EXHIBIT 4.6
NORTEL NETWORKS LIMITED,
as Issuer,
NORTEL NETWORKS CORPORATION,
as Guarantor
AND
HSBC BANK USA,
as Trustee
----------------------------------
SUBORDINATED INDENTURE
DATED AS OF ____________, 2002
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NORTEL NETWORKS LIMITED
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of ___________, 2002
Trust Indenture Act Section Indenture Section
--------------------------- -----------------
310(a)(1)....................................................... 609
(a)(2)...................................................... 609
(a)(3)...................................................... Not Applicable
(a)(4)...................................................... Not Applicable
(b)......................................................... 609
(c)......................................................... Not Applicable
311(a).......................................................... 610
(b)......................................................... 610
312(a).......................................................... 701
(b)......................................................... 701(b)
(c)......................................................... 701(c)
313(a).......................................................... 702(a)
(b)......................................................... 702(a)
(c)......................................................... 702(a)
(d)......................................................... 702(b)
314(a).......................................................... 703(b)
(b)......................................................... Not Applicable
(c)(1)...................................................... 102
(c)(2)...................................................... 102
(c)(3)...................................................... Not Applicable
(d)......................................................... Not Applicable
(e)......................................................... 102
315(a).......................................................... 601(b)
(b)......................................................... 605
(c)......................................................... 601(a)
(d)......................................................... 601(c)
(d)(1)...................................................... 601(b)
(d)(2)...................................................... 601(c)(2)
(d)(3)...................................................... 601(c)(3)
(e)......................................................... 511
316(a)(1)(A).................................................... 506(a)(1)
(a)(1)(B)................................................... 506(a)(2)
503(a)
(a)(2)...................................................... Not Applicable
(b)......................................................... 508
317(a)(1)....................................................... 509
(a)(2)...................................................... 510
(b)......................................................... 1003
318(a).......................................................... 107
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
(i)
TABLE OF CONTENTS
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PARTIES...........................................................................................................1
RECITALS..........................................................................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions........................................................................1
(1) "Act".........................................................................1
(2) "Affiliate"...................................................................1
(3) "Authorized Newspaper"........................................................1
(4) "Authorized Officers".........................................................2
(5) "Board of Directors"..........................................................2
(6) "Board Resolution"............................................................2
(7) "Business Day"................................................................2
(8) "Commission"..................................................................2
(9) "Components"..................................................................2
(10) "Compounded Interest".........................................................2
(11) "Conversion Date".............................................................3
(12) "Corporate Trust Office"......................................................3
(13) "corporation".................................................................3
(14) "Corporation".................................................................3
(15) "Defaulted Interest"..........................................................3
(16) "Deferred Interest"...........................................................3
(17) "Depositary"..................................................................3
(18) "Dollar" or "$"...............................................................3
(19) "Event of Default"............................................................3
(20) "Exchange Act"................................................................3
(21) "Exchange Rate"...............................................................3
(22) "Exchange Rate Officers' Certificate".........................................4
(23) "Extended Interest Payment Period"............................................4
(24) "Foreign Currency"............................................................4
(25) "Global Security".............................................................5
(26) "Guarantee"...................................................................5
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(27) "Guarantor"..................................................................5
(28) "Guarantor Order" and "Guarantor Request"....................................5
(29) "Holder".....................................................................5
(30) "Indenture"..................................................................5
(31) "interest"...................................................................5
(32) "Interest Payment Date"......................................................5
(33) "Issuer".....................................................................5
(34) "Issuer Order" and "Issuer Request"..........................................5
(35) "Maturity"...................................................................5
(36) "Officers' Certificate"......................................................5
(37) "Opinion of Counsel".........................................................6
(38) "Original Issue Discount Security"...........................................6
(39) "Outstanding"................................................................6
(40) "Paying Agent"...............................................................6
(41) "Person".....................................................................7
(42) "Place of Payment"...........................................................7
(43) "Predecessor Security".......................................................7
(44) "Redemption Date"............................................................7
(45) "Redemption Price"...........................................................7
(46) "Regular Record Date"........................................................7
(47) "Responsible Officer"........................................................7
(48) "Security Register" and "Security Registrar".................................7
(49) "Senior Indebtedness"........................................................7
(50) "Special Record Date"........................................................8
(51) "Stated Maturity Date".......................................................8
(52) "Subordinated Debt Securities"...............................................8
(53) "Subsidiary".................................................................8
(54) "Trust Indenture Act"........................................................8
(55) "Trustee"....................................................................8
Section 102. Compliance Certificates and Opinions..............................................9
Section 103. Form of Documents Delivered to Trustee............................................9
Section 104. Acts of Holders..................................................................10
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Section 105. Notices, etc., to Trustee, Issuer and Guarantor..................................11
Section 106. Notice to Holders; Waiver........................................................12
Section 107. Conflict with Trust Indenture Act................................................12
Section 108. Effect of Headings and Table of Contents.........................................12
Section 109. Successors and Assigns...........................................................13
Section 110. Separability Clause..............................................................13
Section 111. Benefits of Indenture............................................................13
Section 112. Governing Law, Etc...............................................................13
Section 113. Legal Holidays...................................................................14
ARTICLE TWO
SUBORDINATED DEBT SECURITY FORMS
Section 201. Forms Generally..................................................................14
Section 202. Forms of Subordinated Debt Securities............................................15
Section 203. Guarantee by Guarantor; Form of Guarantee........................................15
Section 204. Form of Trustee's Certificate of Authentication..................................17
ARTICLE THREE
THE SUBORDINATED DEBT SECURITIES
Section 301. Amount Unlimited; Issuable in Series.............................................18
Section 302. Denominations....................................................................21
Section 303. Execution, Authentication, Delivery and Dating...................................21
Section 304. Temporary Subordinated Debt Securities...........................................23
Section 305. Registration, Registration of Transfer and Exchange..............................24
Section 306. Mutilated, Destroyed, Lost or Stolen Subordinated Debt Securities................26
Section 307. Payment of Interest; Interest Rights Preserved...................................27
Section 308. Persons Deemed Owners............................................................28
Section 309. Cancellation.....................................................................28
Section 310. Computation of Interest..........................................................28
Section 311. Payment in Currencies............................................................29
Section 312. Judgments........................................................................31
Section 313. CUSIP Numbers....................................................................32
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture..........................................32
Section 402. Application of Trust Money.......................................................33
ARTICLE FIVE
DEFAULTS AND REMEDIES
Section 501. Events of Default and Enforcement................................................34
Section 502. Waiver of Declaration............................................................35
Section 503. Waiver...........................................................................36
Section 504. Other Remedies...................................................................36
Section 505. Application of Money Collected...................................................36
Section 506. Control by Holders...............................................................37
Section 507. Limitation on Suits..............................................................37
Section 508. Rights of Holders To Receive Payment.............................................37
Section 509. Collection Suit by Trustee.......................................................38
Section 510. Trustee May File Proofs of Claim.................................................38
Section 511. Undertaking for Costs............................................................38
Section 512. Delay or Omission Not Waiver.....................................................38
Section 513. Waiver of Stay or Extension Laws.................................................38
ARTICLE SIX
THE TRUSTEE
Section 601. Duties of Trustee................................................................39
Section 602. Rights of Trustee................................................................40
Section 603. Individual Rights of Trustee.....................................................40
Section 604. Trustee's Disclaimer.............................................................40
Section 605. Notice of Defaults...............................................................41
Section 606. Compensation and Indemnity.......................................................41
Section 607. Replacement of Trustee...........................................................42
Section 608. Successor Trustee by Merger, etc.................................................44
Section 609. Eligibility; Disqualification....................................................44
Section 610. Preferential Collection of Claims Against the Issuer.............................44
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Section 611. Appointment of Authenticating Agent..............................................44
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE, ISSUER AND GUARANTOR
Section 701. Preservation of Information; Communications to Holders..........................46
Section 702. Reports by Trustee...............................................................47
Section 703. Reports by the Issuer and the Guarantor..........................................47
ARTICLE EIGHT
AMALGAMATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Amalgamation and Merger of Issuer or Guarantor and Conveyances Permitted
Subject to Certain Conditions....................................................48
Section 802. Rights and Duties of Successor Corporation.......................................49
Section 803. Officers' Certificate and Opinion of Counsel.....................................49
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders...............................49
Section 902. Supplemental Indentures with Consent of Holders..................................51
Section 903. Execution of Supplemental Indentures.............................................52
Section 904. Effect of Supplemental Indentures................................................53
Section 905. Conformity with Trust Indenture Act..............................................53
Section 906. Reference in Subordinated Debt Securities to Supplemental Indentures.............53
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.......................................53
Section 1002. Maintenance of Office or Agency..................................................54
Section 1003. Money for Subordinated Debt Securities Payments to Be Held in Trust..............54
Section 1004. Compliance Certificate...........................................................56
Section 1005. Waiver of Certain Covenants......................................................56
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ARTICLE ELEVEN
REDEMPTION OF SUBORDINATED DEBT SECURITIES
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Section 1101. Applicability of Article.........................................................56
Section 1102. Election to Redeem; Notice to Trustee............................................56
Section 1103. Selection by Trustee of Subordinated Debt Securities to Be Redeemed..............57
Section 1104. Notice of Redemption.............................................................57
Section 1105. Deposit of Redemption Price......................................................58
Section 1106. Subordinated Debt Securities Payable on Redemption Date..........................58
Section 1107. Subordinated Debt Security Redeemed in Part......................................58
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.........................................................59
Section 1202. Satisfaction of Sinking Fund Payments with Subordinated Debt Securities..........59
Section 1203. Redemption of Subordinated Debt Securities for Sinking Fund......................59
ARTICLE THIRTEEN
DEFEASANCE
Section 1301. Discharge by Deposit of Money or Subordinated Debt Securities....................60
Section 1302. Defeasance of Certain Obligations................................................61
Section 1303. Application of Trust Money.......................................................62
Section 1304. Repayment to the Issuer..........................................................62
ARTICLE FOURTEEN
EXTENSION OF INTEREST PAYMENT PERIOD
Section 1401. Extension of Interest Payment Period.............................................62
ARTICLE FIFTEEN
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Section 1501. Agreement to Subordinate.........................................................63
Section 1502. Default on Senior Indebtedness of the Issuer.....................................63
Section 1503. Liquidation; Dissolution; Bankruptcy.............................................64
Section 1504. Subrogation......................................................................65
Section 1505. Trustee to Effectuate Subordination..............................................66
Section 1506. Notice by the Issuer.............................................................66
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Section 1507. Rights of the Trustee; Holders of Senior Indebtedness of the Issuer..............67
Section 1508. Subordination May Not Be Impaired................................................67
ARTICLE SIXTEEN
SUBORDINATION OF THE GUARANTEE
Section 1601. Agreement to Subordinate.........................................................68
Section 1602. Default on Senior Indebtedness of the Guarantor..................................68
Section 1603. Liquidation; Dissolution; Bankruptcy.............................................69
Section 1604. Subrogation......................................................................70
Section 1605. Trustee to Effectuate Subordination..............................................71
Section 1606. Notice by the Guarantor..........................................................71
Section 1607. Rights of the Trustee; Holders of Senior Indebtedness of the Guarantor...........72
Section 1608. Subordination May Not Be Impaired................................................73
ARTICLE SEVENTEEN
MEETINGS OF HOLDERS OF SUBORDINATED DEBT SECURITIES
Section 1701. Purposes for Which Meetings May Be Called........................................73
Section 1702. Call, Notice and Place of Meetings...............................................73
Section 1703. Persons Entitled to Vote at Meetings.............................................74
Section 1704. Quorum; Action...................................................................74
Section 1705. Determination of Voting Rights; Conduct and Adjournment of Meetings..............75
Section 1706. Counting Votes and Recording Action of Meetings..................................75
Exhibit A ................................................................................A-1
(viii)
INDENTURE dated as of _____________, 2002 among Nortel Networks Limited (the
"Corporation" or the "Issuer"), a Canadian corporation having its principal
place of business at 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx, Xxxxxx X0X
0X0, Nortel Networks Corporation, a Canadian corporation having its principal
place of business at 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx, Xxxxxx X0X
0X0, as guarantor of Subordinated Debt Securities issued by the Issuer (the
"Guarantor"), and HSBC BANK USA, a New York banking corporation and trust
company (the "Trustee"), having its Corporate Trust Office at 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Issuer Services.
For and in consideration of the premises and the purchase of the Subordinated
Debt Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Subordinated Debt
Securities or of a series thereof, as follows.
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in this
Article, and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with United States generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such United States accounting
principles as are generally accepted at the date of such computation; and
(d) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
(1) "Act" when used with respect to any Holder has the meaning specified in
Section 104.
(2) "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
(3) "Authorized Newspaper" means a newspaper in an official language of the
country of publication or in the English language customarily published on each
Business Day, whether or
not published on Saturdays, Sundays or holidays, and of general circulation in
the place in connection with which the term is used or in the financial
community of such place. Where successive publications are required to be made
in Authorized Newspapers, the successive publications may be made in the same or
in different newspapers in the same city meeting the foregoing requirements and
in each case on any Business Day.
(4) "Authorized Officers" means, with respect to the Issuer or the Guarantor, as
the case may be, any two of the President and Chief Executive Officer, the Chief
Legal Officer, the Chief Financial Officer or any one of the aforesaid officers
together with any one of the Corporate Secretary, the Controller, the Treasurer,
any Assistant Secretary, any Assistant Controller or any Assistant Treasurer;
provided, however, that the Issuer or the Guarantor may, from time to time,
designate additional officers who would qualify as its "Authorized Officers"
pursuant to an Officers' Certificate delivered to the Trustee.
(5) "Board of Directors" means, in respect of the Issuer or the Guarantor, the
board of directors, the executive committee or any other committee of that board
or any group of directors of that board, duly authorized to make a decision on
the matter in question.
(6) "Board Resolution" means a copy of a resolution certified by the Corporate
Secretary or an Assistant Secretary of the Issuer or the Guarantor, as the case
may be, to have been duly adopted by the Board of Directors of the Issuer or the
Guarantor, respectively, and to be in full force and effect on the date of such
certification.
(7) "Business Day", when used with respect to any Place of Payment, means any
Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
to close.
(8) "Commission" means the United States 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 instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.
(9) "Components", with respect to a composite currency, means the currency
amounts that are components of such composite currency on the Conversion Date.
