometimes called the
"Corporation"), and Wilmington Trust Company, a Delaware banking corporation, as
debenture trustee (hereinafter sometimes called the "Debenture Trustee").
W I T N E S S E T H :
In consideration of the premises, and the purchase of the
Securities (as defined below) by the holders thereof, the Corporation covenants
and agrees with the Debenture Trustee for the equal and proportionate benefit of
the respective holders from time to time of the Securities, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
The terms defined in this Section 1.01 (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 1.01. All other terms used in this Indenture which are defined in the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), or which
are by reference therein defined in the Securities Act of 1933, as amended (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) Initial Capital
Securities; (vi) Exchange Capital Securities; (vii) Direct Action; (viii)
Initial Capital Securities Guarantee; (ix) Exchange Capital Securities
Guarantee; and (x) Distributions. 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 Sums" shall have the meaning set forth in Section
2.06(c).
"Adjusted Treasury Rate" means, with respect to any prepayment
date pursuant to Section 14.01, 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 Remaining Life (if no
maturity is within three months before or after the maturity corresponding to
the Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined, 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,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date, in each case calculated on the third Business Day
preceding the prepayment date, plus in each case (a) 4.100% if such prepayment
date occurs on or prior to June 1, 1998 and (b) 3.550% in all other cases.
"Affiliate" shall have the meaning given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Authenticating Agent" shall mean any agent or agents of the
Debenture 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 Corporation 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 Corporation 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 Debenture Trustee.
"Book-Entity Capital Securities" shall have the meaning set forth
in Section 2.05(a)(i).
"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 New York, New York, Wilmington, Delaware or Arlington, Virginia
are authorized or required by law or executive order to remain closed.
"Capital Securities" shall mean undivided beneficial interests in
the assets of the Trust which are designated as "Capital Securities" and rank
pari passu with the Common Securities issued by the 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 Initial
Capital Securities and Exchange Capital Securities.
"Capital Securities Guarantee" shall mean any guarantee agreement
that the Corporation may enter into with Wilmington Trust Company or other
Persons that operates directly or indirectly for the benefit of holders of
Capital Securities and shall include the Initial Capital Securities Guarantee
and the Exchange Capital Securities Guarantee with respect to the Initial
Capital Securities and the Exchange 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.
"Common Securities" shall mean undivided beneficial interests in
the assets of the Trust which are designated as "Common Securities" and rank
pari passu with Capital Securities issued by the 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,
prepayment and other payments to which they are then entitled.
"Common Securities Guarantee" shall mean any guarantee that the
Corporation may enter into that operates directly or indirectly for the benefit
of holders of Common Securities.
"Common Stock" shall mean the Common Stock, par value $.01 per
share, of the Corporation 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.
"Comparable Treasury Issue" shall mean the United States Treasury
security selected by the Quotation Agent as having a maturity comparable to the
Remaining Life of the Securities that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining Life
of the Securities, provided that if no United States Treasury security has a
maturity which is within a period from three months before to three months after
the Remaining Life, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Adjusted
Treasury Rate shall be interpolated or extrapolated on a straight-line basis,
rounding to the nearest month, using such securities.
"Comparable Treasury Price" shall mean, with respect to any
prepayment date pursuant to Section 14.01, (i) the average of three Reference
Treasury Dealer Quotations for such prepayment date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (ii) if the Debenture
Trustee obtains fewer than five such Reference Treasury Dealer Quotations, the
average of all such Reference Treasury Dealer Quotations.
"Corporation" shall mean TeleBanc Financial Corporation, a
Delaware corporation, and, subject to the provisions of Article X, shall include
its successors and assigns.
"Corporation Request" or "Corporation Order" shall mean a written
request or order signed in the name of the Corporation by an Officer and
delivered to the Debenture Trustee.
"Compounded Interest" shall have the meaning set forth in Section
16.01.
"Custodian" shall mean any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
"Debenture Trustee" shall mean the Person identified as
"Debenture Trustee" in the first paragraph hereof, and, subject to the
provisions of Article VI hereof, shall also include its successors and assigns
as Debenture Trustee hereunder.
"Declaration" shall mean the Amended and Restated Declaration of
Trust of the Trust, dated as of June 9, 1997, as amended from time to time.
"Default" shall mean any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulted Interest" shall have the same meaning set forth in
Section 2.11.
"Deferred Interest" shall have the meaning set forth in Section
16.01.
"Definitive Securities" shall mean those securities issued in
fully registered certificated form not otherwise in global form.
"Depositary" shall mean, with respect to the Securities for which
the Corporation 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 Corporation pursuant to Section 2.05(d).
"Dissolution Event" shall mean 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
5.01, 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" shall mean the offer that may be made pursuant
to the Registration Rights Agreement (i) by the Corporation to exchange the
Exchange Securities for the Initial Securities and to execute the Exchange
Capital Securities Guarantee in respect of the Exchange Capital Securities and
(ii) by the Trust to exchange the Exchange Capital Securities for the Initial
Capital Securities.
"Exchange Securities" shall mean the Corporation's 11.00% Junior
Subordinated Deferrable Interest Debentures due June 1, 2027, Series B, as
authenticated and issued under this Indenture.
"Extended Interest Payment Period" shall have the meaning set
forth in Section 16.01.
"Federal Reserve" shall mean the Board of Governors of the
Federal Reserve System.
"Global Security" shall mean, with respect to the Securities, a
Security executed by the Corporation and delivered by the Debenture Trustee to
the Depositary or pursuant to the Depositary's instruction, or if no
instructions are received then held by the Property Trustee, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
"Holding Company Capital Rules" shall mean the holding company
level capital adequacy guidelines of the Federal Reserve or similar guidelines.
"Indebtedness" shall mean (i) every obligation of the Corporation
for money borrowed; (ii) every obligation of the Corporation evidenced by bonds,
debentures, notes or other similar instruments, including obligations incurred
in connection with the acquisition of property, assets or businesses; (iii)
every reimbursement obligation of the Corporation with respect to letters of
credit, banker's acceptances or similar facilities issued for the account of the
Corporation; (iv) every obligation of the Corporation issued or assumed as the
deferred purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business); (v)
every capital lease obligation of the Corporation; (vi) all indebtedness of the
Corporation, whether incurred on or prior to the date of this Indenture or
hereafter incurred, for claims in respect of derivative products, including
interest rate, foreign exchange rate and commodity forward contracts, options
and swaps and similar arrangements; and (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all dividends of
another Person the payment of which, in either case, the Corporation has
guaranteed or is responsible or liable for, directly or indirectly, as obligor
or otherwise.
"Indebtedness Ranking on a Parity with the Securities" shall mean
(i) Indebtedness, whether outstanding on the date of execution of this Indenture
or hereafter created, assumed or incurred, to the extent such Indebtedness by
its terms ranks pari passu with and not prior to the Securities in the right of
payment upon the happening of the dissolution or winding-up or liquidation or
reorganization of the Corporation, and (ii) all other debt securities, and
guarantees in respect of those debt securities, issued to any trust other than
the Trust, or a trustee of such trust, partnership or other entity affiliated
with the Corporation, that is a financing vehicle of the Corporation (a
"financing entity") in connection with the issuance by such financing entity of
equity securities or other securities guaranteed by the Corporation pursuant to
an instrument that ranks pari passu with or junior in right of payment to the
Capital Securities Guarantee. The securing of any Indebtedness otherwise
constituting Indebtedness Ranking on a
Parity with the Securities shall not be deemed to prevent such Indebtedness from
constituting Indebtedness Ranking on a Parity with the Securities.
"Indebtedness Ranking Junior to the Securities" shall mean any
Indebtedness, whether outstanding on the date of execution of this Indenture or
hereafter created, assumed or incurred, to the extent such Indebtedness by its
terms ranks junior to and not pari passu with or prior to the Securities (and
any other Indebtedness Ranking on a Parity with the Securities) in right of
payment upon the happening of the dissolution or winding-up or liquidation or
reorganization of the Corporation. The securing of any Indebtedness otherwise
constituting Indebtedness Ranking Junior to the Securities shall not be deemed
to prevent such Indebtedness from constituting Indebtedness Ranking Junior to
the Securities.
"Indenture" shall mean this instrument as originally executed or,
if amended as herein provided, as so amended.
"Initial Optional Prepayment Date" shall mean June 1, 2007.
"Initial Securities" shall mean the Corporation's 11.00% Junior
Subordinated Deferrable Interest Debentures due June 1, 2027, Series A, as
authenticated and issued under this Indenture.
"Interest Payment Date" shall have the meaning set forth in
Section 2.06(a).
"Like Amount" shall mean (i) with respect to a redemption of the
Trust Securities, Trust Securities having a liquidation amount equal to the
principal amount of Securities to be paid in accordance with their terms and
(ii) with respect to a distribution of Securities upon the liquidation of the
Trust, Securities having a principal amount equal to the liquidation amount of
the Trust Securities of the holder to whom Securities are distributed.
"Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement.
"Make Whole Amount" shall mean an amount equal to the greater of
(x) 100% of the principal amount of Securities to be prepaid or (y) the sum, as
determined by a Quotation Agent, of the present values of the remaining
scheduled payments of principal and interest on such Securities, discounted to
the prepayment date on a semi-annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Adjusted Treasury Rate, plus, in the case of
each of clauses (x) and (y), accrued and unpaid interest thereon, including
Compounded Interest and Additional Sums, if any, to the date of such prepayment.
"Maturity Date" shall mean June 1, 2027.
"Non Book-Entry Capital Securities" shall have the meaning set
forth in Section 2.05(a)(ii).
"Officers" shall mean any of the Chairman, the Chief Executive
Officer, the President, an Executive or Senior Vice President, a Vice President,
the Chief Financial Officer, the Secretary or an Assistant Secretary of the
Corporation.
"Officers' Certificate" shall mean a certificate signed by two
Officers and delivered to the Debenture Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who
may be an employee of the Corporation, and who shall be reasonably acceptable to
the Debenture Trustee.
"Optional Prepayment Price" shall have the meaning set forth in
Section 14.02(a).
"Other Debentures" shall mean all junior subordinated debentures
other than the Securities issued by the Corporation from time to time and sold
to trusts other than the Trust to be established by the Corporation (if any), in
each case similar to the Trust.
"Other Guarantees" shall mean all guarantees other than the
Capital Securities Guarantee and the Common Guarantee issued by the Corporation
with respect to preferred beneficial interests (if any) issued to trusts other
than the Trust to be established by the Corporation (if any), in each case
similar to the Trust.
The term "outstanding" when used with reference to the
Securities, shall mean, subject to the provisions of Section 7.04, as of any
particular time, all Securities authenticated and delivered by the Debenture
Trustee or the Authenticating Agent under this Indenture, except
(a) Securities theretofore cancelled by the Debenture Trustee or
the Authenticating Agent or delivered to the Debenture
Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
prepayment of which moneys in the necessary amount shall
have been deposited in trust with the Debenture Trustee or
with any paying agent (other than the Corporation) or shall
have been set aside and segregated in trust by the
Corporation (if the
Corporation shall act as its own paying agent); provided
that, if such Securities, or portions thereof, are to be
prepaid prior to maturity thereof, notice of such prepayment
shall have been given as set forth in Article XIV or
provision satisfactory to the Debenture 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 2.08 unless proof
satisfactory to the Corporation and the Debenture 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 shall mean
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 2.08 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Prepayment Price" shall mean the Special Event Prepayment Price
or the Optional Prepayment Price, as the context requires.
"Principal Office of the Debenture Trustee", or other similar
term, shall mean the office of the Debenture Trustee, at which at any particular
time its corporate trust business shall be administered.
