EXHIBIT 4.1
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MMI COMPANIES, INC.
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INDENTURE
Dated as of December 23, 1997
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THE CHASE MANHATTAN BANK,
as Trustee
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JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
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TIE SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as
of December 23, 1997 between MMI Companies, Inc. and The Chase Manhattan Bank,
as Trustee:
ACT SECTION INDENTURE SECTION
310(a)(1)................................................... 6.9
(a)(2)................................................... 6.9
310(a)(3)................................................... N/A
(a)(4)................................................... N/A
310(a)(5)................................................... 6.10, 6.11
310(b)...................................................... 6.8
310(c)...................................................... N/A
311(a) and (b).............................................. 6.13
311(c)...................................................... N/A
312(a)...................................................... 4.1, 4.2(a)
312(b) and (c).............................................. 4.2
313(a)...................................................... 4.4
313(b)(1)................................................... 4.4
313(b)(2)................................................... 4.4
313(c)...................................................... 4.4
313(d)...................................................... 4.4
314(a)...................................................... 3.5, 4.3
314(b)...................................................... N/A
314(c)(1) and (2)........................................... 6.7, 13.6
314(c)(3)................................................... N/A
314(d)...................................................... N/A
314(e)...................................................... 13.6
314(f)...................................................... N/A
315(a)(c) and (d)........................................... 6.1
315(b)...................................................... 5.8
315(e)...................................................... 5.9
316(a)(1)................................................... 5.7
316(a)(2)................................................... N/A
316(a) last sentence........................................ 7.4
316(b)...................................................... 9.2
316(c)...................................................... 7.1
317(a)...................................................... 5.2, 5.5
317(b)...................................................... 6.5
318(a)...................................................... 13.8
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THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
CONTENTS
THIS TABLE IS NOT PART OF THE INDENTURE AS EXECUTED.
Page
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ARTICLE I. DEFINITIONS
1.1. Definitions.......................................................... 1
ARTICLE II. SECURITIES
2.1. Forms Generally...................................................... 11
2.2. Execution and Authentication......................................... 12
2.3. Form and Payment..................................................... 12
2.4. Legends.............................................................. 13
2.5. Global Debenture..................................................... 13
2.6. Interest............................................................. 15
2.7. Transfer and Exchange................................................ 16
2.8. Replacement Debentures............................................... 18
2.9. Temporary Debentures................................................. 18
2.10. Cancellation........................................................ 19
2.11. Defaulted Interest.................................................. 19
2.12. CUSIP Numbers....................................................... 20
ARTICLE III. PARTICULAR COVENANTS OF THE COMPANY
3.1. Payment of Principal or Redemption Price and Interest................ 21
3.2. Offices for Notices and Payments, etc................................ 21
3.3. Appointments to Fill Vacancies in Trustee's Office................... 22
3.4. Provision as to Paying Agent......................................... 22
3.5. Certificate to Trustee............................................... 23
3.6. Statement as to Default.............................................. 23
3.7. Compliance with Consolidation Provisions............................. 23
3.8. Limitation on Dividends.............................................. 23
3.9. Covenants as to MMI Trust............................................ 24
3.10. Payment of Expenses................................................. 25
3.11. Payment Upon Resignation or Removal................................. 25
3.12. Calculation of Original Issue Discount.............................. 26
ARTICLE IV. SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
4.1. Debentureholders' Lists.............................................. 26
4.2. Preservation and Disclosure of Lists................................. 26
4.3. Reports by Company................................................... 28
4.4. Reports by the Trustee............................................... 29
ARTICLE V. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
5.1. Events of Default.................................................... 29
5.2. Payment of Debentures on Default; Suit Therefor...................... 32
5.3. Application of Moneys Collected by Trustee........................... 34
5.4. Proceedings by Debentureholders...................................... 34
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5.5. Proceedings by Trustee.............................................. 36
5.6. Remedies Cumulative and Continuing.................................. 36
5.7. Direction of Proceedings and Waiver of Defaults by Majority of
Debentureholders.................................................. 36
5.8. Notice of Defaults.................................................. 37
5.9. Undertaking to Pay Costs............................................ 37
ARTICLE VI. CONCERNING THE TRUSTEE
6.1. Duties and Responsibilities of Trustee.............................. 38
6.2. Reliance on Documents, Opinions, etc................................ 39
6.3. No Responsibility for Recitals, etc................................. 40
6.4. Trustee, Authenticating Agent, Paying Agents, Transfer Agents or
Registrar May Own Debentures...................................... 41
6.5. Moneys to be Held in Trust.......................................... 41
6.6. Compensation and Expenses of Trustee................................ 41
6.7. Officers' Certificate as Evidence................................... 42
6.8. Conflicting Interest of Trustee..................................... 42
6.9. Eligibility of Trustee.............................................. 42
6.10. Resignation or Removal of Trustee................................... 43
6.11. Acceptance by Successor Trustee..................................... 44
6.12. Succession by Merger, etc........................................... 45
6.13. Limitation on Rights of Trustee as a Creditor....................... 46
6.14. Authenticating Agents............................................... 46
ARTICLE VII. CONCERNING THE SECURITYHOLDERS
7.1. Action by Debentureholders.......................................... 47
7.2. Proof of Execution by Debentureholders.............................. 48
7.3. Who Are Deemed Absolute Owners...................................... 48
7.4. Debentures Owned by Company Deemed Not Outstanding.................. 49
7.5. Revocation of Consents; Future Holders Bound........................ 49
ARTICLE VIII. SECURITYHOLDERS' MEETINGS
8.1. Purposes of Meetings................................................ 50
8.2. Call of Meetings by Trustee......................................... 50
8.3. Call of Meetings by Company or Debentureholders..................... 51
8.4. Qualifications for Voting........................................... 51
8.5. Regulations......................................................... 51
8.6. Voting.............................................................. 52
ARTICLE IX. AMENDMENTS
9.1. Without Consent of Debentureholders................................. 52
9.2. With Consent of Debentureholders.................................... 54
9.3. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures........................................... 55
9.4. Notation on Debentures.............................................. 55
9.5. Evidence of Compliance of Supplemental Indenture to be
Furnished Trustee................................................. 55
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ARTICLE X CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
10.1. Company May Consolidate, etc., on Certain Terms..................... 56
10.2. Successor Corporation to be Substituted for Company................. 56
10.3. Opinion of Counsel to be Given Trustee.............................. 57
ARTICLE XI SATISFACTION AND DISCHARGE OF INDENTURE
11.1. Discharge of Indenture.............................................. 57
11.2. Deposited Moneys and U.S. Government Obligations to be
Held in Trust by Trustee.......................................... 58
11.3. Paying Agent to Repay Moneys Held................................... 58
11.4. Return of Unclaimed Moneys.......................................... 59
11.5. Defeasance and Discharge............................................ 59
11.6. Conditions to Defeasance............................................ 59
ARTICLE XII IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
12.1. Indenture and Debentures Solely Corporate Obligations............... 61
ARTICLE XIII MISCELLANEOUS PROVISIONS
13.1. Successors.......................................................... 61
13.2. Official Acts by Successor Corporation.............................. 61
13.3. Surrender of Company Powers......................................... 61
13.4. Addresses for Notices, etc.......................................... 62
13.5. Governing Law....................................................... 62
13.6. Evidence of Compliance with Conditions Precedent.................... 62
13.7. Business Days....................................................... 63
13.8. Trust Indenture Act to Control...................................... 63
13.9. Table of Contents, Headings, etc.................................... 63
13.10. Execution in Counterparts........................................... 63
13.11. Separability........................................................ 63
13.12. Acknowledgment of Rights............................................ 63
ARTICLE XIV REDEMPTION OF SECURITIES
14.1. Special Event Redemption............................................ 64
14.2. No Sinking Fund..................................................... 65
14.3. Notice of Redemption; Selection of Debentures....................... 65
14.4. Payment of Debentures on the Maturity Date.......................... 65
ARTICLE XV SUBORDINATION OF SECURITIES
15.1. Agreement to Subordinate............................................ 66
15.2. Default on Senior Indebtedness...................................... 66
15.3. Liquidation; Dissolution; Bankruptcy................................ 67
15.4. Subrogation......................................................... 68
15.5. Trustee to Effectuate Subordination................................. 69
15.6. Notice by the Company............................................... 69
15.7. Rights of the Trustee; Holders of Senior Indebtedness............... 71
15.8. Subordination May Not Be Impaired................................... 71
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ARTICLE XVI EXTENSION OF INTEREST PAYMENT PERIOD
16.1. Extension of Interest Payment Period................................ 72
16.2. Notice of Extension................................................. 73
TESTIMONIUM
SIGNATURES
EXHIBIT A (FORM OF DEBENTURE).............................................. A-1
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THIS INDENTURE, dated as of December 23, 1997, between MMI Companies, Inc.,
a Delaware corporation (hereinafter sometimes called the "Company"), and The
Chase Manhattan Bank, a New York banking corporation, as trustee (hereinafter
sometimes called the "Trustee"),
W I T N E S S E T H:
In consideration of the premises, and the purchase of the Debentures by the
holders thereof, the Company covenants and agrees with the Trustee for the equal
and proportionate benefit of the respective holders from time to time of the
Debentures, as follows:
ARTICLE I.
DEFINITIONS
1.1. Definitions
The terms defined in this Section 1.1 (except as herein otherwise expressly
provided or unless the context otherwise requires) for all purposes of this
Indenture shall have the respective meanings specified in this Section 1.1. All
other terms used in this Indenture which are defined in the Trust Indenture Act,
or which are by reference therein defined in the Securities Act, shall (except
as herein otherwise expressly provided or unless the context otherwise requires)
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture as originally executed.
The following terms have the meanings given to them in the Declaration: (i)
Clearing Agency; (ii) Delaware Trustee; (iii) Property Trustee; (iv)
Administrative Trustees; (v) Direct Action; (vi) Purchase Agreement; (vii)
Distributions; (viii) Series A Capital Securities and (ix) Series B Capital
Securities. All accounting terms used herein and not expressly defined shall
have the meanings assigned to such terms in accordance with generally accepted
accounting principles and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted at the time of any
computation. The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision. Headings are used for convenience of
reference only and do not affect interpretation. The singular includes the
plural and vice versa.
"Additional Interest" shall have the meaning set forth in Section 2.6(c).
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to (i) the yield, under the heading which represents the
average for the immediately
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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 Stated
Maturity Date (if no such maturity is within three months before or after the
Stated Maturity Date, yields for the two published maturities most closely
corresponding to the Stated Maturity Date shall be interpolated, and the
Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such redemption
date plus, in either case, (a) 1.25% if such redemption date occurs on or prior
to December 23, 1998, and (b) 0.50% in all other cases.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding the power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with,
the specified Person, (d) a partnership in which the specified Person is a
general partner, (e) any officer or director of the specified Person, and (f) if
the specified Person is an individual, any entity of which the specified Person
is an officer, director or general partner.
"Authenticating Agent" shall mean any agent or agents of the Trustee which
at the time shall be appointed and acting pursuant to Section 6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of that board.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
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"Business Day" shall mean any day other than a Saturday or a Sunday or a
day on which banking institutions in The City of New York or in Chicago,
Illinois, are authorized or required by law or executive order to close.
"Capital Securities" shall mean undivided beneficial interests in the
assets of MMI Trust which rank pari passu with the Common Securities issued by
MMI Trust; provided, however, that if an Event of Default has occurred and is
continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the holders of the Capital Securities shall be paid in full
the Distributions and the liquidation, redemption and other payments to which
they are entitled. References to "Capital Securities" shall include collectively
any Series A Capital Securities and Series B Capital Securities.
"Capital Securities Guarantee" shall mean any guarantee that the Company
may enter into with The Chase Manhattan Bank in its capacity as trustee of MMI
Trust or other Persons that operates directly or indirectly for the benefit of
holders of Capital Securities of MMI Trust and shall include a Series A Capital
Securities Guarantee and a Series B Capital Securities Guarantee with respect to
the Series A Capital Securities and the Series B Capital Securities,
respectively.
"Commission" shall mean the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Securities" shall mean undivided beneficial interests in the assets
of MMI Trust which rank pari passu with Capital Securities issued by MMI Trust;
provided, however, that if an Event of Default has occurred and is continuing,
no payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the holders of the Capital Securities shall be paid in full the
Distributions and the liquidation, redemption and other payments to which they
are entitled.
"Common Securities Guarantee" shall mean any guarantee that the Company may
enter into with any Person or Persons that operates directly or indirectly for
the benefit of holders of Common Securities of MMI Trust.
"Common Stock" shall mean the common stock, par value $0.10 per share, of
the Company or any other class of stock resulting from changes or
reclassifications of such Common Stock consisting
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solely of changes in par value or from par value to no par value, or from no par
value to par value.
"Company" shall mean MMI Companies, Inc., a Delaware corporation, and,
subject to the provisions of Article X, shall include its successors and
assigns.
"Company Request" or "Company Order" shall mean a written request or order
signed in the name of the Company by an Officer.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity date corresponding to the
Stated Maturity Date that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities with a maturity date corresponding to the Stated Maturity Date.
If no United States Treasury security has a maturity date which is within three
months before or after the Stated Maturity Date, the two most closely
corresponding United States Treasury securities shall be used as the Comparable
Treasury Issue, and the calculation of the Adjusted Treasury Rate pursuant to
clause (ii) of the definition thereof shall be interpolated or extrapolated on a
straight-line basis, rounding to the nearest month using such securities.
"Comparable Treasury Price" means, with respect to any redemption date
pursuant to Section 14.1, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such redemption date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (A) the average of five Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Compounded Interest" shall have the meaning set forth in Section 16.1.
"Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Debentures" means, collectively, the Series A Debentures and the Series B
Debentures.
"Debentureholder", "holder of Debentures", or other similar terms, shall
mean any Person in whose name at the time a particular Debenture is registered
on the register kept by the
4
Company or the Trustee for that purpose in accordance with the terms hereof.
"Debenture Register" shall mean (i) prior to a Dissolution Event, the list
of holders provided to the Trustee pursuant to Section 4.1, and (ii) following a
Dissolution Event, any security register maintained by a security registrar for
the Debentures appointed by the Company following the execution of a
supplemental indenture providing for transfer procedures as provided for in
Section 2.7(a).
"Declaration" means the Amended and Restated Declaration of Trust of MMI
Trust, dated as of the Issue Date, as amended.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in Section 16.1.
"Definitive Debentures" shall mean those Debentures issued in fully
registered certificated form not otherwise in global form.
"Depositary" shall mean, with respect to Debentures of any series for which
the Company shall determine that such Debentures will be issued as a Global
Debenture, The Depository Trust Company, New York, New York, another clearing
agency, or any successor registered as a clearing agency under the Exchange Act
or other applicable statute or regulation, which, in each case, shall be
designated by the Company pursuant to Section 2.5(d).
"Dissolution Event" means the dissolution of the Trust pursuant to the
Declaration, and the distribution of the Debentures held by the Property Trustee
to the holders of the Trust Securities issued by the Trust pro rata in
accordance with the Declaration.
"Event of Default" shall mean any event specified in Section 5.1, continued
for the period of time, if any, and after the giving of the notice, if any,
therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Company to exchange Series B Debentures
for Series A Debentures and to exchange a Series B Capital Securities Guarantee
for a Series A Capital Securities Guarantee and (ii) by MMI Trust to exchange
Series B Capital Securities for Series A Capital Securities.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 16.1.
5
"Federal Reserve" shall mean the Board of Governors of the Federal Reserve
System.
"Global Debenture" means, with respect to the Debentures, a Debenture
registered in the name of the Depositary or its nominee.
"Indebtedness for Money Borrowed" shall mean any obligation of, or any
obligation guaranteed by, the Company for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, but shall not include (i) any trade accounts payable in the
ordinary course of business, (ii) any such indebtedness that by its terms ranks
pari passu with or junior in right of payment to the Debentures, (iii) all other
debt securities, and guarantees in respect of those debt securities, issued to
any other trust, or a trustee of such trust, partnership or other entity
affiliated with the Company that is a financing vehicle of the Company (a
"financing entity") in connection with the issuance by such financing entity of
equity securities or other securities guaranteed by the Company pursuant to an
instrument that ranks pari passu with or junior in right of payment to the
Guarantee, and (iv) any other indebtedness that would otherwise qualify as
"Indebtedness for Money Borrowed" to the extent that such indebtedness by its
terms ranks pari passu with or junior in right of payment to any of the
Indebtedness described in clauses (i), (ii) or (iii) above.
"Indenture" shall mean this instrument as originally executed or, if
amended as herein provided, as so amended.
"interest" means and includes, unless the context clearly otherwise
requires, interest, Deferred Interest, Compounded Interest, Liquidated Damages
and Additional Interest.
"Interest Payment Date" shall have the meaning set forth in Section 2.6.
"Investment Company Event" means the receipt by the Company and the Trust
of an Opinion of Counsel experienced in practice under the Investment Company
Act of 1940, as amended (the "Investment Company Act"), to the effect that, as a
result of the occurrence of a change in law or regulation or a written change,
in interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" or a company "controlled" by an "investment company" that is required
to be registered under the Investment Company Act, which change becomes
effective on or after the date of the issuance of the Capital Securities.
"Issue Date" means December 23, 1997.
6
"Liquidated Damages" shall have the meaning set forth in the Registration
Rights Agreement.
"Maturity Date" shall mean the Stated Maturity Date, the date of redemption
upon the occurrence of a Special Event, or the date upon which all of the
principal and interest on the Debentures becomes due and payable upon an Event
of Default pursuant to Section 5.1 hereof.
"MMI Trust" shall mean MMI Capital Trust I, a Delaware business trust
created for the purpose of issuing its undivided beneficial interests in its
assets in connection with the issuance of Debentures under this Indenture.
"Mortgage" shall mean and include any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Non Book-Entry Capital Securities" shall have the meaning set forth in
Section 2.5.
"Officer" shall mean any of the Chairman, the Chief Executive Officer, the
President, the Chief Financial Officer, a Vice President, the Treasurer, any
Assistant Treasurer, the Controller and any Assistant Controller, or the
Secretary or any Assistant Secretary of the Company.
"Officers' Certificate" shall mean a certificate signed by two Officers and
delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may be an
employee of the Company, and who shall be acceptable to the Trustee.
"Other Debentures" means all junior subordinated debentures issued by the
Company from time to time and sold to trusts or other financing entities to be
established by the Company (if any), in each case similar to MMI Trust.
"Other Guarantees" means all guarantees issued by the Company with respect
to capital securities (if any) and issued to other trusts established by the
Company (if any), in each case similar to MMI Trust.
The term "outstanding" when used with reference to Debentures, shall,
subject to the provisions of Section 7.4, mean, as of any particular time, all
Debentures authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except
(a) Debentures theretofore cancelled by the Trustee or the Authenticating
Agent or delivered to the Trustee for cancellation;
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(b) Debentures for whose payment moneys in the necessary amount shall have
been deposited in trust with the Trustee or with any paying agent (other than
the Company) or shall have been set aside and segregated in trust by the Company
(if the Company shall act as its own paying agent); provided that, if such
Debentures, or portions thereof, are to be redeemed prior to maturity thereof,
notice of such redemption shall have been given as provided in Article XIV or
provision satisfactory to the Trustee shall have been made for giving such
notice; and
(c) Debentures in lieu of or in substitution for which other Debentures
shall have been authenticated and delivered pursuant to the terms of Section 2.8
unless proof satisfactory to the Company and the Trustee is presented that any
such Debentures 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 Debenture" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for the purposes of this definition, any Debenture
authenticated and delivered under Section 2.8 in lieu of a lost, destroyed or
stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.
"Principal Office of the Trustee", or other similar term, shall mean the
office of the Trustee, at which at any particular time its corporate trust
business shall be principally administered.
"Property Trustee" shall have the same meaning as set forth in the
Declaration.
"Purchase Agreement" shall mean the Purchase Agreement dated December 18,
1997 among the Company, MMI Trust and the initial purchasers named therein.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Redemption Price" means the Special Event Redemption Price.
"Reference Treasury Dealer" means (i) initially, Salomon Brothers Inc and
its successors; provided, however, that if the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer,
or (ii) any other Primary Treasury Dealer selected by the Company.
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"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date pursuant to Section 14.1, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) at 5:00 p.m., New York City time, on the third Business Day
preceding such redemption date, quoted in writing to the Trustee by such
Reference Treasury Dealer.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the Issue Date, by and among the Company, MMI Trust and the Initial
Purchasers named therein as such agreement may be amended, modified or
supplemented from time to time.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, with direct responsibility for
the administration of this Indenture and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Restricted Debenture" shall mean Debentures that bear or are required to
bear the Securities Act legends set forth in Exhibit A hereto.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Senior Indebtedness" shall mean, all Indebtedness for Money Borrowed,
whether outstanding on the date of execution of this Indenture or thereafter
created, assumed or incurred, unless the terms thereof specifically provide that
it is not superior in right of payment to the Debentures (or to any Other
Debentures), and any deferrals, renewals or extensions thereof.
"Series A Debentures" means the Company's 7 5/8% Series A Junior
Subordinated Deferrable Interest Debentures due December 15, 2027, as
authenticated and issued under this Indenture.
"Series B Debentures" means the Company's Series B 7 5/8% Junior
Subordinated Deferrable Interest Debentures due December 15, 2027, as
authenticated and issued under this Indenture.
"Special Event" means a Tax Event or an Investment Company Event, as the
case may be.
"Special Event Redemption Price" shall mean, with respect to any redemption
of the Debentures pursuant to Section 14.1 hereof,
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an amount in cash equal to the greater of (i) 100% of the principal amount to be
redeemed or (ii) the sum, as determined by a Quotation Agent, of the present
values of the remaining scheduled payments of principal and interest on the
Debentures to the Stated Maturity Date, together with scheduled payments of
interest on the Debentures from the redemption date to and including the Stated
Maturity Date, discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, plus, in each case (but in the case of clause (ii) above without
duplication), any accrued and unpaid interest thereon, including Compounded
Interest, Liquidated Damages and Additional Interest, if any, to the date of
such redemption.
"Stated Maturity Date" shall mean December 15, 2027.
"Subsidiary" shall mean with respect to any Person, (i) any corporation at
least a majority of whose outstanding voting stock is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of whose outstanding partnership
or similar interests shall at the time be owned by such Person, or by one or
more of its Subsidiaries, or by such Person and one or more of its Subsidiaries
and (iii) any limited partnership of which such Person or any of its
Subsidiaries is a general partner. For the purposes of this definition, "voting
stock" means shares, interests, participations or other equivalents in the
equity interest (however designated) in such Person having ordinary voting power
for the election of a majority of the directors (or the equivalent) of such
Person, other than shares, interests, participations or other equivalents having
such power only by reason of the occurrence of a contingency.
"Tax Event" shall mean the receipt by MMI Trust and the Company of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change) in,
the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein or any amendment to or change
in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory agency, which
amendment or change is effective or announced after the Issue Date (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after such date), there is more than an
insubstantial risk that (i) MMI Trust would be subject to United States federal
income tax with respect to income received or accrued on the Debentures, (ii)
interest payable to MMI Trust on the Debentures would not be deductible by the
Company for United States federal income tax purposes or (iii) MMI Trust will be
subject to more than a de
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minimis amount of other taxes, duties or other governmental charges.
"Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder. The term "Trustee"
as used with respect to a particular series of the Debentures shall mean the
trustee with respect to that series.
"Trust Indenture Act of 1939" shall mean the Trust Indenture Act of 1939 as
in force at the date of execution of this Indenture, except as provided in
Section 9.3.
"Trust Securities" shall mean the Capital Securities and the Common
Securities, collectively.
"U.S. Government Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
ARTICLE II.
SECURITIES
2.1. Forms Generally
The Debentures and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, the terms of which are incorporated in
and made a part of this Indenture. The Debentures may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject or usage. Each Debenture shall be dated the date of its
authentication. The Debentures shall be issued in denominations of $1,000 and
integral multiples thereof.
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2.2. Execution and Authentication
Two Officers shall sign the Debentures for the Company by manual or
facsimile signature in the manner set forth in Exhibit A. If an Officer whose
signature is on a Debenture no longer holds that office at the time the
Debenture is authenticated, the Debenture shall nevertheless be valid when
authenticated as provided herein.
A Debenture shall not be valid until authenticated by the manual signature
of an authorized officer of the Trustee. The signature of the Trustee shall be
conclusive evidence that the Debenture has been authenticated under this
Indenture. The form of Trustee's certificate of authentication to be borne by
the Debentures shall be substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a Company Order, authenticate for original issue up
to, and the aggregate principal amount of Debentures outstanding at any time may
not exceed the sum of $128,866,000 principal amount of the Debentures.
The Debentures are issuable in two Series, the "7 5/8% Junior Subordinated
Deferrable Interest Debentures, Series A" and the "7 5/8% Junior Subordinated
Deferrable Interest Debentures, Series B." The Series A Debentures and the
Series B Debentures shall be of equal rank, without preference as to any payment
or obligation under this Indenture. As of the Issue Date and up until the
consummation of the Exchange Offer, the Trustee shall authenticate and deliver
only Series A Debentures. Series B Debentures shall be authenticated and
delivered only as provided in Section 2.7.
2.3. Form and Payment
Except as provided in Section 2.5, the Debentures shall be issued in fully
registered certificated form without interest coupons. The principal or
Redemption Price of and interest on the Debentures issued in certificated form
will be payable, the transfer of such Debentures will be registrable and such
Debentures will be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Company maintained for such purpose
under Section 3.2; provided, however, that payment of interest with respect to
the Debentures may be made at the option of the Company (i) by check mailed to
the holder at such address as shall appear in the Debenture 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
Debentures is the Property Trustee, the payment of the principal or Redemption
Price of and interest (including Compounded Interest and Additional Interest, if
any) on such Debentures held
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by the Property Trustee will be made at such place and to such account as may be
designated by the Property Trustee.
2.4. Legends
(a) Except as permitted by subsection (b) of this Section 2.4 or as
otherwise determined by the Company in accordance with applicable law, each
Debenture shall bear the applicable legends relating to restrictions on transfer
pursuant to the securities laws in substantially the form set forth on Exhibit A
hereto.
(b) The Company shall issue and the Trustee shall authenticate Series B
Debentures in exchange for Series A Debentures accepted for exchange in the
Exchange Offer, which Series B Debentures shall not bear the legends required by
subsection (a) above, in each case unless the holder of such Series A Debentures
is either (i) a broker-dealer who purchased such Series A Debentures directly
from the Company for resale pursuant to Rule 144A or any other available
exemption under the Securities Act, (ii) a Person participating in the
distribution of the Series B Debentures or (iii) a Person who is an affiliate
(as defined in Rule 144 under the Securities Act) of the Company.