If after such Conversion Date the official unit of any component currency is
altered by way of combination or subdivision, the number of units of such
currency shall be divided or multiplied in the same proportion to calculate the
Component. If after such Conversion Date two or more component currencies are
consolidated into a single currency, the amounts of those currencies as
Components shall be replaced by an amount in such single currency equal to the
sum of the amounts of such consolidated component currencies expressed in such
single currency, and such amount shall thereafter be a Component. If after such
Conversion Date any component currency shall be divided into two or more
currencies, the amount of such currency as a Component shall be replaced by
amounts of such two or more currencies, each of which shall be equal to the
amount of such former component currency divided by the number of currencies
into which such component currency was divided, and such amounts shall
thereafter be Components.
(10) "Compounded Interest" has the meaning specified in Section 1401.
2
(11) "Conversion Date", with respect to a composite currency, has the meaning
specified in Section 311(f).
(12) "Corporate Trust Office" means, with respect to the Trustee, the Security
Registrar and any Paying Agent, the principal corporate trust office at which at
any particular time such respective entity's corporate trust business shall be
administered, which office at the date of the execution of the Indenture is
located, in the case of the Trustee, at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000 Attention: Issuer Services, and in the case of Deutsche Bank Trust
Company Americas appointed as the Security Registrar and the Paying Agent as of
the date hereof, at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Trust & Agency Services, or at any other time at such other address as
the Trustee, the Security Registrar or any Paying Agent may designate from time
to time by notice to the Holders.
(13) "corporation" includes corporations, associations, companies and business
trusts.
(14) "Corporation" means the Person named as the "Corporation" in the first
paragraph of this Indenture until a successor corporation to such Person shall
have become such pursuant to the applicable provisions of this Indenture, and
thereafter "Corporation" shall mean such successor corporation.
(15) "Defaulted Interest" has the meaning specified in Section 307.
(16) "Deferred Interest" has the meaning specified in Section 1401.
(17) "Depositary" means, with respect to the Subordinated Debt Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Issuer pursuant to
Section 301 until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Depositary" shall mean
or include each Person who is then a Depositary hereunder, and if at any time
there is more than one such Person, "Depositary" as used with respect to the
Subordinated Debt Securities of any such series shall mean the Depositary with
respect to the Subordinated Debt Securities of that series.
(18) "Dollar" or "$" means the currency of the United States of America which as
at the time of payment is legal tender for the payment of public and private
debts.
(19) "Event of Default" has the meaning specified in Section 501.
(20) "Exchange Act" means the United States Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(21) "Exchange Rate" means: (i) with respect to a currency (other than a
composite currency) in which payment is to be made on Subordinated Debt
Securities denominated in a composite currency, the exchange rate between such
composite currency and such currency reported by the agency or organization, if
any, designated pursuant to Section 301(b)(5), or if such exchange rate is not
or ceases to be so reported, then such exchange rate as shall be determined by
the Trustee or, if the Trustee is not also acting as the Paying Agent, any
Paying Agent using quotations from one or more major banks in the City of New
York or such other quotations as the Trustee or any
3
Paying Agent, as the case may be, shall deem appropriate, such banks being
satisfactory to the Issuer, on the Regular or Special Record Date with respect
to such Interest Payment Date or date for payment of Defaulted Interest or the
fifteenth day immediately preceding the maturity of an installment of principal,
as the case may be; (ii) with respect to payments in Dollars to be made on
Subordinated Debt Securities denominated in a Foreign Currency, the noon buying
rate for that currency for wire transfers quoted in the City of New York on the
Regular or Special Record Date with respect to such Interest Payment Date or
date for payment of Defaulted Interest or the fifteenth day immediately
preceding the maturity of an installment of principal, as the case may be, as
certified for customs purposes by the Federal Reserve Bank of New York; (iii)
with respect to payments in a Foreign Currency to be made on Subordinated Debt
Securities denominated in Dollars or converted into Dollars pursuant to Section
311(f), the noon Dollar buying rate for that currency for wire transfers quoted
in the City of New York on the Regular or Special Record Date with respect to
such Interest Payment Date or date for payment of Defaulted Interest or the
fifteenth day immediately preceding the maturity of an installment of principal,
as the case may be, as certified for customs purposes by the Federal Reserve
Bank of New York; and (iv) with respect to payments in a Foreign Currency to be
made on Subordinated Debt Securities denominated in a different Foreign
Currency, the exchange rate between such Foreign Currencies determined in the
manner specified pursuant to Section 301(b)(18). Except in the situation
contemplated in (i) above, if for any reason such rates are not available with
respect to one or more currencies for which an Exchange Rate is required, the
Trustee or any Paying Agent, as the case may be, shall use such quotation of the
Federal Reserve Bank of New York as of the most recent available date, or
quotations from one or more major banks in the City of New York or in the
country of issue of the currency in question, or such other quotations as the
Trustee or any Paying Agent, as the case may be, shall deem appropriate, such
banks being satisfactory to the Issuer. Unless otherwise specified by the
Trustee or by any Paying Agent, as the case may be, if there is more than one
market for dealing in any currency by reason of foreign exchange regulations or
otherwise, the market to be used in respect of such currency shall be that upon
which a non-resident issuer of securities designated in such currency would
purchase such currency in order to make payments in respect of such securities.
(22) "Exchange Rate Officers' Certificate", with respect to any date for the
payment of principal of (and premium, if any) and interest on any series of
Subordinated Debt Securities, means a certificate setting forth the applicable
Exchange Rate or Rates as of the Regular or Special Record Date with respect to
such Interest Payment Date, the date for payment of Defaulted Interest or the
fifteenth day immediately preceding the maturity of an installment of principal,
as the case may be, and the amounts payable in Dollars and Foreign Currencies in
respect of the principal of (and premium, if any) and interest on Subordinated
Debt Securities denominated in any composite currency or any Foreign Currency,
and signed by the Authorized Officers of the Issuer and delivered to the Trustee
or to any Paying Agent, as the case may be.
(23) "Extended Interest Payment Period" has the meaning specified in Section
1401.
(24) "Foreign Currency" means a currency issued by the government of any country
other than the United States of America.
4
(25) "Global Security" means a Subordinated Debt Security evidencing all or part
of a series of Subordinated Debt Securities, issued to the Depositary for such
series in accordance with Section 303 and bearing the legend prescribed in
Section 303(c).
(26) "Guarantee" means the guarantee of the Guarantor as endorsed on each
Subordinated Debt Security authenticated and delivered pursuant to this
Indenture and shall include the guarantee of the Guarantor set forth in Section
203 of this Indenture and shall include all other obligations and covenants of
the Guarantor contained in this Indenture and any Subordinated Debt Securities.
(27) "Guarantor" means the Person named as "Guarantor" in the first paragraph of
this Indenture until a successor corporation to such Guarantor shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean such successor corporation.
(28) "Guarantor Order" and "Guarantor Request" mean, respectively, a written
order or request signed in the name of the Guarantor by its Authorized Officers.
(29) "Holder", with respect to a Subordinated Debt Security, means the Person in
whose name such Subordinated Debt Security is registered in the Security
Register.
(30) "Indenture" means this instrument as originally executed or as it may from
time to time be supplemented, amended or restated by or pursuant to one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and, unless the context otherwise requires, shall include the
terms of a particular series of Subordinated Debt Securities established as
contemplated by Section 301.
(31) "interest", when used with respect to an Original Issue Discount Security
that by its terms bears stated interest only after Maturity, refers to interest
payable after Maturity.
(32) "Interest Payment Date", with respect to any Subordinated Debt Security,
means the Stated Maturity Date of an installment of interest on such
Subordinated Debt Security.
(33) "Issuer" has the meaning assigned to it in the first paragraph of this
Indenture until a successor corporation to the Issuer shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter,
"Issuer" shall mean with respect to the Issuer, the successor corporation to the
Issuer.
(34) "Issuer Order" and "Issuer Request" mean, respectively, a written order or
request signed in the name of the Issuer by its Authorized Officers.
(35) "Maturity", when used with respect to any Subordinated Debt Security, means
the date on which the principal of such Subordinated Debt Security becomes due
and payable as therein or herein provided, whether at the Stated Maturity Date
or by declaration of acceleration, call for redemption, repayment at the option
of the Holder or otherwise.
(36) "Officers' Certificate" means a certificate signed by the Authorized
Officers of the Issuer or the Guarantor, as the case may be, and delivered to
the Trustee.
5
(37) "Opinion of Counsel" means a written opinion of counsel, who may be counsel
to the Issuer or the Guarantor or both, as the case may be, which opinion shall
be subject to assumptions and qualifications satisfactory to such counsel.
(38) "Original Issue Discount Security" means any Subordinated Debt Security
that is issued with "original issue discount" within the meaning of Section
1273(a) of the United States Internal Revenue Code of 1986 and the regulations
thereunder and any other Subordinated Debt Security designated by the Issuer as
issued with original issue discount for United States federal income tax
purposes.
(39) "Outstanding" when used with respect to Subordinated Debt Securities means,
as of the date of determination, all Subordinated Debt Securities theretofore
authenticated and delivered under this Indenture, except:
(i) Subordinated Debt Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Subordinated Debt Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Issuer) in trust or set aside and
segregated in trust by the Issuer (if the Issuer shall act as its own
Paying Agent) for the Holders of such Subordinated Debt Securities;
provided, however, that if such Subordinated Debt Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(iii)Subordinated Debt Securities that have been surrendered to the Trustee
pursuant to Section 306 or in exchange for or in lieu of which other
Subordinated Debt Securities have been authenticated and delivered
pursuant to this Indenture, other than any such Subordinated Debt
Securities in respect of which there shall have been presented to the
Trustee proof that such Subordinated Debt Securities are held by a
bona fide purchaser in whose hands such Subordinated Debt Securities
are valid and binding obligations of the Issuer;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Subordinated Debt Securities have taken any Act
hereunder, Subordinated Debt Securities owned by the Issuer or any other obligor
upon the Subordinated Debt Securities or any Affiliate of the Issuer or of such
other obligor shall be disregarded and deemed not to be Outstanding; provided
further that, in determining whether the Trustee shall be protected in relying
upon such Act, only Subordinated Debt Securities that a Responsible Officer of
the Trustee knows to be so owned shall be so disregarded; and provided further
that Subordinated Debt Securities so owned that have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right to act with respect to such Subordinated Debt
Securities and that the pledgee is not the Issuer or any other obligor upon the
Subordinated Debt Securities or any Affiliate of the Issuer or of such other
obligor.
(40) "Paying Agent" means any Person authorized by the Issuer to pay the
principal of (and premium, if any) or interest on any Subordinated Debt
Securities on behalf of the Issuer.
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(41) "Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
(42) "Place of Payment" means: (i) when used with respect to the Subordinated
Debt Securities of any series payable in Dollars, the Corporate Trust Office of
the Trustee or the Paying Agent, as the case may be, in the Borough of
Manhattan, the City and State of New York; and, (ii) when used with respect to
the Subordinated Debt Securities of any series payable in a Foreign Currency,
the other place or places, if any, where the principal of (and premium, if any)
and interest on the Subordinated Debt Securities of that series are payable as
specified as contemplated by Section 301.
(43) "Predecessor Security" of any particular Subordinated Debt Security means
every previous Subordinated Debt Security evidencing all or a portion of the
same debt as that evidenced by such particular Subordinated Debt Security; and,
for the purposes of this definition, any Subordinated Debt Security
authenticated and delivered under Section 306 in lieu of a lost, destroyed or
stolen Subordinated Debt Security shall be deemed to evidence the same debt as
the lost, destroyed or stolen Subordinated Debt Security.
(44) "Redemption Date", when used with respect to any Subordinated Debt Security
to be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
(45) "Redemption Price", when used with respect to any Subordinated Debt
Security to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
(46) "Regular Record Date" for the interest payable on any Interest Payment Date
on the Subordinated Debt Securities of any series means the date specified for
that purpose as contemplated by Section 301.
(47) "Responsible Officer" when used with respect to the Trustee means any
officer within the Corporate Trust Office, including any vice-president (whether
or not designated by a number or word or words added before or after the title
"vice-president"), any assistant vice-president, any managing director, any
director, any associate, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, the cashier, any assistant cashier, any trust officer
or assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
(48) "Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
(49) "Senior Indebtedness" means, with respect to any Person, the principal of,
(and premium, if any) and interest in respect of indebtedness of such Person for
(i) money borrowed by such Person; (ii) securities, notes, bonds or other
similar instruments issued by such Person; (iii) all capital lease obligations
of such Person; (iv) all obligations issued or assumed by such Person as the
purchase price of property by such Person or a Subsidiary of such Person, all
conditional sale
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obligations of such Person and all obligations of such Person under any
conditional sale or title retention agreement (but excluding trade accounts
payable in the ordinary course of business); (v) all obligations, contingent or
otherwise, of such Person in respect of any letters of credit, banker's
acceptances, security purchase facilities or similar credit transactions; (vi)
all obligations in respect of interest rate swap, cap or other agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements; (vii) all obligations
of the type referred to in clauses (i) through (vi) of other Persons for the
payment of which such Person is responsible or liable as obligor, guarantor or
otherwise; (viii) obligations under performance guarantees, support agreements
and other agreements in the nature thereof relating to obligations of a
Subsidiary of such Person; (ix) renewals, extensions, refundings, amendments and
modifications of indebtedness or obligations referred to in clauses (i) through
(viii) (unless the instrument creating or evidencing any such indebtedness or
obligation or its renewal, extension, refund, amendment or modification
specifically provides that such indebtedness or obligation is not senior in
right of payment to the Subordinated Debt Securities); and (x) all obligations
of the type referred to in clauses (i) through (ix) of other Persons secured by
any lien on any property or asset of such Person (whether or not such obligation
is assumed by such obligor). Notwithstanding the foregoing, Senior Indebtedness
does not include (1) any such indebtedness or obligation that is by its terms
subordinated to or pari passu with the Subordinated Debt Securities, and (2) any
indebtedness or obligation between or among such Person and its Affiliates.
(50) "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
(51) "Stated Maturity Date", when used with respect to any Subordinated Debt
Security or any installment of interest thereon, means the date specified in
such Subordinated Debt Security as the fixed date on which the principal of such
Subordinated Debt Security or such installment of interest is due and payable.
(52) "Subordinated Debt Securities" means Subordinated Debt Securities issued by
the Issuer, guaranteed by the Guarantor and authenticated and delivered under
this Indenture.
(53) "Subsidiary" means, with respect to the Issuer or the Guarantor, as the
case may be, a corporation, a majority of the outstanding voting shares of which
are owned, directly or indirectly, by the Issuer or the Guarantor or by one or
more other Subsidiaries of the Issuer or the Guarantor, or by the Issuer or the
Guarantor and one or more other Subsidiaries of the Issuer or the Guarantor. For
the purposes of this definition, "voting shares" means shares having voting
power for the election of directors, whether at all times or only so long as no
other shares have such voting power by reason of any contingency.