"Purchase Agreement" shall mean the Purchase Agreement dated June
9, 1997 among the Corporation, the Trust and the Initial Purchaser named
therein.
"Quotation Agent" shall mean the Reference Treasury Dealer
appointed by the Corporation.
"Reference Treasury Dealer" shall mean a nationally recognized
U.S. Government securities dealer in New York, New York selected by the
Corporation.
"Reference Treasury Dealer Quotations" shall mean, with respect
to each Reference Treasury Dealer and any prepayment date pursuant to Section
14.01, the average, as determined by the Debenture Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Debenture Trustee by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on the third
Business Day preceding such prepayment date.
"Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated as of June 9, 1997, among the Corporation, the Trust and
the initial purchaser named therein, as such agreement may be amended, modified
or supplemented from time to time.
"Regulatory Capital Event" shall mean the receipt by the
Corporation and the Trust of an opinion of independent bank regulatory counsel
experienced in such matters to the effect that the Corporation is subject to the
Holding Company Capital Rules and is not entitled to treat the Capital
Securities as Tier 1 capital (or its then equivalent) thereunder; provided,
however, that the distribution of the Securities in connection with the
liquidation of the Trust by the Corporation shall not in and of itself
constitute a Regulatory Capital Event unless such liquidation shall have
occurred in connection with a Tax Event.
"Remaining Life" shall mean the term of the Securities from any
prepayment date pursuant to Section 14.01 to the Maturity Date.
"Responsible Officer" shall mean any officer of the Debenture
Trustee's Corporate Trust Administration department with direct responsibility
for the administration of the Indenture and also means, with respect to a
particular corporate trust matter, any other officer of the Debenture Trustee to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Restricted Security" shall mean Securities that bear or are
required to bear the legends relating to transfer restrictions under the
Securities Act set forth in Exhibit A hereto.
"Rule 144A" shall mean Rule 144A under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Securities" shall mean, collectively, the Initial Securities and
the Exchange Securities.
"Securityholder of Securities", or other similar terms, shall
mean any Person in whose name at the time a particular Security is registered in
the Security Register kept by the Corporation or the Debenture 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 Debenture Trustee pursuant to Section 4.01,
and (ii) following a Dissolution Event, any security register maintained by a
security registrar for the Securities appointed by the Corporation following the
execution of a supplemental indenture providing for transfer procedures as
provided for in Section 2.07(a).
"Senior Indebtedness" shall mean all Indebtedness, whether
outstanding on the date of execution of this Indenture or hereafter created,
assumed or incurred, except Indebtedness Ranking on a Parity with the Securities
or Indebtedness Ranking Junior to the Securities, and any deferrals, renewals or
extensions of such Senior Indebtedness.
"Special Event" shall mean a Regulatory Capital Event or a Tax
Event, as the context requires.
"Special Event Prepayment Price" shall mean, with respect to any
prepayment of the Securities following a Special Event, an amount in cash equal
to the Make Whole Amount.
"Subsidiary" shall mean with respect to any Person, (i) any
corporation at least a majority of the outstanding voting stock of which 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 the Trust and the
Corporation 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
as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after June 9,
1997, there is more than an insubstantial
risk that (i) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Securities, (ii) the interest payable by the
Corporation on the Securities is not, or within 90 days of the date of such
opinion will not be, deductible by the Corporation, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"TeleBanc Capital Trust" or the "Trust" shall mean TeleBanc
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.
"Trust Securities" shall mean, collectively, the Capital
Securities and the Common Securities.
"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 prepayable 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.
SECTION 1.02. Business Day Certificate.
____________ On the date of execution and delivery of this Indenture (with
respect to the remainder of calendar year 1997) and thereafter, within 15 days
prior to the end of each calendar year while this Indenture remains in effect
(with respect to the succeeding calendar years), the Corporation shall deliver
to the Debenture Trustee an Officers' Certificate specifying the days on which
banking institutions or trust companies in New York, New York, Wilmington,
Delaware or Arlington, Virginia are then authorized or obligated by law or
executive order to remain closed.
ARTICLE II
SECURITIES
SECTION 2.01. Forms Generally.
The Securities and the Debenture 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 Corporation is subject or usage. Each Security shall be
dated the date of its authentication.
SECTION 2.02. Execution and Authentication.
An Officer shall sign the Securities for the Corporation by
manual or facsimile signature. 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 the Debenture Trustee. The signature of the Debenture Trustee shall
be conclusive evidence that the Security has been authenticated under this
Indenture.
The Debenture Trustee shall, upon a Corporation Order,
authenticate for original issue up to, and the aggregate principal amount of
Securities outstanding at any time may not exceed, $10,310,000 aggregate
principal amount of the Securities, except as provided in Sections 2.07, 2.08,
2.09 and 14.05. The series of Securities to be initially issued hereunder shall
be the Initial Securities.
SECTION 2.03. Form and Payment.
Except as provided in Section 2.05, the Securities shall be
issued in fully registered certificated form without interest coupons. Principal
of and 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 will be exchangeable for Securities bearing identical terms and
provisions at the office or agency of the Corporation maintained for such
purpose under Section 3.02; provided, however, that payments of interest may be
made at the option of the Corporation (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 and
premium, if any, and interest (including Compounded Interest and Additional
Sums, if any) and Liquidated Damages, 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.
SECTION 2.04. Legends.
(a) Except as permitted by subsection (b) of this Section 2.04 or
as otherwise determined by the Corporation in accordance with applicable law,
each Security shall bear the applicable legends relating to restrictions on
transfer pursuant to the Securities Act and any other applicable securities laws
in substantially the form set forth on Exhibit A hereto.
(b) In the event of an Exchange Offer, the Corporation shall
issue and the Debenture Trustee, upon Corporation Order, shall authenticate
Exchange Securities in exchange for Initial Securities accepted for exchange in
the Exchange Offer, which Exchange Securities shall not bear the legends
required by subsection (a) above, in each case unless the holder of such Initial
Securities is either (A) a broker-dealer who purchased such Initial Securities
directly from the Corporation for resale pursuant to Rule 144A or any other
available exemption under the Securities Act, (B) a Person participating in the
distribution of the Initial Securities or (C) a Person who is an Affiliate of
the Corporation or the Trust.
SECTION 2.05. Global Security.
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in
book-entry form ("Book-Entry Capital Securities"), a Like Amount
of Definitive Securities shall be presented to the Debenture
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 2.07),
to be registered in the name of the Depositary, or its nominee,
and delivered by the Debenture Trustee to the Depositary for
crediting to the accounts of its participants pursuant to the
instructions of the Administrative Trustees; the Corporation upon
any such presentation shall execute one or more Global Securities
in such aggregate principal amount and deliver the same to the
Debenture 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 Debenture Trustee by the Property Trustee and
any Capital Security certificates which represent
Capital Securities other than Book-Entry Capital Securities ("Non
Book-Entry Capital Securities") will be deemed to represent
beneficial interests in Securities presented to the Debenture
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 the
Securities for transfer or reissuance, at which time such Capital
Security certificates will be cancelled and a Security in a Like
Amount, 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, will be
executed by the Corporation and delivered to the Debenture
Trustee for authentication and delivery in accordance with this
Indenture; and upon the issuance of such Securities, Securities
with an equivalent aggregate principal amount that were presented
by the Property Trustee to the Debenture Trustee will be
cancelled.
(b) The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; provided, however,
that the aggregate principal amount of outstanding Securities represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and prepayments. Any endorsement of a Global Security to
reflect the amount of any increase or decrease in the aggregate principal amount
of outstanding Securities represented thereby shall be made by the Debenture
Trustee, in accordance with instructions given by the Corporation as required by
this Section 2.05.
(c) The Global Securities may be transferred, in whole but not in
part, only to the Depositary, to another nominee of the Depositary, or to a
successor Depositary selected or approved by the Corporation or to a nominee of
such successor Depositary.
(d) If at any time the Depositary notifies the Corporation 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, in each case, a
successor Depositary is not appointed by the Corporation within 90 days after
the Corporation receives such notice or becomes aware of such condition, as the
case may be, the Corporation will execute, and the Debenture Trustee, upon
receipt of a Corporation Order, 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 a Default or an Event of
Default, the Depositary shall have the right to exchange the Global Securities
for Definitive Securities. In addition, the Corporation 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
Corporation shall execute, and subject to Section 2.07, the
Debenture Trustee, upon receipt of an Officers' Certificate evidencing such
determination by the Corporation and a Corporation Order, 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 Debenture 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 Debenture Trustee. The Debenture Trustee shall deliver such
Definitive Securities to the Depositary for delivery to the Persons in whose
names such Definitive Securities are so registered.
SECTION 2.06 Interest.
(a) Each Security will bear interest at the rate of 11.00% per
annum (the "Coupon Rate") 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 June 9, 1997, until the principal thereof becomes due and payable, and at
the Coupon Rate 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 June 1 and December 1
of each year, commencing December 1, 1997 (each, an "Interest Payment Date"), 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 15th day of the month immediately
preceding the month in which the relevant Interest Payment Date falls.
(b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
(c) During such time as the Property Trustee is the holder of any
Securities, the Corporation 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 Trust on the outstanding Trust Securities shall not be reduced as
a result of any additional taxes, duties and other governmental charges to which
the Trust has become subject as a result of a Tax Event ("Additional Sums").
SECTION 2.07. Transfer and Exchange.
(a) Transfer Restrictions. (i) The Initial Securities, and those
Exchange Securities with respect to which any Person described in Section
2.04(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 Corporation in accordance with applicable law. Upon any distribution of the
Securities following a Dissolution Event, the Corporation and the Debenture
Trustee shall enter into a supplemental indenture pursuant to Section 9.01 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.
(ii) The Securities will be issued and may be transferred only
in blocks having an aggregate principal amount of not less than $100,000 and in
multiples of $1,000 in excess thereof. Any attempted transfer of the Securities
in a block having an aggregate principal amount of less than $100,000 shall be
deemed to be voided and of no legal effect whatsoever. Any such purported
transferee shall be deemed not to be a holder of such Securities for any
purpose, including, but not limited to the receipt of payments on such
Securities, and such purported transferee shall be deemed to have no interest
whatsoever in such Securities.
(b) General Provisions Relating to Transfers and Exchanges. To
permit registrations of transfers and exchanges, the Corporation shall execute
and the Debenture Trustee shall authenticate Definitive Securities and Global
Securities at the request of the security registrar for the Securities. 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 Corporation, 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 Corporation may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith.
The Corporation 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 prepayment or any
notice of selection of Securities for prepayment 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 prepayment in whole or in
part, except the nonprepaid portion of any Security being prepaid in part.
Prior to due presentment for the registration of a transfer of
any Security, the Debenture Trustee, the Corporation and any agent of the
Debenture Trustee or the Corporation may deem and treat the Person in whose name
any Security is registered as the absolute owner of such Security for the
purpose of
receiving payment of principal of and premium, if any, and interest on such
Securities, and none of the Debenture Trustee, the Corporation and any agents of
the Debenture Trustee or the Corporation shall be affected by notice to the
contrary.
(c) Exchange of Initial Securities for Exchange Securities.
The Initial Securities may be exchanged for Exchange Securities pursuant to the
terms of the Exchange Offer. The Debenture Trustee shall make the exchange as
follows:
The Corporation shall present the Debenture Trustee with an
Officers' Certificate certifying the following:
(A) upon issuance of the Exchange Securities, the
transactions contemplated by the Exchange Offer have
been consummated; and
(B) the principal amount of Initial Securities properly
tendered in the Exchange Offer that are represented
by a Global Security, the principal amount of Initial
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 Exchange
Securities shall be registered and sent for each such
holder.