2.5. Global Debenture
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in book-entry form, the
related Definitive Debentures shall be presented to the Trustee (if an
arrangement with the Depositary has been maintained) by the Property Trustee in
exchange for one or more Global Debentures (as may be required pursuant to
Section 2.7) in an aggregate principal amount equal to the aggregate principal
amount of all outstanding Debentures to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the Depositary for
crediting to the accounts of its participants pursuant to the instructions of
the Administrative Trustees; the Company upon any such presentation shall
execute one or more Global Debentures in such aggregate principal amount and
deliver the same to the Trustee for authentication and delivery in accordance
with this Indenture; and payments on the Debentures issued as a Global Debenture
will be made to the Depositary; and
(ii) if any Capital Securities are held in certificated form, the
related Definitive Debentures may be presented to the Trustee by the Property
Trustee and any Capital Security certificate which represents Capital Securities
other than Capital Securities in book-entry form ("Non Book-Entry Capital
Securities") will be deemed to represent beneficial interests in Debentures
presented to the Trustee by the Property Trustee having an aggregate principal
amount equal to the aggregate liquidation amount of the Non Book-Entry Capital
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Securities until such Capital Security certificates are presented to the
Debenture registrar for transfer or reissuance, at which time such Capital
Security certificates will be cancelled and a Debenture, registered in the name
of the holder of the Capital Security certificate or the transferee of the
holder of such Capital Security certificate, as the case may be, with an
aggregate principal amount equal to the aggregate liquidation amount of the
Capital Security certificate cancelled, will be executed by the Company and
delivered to the Trustee for authentication and delivery in accordance with the
Indenture.
Upon the issuance of such Debentures pursuant to clauses (i) or (ii)
of this subsection 2.5(a), Debentures with an equivalent aggregate principal
amount that were presented by the Property Trustee to the Trustee will be deemed
to have been cancelled.
(b) The Global Debentures shall represent the aggregate amount of
outstanding Debentures from time to time endorsed thereon; provided, that the
aggregate amount of outstanding Debentures represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Debenture to reflect the amount of any
increase or decrease in the amount of outstanding Debentures represented thereby
shall be made by the Trustee, in accordance with instructions given by the
Company as required by this Section 2.5.
(c) The Global Debentures may be transferred, in whole but not in part,
only to the Depositary, another nominee of the Depositary, or to a successor
Depositary selected or approved by the Company or to a nominee of such successor
Depositary.
(d) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or the Depositary has ceased to be
a clearing agency registered under the Exchange Act, and a successor Depositary
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, the Company will
execute, and the Trustee, upon written notice from the Company, will
authenticate and make available for delivery the Definitive Debentures, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture in exchange for such Global Debenture.
If there is an Event of Default, the Depositary shall have the right to exchange
the Global Debentures for Definitive Debentures. In addition, the Company may at
any time determine that the Debentures shall no longer be represented by a
Global Debenture. In the event of such an Event of Default or such a
determination, the Company shall execute, and subject to Section 2.7, the
Trustee, upon receipt of an Officers' Certificate evidencing such determination
by the Company, will authenticate and make available for delivery the Definitive
Debentures, in authorized denominations, and in an aggregate principal amount
equal to the
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principal amount of the Global Debenture, in exchange for such Global Debenture.
Upon the exchange of the Global Debenture for such Definitive Debentures, in
authorized denominations, the Global Debenture shall be cancelled by the
Trustee. Such Definitive Debentures issued in exchange for the Global Debenture
shall be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such Definitive
Debentures to the Depositary for delivery to the Persons in whose names such
Definitive Debentures are so registered.
2.6. Interest
(a) Each Debenture will bear interest at the rate of 7 5/8% per annum,
except as provided in Section 2.6(e), from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from the Issue Date, until the principal thereof becomes due
and payable, and at the rate of 7 5/8% per annum on any overdue principal or
Redemption Price of 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 15 and December 15 of each year (each, an
"Interest Payment Date") commencing on June 15, 1998, to the Person in whose
name such Debenture or any Predecessor Debenture is registered at the close of
business on the regular record date for such interest installment, which shall
be the June 1 or December 1 immediately preceding the relevant Interest Payment
Date.
(b) Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months and, for any period of less than a full calendar month, the
number of days elapsed in such month. In the event that any Interest Payment
Date falls on a day that is not a Business Day, then payment of interest payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, with the same force and effect
as if made on such date.
(c) During such time as the Property Trustee is the holder of any
Debentures, the Company shall pay any additional amounts on the Debentures as
may be necessary in order that the amount of Distributions then due and payable
by MMI Trust on the outstanding Capital Securities shall not be reduced as a
result of any additional taxes, duties and other governmental charges to which
MMI Trust has become subject as a result of a Tax Event or an Investment Company
Act Event, including taxes, duties and
15
other governmental charges on amounts paid pursuant to this Section 2.6(c)
("Additional Interest").
(d) Notwithstanding Section 2.6(c) above, neither the Company nor the
Trust will be responsible for, nor will the Company or the Trust be required to
compensate holders of or investors in the Capital Securities (or Debentures that
may be distributed by the Trust) for, any withholding taxes that are imposed on
interest payments on the Debentures or on Distributions with respect to the
Capital Securities.
(e) The interest rate payable on the Debentures may be adjusted from time
to time in accordance with the Registration Rights Agreement in payment of any
Liquidated Damages thereunder.
2.7. Transfer and Exchange
(a) Transfer Restrictions. The Series A Debentures, and those Series B
Debentures with respect to which any Person described in Section 2.4(b)(i), (ii)
or (iii) is the beneficial owner, may not be transferred except in compliance
with the legend contained in Exhibit A unless otherwise determined by the
Company in accordance with applicable law. Upon any distribution of the
Debentures following a Dissolution Event, the Company and the Trustee shall
enter into a supplemental indenture pursuant to Section 9.1 to provide for the
transfer restrictions and procedures with respect to the Debentures
substantially similar to those contained in the Declaration with respect to the
Capital Securities to the extent applicable in the circumstances existing at
such time.
(b) General Provisions Relating to Transfers and Exchanges. Upon
surrender for registration of transfer of any Debenture at the office or agency
of the Company maintained for the purpose pursuant to Section 3.2, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Debentures of the same
series, of any authorized denominations and of a like aggregate principal
amount.
At the option of the holder, Debentures of any series may be exchanged for
other Debentures of the same series, of any authorized denominations and of a
like aggregate principal amount, upon surrender of the Debentures to be
exchanged at such office or agency. Whenever any Debentures are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Debentures which the holder making the exchange is entitled to
receive.
Every Debenture presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and
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the Debenture registrar duly executed by the holder thereof or such holder's
attorney duly authorized in writing; such instrument shall include a signature
guaranty by an "eligible guarantor institution" that is a bank, stockbroker,
savings and loan association or credit union meeting the requirements of the
Debenture registrar, which requirements include membership or participation in
the Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guarantee program as may be determined by the Debenture registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.
All Definitive Debentures and Global Debentures issued upon any
registration of transfer or exchange of Definitive Debentures or Global
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Debentures or Global Debentures surrendered upon such registration of transfer
or exchange.
No service charge shall be made to a holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith.
The Company shall not be required to (i) issue, register the transfer of or
exchange Debentures during a period beginning at the opening of business 15 days
before the day of mailing of a notice of redemption or any notice of selection
of Debentures for redemption under Article XIV hereof and ending at the close of
business on the day of such mailing; or (ii) register the transfer of or
exchange any Debenture so selected for redemption in whole or in part, except
the unredeemed portion of any Debenture being redeemed in part.
(c) Exchange of Series A Debentures for Series B Debentures. The Series A
Debentures may be exchanged for Series B Debentures pursuant to the terms of the
Exchange Offer. The Trustee shall make the exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Debentures, the transactions
contemplated by the Exchange Offer have been consummated; and
(B) the principal amount of Series A Debentures properly tendered in
the Exchange Offer that are represented by a Global Debenture and the principal
amount of Series A Debentures properly tendered in the Exchange Offer that are
represented by Definitive Debentures, the name of each holder of such Definitive
Debentures, the principal amount properly tendered in the Exchange Offer by each
such holder and the name and address to
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which Definitive Debentures for Series B Debentures shall be registered and sent
for each such holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Debentures have been
registered under Section 5 of the Securities Act and the Indenture has been
qualified under the Trust Indenture Act and (y) with respect to the matters set
forth in Section 3(p) of the Registration Rights Agreement and (iii) a Company
Order, shall authenticate (A) a Global Debenture for Series B Debentures in
aggregate principal amount equal to the aggregate principal amount of Series A
Debentures represented by a Global Debenture indicated in such Officers'
Certificate as having been properly tendered and (B) Definitive Debentures
representing Series B Debentures registered in the names of, and in the
principal amounts indicated in, such Officers' Certificate.
If the principal amount of the Global Debenture for the Series B Debentures
is less than the principal amount of the Global Debenture for the Series A
Debentures, the Trustee shall make an endorsement on such Global Debenture for
Series A Debentures indicating a reduction in the principal amount represented
thereby.
The Trustee shall deliver such Definitive Debentures for Series B
Debentures to the holders thereof as indicated in such Officers' Certificate.
2.8. Replacement Debentures
If any mutilated Debenture is surrendered to the Trustee, or the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Debenture, the Company shall issue and the Trustee shall
authenticate a replacement Debenture if the Trustee's requirements for
replacements of Debentures are met. An indemnity bond must be supplied by the
holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any agent thereof or any authenticating agent
from any loss that any of them may suffer if a Debenture is replaced. The
Company or the Trustee may charge for its expenses in replacing a Debenture.
Every replacement Debenture is an obligation of the Company and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Debentures duly issued hereunder.
2.9. Temporary Debentures
Pending the preparation of Definitive Debentures, the Company may execute,
and upon receipt of a Company Order the Trustee shall authenticate and make
available for delivery,
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temporary Debentures that are printed, lithographed, typewritten or otherwise
reproduced, in any authorized denomination, substantially of the tenor of the
Definitive Debentures in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Debentures may determine, as conclusively evidenced by their
execution of such Debentures.
If temporary Debentures are issued, the Company shall cause Definitive
Debentures to be prepared without unreasonable delay. The Definitive Debentures
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 on which the Debentures may be listed, all as
determined by the officers executing such Definitive Debentures. After the
preparation of Definitive Debentures, the temporary Debentures shall be
exchangeable for Definitive Debentures upon surrender of the temporary
Debentures at the office or agency maintained by the Company for such purpose
pursuant to Section 3.2 hereof, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Debentures, the Company shall execute,
and the Trustee shall authenticate and make available for delivery, in exchange
therefor the same aggregate principal amount of Definitive Debentures of
authorized denominations. Until so exchanged, the temporary Debentures shall in
all respects be entitled to the same benefits under this Indenture as Definitive
Debentures.
2.10. Cancellation
The Company at any time may deliver Debentures to the Trustee for
cancellation. The Trustee and no one else shall cancel all Debentures
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall retain or dispose of cancelled Debentures in accordance
with its normal practices (subject to the record retention requirement of the
Exchange Act) unless the Company directs them to be returned to it. The Company
may not issue new Debentures to replace Debentures that have been redeemed or
paid or that have been delivered to the Trustee for cancellation.
2.11. Defaulted Interest
Any interest on any Debenture that is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the holder on the relevant
regular record date by virtue of having been such holder, and such Defaulted
Interest shall be paid by the Company, at its election, as provided in clause
(a) or clause (b) below:
(a) The Company may make payment of any Defaulted Interest on Debentures
to the Persons in whose names such Debentures (or
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their respective Predecessor Debentures) are registered at the close of business
on a special record date for the payment of such Defaulted Interest, which shall
be fixed in the following manner: the Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each such
Debenture and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall not be more than 15 nor less than 10 days
prior to the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Debentureholder at his or her address as it
appears in the Debenture Register, not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered on such special record date
and shall be no longer payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Debentures may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
2.12. CUSIP Numbers
The Company in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Debentureholders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
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ARTICLE III.
PARTICULAR COVENANTS OF THE COMPANY
3.1. Payment of Principal or Redemption Price and Interest
The Company covenants and agrees for the benefit of the holders of the
Debentures that it will duly and punctually pay or cause to be paid the
principal or Redemption Price of and interest on the Debentures at the place, at
the respective times and in the manner provided herein. Except as provided in
Section 2.3, each installment of interest on the Debentures may be paid by
mailing checks for such interest payable to the order of the holders of the
Debentures entitled thereto as they appear in the Debenture Register. The
Company further covenants to pay any and all amounts including, without
limitation, Liquidated Damages, if any, on the dates and in the manner required
under the Registration Rights Agreement.
3.2. Offices for Notices and Payments, etc.
So long as any of the Debentures remain outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where the Debentures may be presented for payment, an office or agency where the
Debentures may be presented for registration of transfer and for exchange as in
this Indenture provided and an office or agency where notices and demands to or
upon the Company in respect of the Debentures or of this Indenture may be
served. The Company will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. Until otherwise
designated from time to time by the Company in a notice to the Trustee, any such
office or agency for all of the above purposes shall be the Principal Office of
the Trustee. In case the Company shall fail to maintain any such office or
agency in the Borough of Manhattan, The City of New York, or shall fail to give
such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the Principal
Office of the Trustee.
In addition to any such office or agency, the Company may from time to time
designate one or more offices or agencies outside the Borough of Manhattan, The
City of New York, where the Debentures may be presented for payment,
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City of New York, for the purposes above mentioned. The Company will give to
the Trustee prompt written notice of any such designation or rescission thereof.