(54) "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this Indenture was executed, except as provided in Sections
609, 703 and 905 hereof.
(55) "Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions hereof, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect
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to the Subordinated Debt Securities of any series shall mean the Trustee with
respect to Subordinated Debt Securities of that series.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or request by the Issuer or the Guarantor to the
Trustee to take any action under any provision of this Indenture, the Issuer or
the Guarantor, as the case may be, shall furnish to the Trustee an Officers'
Certificate and Opinion of Counsel stating that all conditions precedent, if
any, provided for in this Indenture related to the proposed action have been
complied with except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture related to such particular application or request, no
additional certificate or opinion need be furnished.
(b) Every Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture (other than the
certificate required by Section 1004) shall include: (1) a statement that each
individual signing such certificate or opinion has read such covenant or
condition and the definitions herein related thereto; (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 each such individual, he has made such
examination or investigation as is reasonably necessary to enable him to make
the statement or to express an opinion whether such covenant or condition has
been complied with; and (4) a statement whether, in the opinion of each such
individual, such condition or covenant has been complied with.
(c) Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Authorized Officer knows that
the opinion with respect to the matters upon which his or her certificate may be
based as aforesaid is erroneous. Any Opinion of Counsel may be based, insofar as
it relates to factual matters, upon certificates, statements or opinions of, or
representations by an officer or officers of the Issuer, or other persons or
firms deemed appropriate by such counsel, unless such counsel knows that the
certificates, statements or opinions or representations with respect to the
matters upon which his or her opinion may be based as aforesaid are erroneous.
(d) Any Officers' Certificate, statement or Opinion of Counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of or
representation by an accountant (who may be an employee of the Issuer), or firm
of accountants, unless such Authorized Officer or counsel, as the case may be,
knows that the certificate or opinion or representation with respect to the
accounting matters upon which his or her certificate, statement or opinion may
be based as aforesaid is erroneous.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
(a) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters
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and one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
(b) Any Officers' Certificate or Opinion of Counsel of the Issuer or the
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which such
certificate or opinion is based is erroneous. Any such certificate or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Issuer or the Guarantor, as the case may be, stating that the information with
respect to such factual matters is in the possession of such certifying entity
unless such counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
is erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Issuer or the Guarantor or any of
them. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and, subject to Section 601, conclusive in favor of
the Trustee, the Issuer and the Guarantor, if made in the manner provided in
this Section. The record of any meeting of Holders of Subordinated Debt
Securities shall be proved in the manner provided in Section 1706.
(b) The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
manner that the Trustee deems sufficient.
(c) The ownership of Subordinated Debt Securities shall be proved by the
Security Register.
(d) If the Issuer or the Guarantor shall solicit from the Holders of
Subordinated Debt Securities of any series any Act, the Issuer or the Guarantor,
as the case may be, may, at its
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option, by Board Resolution, fix in advance a record date for the determination
of Holders of Subordinated Debt Securities entitled to take such Act, but the
Issuer or the Guarantor, as the case may be, shall have no obligation to do so.
Any such record date shall be fixed at the discretion of the Issuer or the
Guarantor, as the case may be. If such a record date is fixed, such Act may be
sought or taken before or after the record date, but only the Holders of record
at the close of business on such record date shall be deemed to be Holders for
the purpose of determining whether Holders of the requisite proportion of
Subordinated Debt Securities of such series Outstanding have authorized or
agreed or consented to such Act, and for that purpose the Subordinated Debt
Securities of such series Outstanding shall be computed as of such record date.
(e) Any Act of the Holder of any Subordinated Debt Security shall bind every
future holder of the same Subordinated Debt Security and the Holder of every
Subordinated Debt Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, suffered or
omitted by the Trustee, the Issuer or the Guarantor in reliance thereon, whether
or not notation of such action is made upon such Subordinated Debt Security.
(f) For purposes of determining the principal amount of Outstanding Subordinated
Debt Securities of any series the Holders of which are required, requested or
permitted to take any Act under this Indenture: (1) each Original Issue Discount
Security shall be deemed to have an amount outstanding determined by the Trustee
that could be declared to be due and payable pursuant to the terms of such
Original Issue Discount Security as of the date such Act is delivered to the
Trustee and, where it is hereby expressly required, to the Issuer or the
Guarantor; and (2) each Subordinated Debt Security denominated in a Foreign
Currency or composite currency shall be deemed to have an amount outstanding
determined by the Trustee by converting the principal amount of such
Subordinated Debt Security in the currency in which such Subordinated Debt
Security is denominated into Dollars at the Exchange Rate as of the date such
Act is delivered to the Trustee and, where it is hereby expressly required, to
the Issuer or the Guarantor (or, if there is no such rate on such date for the
reasons specified in Section 311(d), such rate on the date specified in such
Section).
SECTION 105. NOTICES, ETC., TO TRUSTEE, ISSUER AND GUARANTOR.
Any Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(1) the Trustee, by any Holder or by the Issuer or the Guarantor, shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Issuer Services/Nortel Networks Limited, facsimile
000-000-0000, or such other facsimile number as may be provided by the
Trustee from time to time, and shall be deemed to have been made at
the time of delivery or facsimile transmission; provided that any
delivery made or facsimile sent on a day other than a Business Day in
New York shall be deemed to be received on the next following Business
Day in New York; or
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(2) the Issuer or the Guarantor, by the Trustee or by any Holder, shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing to the Issuer or the Guarantor, as
the case may be, addressed to it at the address of its executive
office specified in the first paragraph of this Indenture, Attention:
Corporate Secretary of the Issuer or the Guarantor, as the case may
be, facsimile number (000) 000-0000, or such other facsimile number as
may be provided by the Issuer or the Guarantor to the Trustee from
time to time, and shall be deemed to have been made at the time of
delivery or facsimile transmission; provided that any delivery made or
facsimile sent on a day other than a Business Day in Toronto, Ontario
shall be deemed to be received on the next following Business Day in
Xxxxxxx, Xxxxxxx.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
(a) Except as otherwise expressly provided herein, where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given to
Holders if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice.
(b) If the regular mail service is suspended or for any other reason it shall be
impracticable to give notice to Holders by mail, then such notification to
Holders as shall be made with the approval of the Trustee shall constitute
sufficient notification for every purpose hereunder. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.
(c) Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
(d) Any Act required or permitted under this Indenture shall be in the English
language.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under the Trust Indenture
Act to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or excluded,
as the case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
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SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Issuer or the Guarantor
shall bind its successors and assigns, whether expressed or not. All agreements
of the Trustee in this Indenture shall bind its respective successors.
SECTION 110. SEPARABILITY CLAUSE.
If any provision in this Indenture or in the Subordinated Debt Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Subordinated Debt Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and any Paying Agent and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW, ETC.
(a) This Indenture and the Subordinated Debt Securities shall be governed by and
construed in accordance with the laws of the State of New York, but without
giving effect to applicable principles of conflicts of law to the extent that
the application of the law of another jurisdiction would be required thereby.
(b) Each of the Issuer and the Guarantor has appointed CT Corporation System
with offices at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000 as its
authorized agent (the "Authorized Agent") upon whom all writs, process and
summonses may be served in any suit, action or proceeding arising out of or
based upon this Indenture or the Subordinated Debt Securities which may be
instituted in any state or federal court in the City of New York, New York. The
Issuer and the Guarantor hereby represent and warrant that the Authorized Agent
has accepted such appointment and has agreed to act as said agent for service of
process, and the Issuer and the Guarantor agree to take any and all action,
including the filing of any and all documents, that may be reasonably necessary
to continue each such appointment in full force and effect as aforesaid so long
as the Subordinated Debt Securities remain outstanding. The Issuer and the
Guarantor agree that the appointment of the Authorized Agent shall be
irrevocable so long as any of the Subordinated Debt Securities remain
outstanding or until the irrevocable appointment by the Issuer and the Guarantor
of a successor agent in the City of New York, New York as each of their
authorized agent for such purpose and the acceptance of such appointment by such
successor. Service of process upon the Authorized Agent shall be deemed, in
every respect, effective service of process upon the Issuer or the Guarantor, as
the case may be.
(c) Each of the Issuer and the Guarantor hereby:
(1) agrees that any suit, action or proceeding against it arising out of
or relating to this Indenture or the Subordinated Debt Securities, as
the case may be, may be instituted in any federal or state court
sitting in the City of New York;
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(2) waives to the extent permitted by applicable law, any objection which
it may now or hereafter have to the laying of venue of any such suit,
action or proceeding, and any claim that any suit, action or
proceeding in such a court has been brought in an inconvenient forum;
(3) irrevocably submits to the non-exclusive jurisdiction of such courts
in any suit, action or proceeding; and
(4) agrees that service of process by mail to the addresses specified
herein shall constitute personal service of such process on it in any
such suit, action or proceeding.
SECTION 113. LEGAL HOLIDAYS.
If any Interest Payment Date, Redemption Date or Stated Maturity Date of any
Subordinated Debt Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Subordinated Debt Securities) payment of interest or principal (and premium, if
any) need not be made at such Place of Payment on such date, but may be made on
the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date, Redemption Date, or Stated
Maturity Date, and no interest shall accrue on such payment for the period from
and after such Interest Payment Date, Redemption Date or Stated Maturity Date,
as the case may be.
ARTICLE TWO
SUBORDINATED DEBT SECURITY FORMS
SECTION 201. FORMS GENERALLY.
(a) All Subordinated Debt Securities, the Guarantee and the Trustee's
certificate of authentication shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or by a Board Resolution and as set forth in an Officers' Certificate
or any indenture supplemental hereto and may have such letters, numbers or other
marks of identification or designation and such legends or endorsements placed
thereon as the Issuer or the Guarantor, as the case may be, may deem appropriate
and as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which any
of the Subordinated Debt Securities may be listed, or to conform to usage.
(b) The definitive Subordinated Debt Securities and the Guarantee shall be
printed, lithographed or engraved or produced by any combination of these
methods on steel engraved borders or may be produced in any other manner;
provided, that such manner is permitted by the rules of any securities exchange
on which the Subordinated Debt Securities may be listed or of any automated
quotation system on which such series may be quoted, all as determined by the
officers executing such Subordinated Debt Securities, as conclusively evidenced
by their execution of such Subordinated Debt Securities.
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SECTION 202. FORMS OF SUBORDINATED DEBT SECURITIES.
Subordinated Debt Securities shall be in the forms approved by the officers
executing such Subordinated Debt Securities, as conclusively evidenced by their
execution of such Subordinated Debt Securities, having those terms approved by
or pursuant to a Board Resolution and set forth in an Officers' Certificate or
one or more indentures supplemental hereto which shall set forth the information
required by Section 301. The Subordinated Debt Securities of each series shall
be issuable in registered form without coupons and may be in the form of one or
more Global Securities in whole or in part.
SECTION 203. GUARANTEE BY GUARANTOR; FORM OF GUARANTEE.
(a) The Guarantor by its execution of this Indenture hereby agrees with each
Holder of a Subordinated Debt Security of each series authenticated and
delivered by the Trustee and with the Trustee on behalf of each such Holder, to
be unconditionally bound by the terms and provisions of the Guarantee set forth
below and authorizes the Trustee to confirm such Guarantee to the Holder of each
such Subordinated Debt Security by its execution and delivery of each such
Subordinated Debt Security, with such Guarantee endorsed thereon, authenticated
and delivered by the Trustee.
(b) The Guarantee to be endorsed on the Subordinated Debt Securities shall,
subject to Section 201, be in substantially the form set forth below:
SUBORDINATED GUARANTEE
OF
NORTEL NETWORKS CORPORATION
For value received, Nortel Networks Corporation, a corporation incorporated
under the laws of Canada, having its principal executive offices at 0000 Xxxxx
Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx, Xxxxxx, X0X 0X0 (herein called the
"Guarantor", which term includes any Person as a successor Guarantor under the
Indenture referred to in the Subordinated Debt Security upon which this
Guarantee is endorsed), subject to the prior payment in full of all its existing
and future Senior Indebtedness and to the subordination provisions contained in
Article Sixteen of the Indenture, hereby fully and unconditionally guarantees to
the Holder of the Subordinated Debt Security upon which this Guarantee is
endorsed and to the Trustee on behalf of each such Holder the due and punctual
payment of the principal of, premium, if any, and interest on such Subordinated
Debt Security and the due and punctual payment of the sinking fund or analogous
payments referred to therein, if any, when and as the same shall become due and
payable, whether on the Stated Maturity Date, by declaration of acceleration,
call for redemption or otherwise, according to the terms thereof and of the
Indenture referred to therein. In case of the failure of Nortel Networks
Limited, a corporation organized under the laws of Canada (herein called the
"Borrower", which term includes any successor Person under such Indenture), to
punctually make any such payment of principal, premium, if any, or interest or
any such sinking fund or analogous payment, the Guarantor hereby agrees, subject
to the subordination provisions contained in Article Sixteen of the Indenture,
to cause any such payment to be made punctually when and as the same shall
become due and payable, whether on the Stated Maturity Date or by
15
declaration of acceleration, call for redemption or otherwise, and as if such
payment were made by the Borrower.
The indebtedness evidenced by this Guarantee 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 of the Guarantor, and this Guarantee is issued
subject to the subordination provisions of Article Sixteen of the Indenture with
respect thereto. The Holder of the Subordinated Debt Security upon which this
Guarantee is endorsed, by accepting the same, (i) agrees to and shall be bound
by, such provisions, (ii) authorizes and directs the Trustee on his, her or its
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (iii) appoints the Trustee his, her
or its attorney-in-fact for any and all such purposes. The Holder hereof, by
his, her or its 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 of the Guarantor, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
Subject to the subordination provisions of Article Sixteen of the Indenture, the
Guarantor hereby agrees that its obligations hereunder shall be as if it were
the principal debtor and not merely surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of such Subordinated Debt Security or such
Indenture, any failure to enforce the provisions of such Subordinated Debt
Security or such Indenture, or any waiver, modification or indulgence granted to
the Borrower with respect thereto, by the Holder of such Subordinated Debt
Security or the Trustee or any other circumstance which may otherwise constitute
a legal or equitable discharge of a surety or guarantor; provided, however,
that, notwithstanding the foregoing, no such waiver, modification or indulgence
shall, without the consent of the Guarantor, increase the principal amount of
such Subordinated Debt Security, or increase the interest rate thereon, or
increase any premium payable upon redemption thereof, or alter the Stated
Maturity Date thereof, or increase the principal amount of any Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the maturity thereof pursuant to Article Five of such Indenture.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Borrower, any
right to require a proceeding first against the Borrower, protest or notice with
respect to such Subordinated Debt Security or the indebtedness evidenced thereby
or with respect to any sinking fund or analogous payment required under such
Subordinated Debt Security and all demands whatsoever, and covenants that this
Guarantee will not be discharged except by payment in full of the principal of,
premium, if any, and interest on such Subordinated Debt Security.