The Debenture Trustee, upon receipt of (i) such Officers'
Certificate, (ii) an Opinion of Counsel (x) to the effect that the Exchange
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(q) of the Registration Rights Agreement
and (iii) a Corporation Order, shall authenticate (A) a Global Security
representing Exchange Securities in aggregate principal amount equal to the
aggregate principal amount of Initial Securities represented by a Global
Security indicated in such Officers' Certificate as having been properly
tendered and (B) Definitive Securities representing Exchange Securities
registered in the names of, and in the principal amounts indicated in, such
Officers' Certificate.
If the principal amount of the Global Security for the Exchange
Securities is less than the principal amount of the Global Security for the
Initial Securities, the Debenture Trustee shall make an endorsement on such
Global Security for Initial Securities indicating a reduction in the principal
amount represented thereby.
The Debenture Trustee shall deliver such Definitive Securities
representing Exchange Securities to the holders thereof as indicated in such
Officers' Certificate.
SECTION 2.08. Replacement Securities.
If any mutilated Security is surrendered to the Debenture
Trustee, or the Corporation and the Debenture Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, the Corporation
shall issue and the Debenture Trustee shall authenticate a replacement Security
if the Debenture 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 Debenture Trustee and the Corporation to protect the
Corporation, the Debenture Trustee, any agent thereof or any authenticating
agent from any loss that any of them may suffer if a Security is replaced. The
Corporation or the Debenture Trustee may charge for its expenses in replacing a
Security.
Every replacement Security is an obligation of the Corporation
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
SECTION 2.09. Temporary Securities.
Pending the preparation of Definitive Securities, the Corporation
may execute, and upon Corporation Order the Debenture Trustee shall authenticate
and make available for delivery, temporary Securities that are printed,
lithographed, typewritten, mimeographed 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 Corporation 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 Corporation for such purpose pursuant to Section
3.02 hereof, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities, the Corporation shall execute, and the
Debenture 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.
SECTION 2.10. Cancellation.
The Corporation at any time may deliver Securities to the
Debenture Trustee for cancellation. The Debenture Trustee and no one else shall
cancel all Securities surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall retain or destroy cancelled
Securities in accordance with its normal practices (subject to the record
retention requirement of the Exchange Act) unless the Corporation directs them
to be returned to it. The Corporation may not issue new Securities to replace
Securities that have been prepaid or paid or that have been delivered to the
Debenture Trustee for cancellation.
SECTION 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 Corporation, at its election, as
provided in clause (a) or clause (b) below:
(a) The Corporation 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 Corporation
shall notify the Debenture 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 Corporation
shall deposit with the Debenture 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 Debenture
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 Debenture 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 Debenture Trustee of the
notice of the proposed payment. The Debenture Trustee shall promptly
notify the Corporation of such special record date and, in the name and
at the expense of the Corporation, 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 Corporation 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 Corporation to the Debenture Trustee of the
proposed payment pursuant to this clause, such manner of payment shall
be deemed practicable by the Debenture Trustee.
SECTION 2.12. CUSIP Numbers.
The Corporation in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Debenture Trustee shall use "CUSIP"
numbers in notices of prepayment as a convenience to Securityholders; provided,
however, 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 prepayment and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such prepayment shall
not be affected by any defect in or omission of such numbers. The Corporation
will promptly notify the Debenture Trustee of any change in the CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE CORPORATION
SECTION 3.01. Payment of Principal, Premium and Interest.
The Corporation 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. The
Corporation further covenants to pay any and all amounts due in respect of the
Securities, including, without limitation, Additional Sums, as may be required
pursuant to Section 2.06(c), Liquidated Damages, if any, on the dates and in the
manner required under the Registration Rights Agreement and Compounded Interest,
as may be required pursuant to Section 16.01.
SECTION 3.02. Offices for Notices and Payments, etc.
So long as any of the Securities remain outstanding, the
Corporation will maintain in Wilmington, Delaware 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 Corporation in respect of the Securities or this Indenture may be
served. The Corporation will give to the Debenture 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 Corporation in a notice to
the Debenture Trustee, any such office or agency for all of the above purposes
shall be the Principal Office of the Debenture Trustee. In case the Corporation
shall fail to maintain any such office or agency in Wilmington, Delaware 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 Debenture Trustee.
In addition to any such office or agency, the Corporation may
from time to time designate one or more offices or agencies outside Wilmington,
Delaware where the Securities may be presented for payment, for registration of
transfer and for exchange and where notices and demands to or upon the
Corporation in respect of the Securities or this Indenture may be served in the
manner provided in this Indenture, and the Corporation may from time to time
rescind such designation, as the Corporation may deem desirable or expedient;
provided, however, that no such designation or rescission shall in any manner
relieve the Corporation of its obligation to maintain any such office or agency
in Wilmington, Delaware for the purposes above mentioned. The Corporation will
give to the Debenture Trustee prompt written notice of any such designation or
rescission thereof.
SECTION 3.03. Appointments to Fill Vacancies in Debenture
Trustee' Office.
The Corporation, whenever necessary to avoid or fill a vacancy in
the office of Debenture Trustee, will appoint, in the manner provided in Section
6.10, a Debenture Trustee, so that there shall at all times be a Debenture
Trustee hereunder.
SECTION 3.04. Provision as to Paying Agent.
(a) If the Corporation shall appoint a paying agent other than
the Debenture Trustee with respect to the Securities, it
will cause
such paying agent to execute and deliver to the Debenture
Trustee an instrument in which such agent shall agree with
the Debenture Trustee, subject to the provision of this
Section 3.04,
(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 Corporation or by any
other obligor on the Securities) in trust for the
benefit of the holders of the Securities; and
(2) that it will give the Debenture Trustee notice of any
failure by the Corporation (or by any other obligor
on the Securities) to make any payment of the
principal of and premium or interest (including
Additional Sums and Compounded Interest, if any) and
Liquidated Damages, if any, on the Securities when
the same shall be due and payable.
(b) If the Corporation 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
Debenture Trustee of any failure to take such action and of
any failure by the Corporation (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 3.04 to the contrary
notwithstanding, the Corporation 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 Debenture Trustee
all sums held in trust for such Securities by the Debenture
Trustee or any paying agent hereunder, as required by this
Section 3.04, such sums to be held by the Debenture Trustee
upon the trusts herein contained.
(d) Anything in this Section 3.04 to the contrary
notwithstanding, the agreement to hold sums in trust as
provided in this Section 3.04 is subject to Sections 11.03
and 11.04.
SECTION 3.05. Certificate to Debenture Trustee.
The Corporation will deliver to the Debenture Trustee on or
before 120 days after the end of each fiscal year in each 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 Corporation, stating that in the course of the performance by the
signers of their duties as officers of the Corporation they would normally have
knowledge of any Default by the Corporation 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.
SECTION 3.06. Compliance with Consolidation Provisions.
The Corporation 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.
SECTION 3.07. Limitation on Dividends.
The Corporation 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 Corporation's capital stock, (ii) make any payment
of principal of or premium, if any, or interest on or repay, repurchase or
redeem any debt securities of the Corporation (including 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 (other than the
Capital Securities Guarantee) by the Corporation of the debt securities of any
Subsidiary of the Corporation (including Other Guarantees) if such guarantee
ranks pari passu with 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, (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) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock, (d) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged and (e) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Corporation's benefit or
compensation plans for its directors, officers or employees or any of the
Corporation's dividend reinvestment plans), if at such time (1) there shall have
occurred any event of
which the Corporation has actual knowledge that (a) is a Default or an Event of
Default and (b) in respect of which the Corporation shall not have taken
reasonable steps to cure, (2) if such Securities are held by the Property
Trustee, the Corporation shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee or (3) the Corporation shall
have given notice of its election to exercise its right to commence an Extended
Interest Payment Period and shall not have rescinded such notice, and such
Extended Interest Payment Period or any extension thereof shall have commenced
and be continuing.
SECTION 3.08. Covenants as to TeleBanc Capital Trust
In the event Securities are issued to the Trust or a trustee of
such trust in connection with the issuance of Trust Securities by the Trust, for
so long as such Trust Securities remain outstanding, the Corporation (i) will
maintain 100% direct or indirect ownership of the Common Securities of the
Trust; provided, however, that any successor of the Corporation, permitted
pursuant to Article X, may succeed to the Corporation's ownership of such Common
Securities, (ii) will use commercially reasonable efforts to cause the Trust (a)
to remain a business trust, except in connection with a distribution of
Securities to the holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities of the Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and (b)
to otherwise continue to be classified as a grantor trust and not an association
taxable as a corporation for United States federal income tax purposes, (iii)
will use commercially reasonable efforts to cause each holder of the Trust
Securities to be treated as owning an undivided beneficial interest in the
Securities and (iv) will not cause, as sponsor of the Trust, or permit, as
holder of the Common Securities, the dissolution, winding-up or termination of
the Trust, except as provided in the Declaration.
SECTION 3.09. Payment of Expenses.
In connection with the offering, sale and issuance of the
Securities to the Trust and in connection with the sale of the Trust Securities
by the Trust, the Corporation, 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 purchaser
payable pursuant to the Purchase Agreement, fees and expenses in connection with
any Exchange Offer, filing of a shelf registration statement or other action to
be taken pursuant to the Registration Rights Agreement and compensation of the
Debenture Trustee in accordance with the provisions of Section 6.06;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust, the
offering,
sale and issuance of the Trust Securities (including commissions to the initial
purchaser in connection therewith), the fees and expenses of the Property
Trustee and the Delaware Trustee, the costs and expenses relating to the
operation of the 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 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 Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust; and
(e) pay all other fees, expenses, debts and obligations (other
than in respect of the Trust Securities) related to the Trust.
SECTION 3.10. Payment Upon Resignation or Removal.
Upon termination of this Indenture or the removal or resignation
of the Debenture Trustee, unless otherwise stated, the Corporation shall pay to
the Debenture 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 Corporation 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 CORPORATION AN THE DEBENTURE TRUSTEE
SECTION 4.01. Securityholders' Lists.
The Corporation covenants and agrees that it will furnish or
cause to be furnished to the Debenture Trustee:
(a) on a semi-annual basis on each regular record date for the
Securities, a list, in such form as the Debenture 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 Debenture Trustee may request in
writing, within 30 days after the receipt by the
Corporation, of any such request, a list of similar form
and content as of a date not more than 15 days prior to the
time such list is furnished,
except that, no such lists need be furnished so long as the
Debenture Trustee is in possession thereof by reason of its
acting as security registrar for the Securities.
SECTION 4.02. Preservation and Disclosure of Lists.
(a) The Debenture 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 4.01 or (2) received by it in the
capacity of security registrar (if so acting) hereunder.
The Debenture Trustee may destroy any list furnished to it
as provided in Section 4.01 upon receipt of a new list so
furnished.
(b) In case three or more holders of Securities (hereinafter
referred to as "applicants") apply in writing to the
Debenture Trustee and furnish to the Debenture 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 Debenture
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 Debenture Trustee in
accordance with the provisions of subsection (a)
of this Section 4.02, or
(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 Debenture Trustee in
accordance with the provisions of subsection (a)
of this Section 4.02, 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 Debenture Trustee shall elect not to afford
such applicants access to such information, the Debenture
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 Debenture
Trustee in accordance with the provisions of subsection (a)
of this Section 4.02 a copy of the form of proxy or other
communication which is specified in such request with
reasonable promptness after a tender to the Debenture
Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of
mailing, unless within five Business Days after such
tender, the Debenture 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 Debenture Trustee, such mailing
would be contrary to the best interests of the holders of
Securities 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 Debenture 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 Debenture 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 Corporation and the
Debenture Trustee that neither the Corporation nor the
Debenture 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 4.02, regardless of the
source from which such information was derived, and that
the Debenture Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made
under said subsection (b).