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3.3. Appointments to Fill Vacancies in Trustee's Office
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
3.4. Provision as to Paying Agent
(a) If the Company shall appoint a paying agent other than the Trustee
with respect to the Debentures, it will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provision of this Section 3.4,
(1) that it will hold all sums held by it as such agent for the
payment of the principal or Redemption Price of or interest on the Debentures
(whether such sums have been paid to it by the Company or by any other obligor
on the Debentures of such series) in trust for the benefit of the holders of the
Debentures;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Debentures) to make any payment of the
principal or Redemption Price of or interest on the Debentures when the same
shall be due and payable;
(3) that it will at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by it as such paying agent; and
(4) that it will not remove or impair the rights of any Holder of
Capital Securities to bring a Direct Action in certain circumstances, as
provided in Section 15.1.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal or Redemption Price of or interest on the
Debentures, set aside, segregate and hold in trust for the benefit of the
holders of the Debentures a sum sufficient to pay such principal or Redemption
Price and interest so becoming due and will notify the Trustee of any failure to
take such action and of any failure by the Company (or by any other obligor
under the Debentures) to make any payment of the principal or Redemption Price
of or interest on the Debentures when the same shall become due and payable.
(c) Anything in this Section 3.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Debentures hereunder, or for any other reason, pay
or cause to be paid to the Trustee all sums held in trust for the Debentures by
22
the Trustee or any paying agent hereunder, as required by this Section 3.4, such
sums to be held by the Trustee upon the trusts herein contained.
(d) Anything in this Section 3.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.4 is subject to
Sections 11.3 and 11.4.
3.5. Certificate to Trustee
The Company will deliver to the Trustee on or before 120 days after each
December 31, commencing with December 31, 1997, so long as Debentures are
outstanding hereunder, an Officers' Certificate, one of the signers of which
shall be the principal executive, principal financial or principal accounting
officer of the Company stating that in the course of the performance by the
signers of their duties as officers of the Company they would normally have
knowledge of any default by the Company in the performance of any covenants
contained herein, stating whether or not they have knowledge of any such default
and, if so, specifying each such default of which the signers have knowledge and
the nature thereof.
3.6. Statement as to Default
The Company shall deliver to the Trustee, as soon as possible and in any
event within five days after the Company becomes aware of the occurrence of any
Event of Default or an event which, with notice or the lapse of time or both,
would constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default and the action which the Company
proposes to take with respect thereto.
3.7. Compliance with Consolidation Provisions
The Company will not, while any of the Debentures remain outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other Person unless the provisions of
Article X hereof are complied with.
3.8. Limitation on Dividends
The Company will not (i) declare or pay any dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Company's capital stock (which includes common and preferred stock) or
(ii) make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Company (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Company of any securities of any Subsidiary of the Company (including any
23
Other Guarantees) if such guarantee ranks pari passu or junior in right of
payment to the Debentures (other than (a) dividends or distributions in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Common Stock of the Company; (b) any declaration of a dividend in connection
with the implementation of a shareholder's rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto; (c) payments under the Capital Securities Guarantee;
(d) as a direct result of, and only to the extent required in order to avoid the
issuance of fractional shares of capital stock, following a reclassification of
the Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock; and (e) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged) if at such time
(i) an Event of Default shall have occurred and be continuing, (ii) there shall
have occurred any event of which the Company has actual knowledge that (a) is,
or with the giving of notice or the lapse of time, or both, would constitute an
Event of Default and (b) in respect of which the Company shall not have taken
reasonable steps to cure, (iii) the Company shall be in default with respect to
its payment obligations under the Capital Securities Guarantee or (iv) the
Company shall have given notice of its election of the exercise of its right to
extend the interest payment period, or any extension thereof, pursuant to
Section 16.1 and shall not have rescinded such notice, and such exercise of its
right to extend the interest payment period, or any extension thereof, shall
have commenced.
3.9. Covenants as to MMI Trust
In the event Debentures are issued to MMI Trust or a trustee of such trust
in connection with the issuance of Trust Securities by MMI Trust, for so long as
such Trust Securities remain outstanding, the Company will (i) maintain 100%
direct ownership of the Common Securities of MMI Trust; provided, however, that
any successor of the Company permitted pursuant to Article X, may succeed to the
Company's ownership of such Common Securities, (ii) not cause, as sponsor of MMI
Trust, or permit, as a holder of Common Securities, the dissolution, winding up
or termination of the Trust, except in connection with a distribution of the
Debentures to holders of Trust Securities, the payment of the Debentures on the
Maturity Date, or as otherwise provided in the Declaration, (iii) use its best
efforts to cause MMI Trust (a) to remain a business trust, except in connection
with a distribution of Debentures, the redemption of all of the Trust Securities
or certain mergers, consolidations or amalgamations, each as permitted by the
Declaration and (b) to otherwise continue to be treated as a grantor trust and
not an association taxable as a corporation for United States federal income tax
purposes and
24
(iv) use its best efforts to cause each holder of Trust Securities to be treated
as owning an undivided beneficial interest in the Debentures.
3.10. Payment of Expenses
In connection with the offering, sale and issuance of the Debentures to MMI
Trust and in connection with the sale of the Trust Securities by MMI Trust, the
Company, in its capacity as borrower with respect to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and issuance
of the Debentures, including commissions to the initial purchasers payable
pursuant to the Purchase Agreement, fees and expenses in connection with any
exchange offer or other action to be taken pursuant to the Registration Rights
Agreement and compensation of the Trustee in accordance with the provisions of
Section 6.6;
(b) pay all costs and expenses of MMI Trust (including, but not limited
to, costs and expenses relating to the organization of MMI Trust, the offering,
sale and issuance of the Trust Securities (including commissions to the initial
purchasers payable pursuant to the Purchase Agreement), the fees and expenses of
the Property Trustee and the Delaware Trustee, the costs and expenses relating
to the operation of MMI 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 MMI 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 MMI Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of MMI Trust; and
(e) pay all other fees, expenses, debts and obligations (other than
payments of principal or Redemption Price of or interest on the Trust
Securities) related to MMI Trust.
3.11. Payment Upon Resignation or Removal
Upon termination of this Indenture or the removal or resignation of the
Trustee, unless otherwise stated, the Company shall pay to the Trustee all
amounts accrued and owing to such Trustee to the date of such termination,
removal or resignation. Upon termination of the Declaration or the removal or
resignation
25
of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to
Section 5.7 of the Declaration, the Company shall pay to the Delaware Trustee or
the Property Trustee, as the case may be, all amounts accrued and owing to such
Trustee to the date of such termination, removal or resignation.
3.12. Calculation of Original Issue Discount
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods), if any, accrued on
outstanding Debentures as of the end of such year and (ii) such other specific
information relating to such original issue discount as may then be relevant
under the Internal Revenue Code of 1986, as amended from time to time.
ARTICLE IV.
SECURITYHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
4.1. Debentureholders' Lists
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:
(a) on a semi-annual basis on each regular record date for the
Debentures, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Debentureholders as of such record date; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company, of any such request, a list of similar
form and content with respect to the Debentureholders as of a date not more than
15 days prior to the time such list is furnished,
except that, no such lists need be furnished so long as the Trustee is
in possession thereof by reason of its acting as Debenture registrar.
4.2. Preservation and Disclosure of Lists
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of the
Debentures (1) contained in the most recent list furnished to it as provided in
Section 4.1 or (2) received by it in the capacity of Debentures registrar (if so
acting) hereunder. The Trustee may destroy any list furnished to it as provided
in Section 4.1 upon receipt of a new list so furnished.
26
(b) In case three or more holders of Debentures (hereinafter referred
to as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debenture for a period of
at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other holders of
Debentures or with holders of all Debentures with respect to their rights under
this Indenture and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall
within 5 Business Days after the receipt of such application, at its election,
either:
(1) afford such applicants access to the information preserved
at the time by the Trustee in accordance with the provisions of subsection (a)
of this Section 4.2, or
(2) inform such applicants as to the approximate number of
holders of all Debentures, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.2, and as to the approximate cost of mailing to
such Debentureholders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Debentureholder whose name and address appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.2 a copy of the form of proxy or other
communication which is specified in such request with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender, the Trustee shall (i) mail to such applicants and
(ii) if this Indenture has been qualified under the Trust Indenture Act, file
with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interests of the holders of Debentures of
such series or all Debentures, as the case may be, or would be in violation of
applicable law. Such written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the objections specified
in the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the
27
Trustee shall be relieved of any obligation or duty to such applicants
respecting their application.
(c) Each and every holder of Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any paying agent shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the holders
of Debentures in accordance with the provisions of subsection (b) of this
Section 4.2, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under said subsection (b) except for its
negligence or bad faith.
4.3. Reports by Company
(a) The Company covenants and agrees to file with the Trustee, within 15
days after the date on which the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as said
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then to
file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the applicable rules and regulations prescribed
from time to time by said Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to time by
such rules and regulations.
(c) The Company covenants and agrees to transmit by mail to all holders of
Debentures, as the names and addresses of such holders appear upon the Debenture
Register, within 30 days after the filing thereof with the Trustee, such
summaries of any information, documents and reports required to be filed by the
Company pursuant to subsections (a) and (b) of this Section 4.3 as may be
required by applicable rules and regulations prescribed from time to time by the
Commission.
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(d) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(e) So long as is required for an offer or sale of the Debentures to
qualify for an exemption under Rule 144A under the Securities Act, the Company
shall, upon request, provide the information required by clause (d)(4)
thereunder to each Holder and to each beneficial owner and prospective purchaser
of Debentures identified by any holder of Restricted Debentures, unless such
information is furnished to the Commission pursuant to Section 13 or 15(d) of
the Exchange Act.
4.4. Reports by the Trustee
(a) The Trustee shall transmit to Debentureholders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee
shall, within 60 days after each May 31 following the date of this Indenture,
commencing May 31, 1998, deliver to Debentureholders a brief report which
complies with the provisions of such Section 313(a).
(b) The Trustee shall transmit to Debentureholders the reports required to
be so transmitted at the times required pursuant to Section 313(b) of the Trust
Indenture Act.
(c) A copy of each such report shall, at the time of such transmission to
Debentureholders, be filed by the Trustee with each stock exchange or automated
quotation system, if any, upon which the Debentures are listed, with the
Commission, with the Company and such other Persons at such times as are
required pursuant to Section 313(c) of the Trust Indenture Act. The Company will
promptly notify the Trustee when the Debentures are listed on any stock exchange
or automated quotation system.
ARTICLE V.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
5.1. Events of Default
One or more of the following events of default shall constitute an "Event
of Default" hereunder (whatever the reason for such Event of Default and whether
it shall be voluntary or be
29
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) default in the payment of any interest upon any Debenture or any Other
Debentures when it becomes due and payable, and continuance of such default for
a period of 30 days; provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms hereof shall not
constitute a default in the payment of interest for this purpose; or
(b) default in the payment of all or any part of the principal or
Redemption Price of any Debenture or any Other Debentures as and when the same
shall become due and payable either at maturity, upon redemption, by declaration
or otherwise; or
(c) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the holders of not less than
25% in aggregate principal amount of the outstanding Debentures a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(d) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or for any substantial part of
its property, or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(e) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or of any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due.
If an Event of Default with respect to Debentures at the time outstanding
occurs and is continuing, then in every such case the Trustee or the holders of
not less than 25% in aggregate
30
principal amount of the Debentures then outstanding may declare the principal
amount of all Debentures to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by the holders of the
outstanding Debentures), 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 Debentures shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, (i) the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay (A) all
matured installments of interest upon all the Debentures and the principal or
Redemption Price of any and all Debentures which shall have become due otherwise
than by acceleration (with interest upon such principal or Redemption Price of,
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 Debentures to the date of such payment or deposit) and
(B) such amount as shall be sufficient to cover reasonable compensation to the
Trustee and each predecessor Trustee, their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee except as a result of negligence or
bad faith and all other amounts due to the Trustee under Section 6.6 and to the
Delaware Trustee and the Property Trustee under the Declaration, and (ii) any
and all Events of Default under the Indenture, other than the non-payment of the
principal of the Debentures which shall have become due solely by such
declaration of acceleration, shall have been cured, waived or otherwise remedied
as provided herein, then the holders of a majority in aggregate principal amount
of the Debentures then outstanding, by written notice to the Company and to the
Trustee, may rescind and annul such declaration and its consequences, but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon and provided,
that no such waiver or rescission and annulment shall apply to any default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case the Company,
the Trustee and the holders of the Debentures shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the Trustee and the holders of the Debentures shall
continue as though no such proceeding had been taken.
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5.2. Payment of Debentures on Default; Suit Therefor
The Company covenants that (a) in case default shall be made in the payment
of any installment of interest upon any of the Debentures 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
or Redemption Price of any of the Debentures as and when the same shall have
become due and payable, whether at maturity of the Debentures or upon redemption
or by declaration or otherwise, then, upon demand of the Trustee, the Company
will pay to the Trustee, for the benefit of the holders of the Debentures, the
whole amount that then shall have become due and payable on all such Debentures
for principal, Redemption Price or interest, or both, as the case may be, with
interest upon the overdue principal or Redemption Price, and (to the extent that
payment of such interest is enforceable under applicable law and, if the
Debentures are held by MMI Trust or a trustee of such trust, without duplication
of any other amounts paid by MMI Trust or a trustee in respect thereof) upon the
overdue installments of interest at the rate borne by the Debentures; and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including a reasonable compensation to the Trustee,
its agents, attorneys and counsel, and any expenses or liabilities incurred by
the Trustee hereunder other than through its negligence or bad faith and all
other amounts due to the Trustee under Section 6.6 and to the Delaware Trustee
and the Property Trustee under the Declaration.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures 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 Company or any other obligor on the Debentures under Xxxxx
00, Xxxxxx Xxxxxx Code, or any other applicable law, or in case a receiver or
trustee shall have been appointed for the property of the Company or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Company or other obligor upon the Debentures, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal or Redemption Price of the Debentures shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand
32
pursuant to the provisions of this Section 5.2, shall be entitled and empowered,
by intervention in such proceedings or otherwise, to file and prove a claim or
claims for the whole amount of the principal or Redemption Price and interest
owing and unpaid in respect of the Debentures and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence or
bad faith and all other amounts due to the Trustee under Section 6.6 and to the
Delaware Trustee and the Property Trustee under the Declaration) and of the
Debentureholders allowed in such judicial proceedings relative to the Company or
any other obligor on the Debentures, or to the creditors or property of the
Company or such other obligor, unless prohibited by applicable law and
regulations, to vote on behalf of the holders of the Debentures 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
Debentureholders to make such payments to the Trustee, and, in the event that
the Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith and all other amounts due to the
Trustee under Section 6.6 and to the Delaware Trustee and the Property Trustee
under the Declaration.