The Guarantor shall be subrogated to all rights of the Holder of such
Subordinated Debt Security and the Trustee against the Borrower in respect of
any amounts paid to such Holder by the Guarantor pursuant to the provisions of
this Guarantee; provided, however, that the Guarantor shall not be entitled to
enforce, or to receive any payments arising out of or based upon such right of
subrogation until the principal of, premium, if any, and interest on all
Subordinated Debt Securities of the same series issued under such Indenture
shall have been paid in full.
No reference herein to such Indenture and no provision of this Guarantee or of
such Indenture shall alter or impair the guarantees of the Guarantor, which,
subject to the subordination
16
provisions of Article 16 of the Indenture, are absolute and unconditional, of
the due and punctual payment of the principal of, premium, if any, and interest
on, and any sinking fund or analogous payments with respect to, the Subordinated
Debt Security upon which this Guarantee is endorsed.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication of such Subordinated Debt Security shall have been
manually executed by or on behalf of the Trustee under such Indenture.
All terms used in this Guarantee which are defined in such Indenture shall have
the meanings assigned to them in such Indenture.
This Guarantee shall be governed by and construed in accordance with the laws of
the State of New York.
Executed and dated the date on the face hereof.
NORTEL NETWORKS CORPORATION
By
------------------------------------
Name:
Title:
By
-------------------------------------
Name:
Title:
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The form of the Trustee's certificate of authentication to be borne by the
Subordinated Debt Securities shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Debt Securities issued under the
within-mentioned Indenture.
HSBC BANK USA,
as Trustee
By:
-------------------------------------
Authorized Signatory
Dated: _______________
17
ARTICLE THREE
THE SUBORDINATED DEBT SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
(a) The aggregate principal amount of Subordinated Debt Securities that may be
authenticated and delivered under this Indenture is unlimited.
(b) The Subordinated Debt Securities may be issued in one or more series. Not
all Subordinated Debt Securities of any one series need be issued at the same
time, and, unless otherwise provided, a series may be reopened for issuances of
additional Subordinated Debt Securities of such series. There shall be
established in or pursuant to a Board Resolution of the Issuer and set forth in
an Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Subordinated Debt Securities of any series:
(1) the designation of the Subordinated Debt Securities of the series
(which shall distinguish the Subordinated Debt Securities of the
series from all other Subordinated Debt Securities);
(2) the limit, if any, upon the aggregate principal amount of the
Subordinated Debt Securities of the series that may be authenticated
and delivered under this Indenture (except for Subordinated Debt
Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Subordinated Debt
Securities of the series pursuant to Sections 304, 305, 306, 906 or
1107);
(3) the denominations in which Subordinated Debt Securities of the series
shall be issuable;
(4) the date or dates on which the principal of the Subordinated Debt
Securities of the series is payable;
(5) the currency or currencies of denominations of the Subordinated Debt
Securities of any series, which may be in Dollars, any Foreign
Currency or any composite currency, and, if any such currency of
denomination is a composite currency, the agency or organization, if
any, responsible for overseeing such composite currency;
(6) the currency or currencies in which payment of the principal of (and
premium, if any) and interest on the Subordinated Debt Securities of
the series will be made, and the currency or currencies, if any, in
which payment of the principal of (and premium, if any) or the
interest on Subordinated Debt Securities of the series, at the
election of each of the Holders thereof, may also be payable;
(7) the rate or rates or the method of determination thereof at which the
Subordinated Debt Securities of the series shall bear interest, if
any, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such
18
interest shall be payable, and the Regular Record Dates for the
interest payable on such Interest Payment Dates;
(8) the period or periods within which or the date or dates on which, if
any, the price or prices at which and the terms and conditions upon
which Subordinated Debt Securities of the series may be repurchased or
redeemed, in whole or in part, at the option of the Issuer;
(9) the obligation, if any, of the Issuer to redeem, repay or purchase
Subordinated Debt Securities of the series either pursuant to any
sinking fund or analogous provisions or at the option of a Holder
thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which Subordinated Debt
Securities of the series shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligation;
(10) the terms and conditions, if any, upon which additional interest or
amounts may be payable with respect to the Subordinated Debt
Securities;
(11) whether the Subordinated Debt Securities of the series shall be issued
in whole or in part in the form of one or more Global Securities and,
in such case, the Depositary for such Global Security or Securities
and the terms and conditions, if any, upon which interests in such
Global Security or Securities may be exchanged in whole or in part for
the individual Subordinated Debt Securities represented thereby;
(12) whether the Subordinated Debt Securities of the series shall be issued
in whole or in part in the form of one or more temporary debt
certificates pursuant to Section 304 hereof, and, in such case,
provisions relating to the payment of interest thereon and the terms
and conditions, if any, upon which interests in such temporary
Subordinated Debt Securities may be exchanged in whole or in part for
the individual Subordinated Debt Securities represented thereby;
(13) any addition to or change in the covenants set forth in Article Ten
which applies to Subordinated Debt Securities of the series;
(14) any addition to or change in the Events of Default set forth in
Section 501 which applies to Subordinated Debt Securities of the
series;
(15) if other than the principal amount thereof, the portion of the
principal amount of Subordinated Debt Securities of the series that
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 501;
(16) if the amount of payments of principal of (and premium, if any) or
interest on the Subordinated Debt Securities of the series may be
determined with reference to an index based on a currency or
currencies other than that in which the Subordinated Debt Securities
of the series are denominated or designated to be payable, the manner
in which such amounts shall be determined;
19
(17) if the payments of principal of (and premium, if any) or the interest
on the Subordinated Debt Securities of the series are to be made in a
Foreign Currency, other than the Foreign Currency in which such
Subordinated Debt Securities are denominated, the manner in which the
Exchange Rate with respect to such payments shall be determined;
(18) the terms, if any, upon which the Subordinated Debt Securities of the
series will be defeasable;
(19) the place or places where the principal of (and premium, if any) and
interest on Subordinated Debt Securities of the series shall be
payable;
(20) any provision for the conversion or exchange of Subordinated Debt
Securities of the series, either at the option of the Holders thereof
or the Issuer, into or for another security or securities of the
Issuer or another Person, the security or securities into or for
which, the period or periods within which, the price or prices,
including any adjustments thereto, at which and the other terms and
conditions upon which any Subordinated Debt Securities of the series
shall be converted or exchanged, in whole or in part, pursuant to such
obligation;
(21) the securities exchange or quotation system upon which Subordinated
Debt Securities of the series will be listed or quoted, if any;
(22) CUSIP numbers, if any;
(23) the terms and conditions upon which payments of interest may be
deferred pursuant to Article Fourteen; and
(24) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).
(c) All Subordinated Debt Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to such Board Resolution and set forth in such Officers' Certificate
or in such indenture or indentures supplemental hereto.
(d) If any of the terms of a series of Subordinated Debt Securities are
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Corporate Secretary
or an Assistant Secretary of the Issuer and delivered to the Trustee at or prior
to the delivery of the Officers' Certificate setting forth the terms of the
series.
(e) Subordinated Debt Securities of any series which are repayable at the option
of the Holders shall be repaid in accordance with the terms of the Subordinated
Debt Securities of such series.
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SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301 with respect to any
series of Subordinated Debt Securities and except as provided in Section 303,
Subordinated Debt Securities will be issued in denominations, unless otherwise
specified by the Issuer, of integral multiples of $1,000.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
(a) The Subordinated Debt Securities and the Guarantee shall be executed on
behalf of the Issuer and the Guarantor by their respective Authorized Officers.
The Subordinated Debt Securities may but need not be under the corporate seal of
the Issuer or the Guarantor, as the case may be, or a reproduction thereof
(which reproduction shall for such purposes be deemed to be the corporate seal
of the Issuer or the Guarantor, as the case may be). The signature of any of
these officers on the Subordinated Debt Securities may be manual or facsimile.
Subordinated Debt Securities and any Guarantee bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the Issuer
or the Guarantor, as the case may be, shall bind the Issuer or the Guarantor, as
the case may be, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Subordinated Debt Securities or Guarantee.
(b) At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Subordinated Debt Securities of any series
executed by the Issuer, with the Guarantee of the Guarantor endorsed thereon, to
the Trustee for authentication, together with the Issuer Order for the
authentication and delivery of such Subordinated Debt Securities; whereupon the
Trustee, in accordance with such Issuer Order, shall authenticate and deliver
such Subordinated Debt Securities. The Trustee shall be entitled to receive,
prior to the authentication and delivery of such Subordinated Debt Securities,
the supplemental indenture or the Board Resolution by or pursuant to which the
terms of such Subordinated Debt Securities have been approved, an Officers'
Certificate as to the absence of any event that is, or after notice or lapse of
time or both would become, an Event of Default, and an Opinion or Opinions of
Counsel of the Issuer and the Guarantor to the effect that:
(1) all instruments furnished by the Issuer and the Guarantor to the
Trustee in connection with the authentication and delivery of such
Subordinated Debt Securities conform to the requirements of this
Indenture and constitute sufficient authority hereunder for the
Trustee to authenticate and deliver such Subordinated Debt Securities;
(2) the forms of such Subordinated Debt Securities and the Guarantee have
been established in conformity with the provisions of this Indenture;
(3) the terms of such Subordinated Debt Securities and the Guarantee have
been established in conformity with the provisions of this Indenture;
(4) in the event that the forms or terms of such Subordinated Debt
Securities and the Guarantee have been established in a supplemental
indenture, the execution and delivery of such supplemental indenture
have been duly authorized by all
21
necessary corporate action of the Issuer and the Guarantor, such
supplemental indenture has been duly executed and delivered by the
Issuer and the Guarantor and, assuming due authorization, execution
and delivery by the Trustee, is a valid and binding obligation
enforceable against the Issuer and the Guarantor in accordance with
its terms, subject to enforceability being limited by bankruptcy,
insolvency, or other laws or foreign governmental actions affecting
the enforcement of creditors' rights generally, and equitable
remedies, including the remedies of specific performance and
injunction, being granted only in the discretion of a court of
competent jurisdiction;
(5) the execution and delivery of such Subordinated Debt Securities and
the Guarantee have been duly authorized by all necessary corporate
action of the Issuer and the Guarantor and such Subordinated Debt
Securities and the Guarantee have been duly executed by the Issuer and
the Guarantor and, assuming due authentication by the Trustee and
delivery by the Issuer and the Guarantor, are valid and binding
obligations of the Issuer and the Guarantor enforceable against the
Issuer and the Guarantor in accordance with their terms, entitled to
the benefit of the Indenture, subject to enforceability being limited
by bankruptcy, insolvency, or other laws or foreign governmental
actions affecting the enforcement of creditors' rights generally, and
equitable remedies, including the remedies of specific performance and
injunction, being granted only in the discretion of a court of
competent jurisdiction;
(6) the amount of Outstanding Subordinated Debt Securities of such series,
together with the amount of such Subordinated Debt Securities, does
not exceed any limit established under the terms of this Indenture on
the amount of Subordinated Debt Securities of such series that may be
authenticated and delivered; and
(7) such other matters as the Trustee may reasonably request.
(c) If the Issuer shall establish pursuant to Section 301 that the Subordinated
Debt Securities of a series are to be issued in whole or in part in the form of
one or more Global Securities, then the Issuer and the Guarantor shall execute
and the Trustee shall authenticate and deliver one or more Global Securities
that shall: (1) represent an aggregate amount equal to the aggregate principal
amount of the Outstanding Subordinated Debt Securities of such series to be
represented by one or more Global Securities; (2) be registered in the name of
the Depositary for such Global Security or Securities or the nominee of such
Depositary; (3) be held or be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instruction; and (4) bear a legend substantially
to the following effect: "Unless and until it is exchanged in whole or in part
for the individual Subordinated Debt Securities represented hereby, this Global
Security may not be transferred except 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 or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."
22
(d) Each Depositary designated pursuant to Section 301 for a Global Security
must, at the time of its designation and at all times while it serves as such
Depositary, be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation.
(e) The Trustee shall not be required to authenticate any Subordinated Debt
Securities if the issuance of such Subordinated Debt Securities pursuant to this
Indenture will adversely affect the Trustee's own rights, duties or immunities
under this Indenture.
(f) Each Subordinated Debt Security shall be dated the date of its issue, except
as otherwise provided pursuant to Section 301 with respect to Subordinated Debt
Securities of such series.
(g) No Subordinated Debt Security or Guarantee endorsed thereon shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on such Subordinated Debt Security a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of one of its authorized officers, and such
certificate upon any Subordinated Debt Security shall be conclusive evidence,
and the only evidence, that such Subordinated Debt Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.
SECTION 304. TEMPORARY SUBORDINATED DEBT SECURITIES.
(a) Pending the preparation of definitive Subordinated Debt Securities of any
series, the Issuer may execute, and, upon receipt of an Issuer Order, the
Trustee shall authenticate and deliver, temporary Subordinated Debt Securities
that are printed, lithographed, typewritten, mimeographed or otherwise produced,
in any authorized denomination, substantially of the tenor of the definitive
Subordinated Debt Securities in lieu of which they are issued, in registered
form, having endorsed thereon a Guarantee executed by the Guarantor
substantially of the tenor of the definitive Guarantee, and in all cases with
such appropriate insertions, omissions, substitutions and other variations as
the officers of the Issuer and the Guarantor executing such Subordinated Debt
Securities and the Guarantee may determine, as conclusively evidenced by their
execution of such Subordinated Debt Securities. Any such temporary Subordinated
Debt Securities may be in global form, representing all or a portion of the
Outstanding Subordinated Debt Securities of such series. Every such temporary
Subordinated Debt Security and Guarantee shall be executed by Authorized
Officers of the Issuer and the Guarantor and shall be authenticated and
delivered by the Trustee upon the same terms and conditions and in substantially
the same manner, and with the same effect, as the definitive Subordinated Debt
Securities and Guarantee in lieu of which it is issued.
(b) If temporary Subordinated Debt Securities of any series are issued, the
Issuer will cause definitive Subordinated Debt Securities of such series to be
prepared without unreasonable delay. Upon surrender for cancellation of any one
or more temporary Subordinated Debt Securities of any series, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Subordinated Debt Securities of the same
series of authorized denominations and of like tenor and having endorsed thereon
a Guarantee executed by the Guarantor. Until so exchanged, temporary
Subordinated Debt Securities of any series shall in all respects be entitled to
the same benefits under this Indenture as individual
23
Subordinated Debt Securities of such series, except as otherwise specified as
contemplated by Section 301 with respect to the payment of interest on Global
Securities in temporary form.