SECTION 4.03. Reports by the Corporation.
(a) The Corporation covenants and agrees to file with the
Debenture Trustee, within 15 days after the date on which
the Corporation 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 Corporation may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if the Corporation is not required to file
information, documents or reports pursuant to either of
such sections, then to provide to the Debenture Trustee,
such of the supplementary and periodic information,
documents and reports which would have been 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.
(b) The Corporation covenants and agrees to file with the
Debenture 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 Corporation 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 Corporation 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 Debenture Trustee,
such summaries of any information, documents and reports
required to be filed by the Corporation pursuant to
subsections (a) and (b) of this Section 4.03 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
Debenture Trustee is for informational purposes only and
the
Debenture Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or
determinable from information contained therein, including
the Corporation's compliance with any of its covenants
hereunder (as to which the Debenture 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 Corporation shall, upon
request, provide the information required by clause (d)(4)
thereunder to each Securityholder and to each beneficial
owner and prospective purchaser of Securities identified by
each Securityholder of Restricted Securities, unless such
information is furnished to the Commission pursuant to
Section 13 or 15(d) of the Exchange Act.
SECTION 4.04. Reports by the Debenture Trustee.
(a) The Debenture Trustee shall transmit to Securityholders
such reports concerning the Debenture 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 Debenture Trustee shall,
within sixty days after each June 1 following the date of
this Indenture, commencing June 1, 1998, deliver to
Securityholders a brief report, dated as of such June 1,
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 Debenture
Trustee with each stock exchange, if any, upon which the
Securities are listed, with the Commission and with the
Corporation. The Corporation will promptly notify the
Debenture Trustee when the Securities are listed on any
stock exchange.
ARTICLE V
REMEDIES OF THE DEBENTURE TRUSTEE
AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 5.01. 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 involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any interest (including
Compounded Interest and Additional Sums, if any) or
Liquidated Damages, if any, on the Securities or any Other
Debentures when due, and continuance of such default for a
period of 30 days; provided, however, that a valid
extension of an interest payment period by the Corporation
in accordance with the terms hereof or thereof shall not
constitute a default in the payment of interest for this
purpose; or
(b) default in the payment of any principal of (or premium, if
any, on) the Securities or any Other Debentures when due,
whether at maturity, upon prepayment, by declaration of
acceleration of maturity or otherwise; or
(c) default in the performance, or breach, of any covenant or
warranty of the Corporation 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 Corporation by the
Debenture Trustee or to the Corporation and the Debenture
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 Corporation 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
Corporation 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 Corporation 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 Corporation
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 Debenture
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 Corporation
(and to the Debenture 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 Corporation shall pay or shall deposit with the Debenture Trustee a sum
sufficient to pay (A) all matured installments of interest (including Compounded
Interest and Additional Sums, if any) and Liquidated Damages, if any, on 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 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 compensation due to the Debenture Trustee and each
predecessor Debenture Trustee, their respective agents, attorneys and counsel,
pursuant to Section 6.06, 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 Corporation and to the Debenture
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 Debenture 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 Debenture Trustee, then and in every
such case the Corporation, the Debenture 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 Corporation, the Debenture
Trustee and the holders of the Securities shall continue as though no such
proceeding had been taken.
SECTION 5.02. Payment of Securities on Default; Suit Therefor.
The Corporation covenants that (a) in case default shall be made
in the payment of any installment of interest (including Compounded Interest and
Additional Sums, if any) and Liquidated Damages, if any, on 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 prepayment or by declaration or otherwise,
then, upon demand of the Debenture Trustee, the Corporation will pay to the
Debenture 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 (including Compounded Interest and
Additional Sums, if any) and Liquidated Damages, if any, 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 the Trust or a trustee of such trust, without
duplication of any other amounts paid by the Trust or a trustee in respect
thereof) upon the overdue installments of interest (including Compounded
Interest and Additional Sums, if any) and Liquidated Damages, if any, 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 the
reasonable compensation to the Debenture Trustee, its agents, attorneys and
counsel, and any other amount due to the Debenture Trustee pursuant to Section
6.06.
In case the Corporation shall fail forthwith to pay such amounts
upon such demand, the Debenture 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
Corporation or any other obligor on the Securities and collect in the manner
provided by law out of the property of the
Corporation or any other obligor on the Securities, wherever situated, the
moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Corporation 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
Corporation or such other obligor, or in the case of any other similar judicial
proceedings relative to the Corporation or other obligor upon the Securities, or
to the creditors or property of the Corporation or such other obligor, the
Debenture 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 Debenture Trustee shall have made any demand
pursuant to the provisions of this Section 5.02, 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 principal 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 Debenture Trustee (including any
claim for amounts due to the Debenture Trustee pursuant to 6.06) and of the
Securityholders allowed in such judicial proceedings relative to the Corporation
or any other obligor on the Securities, or to the creditors or property of the
Corporation 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 Debenture Trustee, and, in the
event that the Debenture Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Debenture Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Debenture Trustee,
each predecessor Debenture Trustee and their respective agents, attorneys and
counsel, and all other amounts due to the Debenture Trustee pursuant to Section
6.06.
Nothing herein contained shall be construed to authorize the
Debenture 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 Debenture 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 Debenture
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 Debenture 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 Debenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Debenture Trustee shall be a party), the Debenture 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.
SECTION 5.03. Application of Moneys Collected
by Debenture Trustee.
Any moneys collected by the Debenture Trustee shall be applied in
the following order, at the date or dates fixed by the Debenture 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 all other amounts due to the Debenture Trustee
under Section 6.06;
Second: To the payment of all Senior Indebtedness of the
Corporation 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 (including
Compounded Interest and Additional Sums, if any) and Liquidated Damages, if any,
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 Corporation.
SECTION 5.04. 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 Debenture 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
Debenture Trustee to institute such action, suit or proceeding in its own name
as Debenture Trustee hereunder and shall have offered to the Debenture Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Debenture 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 Debenture 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
(and premium, if any) and interest on (including Compounded Interest and
Additional Sums, if any) and Liquidated Damages, if any, 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 Debenture 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 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 Debenture Trustee shall be entitled to such relief as can
be given either at law or in equity.
The Corporation and the Debenture 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 referred to in clause (a) or (b) of
Section 5.01.
SECTION 5.05. Proceedings by Debenture Trustee.
In case an Event of Default occurs with respect to Securities and
is continuing, the Debenture 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 Debenture 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 Debenture Trustee by this Indenture or by
law.
SECTION 5.06. Remedies Cumulative and Continuing.
All powers and remedies given by this Article V to the Debenture
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 Debenture 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 Debenture
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
5.04, every power and remedy given by this Article V or by law to the Debenture
Trustee or to the Securityholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Debenture Trustee or by the
Securityholders.
SECTION 5.07. 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
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee; provided, however, that (subject to the provisions of Section 6.01) the
Debenture Trustee shall have the right to decline to follow any such direction
if the Debenture Trustee shall determine that the action so directed would be
unjustly prejudicial to the holders not taking part in such direction or if the
Debenture Trustee being advised by counsel determines that the action or
proceeding so directed may not
lawfully be taken or if the Debenture Trustee in good faith by one of its
Responsible Officers shall determine that the action or proceedings so directed
would involve the Debenture 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 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 (including Compounded Interest
and Additional Sums, if any) or Liquidated Damages, if any, on any of the
Securities (unless such default has been cured and a sum sufficient to pay all
matured installments of interest (including Compounded Interest and Additional
Sums, if any) (and premium, if any) and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) 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 Corporation, the Debenture
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 5.07, 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.
SECTION 5.08. Notice of Defaults.
(a) The Debenture Trustee shall, within 90 days after the
occurrence of a Default with respect to the Securities actually known to a
Responsible Officer of the Debenture Trustee, mail to all Securityholders, as
the names and addresses of such holders appear upon the Security Register,
notice of all Defaults known to the Debenture Trustee, unless such Default shall
have been cured before the giving of such notice (the term "Default" for the
purpose of this Section 5.08 being hereby defined to be any of the events
specified in clauses (a), (b), (c), (d) and (e) of Section 5.01, not including
periods of grace, if any, provided for therein, and irrespective of the giving
of written notice specified in clause (c) of Section 5.01); provided, however,
that, except in the case of Default in the payment of the principal of (or
premium, if any) or interest (including Compounded Interest or Additional Sums,
if any) or Liquidated Damages, if any, on any of the Securities, the Debenture
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 Debenture Trustee in good faith determines that the withholding
of such notice is in the interests of the Securityholders; provided, further,
that in the case of any Default of the character specified in Section 5.01(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.
(b) Within ten Business Days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Debenture Trustee, the
Debenture Trustee shall transmit notice of such Event of Default to all
Securityholders as their names and addresses appear on the Security Register,
unless such Event of Default shall have been cured or waived.
SECTION 5.09. 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 Debenture
Trustee for any action taken or omitted by it as Debenture 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 5.09
shall not apply to any suit instituted by the Debenture 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 (including
Compounded Interest and Additional Sums, if any) or Liquidated Damages, if any,
on any Security against the Corporation on or after the same shall have become
due and payable.
ARTICLE VI
CONCERNING THE DEBENTURE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Debenture Trustee.
With respect to the holders of the Securities issued hereunder,
the Debenture 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 Debenture Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
No provision of this Indenture shall be construed to relieve the
Debenture 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 Debenture Trustee
shall be determined solely by the express provisions
of this Indenture, and the Debenture 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 Debenture Trustee; and
(2) in the absence of bad faith on the part of the
Debenture Trustee, the Debenture 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 Debenture 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 Debenture Trustee, the Debenture
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 Debenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers, unless it shall be proved that the
Debenture Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Debenture 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 5.07, relating to the time, method and
place of conducting any proceeding for any remedy available
to the
Debenture Trustee, or exercising any trust or power
conferred upon the Debenture Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require
the Debenture 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 it reasonably believes 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.
SECTION 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Debenture 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 Corporation
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 Debenture Trustee by a
copy thereof certified by the Secretary or an Assistant
Secretary of the Corporation;
(c) the Debenture 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 omitted by it hereunder in
good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Debenture 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 Debenture Trustee reasonable and sufficient security
or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) the Debenture 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 Debenture 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 man would exercise or use under the
circumstances in the conduct of his own affairs;
(f) the Debenture 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 Debenture 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
Debenture Trustee, not reasonably assured to the Debenture
Trustee by the security afforded to it by the terms of this
Indenture, the Debenture Trustee may require reasonable
indemnity against such expense or liability as a condition
to so proceeding;
(g) the Debenture 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 Debenture
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;
(h) the Debenture Trustee shall not be charged with knowledge
of any Default or Event of Default with respect to the
Securities unless (1) such Default or Event of Default
falls within Section 5.01(a) (other than a default with
respect to the payment of Compounded Interest, Liquidated
Damages or Additional Sums) or 5.01(b) of the Indenture,
(2) a Responsible Officer shall have actual knowledge of
such Default or Event of Default or (3) written notice of
such Default or Event of Default shall have been given to
the Debenture Trustee by the Corporation or any other
obligor on the Securities or by any holder of the
Securities; and
(i) the Debenture Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith, without
negligence or willful misconduct and believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Indenture.