Nothing herein contained shall be construed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures or the rights of any holder thereof or to authorize the Trustee to
vote in respect of the claim of any Debentureholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or under
any of the Debentures, may be enforced by the Trustee without the possession of
any of the Debentures, or the production thereof on any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express
33
trust, and any recovery of judgment shall be for the ratable benefit of the
holders of the Debentures.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Debentures, and it shall not be necessary to make any holders of the
Debentures parties to any such proceedings.
5.3. Application of Moneys Collected by Trustee
Any moneys collected by the Trustee shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the Debentures 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
Debentures and reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and liabilities incurred, and all advances
made, by the Trustee except as a result of its negligence or bad faith and all
other amounts due to the Trustee under Section 6.6 and to the Delaware Trustee
and the Property Trustee under the Declaration;
Second: To the payment of all Senior Indebtedness of the Company if and to
the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon Debentures
for principal or Redemption Price of and interest on the Debentures, 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
Debentures for principal or Redemption Price and interest, respectively; and
Fourth: To the Company.
5.4. Proceedings by Debentureholders
No holder of any Debenture shall have any right by virtue of or by availing
of any provision of this Indenture to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
such holder previously shall have given to the Trustee written notice of an
Event of Default and of the continuance thereof with respect to the Debentures
specifying such Event of Default, as hereinbefore provided, and unless also the
holders of not less than 25% in aggregate principal amount of the Debentures
then outstanding shall have made written request upon the Trustee to
34
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such action, suit or
proceeding, it being understood and intended, and being expressly covenanted by
the taker and holder of every Debenture with every other taker and holder and
the Trustee, that no one or more holders of Debentures 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
Debentures, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Debentures.
Notwithstanding any other provisions in this Indenture, however, the right
of any holder of any Debenture to receive payment of the principal or Redemption
Price of and interest on such Debenture, 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 Debenture hereunder it is expressly understood, intended and
covenanted by the taker and holder of every Debenture with every other such
taker and holder and the Trustee, that no one or more holders of Debentures
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 Debentures, or to obtain or seek to obtain priority over or
preference to any other Such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debentures. For the protection and enforcement
of the provisions of this Section, each and every Debentureholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
The Company and the Trustee acknowledge that pursuant to the Declaration,
the holders of Capital Securities are entitled, in the circumstances and subject
to the limitations set forth therein, to commence a Direct Action with respect
to any Event of Default under this Indenture and the Debentures.
Notwithstanding any payments made to such holder of Trust Securities by the
Company in connection with a Direct Action, the Company shall remain obligated
to pay the principal or Redemption Price of and interest on the Debentures held
by the Property Trustee, and the Company shall be subrogated to the rights of
the holder of such Trust Securities to the extent of any payments made by the
Company to such holder in any Direct Action.
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5.5. Proceedings by Trustee
In case an Event of Default occurs with respect to Debentures and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
5.6. Remedies Cumulative and Continuing
All powers and remedies given by this Article V to the Trustee or to the
Debentureholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any other powers and remedies available to the Trustee or the
holders of the Debentures, 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 Debentures, and no delay
or omission of the Trustee or of any holder of any of the Debentures to exercise
any right or power accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.4, every power and remedy given by this Article V or by
law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.
5.7. Direction of Proceedings and Waiver of Defaults by Majority of
Debentureholders
The holders of a majority in aggregate principal amount of the Debentures
at the time outstanding shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided, however, that
(subject to the provisions of Section 6.1) the Trustee shall have the right to
decline to follow any such direction if the Trustee shall determine that the
action so directed would be unjustly prejudicial to the holders not taking part
in such direction or if the Trustee being advised by counsel determines that the
action or proceeding so directed may not lawfully be taken or if the Trustee in
good faith by its board of directors or trustees, executive committee, or a
trust committee of directors or trustees and/or Responsible Officers shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability. Prior to any declaration accelerating the
36
maturity of the Debentures, the holders of a majority in aggregate principal
amount of the Debentures at the time outstanding may on behalf of the holders of
all of the Debentures waive any past default or Event of Default and its
consequences except a default (a) in the payment of principal, Redemption Price
of or interest on any of the Debentures or (b) in respect of covenants or
provisions hereof which cannot be modified or amended without the consent of the
holder of each Debenture affected. Upon any such waiver, the default covered
thereby shall be deemed to be cured for all purposes of this Indenture and the
Company, the Trustee and the holders of the Debentures shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 5.7, said default or Event of Default shall
for all purposes of the Debentures and this Indenture be deemed to have been
cured and to be not continuing.
5.8. Notice of Defaults
The Trustee shall, within 90 days after the occurrence of a default with
respect to the Debentures mail to all Debentureholders, as the names and
addresses of such holders appear upon the Debenture register, notice of all
defaults known to the Trustee, unless such defaults shall have been cured before
the giving of such notice (the term "defaults" for the purpose of this Section
5.8 being hereby defined to be the events specified in clauses (a), (b), (c),
(d) and (e) of Section 5.1, not including periods of grace, if any, provided for
therein, and irrespective of the giving of written notice specified in clause
(c) of Section 5.1).
5.9. Undertaking to Pay Costs
All parties to this Indenture agree, and each holder of any Debenture by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 5.9 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding in the aggregate more than 10% in aggregate principal
amount of the Debentures outstanding, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the
37
principal, Redemption Price of or interest on any Debenture against the Company
on or after the same shall have become due and payable.
ARTICLE VI.
CONCERNING THE TRUSTEE
6.1. Duties and Responsibilities of Trustee
With respect to the holders of the Debentures issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred
(1) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture;
but, in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers
38
of the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith, in accordance with the direction of
the Debentureholders pursuant to Section 5.7, relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
6.2. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, note, debenture or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein may be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed), and any Board
Resolution may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered to be taken or omitted by
it hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
39
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the occurrence of an
Event of Default (that has not been cured or waived), to exercise such of the
rights and powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
coupon or other paper or document, unless requested in writing to do so by the
holders of a majority in aggregate principal amount of the outstanding
Debentures; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents (including
any Authenticating Agent) or attorneys, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed by it with due care.
(h) the Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Debentures unless either (1) a Responsible
Officer shall have actual knowledge of such Default or Event of Default or (2)
written notice of such Default or Event of Default shall have been given to the
Trustee by the Company or any other obligor on the Debentures or by any Holder
of the Debentures.
6.3. No Responsibility for Recitals, etc.
The recitals contained herein and in the Debentures (except in the
certificate of authentication of the Trustee or the Authenticating Agent) shall
be taken as the statements of the Company, and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the same.
The Trustee and the Authenticating Agent make no representations as to the
validity or sufficiency of this Indenture or of the Debentures. The Trustee and
the Authenticating Agent shall not be accountable
40
for the use or application by the Company of any Debentures or the proceeds of
any Debentures authenticated and delivered by the Trustee or the Authenticating
Agent in conformity with the provisions of this Indenture.
6.4. Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar
May Own Debentures
The Trustee or any Authenticating Agent or any paying agent or any transfer
agent or any Debenture registrar, in its individual or any other capacity, may
become the owner or pledgee of Debentures with the same rights it would have if
it were not Trustee, Authenticating Agent, paying agent, transfer agent or
Debenture registrar.
6.5. Moneys to be Held in Trust
Subject to the provisions of Section 11.4, all moneys received by the
Trustee or any paying agent shall, until used or applied as herein provided, be
held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
and any paying agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of Default shall have occurred and be continuing, all
interest allowed on any such moneys shall be paid from time to time upon the
written order of the Company, signed by an Officer.
6.6. Compensation and Expenses of Trustee
The Company, as borrower, covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, such compensation as shall
be agreed to in writing between the Company and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), and the Company will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify each of the Trustee or any predecessor
Trustee (and its officers, agents, directors and employees) for, and to hold it
harmless against, any and all loss, damage, claim, liability or expense
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on the part of the Trustee and arising out of or
in connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim of liability in the
premises. The obligations of the Company under this Section 6.6
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to compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder. Such additional indebtedness shall be secured by a lien prior to that
of the Debentures upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the benefit of the holders of particular
Debentures.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.l(d) or Section
5.1(e), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the resignation or removal of
the Trustee and the termination of this Indenture.
6.7. Officers' Certificate as Evidence
Except as otherwise provided in Sections 6.1 and 6.2, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof is herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted by
it under the provisions of this Indenture upon the faith thereof.
6.8. Conflicting Interest of Trustee
If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
6.9. Eligibility of Trustee
The Trustee hereunder shall at all times be a bank or trust company
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 Trust Indenture Act and
authorized under law to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000) and
42
subject to supervision or examination by federal, state, territorial, or
District of Columbia authority. If such bank or trust company or other
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 6.9 the combined capital and surplus of such
bank or trust company or other corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.9, the Trustee shall resign immediately in
the manner and with the effect specified in Section 6.10.
6.10. Resignation or Removal of Trustee
(a) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign giving written notice of such resignation to the Company and by
mailing notice thereof to the holders of the Debentures at their addresses as
they shall appear on the Debenture register. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee or trustees
by written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
within 60 days after the mailing of such notice of resignation to the
Debentureholders, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Debentureholder
who has been a bona fide holder of a Debenture for at least six months may,
subject to the provisions of Section 5.9, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section
6.8 after written request therefor by the Company or by any Debentureholder who
has been a bona fide holder of a Debenture or Debentures for at least six
months, or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.9 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder, or
43
(3) the Trustee shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its property shall
be appointed, or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 5.9, any
Debentureholder who has been a bona fide holder of a Debenture for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after such nomination the Company objects thereto
or if no successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after such removal, in which case the Trustee so
removed or any Debentureholder, 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 Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 6.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.11.
6.11. Acceptance by Successor Trustee
Any successor trustee appointed as provided in Section 6.10 shall execute,
acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the retiring trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as trustee herein; but, nevertheless, on
the written request of the Company or of the successor trustee, the trustee
ceasing to act shall, upon payment of any amounts then due it pursuant to the
provisions of Section 6.6, execute and deliver an instrument transferring to
such successor trustee all the rights and powers of the trustee so ceasing to
act and shall duly
44
assign, transfer and deliver to such successor trustee all property and money
held by such retiring trustee thereunder. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.
No successor trustee shall accept appointment as provided in this Section
6.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 6.8 and eligible under the provisions
of Section 6.9.
Upon acceptance of appointment by a successor trustee as provided in this
Section 6.11, the Company shall mail notice of the succession of such trustee
hereunder to the holders of Debentures at their addresses as they shall appear
on the Debenture Register. If the Company fails to mail such notice within 10
days after the acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Company.
6.12. Succession by Merger, etc.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any Debentures shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee may authenticate such
Debentures 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 Debentures or this Indenture elsewhere provides that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Debentures in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
45
6.13. Limitation on Rights of Trustee as a Creditor
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent included therein.
6.14. Authenticating Agents
There may be one or more Authenticating Agents appointed by the Trustee
upon the request of the Company with power to act on its behalf and subject to
its direction in the authentication and delivery of Debentures 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 Debentures: provided, that the Trustee shall have no liability to the
Company for any acts or omissions of the Authenticating Agent with respect to
the authentication and delivery of Debentures. Any such Authenticating Agent
shall at all times be a corporation organized and doing business under the laws
of the United States or of any state or territory thereof or of the District of
Columbia authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of at least $5,000,000 and being subject to
supervision or examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of condition at least
annually pursuant to law or the requirements of such authority, then for the
purposes of this Section 6.14 the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, if such successor corporation is
otherwise eligible under this Section 6.14 without the execution or filing of
any paper or any further act on the part of the parties hereto or such
Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such
46
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 6.14, the
Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent eligible under this Section 6.14, shall give
written notice of such appointment to the Company and shall mail notice of such
appointment to all Debentureholders as the names and addresses of such holders
appear on the Debenture 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 Company, as borrower, agrees to pay to any Authenticating Agent from
time to time reasonable compensation for its services. Any Authenticating Agent
shall have no responsibility or liability for any action taken by it as such in
accordance with the directions of the Trustee.
If an appointment is made pursuant to this Section, the Debentures may have
endorsed thereon an alternative certificate of authentication in the following
form:
This is one of the Series ___ Debentures referred to in the within-
mentioned Indenture.
[Name of Trustee]
--------------------------
As Trustee
By________________________
As Authenticating Agent
By_______________________
Authorizing Officer
ARTICLE VII.
CONCERNING THE SECURITYHOLDERS
7.1. Action by Debentureholders
Whenever in this Indenture it is provided that the holders of a specified
percentage in aggregate principal amount of the Debentures 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
47
have joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by such Debentureholders in Person or by
agent or proxy appointed in writing, or (b) by the record of such holders of
Debentures voting in favor thereof at any meeting of such Debentureholders duly
called and held in accordance with the provisions of Article VII, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of such Debentureholders.