(c) Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Subordinated Debt Securities
represented thereby pursuant to this Section 304 or Section 305, the temporary
Global Security shall be endorsed by the Trustee to reflect the reduction of the
principal amount evidenced thereby, whereupon the principal amount of such
temporary Global Security shall be reduced for all purposes by the amount so
exchanged and endorsed.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer will maintain an office or agency at which shall be kept a
register (the "Security Register") which, subject to such reasonable regulations
as it may prescribe, shall provide for the registration of Subordinated Debt
Securities and of transfers of Subordinated Debt Securities. Unless and until
otherwise determined by the Issuer, Deutsche Bank Trust Company Americas shall
act as the Issuer's agent as Security Registrar and the Security Register shall
be kept at its Corporate Trust Office located at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000. Such Security Register shall be in written form or in any other form
capable of being converted into written form within a reasonable period of time.
At all reasonable times, the Security Register shall be open for inspection by
the Trustee.
(b) Upon surrender for registration of transfer of any Subordinated Debt
Security of any series at the office or agency of the Issuer maintained for such
purpose, the Issuer shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Subordinated Debt Securities of the same series of any authorized
denomination or denominations, of like tenor and aggregate principal amount, and
having endorsed thereon a Guarantee executed by the Guarantor. Every
Subordinated Debt Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Issuer, the Security Registrar or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Issuer, the Security Registrar and the
Trustee duly executed, by the Holder thereof or his attorney duly authorized in
writing.
(c) Notwithstanding any other provision of this Section, unless and until it is
exchanged in whole or in part for Subordinated Debt Securities in definitive
form, a Global Security representing all or a portion of the Subordinated Debt
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.
(d) At the option of the Holder, Subordinated Debt Securities of any series
(other than a Global Security) may be exchanged for other Subordinated Debt
Securities of the same series of any authorized denomination or denominations of
a like aggregate principal amount, upon surrender of the Subordinated Debt
Securities to be exchanged at such office or agency.
24
(e) If at any time the Depositary for the Subordinated Debt Securities of a
series notifies the Issuer that it is unwilling or unable to continue as
Depositary for the Subordinated Debt Securities of such series or if at any time
the Depositary for the Subordinated Debt Securities of such series shall no
longer be eligible under Section 303(d), the Issuer shall appoint a successor
Depositary with respect to the Subordinated Debt Securities of such series.
(f) The Issuer may at any time and in its sole discretion determine that
individual Subordinated Debt Securities of any series issued in the form of one
or more Global Securities shall no longer be represented by such Global Security
or Global Securities. In such event the Issuer will execute, and the Trustee,
upon receipt of the Issuer Order for the authentication and delivery of
individual Subordinated Debt Securities of such series, will authenticate and
deliver, individual Subordinated Debt Securities of such series in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing Subordinated Debt Securities of such series which shall
have endorsed thereon a Guarantee executed by the Guarantor in exchange for such
Global Security or Global Securities.
(g) If specified by the Issuer pursuant to Section 301 with respect to a series
of Subordinated Debt Securities, the Depositary for such series of Subordinated
Debt Securities may surrender a Global Security for such series of Subordinated
Debt Securities in exchange in whole or in part for definitive Subordinated Debt
Securities of such series on such terms as are acceptable to the Issuer and such
Depositary. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and deliver, without service charge: (1) to each Person specified
by such Depositary a new definitive Subordinated Debt Security or Subordinated
Debt Securities of the same series which shall have endorsed thereon a Guarantee
executed by the Guarantor, of any authorized denomination as requested by such
Person in aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and (2) to such Depositary a new
Global Security which shall have endorsed thereon a Guarantee executed by the
Guarantor in a denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the aggregate principal
amount of definitive Subordinated Debt Securities delivered to Holders thereof.
(h) In any exchange provided for in Sections 305(f) or (g), the Issuer shall
execute and the Trustee will authenticate and deliver Subordinated Debt
Securities which shall have endorsed thereon a Guarantee executed by the
Guarantor in registered form in authorized denominations.
(i) Upon the exchange of a Global Security for individual Subordinated Debt
Securities in definitive form, such Global Security shall be cancelled by the
Trustee. Individual Subordinated Debt Securities exchanged for portions of a
Global Security pursuant to this Section shall be registered in such names and
in such authorized denominations as the Depositary for such Global Security,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Subordinated Debt
Securities to the persons in whose names such Subordinated Debt Securities are
so registered.
(j) All Subordinated Debt Securities executed for delivery upon any transfer or
exchange of Subordinated Debt Securities shall be valid obligations of the
Issuer evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Subordinated Debt Securities surrendered for such transfer or
exchange. No service charge shall be made for any registration
25
of transfer or exchange of Subordinated Debt Securities, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer, registration of
transfer or exchange of Subordinated Debt Securities, other than exchanges
pursuant to Sections 304, 906 or 1107 not involving any transfer.
(k) The Issuer shall not be required to: (1) execute for delivery, register the
transfer of or exchange of Subordinated Debt Securities of any particular series
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Subordinated Debt Securities of such
series selected for redemption under Section 1103 and ending at the close of
business on the day of such mailing; or (2) register the transfer of or exchange
of any Subordinated Debt Security so selected for redemption in whole or in
part, except the unredeemed portion of any Subordinated Debt Security being
redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST OR STOLEN SUBORDINATED DEBT SECURITIES.
(a) If: (1) any mutilated Subordinated Debt Security is surrendered to the
Trustee; or (2) the Issuer, the Guarantor and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Subordinated Debt
Security, and the Issuer, the Guarantor and the Trustee receive such security or
indemnity satisfactory to them; then, in the absence of notice to the Issuer,
the Guarantor or the Trustee that such Subordinated Debt Security has been
acquired by a bona fide purchaser, the Issuer and the Guarantor shall execute
and upon their written request the Trustee shall authenticate and deliver, in
exchange for any such Security, a new Subordinated Debt Security of like tenor
and principal amount, having endorsed thereon a Guarantee executed by the
Guarantor, in registered form bearing a number not contemporaneously outstanding
appertaining to such destroyed, lost or stolen Subordinated Debt Security.
(b) If any such mutilated, destroyed, lost or stolen Subordinated Debt Security
has become or is about to become due and payable, the Issuer or the Guarantor,
in their discretion may, instead of executing for delivery a new Subordinated
Debt Security (with the Guarantee endorsed thereon), pay such Subordinated Debt
Security. Upon the execution for delivery of any new Subordinated Debt Security
under this Section, the Issuer or the Guarantor may require the payment by the
Holder of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith. The provisions of this Section
are exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Subordinated Debt Securities.
(c) Every new Subordinated Debt Security of any series (including the Guarantee
endorsed thereon), executed for delivery pursuant to this Section in lieu of any
destroyed, lost or stolen Subordinated Debt Security shall constitute a
contractual obligation of the Issuer and the Guarantor, to the same effect as
such destroyed, lost or stolen Subordinated Debt Security (with the Guarantee
endorsed thereon) and shall be at any time enforceable by anyone, and any such
new Subordinated Debt Security and Guarantee shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Subordinated Debt Securities of that series and the Guarantee endorsed thereon
duly issued hereunder.
26
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
(a) Interest on any Subordinated Debt Security that is payable on any Interest
Payment Date shall be paid to the Person in whose name that Subordinated Debt
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest. At the option of the
Issuer payment of interest on any Subordinated Debt Security may be made by
cheque mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or by wire transfer to an account
designated by such Person.
(b) Except as provided in Article Fourteen, any interest on any Subordinated
Debt Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall be paid in accordance with the following provisions and not to the
registered Holder on the relevant Regular Record Date by virtue of his having
been such Holder.
(1) The Issuer may elect to make payment of any Defaulted Interest to the
Persons in whose names the Subordinated Debt Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Issuer shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Subordinated Debt Security of
such series and the date of the proposed payment, and at the same time
the Issuer 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. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest, which
shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Subordinated Debt
Securities of such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date.
Defaulted Interest shall be paid to the Persons in whose names the
Subordinated Debt Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to
the following clause (2).
(2) The Issuer may make payment of any Defaulted Interest on the
Subordinated Debt Securities of any series in any other lawful manner
not inconsistent with the requirements of any securities exchange on
which the Subordinated Debt Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Issuer to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
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(c) Subject to the foregoing provisions of this Section, each Subordinated Debt
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Subordinated Debt Security shall carry the
rights to interest accrued and unpaid, and to accrue, that were carried by such
other Subordinated Debt Security.
SECTION 308. PERSONS DEEMED OWNERS.
(a) Prior to due presentment of a Subordinated Debt Security for registration of
transfer, the Issuer, the Guarantor, the Trustee and any agent of any of the
foregoing may treat the Person in whose name such Subordinated Debt Security is
registered as the owner of such Subordinated Debt Security for the purpose of
receiving payment of principal of (and premium, if any) and, subject to Section
307, interest on such Subordinated Debt Security and for all other purposes
whatsoever, whether or not such Subordinated Debt Security be overdue, and none
of the Issuer, the Guarantor, the Trustee or any agent of any of the foregoing
shall be affected by notice to the contrary.
(b) None of the Issuer, the Guarantor, the Trustee, any Paying Agent or the
Security Registrar will have any responsibility or liability for any aspect of
the records related to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records related to such beneficial ownership interests.
SECTION 309. CANCELLATION.
Unless otherwise provided, all Subordinated Debt Securities surrendered for
payment, redemption, registration of transfer or exchange shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. The Issuer or the Guarantor may deliver to the Trustee
for cancellation any Subordinated Debt Securities previously authenticated and
delivered hereunder that the Issuer or the Guarantor may have acquired in any
manner whatsoever, and all Subordinated Debt Securities so delivered shall be
promptly cancelled by the Trustee. No Subordinated Debt Securities shall be
authenticated in lieu of or in exchange for any Subordinated Debt Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Subordinated Debt Securities held by the Trustee shall
be disposed of in accordance with the Trustee's policy of disposal or shall be
returned to the Issuer upon Issuer Request; provided, however, that the Trustee
shall not be required to destroy cancelled Subordinated Debt Securities.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified pursuant to Section 301 for Subordinated Debt
Securities of any series, interest on the Subordinated Debt Securities of each
series shall be computed on the basis of a 360-day year of twelve 30-day months.
Solely for the purposes of disclosure pursuant to the Interest Act (Canada) and
without affecting the calculation of interest on any Subordinated Debt
Securities, the yearly rate of interest for any portion of an interest period of
less than one year is the percent rate per annum noted on any series of
Subordinated Debt Securities multiplied by the number of days in the calendar
year in which interest is paid divided by 360.
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SECTION 311. PAYMENT IN CURRENCIES.
(a) Payment of principal of (and premium, if any) and interest on the
Subordinated Debt Securities of any series shall be made in the currency or
currencies specified pursuant to Section 301; provided that the Holder of a
Subordinated Debt Security of such series may elect to receive such payment in
any one of Dollars or any other currency designated for such purpose pursuant to
Section 301. A Holder may make such election by delivering to the Trustee or, if
the Trustee is not also acting as the Paying Agent, to any Paying Agent, a
written notice thereof, substantially in the form attached hereto as Exhibit A
or in such other form as may be acceptable to the Trustee, or to any Paying
Agent, as the case may be, not later than the close of business on the Regular
or Special Record Date immediately preceding the applicable Interest Payment
Date or date for payment of Defaulted Interest or the fifteenth day immediately
preceding the Maturity of an installment of principal, as the case may be. Such
election shall remain in effect with respect to such Holder until such Holder
delivers to the Trustee or to any Paying Agent, as the case may be, a written
notice substantially in the form attached hereto as Exhibit A or in such other
form as may be acceptable to the Trustee or to any Paying Agent, as the case may
be, specifying a change in the currency in which such payment is to be made;
provided further that any such notice must be delivered to the Trustee or to any
Paying Agent, as the case may be, not later than the close of business on the
Regular or Special Record Date immediately preceding the next Interest Payment
Date or date for payment of Defaulted Interest or the fifteenth day immediately
preceding the Maturity of an installment of principal, as the case may be, in
order to be effective for the payment to be made thereon; and provided further
that no such change in currency may be made with respect to payments to be made
on any Subordinated Debt Security with respect to which notice of redemption has
been given by the Issuer, pursuant to Article Eleven.
(b) Except as otherwise specified pursuant to Section 301, the Trustee or any
Paying Agent, as the case may be, shall deliver to the Issuer, not later than
the eighth Business Day after the Regular or Special Record Date with respect to
an Interest Payment Date or date for payment of Defaulted Interest or the
fifteenth day immediately preceding the Maturity of an installment of principal,
as the case may be, with respect to a series of Subordinated Debt Securities, a
written notice specifying, in the currency or currencies in which the
Subordinated Debt Securities of such series are denominated, the aggregate
amount of the principal of (and premium, if any) and interest on such
Subordinated Debt Securities to be paid on such payment date. If payments on any
such Subordinated Debt Securities are designated to be made in a currency other
than the currency in which such Subordinated Debt Securities are denominated or
if at least one Holder has made the election referred to in paragraph (a) above,
then such written notice shall also specify, in each currency in which payment
is to be made pursuant to paragraph (a), the amount of principal of (and
premium, if any) and interest on such series of Subordinated Debt Securities to
be paid in such currency on such payment date.
(c) The Issuer shall deliver, not later than the fourth Business Day following
each Regular or Special Record Date or the fifteenth day immediately preceding
the Maturity of an installment of principal, as the case may be, to the Trustee
or to any Paying Agent, as the case may be, an Exchange Rate Officers'
Certificate in respect of the Dollar or Foreign Currency payments to be made on
such payment date. Except as otherwise specified pursuant to Section 301, the
amount receivable by Holders who have elected payment in a currency other than
the currency in which
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such Subordinated Debt Securities are denominated as provided in paragraph (a)
above shall be determined by the Issuer on the basis of the applicable Exchange
Rate set forth in the applicable Exchange Rate Officers' Certificate.
(d) Except as otherwise specified pursuant to Section 301, if the Foreign
Currency in which Subordinated Debt Securities of a series is denominated ceases
to be used both by the government of the country which issued such currency and
for the settlement of transactions by banks, then with respect to each date for
the payment of principal of (and premium, if any) and interest on such
Subordinated Debt Securities occurring after the final date on which the Foreign
Currency was so used, all payments with respect to such Subordinated Debt
Securities shall be made in Dollars; provided that payment to a Holder of a
Subordinated Debt Security of such series shall be made in a different Foreign
Currency if that Holder has elected or elects payment in such Foreign Currency
as provided for by paragraph (a) above. If payment is to be made in Dollars to
the Holders of any such Subordinated Debt Securities pursuant to the provisions
of the preceding sentence, then the amount to be paid in Dollars on a payment
date by the Issuer to the Trustee or to any Paying Agent, as the case may be,
and by the Trustee or any Paying Agent to Holders shall be determined by the
Trustee or by any Paying Agent, as the case may be, as of the Regular or Special
Record Date with respect to such Interest Payment Date or date for payment of
Defaulted Interest or the fifteenth day immediately preceding the Maturity of an
installment of principal, as the case may be, and shall be equal to the sum
obtained by converting the specified Foreign Currency into Dollars at the
Exchange Rate on the last Record Date on which such Foreign Currency was so used
in such capacity.