SECTION 6.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Securities (except in
the certificate of authentication of the Debenture Trustee or the Authenticating
Agent) shall be taken as the statements of the Corporation, and the Debenture
Trustee and the Authenticating Agent assume no responsibility for the
correctness of the same. The Debenture Trustee and the Authenticating Agent make
no representations as to the validity or sufficiency of this Indenture or of the
Securities. The Debenture Trustee and the Authenticating Agent shall not be
accountable for the use or application by the Corporation of any Securities or
the proceeds of any Securities authenticated and delivered by the Debenture
Trustee or the Authenticating Agent in conformity with the provisions of this
Indenture.
SECTION 6.04. Debenture Trustee, Authenticating Agent, Paying
Agents, Transfer Agents or Registrar May
Own Securities.
The Debenture Trustee or any Authenticating Agent or any paying
agent or any transfer agent or any security registrar for the Securities, 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 Debenture Trustee,
Authenticating Agent, paying agent, transfer agent or security registrar for the
Securities.
SECTION 6.05. Moneys to be Held in Trust.
Subject to the provisions of Section 11.04, all moneys received
by the Debenture 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 Debenture 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 Corporation. 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 Corporation, signed by an Officer
thereof.
SECTION 6.06. Compensation and Expenses of Debenture Trustee.
The Corporation, as issuer of Securities under this Indenture,
covenants and agrees to pay to the Debenture Trustee from time to time, and the
Debenture Trustee shall be entitled to, such compensation as shall be agreed to
in writing between the Corporation and the Debenture 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 Corporation will pay or reimburse the Debenture Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Debenture 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 Corporation also covenants to indemnify each of
the Debenture Trustee (including in its individual capacity) and any predecessor
Debenture 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 Debenture
Trustee) incurred without negligence or bad faith on the part of the Debenture
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
Corporation under this Section 6.06 to compensate and indemnify the Debenture
Trustee and to pay or reimburse the Debenture Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Debenture
Trustee as such, except funds held in trust for the benefit of the holders of
particular Securities.
When the Debenture Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(d) or Section
5.01(e), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for its 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 resignation or
removal of the Debenture Trustee and the defeasance or other termination of this
Indenture.
SECTION 6.07. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02, whenever
in the administration of the provisions of this Indenture the Debenture 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 Debenture Trustee, be
deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Debenture Trustee, and
such Officers' Certificate, in the absence of negligence or bad faith on the
part of the Debenture Trustee, shall be full warrant to the Debenture Trustee
for any action taken or omitted by it under the provisions of this Indenture
upon the faith thereof.
SECTION 6.08. Conflicting Interest of Debenture Trustee.
If the Debenture Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Debenture Trustee and the Corporation shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 6.09. Eligibility of Debenture Trustee.
The Debenture 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 6.09 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 Corporation may not, nor may any Person directly or
indirectly controlling, controlled by, or under common control with the
Corporation, serve as Debenture Trustee.
In case at any time the Debenture Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.09, the Debenture
Trustee shall resign immediately in the manner and with the effect specified in
Section 6.10.
SECTION 6.10. Resignation or Removal of Debenture Trustee.
(a) The Debenture Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice
of such resignation to the Corporation 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 Corporation
shall promptly appoint a successor trustee or trustees by
written instrument, in
duplicate, one copy of which instrument shall be delivered
to the resigning Debenture 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
affected Securityholders, the resigning Debenture 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 5.09,
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 Debenture Trustee shall fail to comply with the
provisions of Section 6.08 after written request
therefor by the Corporation or by any Securityholder
who has been a bona fide holder of a Security or
Securities for at least six months, or
(2) the Debenture Trustee shall cease to be eligible in
accordance with the provisions of Section 6.09 and
shall fail to resign after written request therefor
by the Corporation or by any such Securityholder, or
(3) the Debenture Trustee shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent,
or a receiver of the Debenture Trustee or of its
property shall be appointed, or any public officer
shall take charge or control of the Debenture Trustee
or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Corporation may remove the
Debenture Trustee and appoint a successor trustee by
written instrument, in duplicate, one copy of which
instrument shall be delivered to the Debenture Trustee so
removed and one copy to the successor trustee, or, subject
to the provisions of Section 5.09, 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 Debenture 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 Debenture 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 Debenture Trustee and nominate a successor
trustee, which shall be deemed appointed as successor
trustee unless within 10 days after written notification of
such nomination the Corporation 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 Debenture 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.
(d) Any resignation or removal of the Debenture 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.
SECTION 6.11. Acceptance by Successor Debenture Trustee.
Any successor trustee appointed as provided in Section 6.10 shall
execute, acknowledge and deliver to the Corporation 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 Corporation or of the successor
trustee, the trustee ceasing to act shall, upon payment of all amounts then due
it pursuant to the provisions of Section 6.06, 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 Corporation 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 6.06.
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 6.08 and eligible under the
provisions of Section 6.09.
Upon acceptance of appointment by a successor trustee as provided
in this Section 6.11, the Corporation 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 Corporation 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 Corporation.
SECTION 6.12. Succession by Merger, etc.
Any corporation into which the Debenture Trustee may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Debenture Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Debenture Trustee, shall be the successor of the Debenture
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 Debenture Trustee shall
succeed to the trusts created by this Indenture any Securities shall have been
authenticated but not delivered, any such successor to the Debenture 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 Debenture 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 Debenture Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Debenture Trustee or authenticate Securities in the name of any
predecessor Debenture Trustee shall apply only to its successor or successors by
merger or consolidation.
SECTION 6.13. Limitation on Rights of Debenture Trustee
as a Creditor.
The Debenture 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 Debenture Trustee who has resigned or been
removed shall
be subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
SECTION 6.14. Authenticating Agents.
There may be one or more Authenticating Agents appointed by the
Debenture Trustee upon the request of the Corporation 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, however, that the Debenture
Trustee shall have no liability to the Corporation 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 with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which any Authenticating Agent shall be a party, or
any corporation succeeding to 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 Debenture Trustee and to the Corporation. The
Debenture 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 Corporation. 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 Debenture Trustee may, and upon the
request of the Corporation shall, promptly appoint a successor Authenticating
Agent
eligible under this Section 6.14, shall give written notice of such appointment
to the Corporation 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.
The Corporation, as issuer of the Securities, 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
Debenture Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. 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 (including by way of
electronic transmission) 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 Corporation shall solicit from the Securityholders any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Corporation 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, but the Corporation shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the 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.
SECTION 7.02. Proof of Execution by Securityholders.
Subject to the provisions of Section 6.01, 6.02 and 8.05, 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 Debenture Trustee or in such manner as
shall be satisfactory to the Debenture Trustee. The ownership of Securities
shall be proved by the Security Register or by a certificate of the security
registrar for the Securities. The Debenture 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 8.06.
SECTION 7.03. Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any
Security, the Corporation, the Debenture Trustee, any Authenticating Agent, any
paying agent, any transfer agent and any security registrar for the Securities
may deem the person in whose name such Security shall be registered upon the
Security Register to be, and may treat him 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 2.06) interest on such Security and for all other purposes;
and neither the Corporation nor the Debenture Trustee nor any Authenticating
Agent nor any paying agent nor any transfer agent nor any security registrar for
the Securities 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.
SECTION 7.04. Securities Owned by Corporation 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 Corporation 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
Corporation or
any other obligor on the Securities shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided, however, that
for the purposes of determining whether the Debenture Trustee shall be protected
in relying on any such direction, consent or waiver, only Securities which a
Responsible Officer of the Debenture 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 7.04 if the pledgee
shall establish to the satisfaction of the Debenture Trustee the pledgee's right
to vote such Securities and that the pledgee is not the Corporation or any such
other obligor or Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Corporation or any such other
obligor. In the case of a dispute as to such right, any decision by the
Debenture Trustee taken upon the advice of counsel shall be full protection to
the Debenture Trustee.
SECTION 7.05. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the
Debenture Trustee, as provided in Section 7.01, of the taking of any action by
the holders of the percentage in aggregate principal amount of the 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 7.01, the serial number of which is shown by the
evidence to be included in the group of Securities the holders of which have
consented to such action, may, by filing written notice with the Debenture
Trustee at its principal office and upon proof of holding as provided in Section
7.02, 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.
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. 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 Corporation or to the Debenture
Trustee, or to give any directions to the Debenture
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 Debenture 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
9.02; 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.
SECTION 8.02. Call of Meetings by Debenture Trustee.
The Debenture Trustee may at any time call a meeting of
Securityholders to take any action specified in Section 8.01, to be held at such
time and at such place in Wilmington, Delaware as the Debenture 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.
SECTION 8.03. Call of Meetings by Corporation or Securityholders.
In case at any time the Corporation, 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 Debenture
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
Debenture Trustee shall not have mailed the notice of such meeting within 20
days after receipt of such request, then the Corporation or such Securityholders
may determine the time and the place in Wilmington, Delaware for such meeting
and may call such meeting to take any action authorized in Section 8.01, by
mailing notice thereof as provided in Section 8.02.
SECTION 8.04. Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders, a
Person shall be (a) 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 Debenture Trustee and its counsel and any
representatives of the Corporation and its counsel.
SECTION 8.05. Regulations.
Notwithstanding any other provisions of this Indenture, the
Debenture 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 Debenture Trustee shall, by an instrument in writing, appoint
a temporary chairman of the meeting, unless the meeting shall have been called
by the Corporation or by Securityholders as provided in Section 8.03, in which
case the Corporation 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 8.04, 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 chairman of the meeting shall have no right to vote
other than by virtue of Securities held by him 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 8.02 or 8.03 may be adjourned from time to time by a
majority of those present, and the meeting may be held as so adjourned without
further notice.
SECTION 8.06. 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 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 8.02. 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 Corporation and the other to the Debenture Trustee to be
preserved by the Debenture Trustee, the latter to have attached thereto the
ballots voted at the meeting. The holders of the Initial Securities and the
Exchange 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
SECTION 9.01. Without Consent of Securityholders.
The Corporation and the Debenture Trustee may from time to time
and at any time amend this Indenture, without the consent of the
Securityholders, for one or more of the following purposes:
(a) to evidence the succession of another Person to the
Corporation, or successive successions, and the assumption
by the successor Person of the covenants, agreements and
obligations of the Corporation pursuant to Article X
hereof;
(b) to add to the covenants of the Corporation such further
covenants, restrictions or conditions for the protection of
the Securityholders as the Board of Directors and the
Debenture 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
Debenture 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
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, and all other
matters required pursuant to Section 2.07 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 the Trust
following a Dissolution Event, provided that any such
action shall not materially adversely affect the interests
of the holders of the Securities;
(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 Debenture Trustee is hereby authorized to join with the
Corporation 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 Debenture Trustee shall not be obligated to,
but
may in its discretion, enter into any such supplemental indenture which affects
the Debenture Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any amendment to this Indenture authorized by the provisions of
this Section 9.01 may be executed by the Corporation and the Debenture Trustee
without the consent of the holders of any of the Securities at the time
outstanding, notwithstanding any of the provisions of Section 9.02.
SECTION 9.02. With Consent of Securityholders.
With the consent (evidenced as provided in Section 7.01) of the
holders of a majority in aggregate principal amount of the Securities at the
time outstanding, the Corporation, when authorized by a Board Resolution, and
the Debenture Trustee may from time to time and at any time amend this 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) change 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 change
any prepayment provisions, or make the principal thereof or any interest or
premium thereon payable in any coin or currency other than U.S. dollars, 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 the 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 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 Corporation 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 Debenture Trustee of evidence of the
consent of Securityholders as aforesaid, the Debenture Trustee shall join with
the Corporation in the execution of such supplemental indenture unless such
supplemental indenture affects the Debenture Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Debenture
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
Promptly after the execution by the Corporation and the Debenture
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Debenture Trustee shall transmit by mail, first class postage
prepaid, a notice, prepared by the Corporation, 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
Debenture 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 9.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.