If the Company shall solicit from the Debentureholders any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company
may, at its option, as evidenced by an Officers' Certificate, fix in advance a
record date for the determination of Debentureholders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
action or to revoke any such action, but the Company shall have no obligation to
do so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action or revocation may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of Outstanding Debentures have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
action, and for that purpose the Outstanding Debentures shall be computed as of
the record date, provided, however, that no such authorization, agreement or
consent by such Debentureholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
7.2. Proof of Execution by Debentureholders
Subject to the provisions of Sections 6.1, 6.2 and 8.5, proof of the
execution of any instrument by a Debentureholder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The ownership of Debentures shall be proved by the Debenture
Register or by a certificate of the Debenture registrar. The Trustee may require
such additional proof of any matter referred to in this Section as it shall deem
necessary.
The record of any Debentureholders' meeting shall be proved in the manner
provided in Section 8.6.
7.3. Who Are Deemed Absolute Owners
Prior to due presentment for registration of transfer of any Debenture, the
Company, the Trustee, any Authenticating Agent, any paying agent, any transfer
agent and any Debenture registrar may deem the Person in whose name such
Debenture shall be
48
registered upon the Debenture Register to be, and may treat him or her as, the
absolute owner of such Debenture (whether or not such Debenture shall be
overdue) for the purpose of receiving payment of or on account of the principal
or Redemption Price of and (subject to Section 2.6) interest on such Debenture
and for all other purposes; and neither the Company nor the Trustee nor any
Authenticating Agent nor any paying agent nor any transfer agent nor any
Debenture registrar shall be affected by any notice to the contrary. All such
payments so made to any holder for the time being or upon his order shall be
valid, and, to the extent other sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Debenture.
7.4. Debentures Owned by Company Deemed Not Outstanding
In determining whether the holders of the requisite aggregate principal
amount of Debentures have concurred in any direction, consent or waiver under
this Indenture, Debentures which are owned by the Company or any other obligor
on the Debentures or by any Affiliate of the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent or
waiver, only Debentures which the Trustee actually knows are so owned shall be
so disregarded. Debentures so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 7.4 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Debentures and that the pledgee is not the Company or any Affiliate of
Company or any such other obligor. In the case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee. The ownership of Debentures by MMI Trust and of Trust
Securities by the Company or any other obligor on the Debentures or any
Affiliate of the foregoing shall be disregarded for purposes of this Section
7.4; provided that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver, only Debentures
which the Trustee actually knows are so owned shall be so disregarded.
7.5. Revocation of Consents; Future Holders Bound
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.1, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Debentures specified in this
Indenture in connection with such action, any holder of a Debenture (or any
Debenture issued in whole or in part in exchange or substitution therefor),
subject to Section 7.1, the serial number of which is shown by the evidence to
be included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee at its principal office and upon
proof of
49
holding as provided in Section 7.2, revoke such action so far as concerns such
Debenture (or so far as concerns the principal amount represented by any
exchanged or substituted Debenture). Except as aforesaid any such action taken
by the holder of any Debenture shall be conclusive and binding upon such holder
and upon all future holders and owners of such Debenture, and of any Debenture
issued in exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon such Debenture or any Debenture issued
in exchange or substitution therefor.
ARTICLE VIII.
SECURITYHOLDERS' MEETINGS
8.1. Purposes of Meetings
A meeting of Debentureholders may be called at any time and from time to
time pursuant to the provisions of this Article VIII for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be
taken by Debentureholders pursuant to any of the provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.2; or
(d) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of such Debentures
under any other provision of Indenture or under applicable law.
8.2. Call of Meetings by Trustee
The Trustee may at any time call a meeting of Debentureholders to take any
action specified in Section 8.1, to be held at such time and at such place in
the Borough of Manhattan, The City of New York, as the Trustee shall determine.
Notice of every meeting of the Debentureholders, 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 Debentures at their addresses as
they shall appear on the Debentures Register. Such notice shall be mailed not
less than 20 nor more than 180 days prior to the date fixed for the meeting.
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8.3. Call of Meetings by Company or Debentureholders
In case at any time the Company pursuant to a Board Resolution, or the
holders of at least 10% in aggregate principal amount of the Debentures then
outstanding, shall have requested the Trustee to call a meeting of
Debentureholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or such Debentureholders may determine the time and the place
in said Borough of Manhattan for such meeting and may call such meeting to take
any action authorized in Section 8.1, by mailing notice thereof as provided in
Section 8.2.
8.4. Qualifications for Voting
To be entitled to vote at any meeting of Debentureholders a person shall
(a) be a holder of one or more Debentures or (b) a person appointed by an
instrument in writing as proxy by a holder of one or more Debentures. The only
persons who shall be entitled to be present or to speak at any meeting of
Debentureholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
8.5. Regulations
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Debentureholders, in regard to proof of the holding of Debentures and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 8.3, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by majority vote of the
meeting.
Subject to the provisions of Section 8.4, at any meeting each holder of
Debentures or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Debenture
challenged as not outstanding and ruled by the chairman of the meeting to be
51
not outstanding. The chair of the meeting shall have no right to vote other than
by virtue of Debentures held by him or her or instruments in writing as
aforesaid duly designating him as the person to vote on behalf of other
Debentureholders. Any meeting of Debentureholders duly called pursuant to the
provisions of Section 8.2 or 8.3 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.
8.6. Voting
The vote upon any resolution submitted to any meeting of holders of
Debentures 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 Debentures 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 Debentureholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 8.2. The record shall show the serial numbers of the
Debentures voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. The holders of the Series A Debentures
and the Series B Debentures shall vote for all purposes as a single class.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE IX.
AMENDMENTS
9.1. Without Consent of Debentureholders
The Company, when authorized by a Board Resolution, and the Trustee may
from time to time and at any time amend the Indenture, without the consent of
the Debentureholders, for one or more of the following purposes:
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(a) to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company pursuant to Article X;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the Debentureholders as the
Board of Directors and the Trustee shall consider to be for the protection of
the Debentureholders, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants, restrictions or
conditions a default or an Event of Default permitting the enforcement of all or
any of the remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction or
condition, such amendment may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(c) to 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, as
evidenced by an Opinion of Counsel, materially adversely affect the interests of
the holders of the Debentures;
(d) to evidence and provide for the acceptance of appointment hereunder by
a successor trustee with respect to the Debentures;
(e) to make provision for transfer procedures, certification, book-entry
provisions, the form of restricted securities legends, if any, to be placed on
Debentures, minimum denominations and all other matters required pursuant to
Section 2.7 or otherwise necessary, desirable or appropriate in connection with
the issuance of Debentures to holders of Capital Securities in the event of a
distribution of Debentures by MMI Trust following a Dissolution Event;
(f) to qualify or maintain qualification of this Indenture under the Trust
Indenture Act; or
(g) to make any change that does not, as evidenced by an Opinion of
Counsel, adversely affect the rights of any Debentureholder in any material
respect.
The Trustee is hereby authorized to join with the Company in the execution
of any supplemental indenture to effect such amendment, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the
53
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any amendment to the Indenture authorized by the provisions of this Section
9.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 9.2.
9.2. With Consent of Debentureholders
With the consent (evidenced as provided in Section 7.1) of the holders of a
majority in aggregate principal amount of the Debentures at the time
outstanding, the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time amend the Indenture for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
holders of the Debentures; provided, however, that no such amendment shall
without the consent of the holders of each Debenture then outstanding and
affected thereby (i) extend the Stated Maturity Date of any Debenture, or reduce
the rate or extend the time of payment of interest thereon (except as
contemplated by Article XVI), or reduce the principal amount or the Redemption
Price thereof, or make the principal or the Redemption Price thereof or any
interest thereon payable in any coin or currency other than that provided in the
Debentures, or impair or affect the right of any Debentureholder to institute
suit for payment thereof, or (ii) reduce the aforesaid percentage of Debentures
the holders of which are required to consent to any such amendment to the
Indenture.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any supplemental indenture effecting such
amendment, and upon the filing with the Trustee of evidence of the consent of
Debentureholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Debentureholders as their names and addresses appear upon the
Debenture Register. Any failure of the Trustee to mail such
54
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 Debentureholders under
this Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
9.3. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Debentures shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
9.4. Notation on Debentures
Debentures authenticated and delivered after the execution of any
supplemental indenture affecting such series pursuant to the provisions of this
Article IX may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Debentures so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by the
Company, authenticated by the Trustee or the Authenticating Agent and delivered
in exchange for the Debentures then outstanding.
9.5. Evidence of Compliance of Supplemental Indenture to be
Furnished Trustee
The Trustee, subject to the provisions of Sections 6.1 and 6.2, may receive
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant hereto complies with the
requirements of this Article IX.
The Trustee may receive an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is proper
for the Trustee under the provisions of this Article to join in the execution
thereof.
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ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
10.1. Company May Consolidate, etc., on Certain Terms
Nothing contained in this Indenture or in any of the Debentures shall
prevent any consolidation or merger of the Company with or into any other Person
(whether or not an Affiliate of the Company), or successive consolidations or
mergers in which the Company, or its successor or successors, as the case may
be, shall be a party or parties, or shall prevent any sale, conveyance, transfer
or lease of the property of the Company, or its successor or successors, as the
case may be, as an entirety, or substantially as an entirety, to any other
Person (whether or not an Affiliate of the Company, or its successor or
successors, as the case may be) authorized to acquire and operate the same;
provided, that (a) the Company is the surviving Person, or the Person formed by
or surviving any such consolidation or merger (if other than the Company) or to
which such sale, conveyance, transfer or lease of property is made is a Person
organized and existing under the laws of the United States or any State thereof
or the District of Columbia, and (b) upon any such consolidation, merger, sale,
conveyance, transfer or lease, the due and punctual payment of the principal or
Redemption Price of and interest on the Debentures according to their tenor and
the due and punctual performance and observance of all the covenants and
conditions of this Indenture to be kept or performed by the Company shall be
expressly assumed, by supplemental indenture (which shall conform to the
provisions of the Trust Indenture Act, as then in effect) satisfactory in form
to the Trustee executed and delivered to the Trustee by the Person formed by
such consolidation, or into which the Company shall have been merged, or by the
Person which shall have acquired such property, as the case may be, and (c)
after giving effect to such consolidation, merger, sale, conveyance, transfer or
lease, no Default or Event of Default shall have occurred and be continuing.
10.2. Successor Corporation to be Substituted for Company
In case of any such consolidation, merger, conveyance or transfer and upon
the assumption by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the due
and punctual payment of the principal or Redemption Price of and interest on all
of the Debentures and the due and punctual performance and observance of all of
the covenants and conditions of this Indenture to be performed or observed by
the Company, such successor Person shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the party of the
first part, and, in the event of a sale of all or substantially all of its
assets, the Company thereupon shall
56
be relieved of any further liability or obligation hereunder or upon the
Debentures. Such successor Person thereupon may cause to be signed, and may
issue either in its own name or in the name of MMI Companies, Inc., any or all
of the Debentures issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee or the Authenticating Agent;
and, upon the order of such successor Person instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee or the Authenticating Agent shall authenticate and deliver any
Debentures which previously shall have been signed and delivered by the officers
of the Company to the Trustee or the Authenticating Agent for authentication,
and any Debentures which such successor Person thereafter shall cause to be
signed and delivered to the Trustee or the Authenticating Agent for that
purpose. All the Debentures so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Indentures had been issued at the date of the execution hereof.
10.3. Opinion of Counsel to be Given Trustee
Prior to entering into any consolidation, merger, sale, conveyance,
transfer or lease, the Company shall deliver an Opinion of Counsel to the
Trustee as conclusive evidence that such consolidation, merger, sale,
conveyance, transfer or lease, and any assumption, permitted or required by the
terms of this Article X, complies with the provisions of this Article X.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
11.1. Discharge of Indenture
When (a) the Company shall deliver to the Trustee for cancellation all
Debentures theretofore authenticated (other than any Debentures which shall have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.8) and not theretofore cancelled, or (b) all the
Debentures not theretofore cancelled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, funds
sufficient to pay on the Maturity Date all of the Debentures (other than any
Debentures which shall have been destroyed, lost or stolen and which shall have
been replaced as provided in Section 2.8) not theretofore cancelled or delivered
to the Trustee for cancellation, including principal or
57
Redemption Price and interest due or to become due to the Maturity Date, but
excluding, however, the amount of any moneys for the payment of principal,
Redemption Price of or interest on the Debentures (1) theretofore repaid to the
Company in accordance with the provisions of Section 11.4, or (2) paid to any
State or to the District of Columbia pursuant to its unclaimed property or
similar laws, and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company through the Maturity Date,
then this Indenture shall cease to be of further effect except for the
provisions of Sections 2.2, 2.7, 2.8, 3.1, 3.2, 3.4, 6.6, 6.10, 11.2, 11.3 and
11.4 hereof, which shall survive until such Debentures shall mature and be paid.
Thereafter, Sections 3.10(c), 6.6, 6.10 and 11.4 shall survive, and the Trustee,
on demand of the Company accompanied by any Officers' Certificate and an Opinion
of Counsel and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture, the
Company, however, hereby agreeing to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Debentures.
11.2. Deposited Moneys and U.S. Government Obligations to be Held in Trust by
Trustee
Subject to the provisions of Section 11.4, all moneys and U.S. Government
Obligations deposited with the Trustee pursuant to Section 11.1 or Section 11.6
shall be held in trust and applied by it to the payment, either directly or
through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Debentures for the payment of which
such moneys or U.S. Government Obligations have been deposited with the Trustee,
of all sums due and to become due thereon for principal or Redemption Price and
interest.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash and/or U.S. Government
Obligations deposited pursuant to Section 11.1 or Section 11.6 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the holders of outstanding Debentures.