(e) If a Holder of a Subordinated Debt Security denominated in a composite
currency has elected payment in a specified Foreign Currency as provided for by
paragraph (a) and such Foreign Currency ceases to be used both by the government
of the country which issued such currency and for the settlement of transactions
by banks, such Holder shall, subject to paragraph (f) below, receive payment in
such composite currency; provided that such payment to such Holder shall be made
in a different Foreign Currency or in Dollars if that Holder has elected or
elects payment in such Foreign Currency or in Dollars as provided for by
paragraph (a) above.
(f) Except as otherwise specified as contemplated by Section 301, if any
composite currency in which a Subordinated Debt Security is denominated or
payable ceases to be used for the purposes for which it was established, then
with respect to each date for the payment of principal of (and premium, if any)
and interest on Subordinated Debt Securities of a series denominated in such
composite currency occurring after the last date on which such composite
currency was so used (the "Conversion Date"), all payments with respect to such
Subordinated Debt Securities shall be made in Dollars; provided that payment to
a Holder of a Subordinated Debt Security of such series shall be made in a
Foreign Currency if that Holder has elected or elects payment in such Foreign
Currency as provided for by paragraph (a) above.
(g) If payment with respect to Subordinated Debt Securities of a series
denominated in any composite currency is to be made in Dollars pursuant to the
provisions of Section 311(f) then the amount to be paid in Dollars on a payment
date by the Issuer to the Trustee or to any Paying Agent, as the case may be,
and by the Trustee or by any Paying Agent, as the case may be, to Holders shall
be determined by the Trustee or by any Paying Agent, as the case may be, as of
the Regular or Special Record Date with respect to such Interest Payment Date or
date for payment
30
of Defaulted Interest or the fifteenth day immediately preceding the Maturity of
an installment of principal, as the case may be, and shall be equal to the sum
of the amounts obtained by converting each Component of such composite currency
into Dollars at the Exchange Rate for such Component on such Record Date or
fifteenth day, as the case may be, multiplied by the number of units of such
composite currency that would have been so paid had such composite currency not
ceased to be so used. If payment is to be made in Foreign Currency to the
Holders of Subordinated Debt Securities of such series pursuant to Section
311(f), then the amount to be paid in such Foreign Currency on a payment date by
the Issuer to the Trustee or to any Paying Agent, as the case may be, and by the
Trustee or by any Paying Agent, as the case may be, to Holders shall be
determined by the Trustee or by any Paying Agent, as the case may be, as of the
Regular or Special Record Date with respect to such Interest Payment Date or
date for payment of Defaulted Interest or the fifteenth day immediately
preceding the Maturity of an installment of principal, as the case may be, and
shall be determined by (1) converting each Component of such composite currency
into Dollars at the Exchange Rate for such Component on such Record Date or
fifteenth day, as the case may be, and (2) converting the sum in Dollars so
obtained into such Foreign Currency at the Exchange Rate for such Foreign
Currency on such Record Date or fifteenth day, as the case may be.
(h) All decisions and determinations of the Trustee or any Paying Agent, as the
case may be, regarding conversion of Foreign Currency into Dollars pursuant to
Sections 311(d) or 301 or the conversion of any composite currency into Dollars
or Foreign Currency pursuant to Sections 311(d) and (f) above or as specified
pursuant to Section 301 or the Exchange Rate shall, in the absence of manifest
error, be conclusive for all purposes and irrevocably binding upon the Issuer
and all Holders of the Subordinated Debt Securities. If a Foreign Currency or
composite currency in which payment of Subordinated Debt Securities of a series
may be made ceases to be used both by the government of the country which issued
such currency and for the settlement of transactions by banks, the Issuer, after
learning thereof, will give notice pursuant to Section 105 thereof to the
Trustee or to any Paying Agent, as the case may be, immediately (and the Trustee
or any Paying Agent, as the case may be, promptly thereafter will give notice to
the Holders in the manner provided in Section 106) specifying as the case may be
the last date on which the Foreign Currency was used for the payment of
principal of (and premium, if any) or interest on such Subordinated Debt
Securities, or the Conversion Date with respect to such composite currency and
the Components of such composite currency on such Conversion Date. If any
Component subsequently changes, the Issuer, after learning thereof, will give
notice to the Trustee or to any Paying Agent, as the case may be, similarly. The
Trustee or any Paying Agent, as the case may be, shall be fully justified,
protected and otherwise held harmless in relying and acting upon the information
so received by the Issuer and shall not otherwise have any duty or obligation to
determine or verify such information independently.
SECTION 312. JUDGMENTS.
(a) Any payment in respect of principal of (and premium, if any) and interest
otherwise due on Subordinated Debt Securities made in Canadian currency by the
Issuer or the Guarantor, as the case may be, to any Holder of Subordinated Debt
Securities (the "Payee") pursuant to a judgment or order of a court or tribunal
in Canada shall constitute a discharge of the Issuer or the Guarantor, as the
case may be, only to the extent of the amount of Dollars or Foreign Currency
payable on such Subordinated Debt Securities (the "Purchased Amount") that the
Payee, on the
31
date of such payment in Canadian currency, would be able to purchase with the
amount so paid based on the noon buying rate for Dollars or the Foreign Currency
for wire transfers quoted on the date of payment or, if such date if not a
Business Day in Toronto, Ontario, on the next Business Day in Xxxxxxx, Xxxxxxx.
If the amount otherwise due to the Payee (the "Amount Due") is greater or less
than the Purchased Amount, the Issuer or the Guarantor, as the case may be,
shall indemnify and hold harmless the Payee to the extent that the Amount Due
exceeds the Purchased Amount and the Issuer or the Guarantor, as the case may
be, may retain the amount, if any, by which the Amount Due is less than the
Purchased Amount. This indemnity shall constitute a separate and independent
obligation from the other obligations contained in this Indenture and shall give
rise to a separate and independent cause of action and shall continue in full
force and effect notwithstanding any judgment or order for a liquidated sum in
respect of amounts due under the Subordinated Debt Securities or any judgment or
order.
SECTION 313. CUSIP NUMBERS.
The Issuer in issuing the Subordinated Debt Securities may use "CUSIP" numbers
(if then generally accepted in use), and if so, the Trustee shall use "CUSIP"
numbers in notices and redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Subordinated Debt Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Subordinated Debt Securities,
and any such redemption shall not be affected by any defect in or omission of
such numbers. The Issuer will promptly notify the Trustee of any change in the
"CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
(a) This Indenture shall upon Issuer Request cease to be of further effect as to
the Issuer and the Guarantor (except as to any surviving rights of registration
of transfer or exchange of Subordinated Debt Securities provided for herein and
rights to receive payments of principal of (and premium, if any) and interest
thereon) and the Trustee, at the expense of the Issuer, shall execute proper
instruments provided to it acknowledging satisfaction and discharge of this
Indenture with respect to the Issuer and the Guarantor, when:
(1) either
(i) all Subordinated Debt Securities theretofore issued by the Issuer
and authenticated and delivered hereunder (other than: (x)
Subordinated Debt Securities that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section 306; and
(y) Subordinated Debt Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 1003) have been delivered to the Trustee
for cancellation; or
32
(ii) all such Subordinated Debt Securities issued by the Issuer and
authenticated and delivered hereunder and not theretofore delivered to
the Trustee for cancellation:
(x) have become due and payable;
(y) will become due and payable at their Stated Maturity Date
within one year; or
(z) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice by the Trustee in the name, and at the expense, of
the Issuer,
and the Issuer, in the case of (ii)(x), (ii)(y) or (ii)(z) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust an amount sufficient to pay and discharge the
entire indebtedness on such Subordinated Debt Securities for principal
(and premium, if any) and interest to the date of such deposit (in the
case of Subordinated Debt Securities that have become due and payable)
or to the Stated Maturity Date or Redemption Date, as the case may be;
(2) the Issuer or the Guarantor has paid or caused to be paid all
other sums payable hereunder by the Issuer or the Guarantor, as
the case may be; and
(3) the Issuer has delivered to the Trustee an Officers' Certificate
and Opinion of Counsel each stating that all conditions precedent
herein provided related to the satisfaction and discharge of this
Indenture have been complied with.
(b) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 606 and, if money shall
have been deposited with the Trustee pursuant to paragraph (a)(1)(ii) of this
Section, the obligations of the Trustee under Section 402 and Section 1003(e)
shall survive such satisfaction and discharge.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of Section 1003(e), all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Subordinated Debt Securities, the
Guarantee and this Indenture, to the payment, either directly or through any
Paying Agent (including the Issuer, acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee.
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ARTICLE FIVE
DEFAULTS AND REMEDIES
SECTION 501. EVENTS OF DEFAULT AND ENFORCEMENT.
(a) If and when any one or more of the following events (herein called an "Event
of Default") shall happen and be continuing with respect to the Subordinated
Debt Securities of any series, namely:
(1) a default in payment of principal (and premium, if any) of any
Subordinated Debt Security of such series when due;
(2) a default in payment of interest on any Subordinated Debt Security of
such series when due and payable and the continuance of such default
for 30 days, it being understood that the occurrence of an Extended
Interest Payment Period in accordance with Article Fourteen hereunder
and the terms of such series of Subordinated Debt Securities will not
constitute such a default;
(3) a default in the deposit of any sinking fund payment on any
Subordinated Debt Security of such series when due and the continuance
of such default for 30 days;
(4) a default in performing or observing any of the covenants, agreements
or other obligations of the Issuer or the Guarantor as described
herein for 90 days after written notice to the Issuer or the Guarantor
by the holders of not less than 25% in principal amount of Outstanding
Subordinated Debt Securities of such series requiring the same to be
remedied;
(5) a decree, judgment, or order by a court having jurisdiction in the
premises shall have been entered adjudging the Issuer or the Guarantor
a bankrupt or insolvent or approving as properly filed a petition
seeking reorganization, readjustment, arrangement, composition or
similar relief for the Issuer or the Guarantor under any bankruptcy,
insolvency or other similar applicable law and such decree, judgment
or order of a court having jurisdiction in the premises for the
appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of the Issuer or the Guarantor of a
substantial part of its property, or for the winding up or liquidation
of its affairs, shall have remained in force for a period of 60
consecutive days; or any substantial part of the property of the
Issuer or the Guarantor shall be sequestered or attached and shall not
be returned to the possession of the Issuer or the Guarantor or
released from such attachment whether by filing of a bond, or stay or
otherwise within 60 consecutive days thereafter;
(6) the Issuer or the Guarantor shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer
or consent seeking reorganization, readjustment, arrangement,
composition or similar relief under any bankruptcy, insolvency or
other similar applicable law or the Issuer or the Guarantor shall
34
consent to the filing of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency for it or of a substantial part of its
property, or shall make an assignment for the benefit of creditors, or
shall be unable, or admit in writing its inability, to pay its debts
generally as they become due, or corporate action shall be taken by
the Issuer or the Guarantor in furtherance of any of the aforesaid
actions; or
(7) any other Event of Default provided with respect to the Subordinated
Debt Securities of that series;
then, and in each and every such case, the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Subordinated Debt
Securities of such series at such time may declare the principal of (and
premium, if any) together with accrued interest on, all such Subordinated
Debt Securities of such series to be due and payable immediately, by a
notice in writing to the Issuer and the Guarantor, and to the Trustee if
given by the Holders, and upon any such declaration such principal amount
(and premium, if any) together with accrued interest thereon, shall become
immediately due and payable.
SECTION 502. WAIVER OF DECLARATION.
At any time after such a declaration of acceleration with respect to the
Subordinated Debt Securities of a series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter provided, the Holders of a majority in principal amount of
Outstanding Subordinated Debt Securities of such series, by written notice to
the Issuer, the Guarantor and the Trustee, may rescind and annul such
declaration and its consequences if:
(1) the Issuer or the Guarantor has paid or deposited with the Trustee a
sum sufficient to pay:
(i) all overdue interest on all the Subordinated Debt Securities of
such series;
(ii) the principal of any of the Subordinated Debt Securities of such
series which have become due otherwise than by such declaration
of acceleration, and interest thereon at the rate or rates
prescribed therefor in such Subordinated Debt Securities; and
(iii) to the extent that payment of such interest is lawful and
applicable, interest upon overdue installments of interest at the
rate or rates prescribed therefor in such Subordinated Debt
Securities; and
(2) all Events of Default with respect to the Subordinated Debt Securities
of such series, other than the non-payment of the principal of, and
interest on, such Subordinated Debt Securities which have become due
solely by such declaration
35
of acceleration, have been cured or waived in accordance with the
provisions of the Indenture.
SECTION 503. WAIVER.
(a) The Holders of not less than a majority in principal amount of the
Outstanding Subordinated Debt Securities of any series may on behalf of the
Holders of all Subordinated Debt Securities of any such series waive any past or
existing default hereunder with respect to such series and its consequences,
except a default:
(1) in the payment of the principal of (or premium, if any) or interest on
any Subordinated Debt Security of such series; or
(2) in respect of a covenant or provision hereof that under Article Nine
cannot be modified or amended without the consent of the Holder of
each Outstanding Subordinated Debt Security of such series affected.
(b) Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 504. OTHER REMEDIES.
(a) If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal of (and premium, if any) or
interest on Subordinated Debt Securities or to enforce the performance of any
provision of Subordinated Debt Securities or this Indenture.
(b) The Trustee may maintain a proceeding even if it does not possess any
Subordinated Debt Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies,
except as provided in Section 306, are cumulative to the extent permitted by
law.
SECTION 505. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be applied in
the following order, at the dates fixed by the Trustee and, in case of the
distribution of such money on account of principal of (and premium, if any) or
interest, upon presentation of Subordinated Debt Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid for principal of (and
premium, if any) and interest on Subordinated Debt Securities, in respect of
which or for the benefit of which such money has been collected ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Subordinated Debt Securities for principal (and premium,
36
if any) and interest, respectively. The Holders of any Subordinated Debt
Securities denominated in a composite currency or a Foreign Currency shall be
entitled to receive a ratable portion of the amount determined by the Trustee
converting the principal amount Outstanding of such Subordinated Debt Securities
and matured but unpaid interest on such Subordinated Debt Securities in the
currency in which such Subordinated Debt Securities are denominated into Dollars
at the Exchange Rate as of the date of declaration of acceleration of the
Maturity of the Subordinated Debt Securities (or, if there is no such rate on
such date for the reasons specified in Section 311(d), such rate on the date
specified in such Section); and
THIRD: To the Issuer or, to the extent the Trustee collects any amount pursuant
to Section 203 hereof from the Guarantor, to the Guarantor.