SECTION 9.03. Compliance with Trust Indenture Act;
Effect of Supplmental 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 Debenture Trustee, the Corporation
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.
SECTION 9.04. Notation on Securities.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article IX may bear a
notation in form approved by the Debenture Trustee as to any matter provided for
in such supplemental indenture. If the Corporation or the Debenture Trustee
shall so determine, new Securities so modified as to conform, in the opinion of
the Debenture 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 Corporation, authenticated by the Debenture Trustee or the
Authenticating Agent and delivered in exchange for the Securities then
outstanding.
SECTION 9.05. Evidence of Compliance of Supplemental Indenture
to be Furnished to Debenture Trustee.
The Debenture Trustee, subject to the provisions of Sections 6.01
and 6.02, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article IX.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Corporation 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 Corporation with or into any
other Person (whether or not affiliated with the Corporation, as the case may
be), or successive consolidations or mergers in which the Corporation 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
Corporation, 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 Corporation, or its successor or successors, as the case may be)
authorized to acquire and operate the same, provided that (a) the Corporation is
the surviving Person, or the Person formed by or surviving any such
consolidation or merger (if other than the Corporation) 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 Corporation 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 Debenture Trustee executed and delivered to the Debenture Trustee by the
Person formed by such consolidation, or into which the Corporation 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.
SECTION 10.02. Successor Corporation to be Substituted
for Corporation.
In case of any such consolidation, merger, sale, conveyance, or
lease and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Debenture Trustee and satisfactory in
form to the
Debenture Trustee, of the obligation of 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 Corporation,
such successor Person shall succeed to and be substituted for the Corporation,
with the same effect as if it had been named herein as a party hereto, and the
Corporation 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 TeleBanc
Financial Corporation, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Corporation and delivered to the
Debenture Trustee or the Authenticating Agent; and, upon the order of such
successor Person instead of the Corporation and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Debenture Trustee
or the Authenticating Agent shall authenticate and deliver any Securities which
previously shall have been signed and delivered by any Officer of the
Corporation to the Debenture Trustee or the Authenticating Agent for
authentication, and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Debenture 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 Securities had been issued at the date of the execution
hereof.
SECTION 10.03. Opinion of Counsel to be Given Debenture Trustee.
The Debenture Trustee, subject to the provisions of Sections 6.01
and 6.02, 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
SECTION 11.01. Discharge of Indenture.
When (a) the Corporation shall deliver to the Debenture 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 as provided in Section 2.08) and not theretofore cancelled, or (b)
all the Securities not theretofore cancelled or delivered to the Debenture
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
prepayment within one year under
arrangements satisfactory to the Debenture Trustee for the giving of notice of
prepayment, and the Corporation shall deposit with the Debenture Trustee, in
trust, funds sufficient to pay on the Maturity Date or upon prepayment 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 2.08) not
theretofore cancelled or delivered to the Debenture Trustee for cancellation,
including principal (and premium, if any) and interest (including Compounded
Interest and Additional Sums, if any) and Liquidated Damages, if any, due or to
become due to the Maturity Date or prepayment 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 (including Compounded Interest and Additional Sums,
if any) or Liquidated Damages, if any, on the Securities (1) theretofore repaid
to the Corporation in accordance with the provisions of Section 11.04, 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 Corporation shall also pay
or cause to be paid all other sums payable hereunder by the Corporation, then
this Indenture shall cease to be of further effect except for the provisions of
Sections 2.02, 2.07, 2.08, 3.01, 3.02, 3.04, 6.06, 6.10 and 11.04 hereof, which
shall survive until such Securities shall mature and be paid. Thereafter,
Sections 6.06, 6.10 and 11.04 shall survive, and the Debenture Trustee, on
demand of the Corporation accompanied by any Officers' Certificate and an
Opinion of Counsel and at the cost and expense of the Corporation, shall execute
proper instruments acknowledging satisfaction of and discharging this Indenture;
the Corporation, however, hereby agrees to reimburse the Debenture Trustee for
any costs or expenses thereafter reasonably and properly incurred by the
Debenture Trustee in connection with this Indenture or the Securities.
SECTION 11.02. Deposited Moneys and U.S. Government
Obligations to be Held in Trust by
Debenture Trustee.
Subject to the provisions of Section 11.04, all moneys and U.S.
Government Obligations deposited with the Debenture Trustee pursuant to Sections
11.01 or 11.05 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Corporation 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
Debenture Trustee, of all sums due and to become due thereon for principal,
premium, if any, and interest.
The Corporation shall pay and indemnify the Debenture Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 11.05 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.
SECTION 11.03. 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 Debenture
Trustee) shall, upon written demand of the Corporation, be repaid to it or paid
to the Debenture Trustee, and thereupon such paying agent shall be released from
all further liability with respect to such moneys.
SECTION 11.04. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Debenture Trustee or any
paying agent for payment of the principal of (or premium, if any) or interest
(including Compounded Interest and Additional Sums, if any) or Liquidated
Damages, if any, 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 (including Compounded Interest and Additional
Sums, if any) or Liquidated Damages, if any, on such Securities, as the case may
be, shall have become due and payable, shall be repaid to the Corporation by the
Debenture Trustee or such paying agent; and the holder of any of the Securities
shall thereafter look only to the Corporation for any payment which such holder
may be entitled to collect and all liability of the Debenture Trustee or such
paying agent with respect to such moneys shall thereupon cease.
SECTION 11.05. Defeasance Upon Deposit of Moneys
or U.S. Governmen Obligations.
The Corporation shall be deemed to have been Discharged (as
defined below) from its obligations with respect to the Securities on the 91st
day after the applicable conditions set forth below have been satisfied:
(1) the Corporation shall have deposited or caused to be
deposited irrevocably with the Debenture 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 Debenture 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;
(2) if the Securities are then listed on any national
securities exchange, the Corporation shall have delivered
to the Debenture Trustee and the Defeasance Agent, if any,
an Opinion of Counsel to the effect that the exercise of
the option under this Section 11.05 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 Corporation shall have delivered to the Debenture
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 11.05 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.
"Discharged" means that the Corporation 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 Debenture Trustee, at the expense
of the Corporation, 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 the interest and
premium, if any, on the Securities when such payments are due; (B) the
Corporation's obligations with respect to the Securities under Sections 2.07,
2.08, 5.02 and 11.04; and (C) the rights, powers, trusts, duties and immunities
of the Debenture Trustee hereunder.
"Defeasance Agent" means another financial institution which is
eligible to act as Debenture Trustee hereunder and which assumes all of the
obligations of the Debenture Trustee necessary to enable the Debenture Trustee
to act hereunder. In the event such a Defeasance Agent is appointed pursuant to
this Section, the following conditions shall apply:
(1) the Debenture Trustee shall have approval rights over the
document appointing such Defeasance Agent and the document
setting forth such Defeasance Agent's rights and
responsibilities; and
(2) the Defeasance Agent shall provide verification to the
Debenture Trustee acknowledging receipt of sufficient money
and/or U. S. Government Obligations to meet the applicable
conditions set forth in this Section 11.05.
ARTICLE XII
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS,OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely
Corporate Obligations.
No recourse for the payment of the principal of or premium, if
any, or interest (including Compounded Interest and Additional Sums, if any) or
Liquidated Damages, if any, on any Security, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Corporation in this Indenture, or in any Security,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, officer or director, as such,
past, present or future, of the Corporation or of any successor Person to the
Corporation, either directly or through the Corporation or any successor Person
to the Corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that 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 issuance of the Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors.
All the covenants, stipulations, promises and agreements in this
Indenture contained by the Corporation shall bind its successors and assigns
whether so expressed or not.
SECTION 13.02. 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 Corporation 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 Corporation.
SECTION 13.03. Surrender of Corporation Powers.
The Corporation by instrument in writing executed by authority of
2/3 (two-thirds) of its Board of Directors and delivered to the Debenture
Trustee may surrender any of the powers reserved to the Corporation, and
thereupon such power so surrendered shall terminate both as to the Corporation,
as the case may be, and as to any successor Person.
SECTION 13.04. 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 Debenture Trustee or by the
holders of Securities on the Corporation may be given or served by being
deposited postage prepaid by first class mail, registered or certified mail,
overnight courier service or conformed telecopy addressed (until another address
is filed by the Corporation with the Debenture Trustee for the purpose) to the
Corporation at 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, 00000,
Attention: Administrative Trustee. Any notice, direction, request or demand by
any Securityholder to or upon the Debenture 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 Debenture Trustee, Wilmington Trust Company, Xxxxxx Square North,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate
Trust Administration (unless another address is provided by the Debenture
Trustee to the Corporation for such purpose). Any notice or communication to a
Securityholder shall be mailed by first class mail to his or her address shown
on the Security Register kept by the security registrar for the Securities.
SECTION 13.05. 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 conflict of law principles thereof.
SECTION 13.06. Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Corporation to the
Debenture Trustee to take any action under any of the provisions of this
Indenture, the Corporation shall furnish to the Debenture 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 Debenture Trustee with respect to compliance with a condition
or covenant provided for in this Indenture (except certificates delivered
pursuant to Section 3.05) shall include (1) a statement that the Person making
such certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 13.07. Business Days.
In any case where the date of payment of principal of (or
premium, if any) or interest on the Securities is not a Business Day, the
payment of such principal of (or premium, if any) or interest on the Securities
will not be made on such date but will be made on the next succeeding Business
Day, with the same force and effect as if made on the original date of payment,
and no interest shall accrue for the period from and after such date.
SECTION 13.08. 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 318,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09. 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.
SECTION 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.
SECTION 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.
SECTION 13.12. Assignment.
The Corporation 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 Corporation, provided that, in the event
of any such assignment, the Corporation will remain liable for all such
obligations. Subject to the foregoing, this Indenture is binding upon and inures
to the benefit of the parties thereto and their respective successors and
assigns. This Indenture may not otherwise be assigned by the parties thereto.
SECTION 13.13. Acknowledgement of Rights.
The Corporation acknowledges that, with respect to any Securities
held by the 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 the Trust, any holder of Capital Securities may
institute legal proceedings directly against the Corporation 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 Corporation to
pay principal of (or premium, if any) or interest on the Securities when due,
the Corporation 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 an
aggregate 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
PREPAYMENT OF SECURITIES;
MANDATORY AND OPTIONAL SINKING FUND
SECTION 14.01. Special Event Prepayment.
If, prior to the Initial Optional Prepayment Date, a Special
Event has occurred and is continuing, then notwithstanding Section 14.02(a) but
subject to Section 14.02(c), the Corporation shall have the right, at any time
within 90 days following the occurrence of such Special Event, upon (i) not less
than 45 days written notice to the Debenture Trustee and (ii) not less than 30
days nor more than 60 days' written notice to the Securityholders, to prepay the
Securities, in whole (but not in part), at the Special Event Prepayment Price.
Following a Special Event, the Corporation shall take such action as is
necessary to promptly determine the Special Event Prepayment Price, including,
without limitation, the appointment of a Quotation Agent. The Special Event
Prepayment Price shall be paid prior to 12:00 noon, New York City time, on the
date of such prepayment or such earlier time as the Corporation determines,
provided that the Corporation shall deposit with the Debenture Trustee an amount
sufficient to pay the Special Event Prepayment Price by 10:00 a.m., New York
City time, on the date such Special Event Prepayment Price is to be paid.
SECTION 14.02. Optional Prepayment by Corporation.