11.3. Paying Agent to Repay Moneys Held
Upon the satisfaction and discharge of this Indenture all moneys then held
by any paying agent of the Debentures (other than the Trustee) shall, upon
written demand of the Company, be repaid to it or paid to the Trustee, and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
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11.4. Return of Unclaimed Moneys
Any moneys deposited with or paid to the Trustee or any paying agent for
payment of the principal or Redemption Price of or interest on Debentures and
not applied but remaining unclaimed by the holders of Debentures for two years
after the date upon which the principal or Redemption Price of or interest on
such Debentures, as the case may be, shall have become due and payable, shall be
repaid to the Company by the Trustee or such paying agent on Company Request;
and the holder of any of the Debentures shall thereafter look only to the
Company for any payment which such holder may be entitled to collect and all
liability of the Trustee or such paying agent with respect to such moneys shall
thereupon cease; provided, however, that, prior to the return of unclaimed
moneys as described in this Section 11.4, the Company shall cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
11.5. Defeasance and Discharge.
In addition to discharge of this Indenture pursuant to Section 11.1, the
Company shall be deemed to have paid and discharged the entire indebtedness on
all Debentures on and after the date the conditions set forth in Section 11.6
are satisfied with respect to this Section (hereinafter called "Defeasance"),
and the provisions of this Indenture shall no longer be in effect except for (i)
the provisions contained in Sections 2.2, 2.7, 2.8, 3.1, 3.2, 3.4, 6.6, 6.10,
11.2, and 11.3, (ii) the rights of holders of Debentures to receive, from the
trust fund described in Section 11.6(a) hereof, payment of the principal or
Redemption Price of and interest on the Debentures when such payments are due
and (iii) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, and the Trustee at the cost and expense of the Company, shall execute
proper instruments acknowledging the Defeasance and discharge.
11.6. Conditions to Defeasance.
The following shall be the conditions to application of Section 11.5 to the
outstanding Debentures:
(a) the Company has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the holders of Debentures (i) cash
in an amount, or (ii) U.S. Government Obligations, maturing as to principal
and/or interest, at such times and in such amounts as will insure
59
the availability of cash, or (iii) a combination thereof, in each case
sufficient, without reinvestment, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge the principal or Redemption Price
of and interest on all Debentures on each date that such principal or Redemption
Price and interest is due and payable (such deposit, the "Defeasance Deposit");
(b) such Defeasance will not result in a breach or violation of, or
constitute a default under, this Indenture or any agreement or instrument to
which the Company is a party or by which it is bound;
(c) such Defeasance shall not cause the trust holding the Defeasance
Deposit to be required to qualify as a regulated investment company under the
Investment Company Act, unless it is qualified as such,
(d) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent contemplated by this provision for Defeasance, as appropriate, have
been complied with;
(e) the Company has delivered to the Trustee an Opinion of Counsel based on
the fact that (x) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (y), since the date hereof, there has
been a change in the applicable United States federal income tax law, in either
case to the effect that, and such opinion shall confirm that, the holders of the
Debentures will not recognize income, gain or loss for federal income tax
purposes as a result of the Defeasance and will be subject to federal income tax
on the same amount and in the same manner and at the same times, as would have
been the case if such Defeasance had not occurred;
(f) no Event of Default or event which with notice or lapse of time or both
would become an Event of Default shall have occurred and be continuing (A) on
the date of the Defeasance Deposit or (B) insofar as Sections 5.1(d) and (e) of
this Indenture are concerned, at any time during the period beginning on such
date and ending on the 91st day after the date of such deposit or, if longer,
ending on the date following the expiration of the longest preference period
applicable to the Company in respect of the Defeasance Deposit;
(g) if the Debentures are then listed on any national securities exchange,
the Company shall have delivered to the Trustee and the Defeasance Agent, if
any, an Opinion of Counsel to the effect that the exercise of the option under
Section 11.5 would not cause such Debentures to be delisted from such exchange.
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ARTICLE XII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
12.1. Indenture and Debentures Solely Corporate Obligations
No recourse for the payment of the principal or Redemption of or interest
on any Debenture, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture, or in any Debenture, or because of the creation
of any indebtedness represented thereby, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or of any successor Person to the Company, either directly or through
the Company or any successor Person to the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Debentures.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1. Successors
All the covenants, stipulations, promises and agreements in this Indenture
contained by the Company shall bind its successors and assigns whether so
expressed or not.
13.2. Official Acts by Successor Corporation
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
13.3. Surrender of Company Powers
The Company by instrument in writing executed by authority of its Board of
Directors and delivered to the Trustee may surrender any of the powers reserved
to the Company, and thereupon such power so surrendered shall terminate both as
to the Company, as the case may be, and as to any successor Person.
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13.4. Addresses for Notices, etc.
Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or by the holders of
Debentures on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the purpose)
to the Company, 000 Xxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Chief
Financial Officer, Treasurer or Secretary. Any notice, direction, request or
demand by any Debentureholder to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made in writing
at the office of the Trustee, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Global Trust Services (unless another address is provided
by the Trustee to the Company for the purpose).
Any notice or communication to a Holder shall be mailed by first class mail
to his or her address shown on the register kept by the Registrar. Failure to
mail a notice or communication to a Holder or any defect in it shall not affect
its sufficiency with respect to other Holders.
13.5. Governing Law
This Indenture and each Debenture shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be governed
by and construed in accordance with the laws of said State, without regard to
conflicts of laws principles thereof.
13.6. Evidence of Compliance with Conditions Precedent
Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that in the opinion of the
signers all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture (except pursuant to Section 3.5) shall include (1) a statement
that the person making such certificate or opinion has read such covenant or
condition; (2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to enable
him to
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express an informed opinion as to whether or not such covenant or condition has
been complied with; and (4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
13.7. Business Days
In any case where the date of payment of principal or Redemption Price of
or interest on the Debentures will not be a Business Day, the payment of such
principal or Redemption Price of or interest on the Debentures need not be made
on such date but may be made on the next succeeding Business Day, with the same
force and effect as if made on the date of payment and no interest shall accrue
for the period from and after such date.
13.8. Trust Indenture Act to Control
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act of 1939, such imposed duties shall control.
13.9. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
13.10. Execution in Counterparts
This Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
and the same instrument.
13.11. Separability
In case any one or more of the provisions contained in this Indenture or in
the Debentures 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 Debentures,
but this Indenture and the Debentures shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
13.12. Acknowledgment of Rights
The Company acknowledges that, with respect to any Debentures held by MMI
Trust or a trustee of such trust, if the
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Property Trustee of such Trust fails to enforce its rights under this Indenture
as the holder of the Debentures held as the assets of MMI Trust, any holder of
Capital Securities may institute legal proceedings directly against the Company
to enforce such Property Trustee's rights under this Indenture without first
instituting any legal proceedings against such Property Trustee or any other
person or entity. In connection with the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Company to pay principal or Redemption Price of or interest on the Debentures
when due, the Company acknowledges that a holder of Capital Securities may
directly institute a proceeding for enforcement of payment to such holder of the
principal or Redemption Price of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such holder on or after the respective due date specified in the
Debentures.
ARTICLE XIV
REDEMPTION OF SECURITIES
14.1. Special Event Redemption
If an Investment Company Event or a Tax Event has occurred and is
continuing then the Company shall have the right at any time, upon (i) not less
than 45 days written notice to the Trustee, which notice shall be accompanied by
an Officers' Certificate certifying that an Investment Company Event or a Tax
Event entitling the Company to redeem the Debentures pursuant to this Section,
has occurred and (ii) written notice to the Debentureholders as provided in
Section 14.3 below, to redeem the Debentures in whole (but not in part), within
90 days following the occurrence of such Investment Company Event or Tax Event
at the Special Event Redemption Price. Following an Investment Company Event or
a Tax Event, the Company shall take such action as is necessary to promptly
determine the Special Event Redemption Price, including without limitation the
appointment by the Company of a Quotation Agent. The Special Event Redemption
Price shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or such earlier time as the Company determines, provided that the
Company shall have deposited with the Trustee an amount sufficient to pay the
Special Event Redemption Price by 10:00 a.m., New York time, on the date such
Special Event Redemption Price is to be paid. The Company shall provide the
Trustee with written notice of the Special Event Redemption Price promptly after
the calculation thereof, which notice shall include any calculation made by the
Quotation Agent in connection with the determination of the Special Event
Redemption Price.
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14.2. No Sinking Fund
The Debentures are not entitled to the benefit of any sinking fund.
14.3. Notice of Redemption; Selection of Debentures
In case the Company shall desire to exercise the right to redeem all of the
Debentures in accordance with their terms, it shall fix a date for redemption
and shall mail a notice of such redemption at least 30 and not more than 60 days
prior to the date fixed for redemption to the holders of Debentures (provided,
however, that if the Property Trustee then holds Debentures, the Debenture
Trustee shall give not less than 35 days written notice to the Property
Trustee), so to be redeemed as a whole at their last addresses as the same
appear on the Debenture 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 Debenture designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the redemption of any other
Debenture.
Each such notice of redemption shall specify the CUSIP number of the
Debentures to be redeemed, the date fixed for redemption, the Redemption Price
at which the Debentures are to be redeemed (or the method by which such
Redemption Price is to be calculated), the place or places of payment, that
payment will be made upon presentation and surrender of the Debentures, that
interest accrued to the date fixed for redemption will be paid as specified in
said notice, and that on and after said date interest thereon will cease to
accrue.
By 10:00 a.m. New York time on the redemption date specified in the notice
of redemption given as provided in this Section, the Company will deposit with
the Trustee or with one or more paying agents an amount of money sufficient to
redeem on the redemption date all the Debentures so called for redemption at the
appropriate Redemption Price, together with accrued interest to the date fixed
for redemption.
14.4. Payment of Debentures on the Maturity Date
On the Maturity Date of the Debentures, and, in the case of a Special Event
Redemption, if notice of redemption has been given as provided in Section 14.3,
the Debentures shall become due and payable at the office of the Paying Agent
or, in the case of a Special Event Redemption, at the place or places and on the
date stated in such notice at the applicable Redemption Price, together with
interest accrued to the date fixed for redemption (subject to the rights of
holders of Debentures on the close of
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business on a regular record date in respect of an Interest Payment Date
occurring on or prior to the redemption date), and on and after said date
(unless the Company shall default in the payment of such Debentures at the
Redemption Price, together with interest accrued to said date) interest on the
Debentures shall cease to accrue. On presentation and surrender of such
Debentures at the office of the Paying Agent or at a place of payment specified
in said notice, the Debentures shall be paid and redeemed by the Company at the
applicable Redemption Price, together with interest accrued thereon to the date
fixed for redemption (subject to the rights of holders of Debentures on the
close of business on a regular record date in respect of an Interest Payment
Date occurring on or prior to the redemption date).
ARTICLE XV
SUBORDINATION OF SECURITIES
15.1. Agreement to Subordinate
The Company covenants and agrees, and each holder of Debentures issued
hereunder likewise covenants and agrees, that the Debentures shall be issued
subject to the provisions of this Article XV; and each holder of a Debenture,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment by the Company of the principal or Redemption Price of and
interest on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred.
No provision of this Article XV shall prevent the occurrence of any Default
or Event of Default hereunder.
15.2. Default on Senior Indebtedness
In the event and during the continuation of any default by the Company in
the payment of principal, premium, if any, interest or any other payment due on
any Senior Indebtedness, in the event that any applicable grace period with
respect to such default has ended and such default has not been cured or waived
or ceased to exist, or in the event that the maturity of any Senior Indebtedness
has been accelerated because of a default and such acceleration has not been
rescinded, then, in any of these cases, no payment shall be made by the Company
with respect to the principal or Redemption Price of or interest on the
Debentures.
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In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 15.2, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing, within 90 days of
such payment of the amounts then due and owing on such Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of such Senior Indebtedness.
15.3. Liquidation; Dissolution; Bankruptcy
Upon any payment by the Company or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution, winding-up, liquidation, reorganization, assignment for
the benefit of creditors, marshaling of assets or any bankruptcy, insolvency,
debt restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, all Senior Indebtedness of the Company
must first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Company on account
of the principal, Redemption Price or interest on the Debentures; and upon any
such dissolution or winding-up or liquidation or reorganization, any payment by
the Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Debentureholders or the
Trustee would be entitled to receive from the Company, except for the provisions
of this Article XV, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Debentureholders or by the Trustee under the Indenture
if received by them or it, directly to the holders of Senior Indebtedness of the
Company (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all such Senior Indebtedness in full, in money or money's
worth, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness, before any payment or distribution is
made to the Debentureholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or
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character, whether in cash, property or securities, prohibited by the foregoing,
shall be received by the Trustee before all Senior Indebtedness is paid in full,
or provision is made for such payment in money in accordance with its terms,
such payment or distribution shall be held in trust for the benefit of and shall
be paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all such Senior Indebtedness in full in
money in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the benefit of the holders of such Senior
Indebtedness.
For purposes of this Article XV, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company 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 Debentures to the payment of Senior Indebtedness that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale,
conveyance, transfer or lease of its property as an entirety, or substantially
as an entirety, to another Person upon the terms and conditions provided for in
Article X of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 15.3 if such
other Person shall, as a part of such consolidation, merger, sale, conveyance,
transfer or lease, comply with the conditions stated in Article X of this
Indenture.