SECTION 506. CONTROL BY HOLDERS.
(a) The Holders of at least a majority in principal amount of the Outstanding
Subordinated Debt Securities of any series, may:
(1) 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 it with respect to the Subordinated Debt Securities of
such series; and
(2) take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of Subordinated
Debt Securities under any provisions of this Indenture or under
applicable law.
(b) The Trustee may refuse, however, to follow any direction that conflicts with
law or this Indenture or is unduly prejudicial to the rights of other Holders.
SECTION 507. LIMITATION ON SUITS.
(a) A Holder of Subordinated Debt Securities may pursue a remedy with respect to
this Indenture directly himself only if: (1) the Holder gives to the Trustee
written notice of a continuing Event of Default; (2) the Holders of at least 25%
in principal amount of all of the then Outstanding Subordinated Debt Securities
issued under the Indenture (treated as a class) make a request in writing to the
Trustee to pursue the remedy; (3) such Holder or Holders indemnify the Trustee
in form satisfactory to it against any loss, liability, claim, damage or
expense; (4) the Trustee does not comply with the request within 60 days after
receipt of such request and indemnity; and (5) during such 60-day period the
Holders of a majority in principal amount of all of the Outstanding Subordinated
Debt Securities (treated as a class) do not give the Trustee a direction
inconsistent with the request.
(b) Holders may not use this Indenture to prejudice the rights of another Holder
or to obtain a preference or priority over another Holder.
SECTION 508. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of (and, premium, if any) and interest on
Subordinated Debt Securities held
37
by him, on or after the respective due dates expressed in the Subordinated Debt
Securities (or, in the case of redemption, on the Redemption Date), or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Holder.
SECTION 509. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 501(1), (2) or (3) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Issuer or the Guarantor for the whole amount of
principal (and premium, if any) and interest remaining unpaid.
SECTION 510. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may 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, expenses, disbursements and advances of
the Trustee) and the Holders allowed in any judicial proceedings relative to the
Issuer or the Guarantor, their respective creditors or their respective
property. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or compensation affecting the
Subordinated Debt Securities or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 511. UNDERTAKING FOR COSTS.
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, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 507, or a suit by any Holder or group of Holders of more than 10% in
principal amount of the Outstanding Subordinated Debt Securities.
SECTION 512. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Subordinated Debt
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 513. WAIVER OF STAY OR EXTENSION LAWS.
The Issuer and the Guarantor each, severally and not jointly, covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever
38
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Issuer and the Guarantor each,
severally and not jointly (to the extent that it may lawfully do so), hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, 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 person would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others shall be inferred or implied;
and
(2) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture;
however, the Trustee shall examine the certificates and opinions
required to be delivered to it pursuant to the terms of this Indenture
to determine whether or not they so conform.
(c) The Trustee may not be relieved from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by
it pursuant to Section 506; and
(4) no provision of the Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have
39
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Every provision of this Indenture that in any way relates to the Trustee is
subject to the above paragraphs of this Section. The Trustee may refuse to
perform any duty or exercise any right or power under this Indenture (including
with respect to Section 506) unless it receives indemnity reasonably
satisfactory to it for actions taken under this Indenture. The Trustee shall not
be liable for interest on any money received by it except as the Trustee may
agree in writing with the Issuer or the Guarantor. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.
SECTION 602. RIGHTS OF TRUSTEE.
The Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper person or persons. The Trustee need
not investigate any fact or matter stated in the document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Issuer, personally or by agent or attorney at the
sole cost of the Issuer and shall incur no liability or additional liability of
any kind by reason of such inquiry or investigation. Any request, direction,
order or demand of the Issuer mentioned herein shall be sufficiently evidenced
by an Officers' Certificate (unless other evidence in respect thereof is herein
specifically prescribed). Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
thereon. The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or through the appointment of a
co-trustee or through agents, attorneys, custodians or nominees and shall not be
responsible for the misconduct or negligence of any agent, attorney, custodian
or nominee appointed with due care. The Trustee shall not be liable for any
action it takes or omits to take in good faith without negligence or willful
misconduct, except as otherwise provided in this Indenture, which it reasonably
believes to be authorized or within its rights or powers. The Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
SECTION 603. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Subordinated Debt Securities and may otherwise deal with the Issuer
or the Guarantor with the same rights it would have if it were not Trustee. Any
agent of the Trustee may do the same with like rights. However, the Trustee is
at all times subject to Sections 609 and 610.
SECTION 604. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
Subordinated Debt Securities, it shall not be accountable for the Issuer's use
of the proceeds from Subordinated
40
Debt Securities, and it shall not be responsible for any statement in
Subordinated Debt Securities other than its certificate of authentication.
SECTION 605. NOTICE OF DEFAULTS.
(a) If an Event of Default with respect to a series of Subordinated Debt
Securities occurs and is continuing, the Trustee shall mail to Holders of
Subordinated Debt Securities of such series a notice of the Event of Default
within 90 days after it occurs. Except in the case of an Event of Default
resulting from nonpayment on any Subordinated Debt Securities, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders of Subordinated Debt Securities.
(b) Except in the case of an Event of Default resulting from nonpayment on any
Debt Security, the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Subordinated Debt Securities and this Indenture.
SECTION 606. COMPENSATION AND INDEMNITY.
(a) The Issuer shall pay to the Trustee from time to time compensation for its
services as agreed separately by the Issuer and the Trustee. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust.
(b) The Issuer shall fully indemnify the Trustee and any predecessor Trustee and
their agents for, and hold them harmless against, any and all loss, damage,
claims, liability or expense (including reasonable attorneys' fees and expenses)
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder, except to the extent that such loss,
damage, claim, liability or expense is caused by its own negligence or bad faith
or, with respect to indemnification of an agent hereunder, the negligence or bad
faith of such agent. The Trustee shall notify the Issuer promptly of any claim
for which it may seek indemnity. The Issuer shall defend the claim and the
Trustee shall cooperate in the defense. The Issuer need not pay for any
settlement made without its consent.
(c) Except as otherwise expressly provided herein, the Issuer agrees to
reimburse the Trustee upon its request for all reasonable and documented
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable and
documented compensation, expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith or, with respect to documented compensation, expenses
and disbursements of an agent or attorney, the negligence or bad faith of such
agent or attorney.
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(d) To secure the Issuer's payment obligations in this Section, the Trustee
shall have a lien prior to Subordinated Debt Securities on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on Subordinated Debt Securities.
When the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 501(5) or Section 501(6), the reasonable and
documented expenses (including the reasonable and documented charges and
expenses of its counsel) and compensation for the services are intended to
constitute expenses of administration under any applicable Federal or state
bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this Indenture
and the resignation or removal of the Trustee.
SECTION 607. REPLACEMENT OF TRUSTEE.
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee for the Subordinated Debt Securities of any series shall become
effective only upon the successor Trustee's acceptance of appointment as
provided in this Section.
(b) The Trustee may resign at any time with respect to Subordinated Debt
Securities of one or more series by giving written notice thereof to the Issuer
and the Guarantor. If an instrument of acceptance by a successor Trustee shall
not have been delivered to the Trustee and to the Issuer and the Guarantor
within 30 days after the giving of such notice of resignation, the resigning
Trustee may at the expense of the Issuer petition any court of competent
jurisdiction for the appointment of a successor Trustee to the Trustee. The
Holders of at least a majority in principal amount of then Outstanding
Subordinated Debt Securities of such series may remove the Trustee by so
notifying the Trustee, the Issuer and the Guarantor in writing if: (1) the
Trustee fails to comply with Section 609; (2) the Trustee is adjudged a bankrupt
or an insolvent; (3) a receiver or public officer takes charge of the Trustee or
its property; or (4) the Trustee becomes incapable of acting; in addition, in
any such case, (i) the Issuer by a Board Resolution thereof may remove the
Trustee with respect to all Subordinated Debt Securities, or (ii) any Holder who
has been a bona fide Holder of a Subordinated Debt Security of any series 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 for
the Subordinated Debt Securities of such series and the appointment of a
successor Trustee.
(c) If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason with respect to the Subordinated Debt Securities of one
or more series, the Issuer shall promptly appoint a successor Trustee or
Trustees with respect to the Subordinated Debt Securities of that or those
series (it being understood that any such successor Trustee may be appointed
with respect to the Subordinated Debt Securities of one or more or all of such
series and that at any time there shall be only one Trustee with respect to the
Subordinated Debt Securities of any particular series) and shall comply with the
applicable requirements of this Section 607. Within one year after the successor
Trustee takes office, the Holders of a majority in principal amount of
Outstanding Subordinated Debt Securities of any series may appoint a successor
Trustee to replace the successor Trustee appointed by the Issuer with respect to
the Subordinated Debt Securities of such series. If a successor Trustee does not
take office within
42
60 days after the retiring Trustee resigns or is removed, the retiring Trustee,
the Issuer or the Holders of at least 10% in principal amount of the
Subordinated Debt Securities of any series may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Subordinated Debt Securities of such series.
(d) If the Trustee fails to comply with Section 609, any Holder of Subordinated
Debt Securities may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
(e) The Issuer shall give notice of each resignation and each removal of the
Trustee with respect to Subordinated Debt Securities of any series and each
appointment of a successor Trustee with respect to Subordinated Debt Securities
of any series in the manner provided in Section 106. Each notice shall include
the name of the successor Trustee with respect to Subordinated Debt Securities
of such series and the address of its Corporate Trust Office.
(f) In the case of an appointment hereunder of a successor Trustee with respect
to all Subordinated Debt Securities, every such successor Trustee so appointed
shall execute, acknowledge and deliver to the Issuer and to the Guarantor and to
the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Issuer or the Guarantor or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
(g) In case of the appointment hereunder of a successor Trustee with respect to
Subordinated Debt Securities of one or more (but not all) series, the Issuer,
the Guarantor, the retiring Trustee upon payment of its charges and each
successor Trustee with respect to Subordinated Debt Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which: (1) shall contain
such provisions as shall be necessary or desirable to transfer and confirm to,
and to vest in, each successor Trustee all the rights, powers, trusts and duties
of the retiring Trustee with respect to Subordinated Debt Securities of that or
those series to which the appointment of such successor Trustee relates; (2) if
the retiring Trustee is not retiring with respect to all Subordinated Debt
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to Subordinated Debt Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee; and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act,
43
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Subordinated Debt Securities
of that or those series to which the appointment of such successor Trustee
relates; but, on request of the Issuer, the Guarantor or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Subordinated Debt Securities of that or those series to which the
appointment of such successor Trustee relates.
(h) Upon request of any such successor Trustee, the Issuer and the Guarantor
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (f) or (g) of this Section, as the case may be.
(i) No successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under this
Article.
SECTION 608. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee,
provided that prior written notice thereof is given to the Issuer and the
Guarantor and such successor corporation is acceptable to the Issuer and the
Guarantor.
SECTION 609. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the requirements of
Section 310(a)(1) of the Trust Indenture Act. The Trustee shall always have a
combined capital and surplus of at least $5 million, calculated as permitted by
Section 310(a)(2) of the Trust Indenture Act. The Trustee is subject to Section
310(b) of the Trust Indenture Act, including the optional provision permitted by
the second sentence of Section 310(b)(9) of the Trust Indenture Act.
SECTION 610. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER.
The Trustee is subject to Section 311(a) of the Trust Indenture Act, except with
respect to any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed is subject to Section
311(a) of the Trust Indenture Act to the extent indicated.
SECTION 611. APPOINTMENT OF AUTHENTICATING AGENT
(a) The Trustee may appoint an authenticating agent or agents with respect to
one or more series of Subordinated Debt Securities which will be authorized to
act on behalf of the Trustee to authenticate Subordinated Debt Securities of
such series issued upon original issue and upon exchange, registration of
transfer, or partial redemption thereof or pursuant to Section 306, and
Subordinated Debt Securities so authenticated will be entitled to the benefits
of this Indenture and will be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Subordinated Debt Securities by
the Trustee or the Trustee's certificate of authentication, such reference will
44
be deemed to include authentication and delivery on behalf of the Trustee by an
authenticating agent and a certificate of authentication executed on behalf of
the Trustee by an authenticating agent. Each authenticating agent shall be
acceptable to the Issuer and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any state
thereof, or the District of Columbia, authorized under such laws to act as
authenticating agent, having a combined capital and surplus of not less than
$5,000,000 and subject to supervision or examination by Federal or state
authority. If such authenticating agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 611, the combined
capital and surplus of such authenticating agent will 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 611, such authenticating agent
will resign immediately in the manner and with the effect specified in this
Section 611.
(b) Any corporation into which an authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion, or consolidation to which such authenticating agent
may be a party, or any corporation succeeding to all or substantially all the
corporate agency or corporate trust business of an authenticating agent, will
continue to be an authenticating agent, provided such corporation is otherwise
eligible under this Section 611, without the execution of filing of any paper or
any further act on the part of the Trustee or the authenticating agent.
(c) An authenticating agent may resign at any time by giving written notice
thereof to the Trustee, the Issuer and the Guarantor. The Trustee may at any
time terminate the agency of an authenticating agent by giving written notice
thereof to such authenticating agent and to the Issuer and the Guarantor. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time such authenticating agent shall cease to be eligible in accordance with
the provisions of this Section 611, the Trustee may appoint a successor
authenticating agent which shall be acceptable to the Issuer and the Guarantor
and will mail written notice of such appointment by first-class mail, postage
prepaid, to all Holders of Subordinated Debt Securities of the series with
respect to which such authenticating agent will serve, as their names and
addresses appear in the Security Register. Any successor authenticating agent
upon acceptance of its appointment hereunder will become vested with all the
rights, powers, and duties of its predecessor hereunder, with like effect as if
originally named as an authenticating agent. No successor authenticating agent
will be appointed unless eligible under the provisions of this Section 611.
(d) The Issuer agrees to pay to each authenticating agent from time to time
reasonable compensation for its services under this Section 611.
(e) If an appointment with respect to one or more series of Subordinated Debt
Securities is made pursuant to this Section 611, the Subordinated Debt
Securities of such series may have endorsed thereon, in addition to the
Trustee's certificate of authentication, an alternative form of certificate of
authentication in the following form:
45
This is one of the Subordinated Debt Securities of the series designated
therein referred to in the within mentioned Indenture.