(a) Subject to Sections 14.02(b) and (c), the Corporation shall
have the right to prepay the Securities, in whole or in part, at any time on or
after the Initial Optional Prepayment Date, upon not less than 30 days and not
more than 60 days' written notice, at the prepayment prices set forth below
plus, in each case, accrued and unpaid interest thereon (including Compounded
Interest and Additional Sums, if any) and Liquidated Damages, if any, to the
applicable date of prepayment (the "Optional Prepayment Price") if prepaid
during the 12-month period beginning June 1 of the years indicated below.
Percentage
Year of Principal
------------------------------------------------------
2007 105.500%
2008 104.950%
2009 104.440%
2010 103.850%
2011 103.300%
2012 102.750%
2013 102.200%
2014 101.650%
2015 101.100%
2016 100.550%
2017 and thereafter 100.000%
If the Securities are only partially prepaid pursuant to this
Section 14.02, the Securities to be prepaid shall be selected on a pro rata
basis not more than 60 days prior to the date fixed for prepayment from the
outstanding Securities not previously called for prepayment; provided, however,
that with respect to Securityholders that would be required to hold Securities
with an aggregate principal amount of less than $100,000 but more than an
aggregate principal amount of zero as a result of such pro rata prepayment, the
Corporation shall prepay Securities of each such Securityholder so that after
such prepayment such Securityholder shall hold Securities either with an
aggregate principal amount of at least $100,000 or such Securityholder no longer
holds any Securities, and shall use such method (including, without limitation,
by lot) as the Corporation shall deem fair and appropriate; provided, further,
that any such proration may be made on the basis of the aggregate principal
amount of Securities held by each Securityholder and may be made by making such
adjustments as the Corporation deems fair and appropriate in order that only
Securities in denominations of $1,000 or integral multiples thereof shall be
prepaid. The Optional Prepayment Price shall be paid prior to 12:00 noon, New
York City time, on the date of such prepayment or at such earlier time as the
Corporation determines, provided that the Corporation shall deposit with the
Debenture Trustee an amount sufficient to pay the Optional Prepayment Price by
10:00 a.m., New York City time, on the date such Optional Prepayment Price is to
be paid.
(b) Notwithstanding the first sentence of Section 14.02(a), upon
the entry of an order for dissolution of the Trust by a court of competent
jurisdiction, the Securities thereafter will be subject to optional prepayment,
in whole only, but not in part, on or after the Initial Optional Prepayment
Date, at the applicable Optional Prepayment Prices and otherwise in accordance
with this Article XIV.
(c) Any prepayment of Securities pursuant to Section 14.01 or
Section 14.02 shall be subject to the Corporation obtaining any and all required
regulatory approvals.
SECTION 14.03. No Sinking Fund.
The Securities are not entitled to the benefit of any sinking
fund.
SECTION 14.04. Notice of Prepayment; Selection of Securities.
In case the Corporation shall desire to exercise the right to
prepay all, or, as the case may be, any part of the Securities in accordance
with their terms, it shall fix a date for prepayment and shall mail a notice of
such prepayment at least 30 and not more than 60 days prior to the date fixed
for prepayment to the holders
of Securities to be so prepaid 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 prepayment as a whole or in
part shall not affect the validity of the proceedings for the prepayment of any
other Security.
Each such notice of prepayment shall specify the CUSIP number of
the Securities to be prepaid, the date fixed for prepayment, the prepayment
price at which the Securities are to be prepaid (or the method by which such
prepayment 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 prepayment will be paid as specified in
said notice, and that on and after said date interest thereon or on the portions
thereof to be prepaid will cease to accrue. If less than all the Securities are
to be prepaid, the notice of prepayment shall specify the numbers of the
Securities to be prepaid. In case any Security is to be prepaid in part only,
the notice of prepayment shall state the portion of the principal amount thereof
to be prepaid and shall state that on and after the date fixed for prepayment,
upon surrender of such Security, a new Security or Securities in principal
amount equal to the portion thereof that has not been prepaid will be issued.
By 10:00 a.m., New York City time, on the prepayment date
specified in the notice of prepayment given as provided in this Section, the
Corporation will deposit with the Debenture Trustee or with one or more paying
agents an amount of money sufficient to prepay on the prepayment date all the
Securities so called for prepayment at the appropriate Prepayment Price,
together with interest accrued thereon to the date fixed for prepayment.
SECTION 14.05. Payment of Securities Called for Prepayment.
If notice of prepayment has been given as provided in Section
14.04, 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 Prepayment Price, together
with interest accrued thereon to the date fixed for prepayment (subject to the
rights of holders of Securities at the close of business on a regular record
date in respect of an Interest Payment Date occurring on or prior to the
prepayment date), and on and after said date (unless the Corporation shall
default in the payment of such Securities at the Prepayment Price, together with
interest accrued thereon to said date) interest (including Compounded Interest
and Additional Sums, if any) and Liquidated Damages, if any, on the Securities
or portions of Securities so called for prepayment 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 prepaid by the Corporation at the applicable
Prepayment Price, together with interest (including Compounded Interest and
Additional Sums, if any) and Liquidated Damages, if any, accrued thereon to the
date fixed for prepayment (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 prepayment date).
Upon presentation of any Security prepaid in part only, the
Corporation shall execute and the Debenture Trustee shall authenticate and make
available for delivery to the holder thereof, at the expense of the Corporation,
a new Security or Securities of authorized denominations, in principal amount
equal to the portion of the Security so presented that has not been prepaid.
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate.
The Corporation 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 Corporation of the principal of, premium, if
any, and interest (including Compounded Interest and Additional Sums, if any)
and Liquidated Damages, if any, 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.
SECTION 15.02. Default on Senior Indebtedness.
In the event and during the continuation of any default by the
Corporation in the payment of principal, premium, interest or any other payment
due on any Senior Indebtedness, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then, in either case, no
payment shall be made by the Corporation with respect to the principal
(including prepayment payments) of (or premium, if any) or interest on the
Securities
(including Compounded Interest and Additional Sums (if any) and Liquidated
Damages, if any, or any other amounts which may be due on the Securities
pursuant to the terms hereof or thereof).
In the event of the acceleration of the maturity of the
Securities, then no payment shall be made by the Corporation with respect to the
principal (including prepayment payments) of (or premium, if any) or interest on
the Securities (including Compounded Interest and Additional Sums (if any) and
Liquidated Damages, if any, or any other amounts which may be due on the
Securities pursuant to the terms hereof or thereof) until the holders of all
Senior Indebtedness outstanding at the time of such acceleration shall receive
payment in full of such Senior Indebtedness (including any amounts due upon
acceleration).
In the event that, notwithstanding the foregoing, any payment
shall be received by the Debenture Trustee when such payment is prohibited by
the preceding paragraphs of this Section 15.02, 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 Debenture 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 Debenture
Trustee shall be paid to the holders of such Senior Indebtedness.
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Corporation or distribution of assets of
the Corporation of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Corporation, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, the holders of all
Senior Indebtedness of the Corporation will first be entitled to receive payment
in full of such Senior Indebtedness, before any payment is made by the
Corporation on account of the principal of (or premium, if any) or interest on
the Securities (including Compounded Interest and Additional Sums (if any) and
Liquidated Damages, if any, or any other amounts which may be due on the
Securities pursuant to the terms hereof or thereof); and upon any such
dissolution or winding-up or liquidation or reorganization, any payment by the
Corporation, or distribution of assets of the Corporation of any kind or
character, whether in cash, property or securities, which the Securityholders or
the Debenture Trustee would be entitled to receive from the Corporation, except
for the provisions of this Article XV, shall be paid by the Corporation 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 Debenture Trustee under the Indenture if received by them or it, directly
to the holders of Senior Indebtedness of the Corporation (pro rata to such
holders on the basis of the respective amounts of Senior Indebtedness held by
such holders, as calculated by the Corporation) 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 Debenture Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Corporation of any kind or character prohibited by
the foregoing, whether in cash, property or securities, shall be received by the
Debenture 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 Corporation, 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 Corporation as
reorganized or readjusted, or securities of the Corporation 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 Corporation with, or the merger of the
Corporation into, another Person or the liquidation or dissolution of the
Corporation 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 15.03 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. Nothing in Section 15.02 or in this Section 15.03 shall apply to
claims of, or payments to, the Debenture Trustee under or pursuant to Section
6.06 of this Indenture.
SECTION 15.04. 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 Corporation, 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 Debenture 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 Debenture Trustee, shall, as between the Corporation, its creditors other
than holders of Senior Indebtedness of the Corporation, and the holders of the
Securities, be deemed to be a payment by the Corporation 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
Corporation, its creditors other than the holders of Senior Indebtedness of the
Corporation, and the holders of the Securities, the obligation of the
Corporation, which is absolute and unconditional, to pay to the holders of the
Securities the principal of (and premium, if any) and interest (including
Compounded Interest and Additional Sums, if any) and Liquidated Damages, if any,
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 Corporation, as the
case may be, other than the holders of Senior Indebtedness of the Corporation,
as the case may be, nor shall anything herein or therein prevent the Debenture
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 Corporation, as the case may
be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Corporation
referred to in this Article XV, the Debenture Trustee, subject to the provisions
of Article VI of this Indenture, and the Securityholders shall be entitled to
conclusively rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, delivered to
the Debenture Trustee or to the Securityholders, for the purposes of
ascertaining the Persons entitled to participate in such distribution, the
holders of Senior Indebtedness and other indebtedness of the Corporation, as the
case may be, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
XV.
SECTION 15.05. Debenture Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance thereof
authorizes and directs the Debenture Trustee on such Securityholder's behalf to
take such action (as the Debenture Trustee, in its discretion, deems necessary
or appropriate, upon instruction or otherwise) to effectuate the subordination
provided in this Article XV and appoints the Debenture Trustee such Security
holder's attorney-in-fact for any and all such purposes.
SECTION 15.06. Notice by the Corporation.
The Corporation shall give prompt written notice to a Responsible
Officer of the Debenture Trustee of any fact known to the Corporation that would
prohibit the making of any payment of monies to or by the Debenture 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 Debenture 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 Debenture Trustee in respect of the Securities pursuant to the
provisions of this Article XV, unless and until a Responsible Officer of the
Debenture Trustee shall have received written notice thereof from the
Corporation or a holder or holders of Senior Indebtedness or from any trustee
therefor; and before the receipt of any such written notice, the Debenture
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 Debenture Trustee shall not have received the notice provided for in
this Section 15.06 at least two Business Days prior to the date upon which by
the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of (or premium, if any) or
interest (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, if any, on any Security), then, anything herein contained to
the contrary notwithstanding, the Debenture Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
The Debenture Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled to conclusively rely on a written notice
delivered to it by a Person representing himself to be a holder of Senior
Indebtedness of the Corporation (or a trustee 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 on behalf of any such holder or holders. In the
event that the Debenture 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 Debenture Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Debenture 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 Debenture 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 Corporation
referred to in this Article XV, the Debenture 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
Debenture 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 Corporation, 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.
SECTION 15.07. Rights of the Debenture Trustee;
Holders of Senior Indebtedness.
The Debenture 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 Debenture
Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the
Corporation, the Debenture 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 such
Senior
Indebtedness shall be read into this Indenture against the Debenture Trustee.
The Debenture Trustee shall not be deemed to owe any fiduciary duty to the
holders of such Senior Indebtedness and, subject to the provisions of Article VI
of this Indenture, the Debenture Trustee shall not be liable to any holder of
such Senior Indebtedness if it shall pay over or deliver to Securityholders, the
Corporation or any other Person money or assets to which any holder of such
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 Debenture Trustee under or pursuant to Section 6.06.
SECTION 15.08. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Indebtedness of the Corporation 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 Corporation, as the case may be, or by any act or failure
to act, in good faith, by any such holder, or by any noncompliance by the
Corporation, as the case may be, 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 of the Corporation may, at any
time and from time to time, without the consent of or notice to the Debenture
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 such 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 Corporation, as
the case may be, and any other Person.