15.4. Subrogation
Subject to the payment in full of all Senior Indebtedness, the rights of
the Debentureholders shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Company, as the case may be, applicable to such Senior
Indebtedness until the principal or Redemption Price of and interest on the
Debentures shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Debentureholders or the Trustee would
be
68
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 Debentureholders or the Trustee, shall,
as between the Company, its creditors other than holders of Senior Indebtedness
of the Company, and the holders of the Debentures, be deemed to be a payment by
the Company to or on account of such Senior Indebtedness. It is understood that
the provisions of this Article XV are and are intended solely for the purposes
of defining the relative rights of the holders of the Debentures, 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 Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal or
Redemption Price of and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Debentures and creditors
of the Company, as the case may be, other than the holders of Senior
Indebtedness of the Company, as the case may be, nor shall anything herein or
therein prevent the Trustee or the holder of any Debenture from exercising all
remedies otherwise permitted by applicable law upon default under the Indenture,
subject to the rights, if any, under this Article XV of the holders of such
Senior Indebtedness in respect of cash, property or securities of the Company,
as the case may be, received upon the exercise of any such remedy.
15.5. Trustee to Effectuate Subordination
Each Debentureholder by such Debentureholder's acceptance thereof
authorizes and directs the Trustee on such Debentureholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XV and appoints the Trustee such Debentureholder's
attorney-in-fact for any and all such purposes.
15.6. Notice by the Company
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of moneys to or by the Trustee in respect of the Debentures pursuant
to the provisions of this Article XV. Notwithstanding the provisions of this
Article XV or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of moneys to or by the Trustee in respect of the
Debentures pursuant to the
69
provisions of this Article XV, unless and until a Responsible Officer of the
Trustee assigned to its Principal Office shall have received written notice
thereof from the Company or a holder or holders of Senior Indebtedness or from
any trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Article VI of this Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 15.6 at least two Business Days prior to the date (i) upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal or Redemption Price of or interest on
any Debenture), or (ii) moneys and/or U.S. Government Obligations are deposited
in trust pursuant to Article XI, then anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and U.S. Government Obligations and to apply the same to the purposes for
which they were received, and shall not be affected by any notice to the
contrary that may be received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee or representative on behalf of such holder), as the case
may be, to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XV, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XV, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Upon any payment or distribution of assets of the Company referred to in
this Article XV, the Trustee and the Debentureholders shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the
Debentureholders, for the purpose of ascertaining the persons
70
entitled to participate in such payment or distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XV.
15.7. Rights of the Trustee; Holders of Senior Indebtedness
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XV in respect of any Senior Indebtedness at any time
held by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Article VI of this Indenture, the Trustee shall not be liable to
any holder of Senior Indebtedness if it shall pay over or deliver to
Debentureholders, the Company or any other Person money or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this Article XV or
otherwise.
Nothing in this Article XV shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.
15.8. Subordination May Not Be Impaired
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Debentureholders, without
incurring responsibility to the Debentureholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Debentures to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or
71
otherwise amend or supplement in any manner such Senior Indebtedness or any
instrument evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such Senior Indebtedness;
(iii) release any Person liable in any manner for the collection of such Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
16.1. Extension of Interest Payment Period
So long as no Event of Default has occurred and is continuing, the Company
shall have the right, at any time and from time to time during the term of the
Debentures, to defer payments of interest by extending the interest payment
period of such Debentures 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 16.1, will bear interest
thereon at the annual rate of 7 5/8% plus the amount of any rate increase as
Liquidated Damages in conformity with the Registration Rights Agreement
compounded semi-annually for each semi-annual period of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all interest accrued and unpaid on the
Debentures, including any Additional Interest and Compounded Interest (together,
"Deferred Interest") that shall be payable to the holders of the Debentures in
whose names the Debentures are registered in the Debenture Register on the first
record date preceding the end of the Extended Interest Payment Period. Before
the termination of any Extended Interest Payment Period, the Company may further
defer payments of interest by further extending such period, provided that such
period, together with all such previous and further extensions within such
Extended Interest Payment Period, shall not exceed 10 consecutive semi-annual
periods, including the first such semi-annual period during such Extended
Interest Payment Period, or extend beyond the Maturity Date. Upon the
termination of any Extended Interest Payment Period and the payment of all
Deferred Interest then due, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements.
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No interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extended Interest Payment Period.
16.2. Notice of Extension
(a) If the Property Trustee is the only registered holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period five Business Days before the earlier of (i) the next succeeding
date on which Distributions on the Trust Securities issued by MMI Trust are
payable, or (ii) the date MMI Trust is required to give notice of the record
date, or the date such Distributions are payable, to any national securities
exchange, to any automated quotation system or to holders of the Capital
Securities issued by MMI Trust, but in any event at least five Business Days
before such record date.
(b) If the Property Trustee is not the only holder of the Debentures at
the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period at least 10 Business Days
before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the
date the Company is required to give notice of the record or payment date of
such interest payment to any national securities exchange or automated quotation
system.
(c) The semi-annual period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 16.2 shall be counted as one of the 10
semi-annual periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.1.
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The Chase Manhattan Bank, as Trustee, 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.
MMI COMPANIES, INC.
/s/ Xxxx X. XXXXXX
By_____________________________
Name: Xxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
The Chase Manhattan Bank,
as Trustee
/s/ X. XXXXXXXX
By_____________________________
Name: Xxxx Xxxxxxxx
Title: Senior Trust Officer
EXHIBIT A
(FORM OF FACE OF SECURITY)
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: - THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF THE NOMINEE OF THE
DEPOSITARY OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO THE NOMINEE OF THE DEPOSITARY
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS SINCE THE REGISTERED OWNER HEREOF,
THE NOMINEE OF THE DEPOSITARY, 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 THE COMPANY OR ANY "AFFILIATE" OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY)
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
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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 COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY,
AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE REVERSE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEREE TO THE COMPANY. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
No.___________ CUSIP No.____________
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MMI COMPANIES, INC.
7 5/8% SERIES A JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE DECEMBER 15, 2027
MMI Companies, Inc., a Delaware corporation (the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to The Chase Manhattan Bank, as Property
Trustee of MMI Capital Trust I, or registered assigns, the principal sum of
$128,866,000 on December 15, 2027 (the "Stated Maturity Date"), unless
previously redeemed, and to pay interest on the outstanding principal amount
hereof from December 23, 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 15 and December 15 of each year, commencing June 15, 1998 at the
rate of 7 5/8% per annum until the principal hereof shall have become due and
payable, and at the same rate per annum on any overdue principal or Redemption
Price and (without duplication and to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of interest at
the same rate per annum compounded semi-annually. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a 360-day
year of twelve 30-day months and, for any period less than a full calendar
month, the number of days elapsed in such month. In the event that any date on
which the principal, Redemption Price of or interest on this Debenture is
payable is not a Business Day, then the payment payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, with the same force and effect as if made on such date.
Pursuant to the Registration Rights Agreement, in certain limited circumstances
the Company will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to this Debenture.
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 Debenture (or one or more Predecessor Debentures,
as defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be the June 1 or
December 1 immediately preceding the relevant interest payment date. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the holders on such regular record date and may be
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paid to the Person in whose name this Debenture (or one or more Predecessor
Debentures) is registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the holders of Debentures 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 Debentures may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.
The principal or Redemption Price of and interest on this Debenture shall
be payable at the office or agency of the Trustee maintained for that purpose in
any coin or currency of the United States of America that at the time of payment
is legal tender for payment of public and private debts; provided, however,
that, payment of interest may be made at the option of the Company by (i) check
mailed to the holder at such address as shall appear in the Debenture Register
or (ii) by transfer to an account maintained by the Person entitled thereto,
provided that proper written transfer instructions have been received by the
relevant record date. Notwithstanding the foregoing, so long as the Holder of
this Debenture is the Property Trustee, the payment of the principal or
Redemption Price of and interest on this Debenture will be made at such place
and to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Debenture 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 Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her attorney-in-
fact for any and all such purposes. Each holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, or be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on behalf
of the Trustee.
The provisions of this Debenture 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.
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IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
Dated:
MMI COMPANIES, INC.
By_________________________
Name:
Title:
By:_____________________________
Name:
Title:
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(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Series ___ Debentures referred to in the within-
mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By: __________________________
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(FORM OF REVERSE OF SECURITY)
This Debenture is one of the Debentures of the Company (herein sometimes
referred to as the "Debentures"), specified in the Indenture, all issued or to
be issued under and pursuant to an Indenture, dated as of December 23, 1997 (the
"Indenture"), duly executed and delivered between the Company and The Chase
Manhattan Bank, as Trustee (the "Trustee"), to which Indenture reference is
hereby made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Debentures.
Upon the occurrence and continuation of an Investment Company Event or a
Tax Event, the Company shall have the right at any time, within 90 days
following the occurrence of an Investment Company Event or a Tax Event to redeem
this Debenture in whole (but not in part) at the Special Event Redemption Price.
"Special Event Redemption Price" shall mean, with respect to any redemption of
the Debentures following an Investment Company Event or a Tax Event, an amount
in cash equal to the greater of (i) 100% of the principal amount to be redeemed
or (ii) the sum, as determined by a Quotation Agent, of the present values of
the remaining scheduled payments of principal and interest on the Debentures to
the Stated Maturity Date, discounted to the redemption date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate, plus, in each case, any accrued and unpaid interest
thereon, including Compounded Interest and Additional Interest, if any, to the
date of such redemption.
The Special Event Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or at such earlier time as the Company
determines, provided, that the Company shall deposit with the Trustee an amount
sufficient to pay the applicable Redemption Price by 10:00 a.m., New York City
time, on the date such Redemption Price is to be paid. Any redemption pursuant
to this paragraph will be made upon not less than 30 days nor more than 60 days
notice.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in aggregate principal amount of
the Debentures 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
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holders of the Debentures, provided, however, that no such supplemental
indenture shall, without the consent of each holder of Debentures then
outstanding and affected thereby, (i) extend the Stated Maturity Date of any
Debentures, or reduce the principal amount thereof, or reduce any amount payable
on redemption thereof, or reduce the rate or extend the time of payment of
interest thereon (subject to Article XVI of the Indenture), or make the
principal or Redemption Price of or interest on, the Debentures payable in any
coin or currency other than U.S. dollars, or impair or affect the right of any
holder of Debentures to institute suit for the payment thereof, or (ii) reduce
the aforesaid percentage of Debentures, 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 Debentures at the time outstanding, on behalf of all of the holders of the
Debentures, 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 or Redemption
Price of or interest on any of the Debentures 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 Debentures then outstanding. Any such
consent or waiver by the holder of this Debenture (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future holders and owners of this Debenture and of any Debenture 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 Debenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal or Redemption Price of and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
The Company shall have the right, at any time and from time to time during
the term of the Debentures so long as no Event of Default has occurred and then
is continuing, to defer payments of interest by extending the interest payment
period of such Debentures for a period not exceeding 10 consecutive semi-annual
periods, including the first such semi-annual period during such extension
period, and not extending beyond the Maturity Date of the Debentures (an
"Extended Interest Payment Period"), at the end of which period the Company
shall pay all interest then accrued and unpaid (together with interest thereon
at the rate specified for the Debentures to the extent that payment of such
interest is enforceable under applicable law) to the holders of the Debentures.
Before the termination of any such Extended Interest Payment Period, the Company
may further defer payments of interest by further extending such Extended
Interest Payment
A-8
Period, provided that such Extended Interest Payment Period, together with all
such previous and further extensions within such Extended Interest Payment
Period, shall not exceed 10 consecutive semi-annual periods, including the first
semi-annual period during such Extended Interest Payment Period and shall not
end on any date other than an Interest Payment Date, or extend beyond the
Maturity Date of the Debentures. Upon the termination of any such Extended
Interest Payment Period and the payment of all accrued and unpaid interest and
any additional amounts then due, the Company may commence a new Extended
Interest Payment Period, subject to the foregoing requirements.
The Company has agreed that it will not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock) or (ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or redeem any debt securities of the Company that
rank pari passu with or junior in right of payment to the Debentures or (iii)
make any guarantee payments with respect to any guarantee by the Company of any
securities or any Subsidiary of the Company (including any Other Guarantees) if
such guarantee ranks pari passu or junior in right of payment to the Debentures
(other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, Common Stock of the Company; (b)
any declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto; (c)
payments under the Capital Securities Guarantee; (d) as a direct result of, and
only to the extent required in order to avoid the issuance of fractional shares
of capital stock, following a reclassification of the Company's capital stock or
the exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company's capital stock; and (e) the purchase
of fractional interests in shares of the Company's capital stock pursuant to the
exchange or conversion of such capital stock or the security being exchanged or
converted) if at such time (i) an Event of Default shall have occurred and be
continuing, (ii) there shall have occurred any event of which the Company has
actual knowledge that (a) is, or with the giving of notice or the lapse of time,
or both, would be, an Event of Default and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (iii) the Company shall be in
default with respect to its payment obligations under the Capital Securities
Guarantee or (iv) the Company shall have given notice of its election of the
exercise of its right to extend the interest payment period, or any extension
thereof, pursuant to Section 16.1 of the Indenture and shall not have rescinded
such notice, and such exercise of its right to extend the interest payment
period, or any extension thereof, shall have commenced.
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The Debentures are issuable only in registered form without coupons in
denominations of $1,000.00 and any integral multiple thereof. As provided in the
Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Debenture is transferable
by the holder hereof on the Debenture Register of the Company, upon surrender of
this Debenture for registration of transfer at the office or agency of the
Company in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Debenture
registrar duly executed by the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such registration of transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any authenticating agent, any paying agent, any
transfer agent and the registrar may deem and treat the holder hereof as the
absolute owner hereof (whether or not this Debenture shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Debenture registrar) for the purpose of receiving payment of or on
account of the principal or Redemption Price hereof, and (subject to the
Indenture) interest due hereon and for all other purposes, and neither the
Company nor the Trustee nor any authenticating agent nor any paying agent nor
any transfer agent nor any registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal or Redemption
Price of or interest on this Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor Person, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
All terms used in this Debenture that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.
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