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period.
So long as no Event of Default has occurred and is continuing,
the Corporation 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 (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 16.01, will
bear interest thereon at the Coupon Rate compounded semi-annually for each
semi-annual period during the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Corporation
shall pay all interest accrued and unpaid on the Securities, including any
Additional Sums 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 record date immediately preceding
the end of the Extended Interest Payment Period. Before the termination of any
Extended Interest Payment Period, the Corporation 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 (i)
exceed 10 consecutive semi-annual periods, including the first such semi-annual
period during such Extended Interest Payment Period, (ii) end on a date other
than an Interest Payment Date or (iii) extend beyond the Maturity Date of the
Securities. Upon the termination of any Extended Interest Payment Period and the
payment of all amounts then due, the Corporation 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 Corporation may prepay at any time all or any portion
of the interest accrued during an Extended Interest Payment Period.
SECTION 16.02. Notice of Extension.
(a) If the Property Trustee is the only holder of the Securities
at the time the Corporation elects to commence an Extended Interest Payment
Period, the Corporation shall give written notice to the Administrative
Trustees, the Property Trustee and the Debenture Trustee of its election to
commence such Extended Interest Payment Period at least five Business Days
before the earlier of (i) the next succeeding date on which Distributions on the
Trust Securities would have been payable, or (ii) the date the Property Trustee
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, 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 Corporation elects to commence an Extended Interest
Payment Period, the Corporation shall give the holders of the Securities and the
Debenture 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 Debenture Trustee 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 16.02 shall be counted as one of the 10
semi-annual periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.01.
Wilmington Trust Company hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
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.
TELEBANC FINANCIAL CORPORATION
By /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxx
Title:
WILMINGTON TRUST COMPANY,
as Debenture Trustee
By /s/ W. Xxxxx Xxxxxxxxxx
-------------------------------------------
Name: W. Xxxxx Xxxxxxxxxx
Title: Senior Financial Servicers Officer
EXHIBIT A
---------
(FORM OF FACE OF SECURITY)
[IF THIS 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 THE DEPOSITORY TRUST COMPANY ("DTC") OR A
NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN DTC 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 DTC TO A NOMINEE OF DTC OR BY A NOMINEE
OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF 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 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 TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH TELEBANC FINANCIAL
CORPORATION (THE "CORPORATION") OR ANY
"AFFILIATE" OF THE CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE CORPORATION, (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) 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
CORPORATION 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 CORPORATION, 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
CORPORATION. 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.]
THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. ANY
ATTEMPTED TRANSFER OF SECURITIES IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT
OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF SUCH SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF
PRINCIPAL, PREMIUM (IF ANY) OR INTEREST OF SUCH SECURITIES, AND SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN
EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO
PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR
ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION
CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 0R 84-14 WITH RESPECT TO SUCH PURCHASE
OR HOLDING. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN
WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT
EITHER (i) IT IS NOT A PLAN OR PLAN ASSET ENTITY OR (ii) THE ACQUISITION AND
HOLDING OF THIS SECURITY BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE OR IS EXEMPT FORM ANY SUCH PROHIBITION.
No. CUSIP No. *
TELEBANC FINANCIAL CORPORATION
11.00% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE JUNE 1, 2027, Series A
TeleBanc Financial Corporation, a Delaware corporation (the
"Corporation", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________________________ or registered assigns, the principal sum of $ Dollars
on June 9 2027 (the "Maturity Date"), unless previously prepaid, and to pay
interest on the outstanding principal amount hereof from June 9, 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 June 1 and December 1 of
each year, commencing December 1, 1997, at the rate of 11.00% per annum until
the principal hereof shall have become due and payable, and 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
("Compounded Interest"). 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.
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 (as defined in the Indenture), 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 Indenture, in
certain circumstances the Corporation will be required to pay Additional Sums
(as defined in the Indenture) with respect to this Security. Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Corporation
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 at the
close of business on the 15th day of the month immediately preceeding the month
in which the relevant Interest Payment Date falls. 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 Debenture 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 (including
Compounded Interest and Additional Sums, if any) and Liquidated Damages, if any,
on this Security shall be payable at the office or agency of the Debenture
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 Corporation by (i) check mailed to the holder at such address as
shall appear in the Security Register or (ii) 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 of
TeleBanc Capital Trust I, the payment of the principal of (and premium, if any)
and interest (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, if any, on this Security will be made at such place and to
such account as may be designated by such 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 Debenture 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 Debenture 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 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 Debenture
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 Corporation has caused this instrument to
be duly executed and sealed this __ day of ____, ____.
TELEBANC FINANCIAL CORPORATION
By:
-----------------------------------------
Name:
Title:
Attest:
By:
------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Debenture Trustee
By:
-----------------------------------------
Authorized Signatory
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Corporation (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 June 9,
1997 (the "Indenture"), duly executed and delivered between the Corporation and
Wilmington Trust Company, as Debenture Trustee (the "Debenture Trustee"), to
which Indenture reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Debenture Trustee, the Corporation and the holders of the Securities.
Upon the occurrence and continuation of a Special Event (as
defined in the Indenture) prior to June 1, 2007 (the "Initial Optional
Prepayment Date"), the Corporation shall have the right, at any time within 90
days following the occurrence of such Special Event, to prepay this Security in
whole (but not in part) at the Special Event Prepayment Price. "Special Event
Prepayment Price" shall mean, with respect to any prepayment of this Security
following a Special Event, an amount in cash equal to the Make Whole Amount. The
"Make Whole Amount" shall mean an amount equal to the greater of (i) 100% of the
principal amount to be prepaid or (ii) the sum, as determined by a Quotation
Agent (as defined in the Indenture), of the present values of remaining
scheduled payments of principal and interest hereon, discounted to the
prepayment date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined in the
Indenture), plus, in the case of each of clauses (i) and (ii), any accrued and
unpaid interest (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, if any, thereon to the date of such prepayment.
In addition, the Corporation shall have the right to prepay this
Security, in whole or in part, at any time on or after the Initial Optional
Prepayment Date (an "Optional Prepayment"), at the prepayment prices set forth
below plus, in each case, accrued and unpaid interest (including Additional Sums
and Compounded Interest, if any) and Liquidated Damages, if any, thereon to the
applicable date of prepayment (the "Optional Prepayment Price"), if prepaid
during the 12-month period beginning June 1 of the years indicated below.
Percentage
Year of Principal
----------------------------------------------------
2007 105.500%
2008 104.950%
2009 104.440%
2010 103.850%
2011 103.300%
2012 102.750%
2013 102.200%
2014 101.650%
2015 101.100%
2016 100.550%
2017 and thereafter 100.000%
The Optional Prepayment Price or the Special Event Prepayment
Price, as the case requires, shall be paid prior to 12:00 noon, New York City
time, on the date of such prepayment or at such earlier time as the Corporation
determines, provided, that the Corporation shall deposit with the Debenture
Trustee an amount sufficient to pay the applicable Prepayment Price by 10:00
a.m., New York City time, on the date such Prepayment Price is to be paid. Any
prepayment pursuant to this paragraph will be made upon not less than 30 days
nor more than 60 days' prior written notice.
If the Securities are only partially prepaid by the Corporation
pursuant to an Optional Prepayment, the particular Securities to be prepaid
shall be selected on a pro rata basis from the outstanding Securities not
previously called for prepayment; provided, however, that with respect to
Securityholders that would be required to hold Securities with an aggregate
principal amount of less than $100,000 but more than an aggregate principal
amount of zero as a result of such pro rata prepayment, the Corporation shall
prepay Securities of each such Securityholder so that after such prepayment such
Securityholder shall hold Securities either with an aggregate principal amount
of at least $100,000 or such Securityholder no longer holds any Securities and
shall use such method (including, without limitation, by lot) as the Corporation
shall deem fair and appropriate; provided, further, that any such proration may
be made on the basis of the aggregate principal amount of Securities held by
each Securityholder thereof and may be made by making such adjustments as the
Corporation deems fair and appropriate in order that only Securities in
denominations of $1,000 or integral multiples thereof shall be prepaid. In the
event of prepayment of this Security in part only, a new Security or Securities
for the portion hereof that has not been prepaid will be issued in the name of
the holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any prepayment of Securities by
the Corporation shall be subject to the receipt of any and all required
regulatory approvals.
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 Corporation and
the Debenture 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) change the Maturity Date of any Security, or reduce the rate or
extend the time of payment of interest thereon (subject to Article XVI of the
Indenture), or reduce the principal amount thereof, or change any of the
prepayment provisions or make the principal thereof or any interest or premium
thereon 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 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 affected thereby, 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
Corporation, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest (including Compounded Interest and Additional
Sums, if any) and Liquidated Damages, if any, on this Security at the time and
place and at the rate and in the money herein prescribed.
So long as no Event of Default shall have occurred and be
continuing, the Corporation 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 (an "Extended Interest Payment Period") of
such Securities for a period not (i) exceeding 10 consecutive semi-annual
periods, including the first such semi-annual period during such extension
period, (ii) extending beyond the Maturity Date of the Securities or (iii)
ending on a date other than an Interest Payment Date, at the end of which period
the Corporation 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 Corporation 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, (i) shall not exceed 10
consecutive semi-annual periods, including the first semi-annual period during
such Extended Interest Payment Period, (ii) shall not end on any date other than
an Interest Payment Date, and (iii) shall not 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 Corporation 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 Corporation may prepay at any time all or any portion of the interest
accrued during an Extended Interest Payment Period.
The Corporation 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 Corporation's capital stock,
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities (including other Debentures) of
the Corporation 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
(other than the Capital Securities Guarantee, as defined in the Indenture) by
the Corporation of the debt securities of any Subsidiary of the Corporation
(including Other Guarantees) if such guarantee ranks pari passu with 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 Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' 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) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock, (d) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, and (e) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Corporation's benefit or
compensation plans for its directors, officers or employees or any of the
Corporation's dividend reinvestment plans), if at such time (1) there shall have
occurred any event of which the Corporation 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 Corporation shall not have
taken reasonable steps to cure, (2)
if such Securities are held by the Property Trustee of TeleBanc Capital Trust I,
the Corporation shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee or (3) the Corporation shall
have given notice of its election to exercise its right to commence an Extended
Interest Payment Period, and shall not have rescinded such Notice, and such
Extended Interest Payment Period or any extension thereof shall have commenced
and be continuing.
Subject to (i) the Corporation having received any required
regulatory approvals and (ii) the Administrative Trustees of Telebank Capital
Trust I having received an opinion of counsel to the effect that such
distribution will not cause the holders of Capital Securities to recognize gain
or loss for federal income tax purposes, the Corporation will have the right at
any time to liquidate the Trust and, after satisfaction of liabilities of
creditors of the Trust as required by applicable law, to cause the Securities to
be distributed to the holders of the Trust Securities in liquidation of the
Trust.
The Securities are issuable only in registered form without
coupons in minimum denominations of $100,000 and multiples of $1,000 in excess
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
Corporation, upon surrender of this Security for registration of transfer at the
office or agency of the Corporation in The City of New York accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Corporation or the Debenture Trustee 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 will be
issued to the designated transferee or transferees. No service charge will be
made for any such registration of transfer, but the Corporation 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 Corporation, the Debenture Trustee, any authenticating agent, any
paying agent, any transfer agent and the security 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 Securities) 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 Corporation nor the Debenture 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.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest (including Compounded Interest and Additional Sums,
if any) or Liquidated Damages, if any, 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, employee, officer or director,
past, present or future, as such, of the Corporation 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 PRINCIPLES THEREOF