HSBC BANK USA,
as Trustee
Dated: By:
----------------------------- -----------------------------------
As Authenticating Agent
By:
-----------------------------------
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE, ISSUER AND GUARANTOR
SECTION 701. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Subordinated Debt Securities
received by the Trustee in its capacity as Security Registrar, if so acting.
(b) If three or more Holders of a series of Subordinated Debt Securities
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Subordinated Debt Security for a period of at least six months immediately
preceding the date of such application, and such application states that the
applicants' desire to communicate with other Holders of Subordinated Debt
Securities of a particular series (in which case the applicants must hold
Subordinated Debt Securities of such series) or with all Holders of Subordinated
Debt Securities with respect to their rights under this Indenture or under the
Subordinated Debt Securities and is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall, within five Business Days after the receipt of such application,
at its election, either:
(1) afford such applicants access to the information preserved at the time
by the Trustee in accordance with Section 701(a); or
(2) inform such applicants as to the approximate number of Holders of
Subordinated Debt Securities of such series or of all Subordinated
Debt Securities, as the case may be, whose names and addresses appear
in the information preserved at the time by the Trustee in accordance
with Section 701(a), and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified in
such application.
46
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appear in the information preserved
at the time by the Trustee in accordance with Section 701(a), a copy of the form
of proxy or other communication that is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the Holders
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 Holders with reasonable promptness after the
entry of such order and the renewal of such tender, otherwise the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Subordinated Debt Securities, by receiving and holding the
same, agrees with the Issuer, the Guarantor and the Trustee that none of the
Issuer, the Guarantor or the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 701(b), 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 Section 701(b).
SECTION 702. REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year following the date of this
Indenture, the Trustee shall mail to Holders a brief report dated as of such
reporting date that complies with Section 313(a) of the Trust Indenture Act. The
Trustee shall also comply with Sections 313(b)(2) and 313(c) of the Trust
Indenture Act.
(b) A copy of each report at the time of its mailing to Holders shall be filed
with the Commission and each stock exchange on which Subordinated Debt
Securities of any series are listed.
SECTION 703. REPORTS BY THE ISSUER AND THE GUARANTOR.
(a) The Issuer and the Guarantor will:
(1) file with the Trustee, within 15 days after the Issuer or the
Guarantor is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Issuer or the Guarantor may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if
the Issuer or the Guarantor is not required to file information,
documents or
47
reports pursuant to either of these Sections, then the Issuer or the
Guarantor, as the case may be, will 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 that 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;
(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to
compliance thereby with the conditions and covenants of this Indenture
as may be required from time to time by such rules and regulations;
and
(3) notify the Trustee when Subordinated Debt Securities of any series are
listed on any stock exchange.
(b) 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 Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(c) The Issuer and the Guarantor shall also comply with the provisions of
Section 314(a) of the Trust Indenture Act.
ARTICLE EIGHT
AMALGAMATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. AMALGAMATION AND MERGER OF ISSUER OR GUARANTOR AND CONVEYANCES
PERMITTED SUBJECT TO CERTAIN CONDITIONS.
So long as any Subordinated Debt Security of a particular series remains
Outstanding, neither the Issuer nor the Guarantor will amalgamate or merge with
any other corporation or enter into any reorganization or arrangement or effect
any conveyance, transfer or lease of all or substantially all of the assets of
it and its Subsidiaries, taken as a whole (other than with or to the Guarantor,
in the case of the Issuer, or with or to the Issuer, in the case of the
Guarantor), unless in any such case:
(1) (a) the Issuer or the Guarantor, as the case may be, shall be the
surviving corporation or one of the continuing corporations, or (b)
the successor corporation (or the Person that leases or that acquires
by conveyance or transfer all or substantially all of the assets of
the Issuer and its Subsidiaries, taken as a whole, or the Guarantor
and its Subsidiaries taken as a whole, as the case may be) shall
expressly assume the due and punctual payment of the principal of (and
premium, if any) and interest on all Outstanding Subordinated Debt
Securities issued hereunder, according to their tenor, and the due and
punctual performance and
48
observance of all of the covenants and conditions of this Indenture to
be performed by the Issuer or the Guarantor by supplemental indenture
pursuant to Article Nine satisfactory to the Trustee, executed and
delivered to the Trustee by such corporation; and
(2) the Issuer or the Guarantor, as the case may be, or the successor
corporation shall not, immediately thereafter be in default under this
Indenture or the Subordinated Debt Securities.
SECTION 802. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION.
(a) In case of any such amalgamation, merger, reorganization, arrangement,
conveyance, transfer or lease and upon any such assumption by the successor
corporation, such successor corporation shall agree to be bound by the terms of
this Indenture as principal obligor or guarantor in place of the Issuer or the
Guarantor with the same effect as if it had been named herein as the Issuer or
the Guarantor. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of the Issuer or the Guarantor,
as the case may be, any or all of Subordinated Debt Securities of any series
issuable hereunder (including the Guarantee endorsed thereon) which theretofore
shall not have been signed by the Issuer or the Guarantor, and delivered to the
Trustee. All Subordinated Debt Securities so issued, including the Guarantee
endorsed thereon, shall in all respects have the same legal rank and benefit
under this Indenture as Subordinated Debt Securities and the Guarantee
theretofore or thereafter issued or endorsed in accordance with the terms of
this Indenture as though all of such Subordinated Debt Securities and the
Guarantee had been issued or endorsed at the date of the execution hereof.
(b) In the case of any such amalgamation, merger, reorganization, arrangement,
conveyance, transfer or lease, such changes in phraseology and form (but not in
substance) may be made in Subordinated Debt Securities, including the Guarantee
endorsed thereon, thereafter to be issued as may be appropriate.
SECTION 803. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL.
The Trustee shall receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any such amalgamation, merger, reorganization,
arrangement, conveyance, transfer or lease, and any such assumption, comply with
the provisions of this Article Eight.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Issuer and the Guarantor, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
49
(1) to evidence the succession of another corporation to the Issuer or the
Guarantor, and the assumption by such successor of the covenants of the Issuer
or the Guarantor herein and in the Subordinated Debt Securities or the
Guarantee, as the case may be;
(2) to add to the covenants of the Issuer or the Guarantor, as the case may be,
for the benefit of the Holders of all or any series of Subordinated Debt
Securities (and, if such covenants are to be for the benefit of less than all
series of Subordinated Debt Securities, stating that such covenants are
expressly being included solely for the benefit of such series), or to surrender
any right or power herein conferred upon the Issuer or the Guarantor;
(3) to add any additional Events of Default (and, if such Events of Default are
to be applicable to less than all series of Subordinated Debt Securities,
stating that such Events of Default are expressly being included solely to be
applicable to such series); provided, however, that in respect of any such
additional Events of Default such supplemental indenture may provide for a
particular grace period after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the Trustee
upon such default or may limit the right of the Holders of a majority in
aggregate principal amount of the series of Subordinated Debt Securities to
which such additional Events of Default apply to waive such default;
(4) to change or eliminate any restrictions on the payment of principal (or
premium, if any) of Subordinated Debt Securities, provided that any such action
shall not adversely affect the interests of the Holders of Subordinated Debt
Securities of any series in any material respect;
(5) to change or eliminate any of the provisions of this Indenture, provided
that any such change or elimination shall become effective only when there is no
Outstanding Subordinated Debt Security of any series created prior to the
execution of such supplemental indenture that is entitled to the benefit of such
provision;
(6) to establish the form or terms of Subordinated Debt Securities of any series
as permitted by Sections 201 and 301;
(7) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Subordinated Debt Securities of one or
more series and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee;
(8) to add guarantees to or to further guarantee the Subordinated Debt
Securities;
(9) to supplement any of the provisions of the Indenture to such extent as shall
be necessary to permit or facilitate the defeasance and discharge of any series
of Subordinated Debt Securities pursuant to Sections 401, 1301 or 1302; provided
that any such action shall not adversely affect the interests of the Holders of
Subordinated Debt Securities of such series or any other series of Subordinated
Debt Securities in any material respect;
(10) to cure any ambiguity, to correct or supplement any provision herein that
may be defective or inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture that shall not be inconsistent with any
50
provisions of this Indenture, provided such other provisions shall not adversely
affect the interests of the Holders of Subordinated Debt Securities of any
series in any material respect;
(11) to provide for uncertificated Subordinated Debt Securities in addition to
or in place of certificated Subordinated Debt Securities;
(12) to secure the Subordinated Debt Securities;
(13) to make any changes that would provide any additional rights or benefits to
Holders of Subordinated Debt Securities or that do not adversely affect the
legal rights under the Indenture of any such Holder;
(14) to comply with the requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act;
(15) to provide for the conversion rights of Holders of Subordinated Debt
Securities in certain events such as an amalgamation, consolidation, merger or
sale of all or substantially all of the assets of the Issuer or the Guarantor,
as the case may be; or
(16) to reduce the conversion price, if applicable, of any series of
Subordinated Debt Securities.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
(a) Except as provided in Section 901, with the consent of the Holders of not
less than a majority in principal amount of the Outstanding Subordinated Debt
Securities affected by such supplemental indenture, by Act of said Holders
delivered to the Issuer, the Guarantor and the Trustee, the Issuer and the
Guarantor, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders under
this Indenture of such Subordinated Debt Securities; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Subordinated Debt Security affected thereby:
(1) change the Stated Maturity Date of the principal of, or any
installment of interest on, any Subordinated Debt Security, or reduce
the principal amount thereof or the interest thereon or any premium
payable upon redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 501, or change any Place of Payment, or change the currency in
which any Subordinated Debt Security or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity Date thereof (or, in the case
of redemption, on or after the Redemption Date);
(2) reduce the percentage in principal amount of the Outstanding
Subordinated Debt Securities of any series, the consent of whose
Holders is required for any such supplemental indenture, or the
consent of whose Holders is required for any
51
waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in
this Indenture, or reduce the requirements of Section 1704 for quorum
or voting;
(3) modify any of the provisions of this Section, Section 503 or Section
1005, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding
Subordinated Debt Security affected thereby; provided, however, that
this clause shall not be deemed to require the consent of any Holder
with respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 1005, or the deletion
of this proviso, in accordance with the requirements of Section
901(7);
(4) change in any manner adverse to the interests of the Holders of any
Outstanding Subordinated Debt Securities the terms and conditions of
the obligations of the Guarantor in respect of the due and punctual
payment of the principal (or, if the context so requires, lesser
amount in the case of Original Issue Discount Securities) thereof (and
premium, if any, thereon) and interest thereon or any additional
amounts or any sinking fund or analogous payments provided in respect
thereof; or
(5) make any change to the rights of the Holders under Articles Fifteen or
Sixteen, which adversely affects the Holders in any material respect,
except as otherwise provided for in this Indenture.
(b) No supplemental indenture under this Section 902 may make any change that
materially and adversely affects the rights under Article Fifteen or Article
Sixteen of any holder of Senior Indebtedness of the Issuer or the Guarantor then
outstanding unless holders of such Senior Indebtedness (or any Representatives
thereof authorized to give a consent) consent to such change.
(c) It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
(d) A supplemental indenture that changes or eliminates any covenant or other
provisions of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Subordinated Debt Securities, or
that modifies the rights of the Holders of Subordinated Debt Securities of such
series with respect to such covenant or other provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Subordinated Debt
Securities of any other series.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article (other than Section 901(6)) or the
modifications thereby of the trusts created by this Indenture, the Trustee shall
be entitled to receive, and, subject to Section 601, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental
52
indenture is authorized or permitted by this Indenture, is not inconsistent
herewith, is a valid and binding obligation of the Issuer and the Guarantor,
enforceable in accordance with its terms, subject to enforceability being
limited by bankruptcy, insolvency or other laws or foreign governmental actions
affecting the enforcement of creditors' rights generally and equitable remedies
including the remedies of specific performance and injunction being granted only
in the discretion of a court of competent jurisdiction and, in connection with a
supplemental indenture executed pursuant to Section 901, that the Trustee is
authorized to execute and deliver such supplemental indenture without the
consent of the Holders and, in connection with a supplemental indenture executed
pursuant to Section 902, that the requisite consents of the Holders have been
validly obtained in accordance with Section 902 hereof. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Subordinated Debt Securities theretofore or thereafter authenticated and
delivered under this Indenture shall be bound by the supplemental indenture.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall conform to
the requirements of the Trust Indenture Act as then in effect.
SECTION 906. REFERENCE IN SUBORDINATED DEBT SECURITIES TO SUPPLEMENTAL
INDENTURES.
Subordinated Debt Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Issuer or the
Guarantor shall so determine, new Subordinated Debt Securities of any series
including the Guarantee endorsed thereon, so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Issuer and the Guarantor and
authenticated and delivered by the Trustee in exchange for Outstanding
Subordinated Debt Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Issuer covenants and agrees for the benefit of each particular series of
Subordinated Debt Securities that it will duly and punctually pay the principal
of (and premium, if any) and interest on the Subordinated Debt Securities in
accordance with their terms and this Indenture. Principal (and premium, if any)
or interest payable with respect to any Subordinated Debt Securities shall
53
be considered paid on the date due if the Paying Agent, or the Issuer if it acts
as its own Paying Agent, holds on that date money sufficient to pay all
principal (and premium, if any) and interest then due.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
(a) The Issuer will maintain in each Place of Payment for any series of
Subordinated Debt Securities issued thereby an office or agency where
Subordinated Debt Securities of such series may be presented or surrendered for
payment, where Subordinated Debt Securities of such series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Issuer in respect of the Subordinated Debt Securities of such series
and this Indenture may be served; and the Guarantor will maintain in the City of
New York an office or agency where notices and demands to or upon the Guarantor
in respect of Subordinated Debt Securities of any series and this Indenture may
be served. Deutsche Bank Trust Company Americas shall act as the Issuer's and
the Guarantor's agent as the Security Registrar and the Paying Agent to receive
all such presentations, surrenders, notices and demands. The Security Registrar
and the Paying Agent will each give prompt written notice to the Trustee, the
Issuer and the Guarantor of the location, and any change in the location of, any
such office or agency. If at any time the Issuer, the Guarantor, the Security
Registrar or the Paying Agent shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee and the Issuer and the Guarantor each
hereby appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands.
(b) The Issuer may also from time to time designate one or more other offices or
agencies (in or outside of such Place of Payment) where the Subordinated Debt
Securities of one or more series may be presented or surrendered for any or all
of such purposes, and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Issuer of its obligation to maintain an office or agency in each Place of
Payment for any series of Subordinated Debt Securities, for such purposes. The
Issuer will give prompt written notice to the Trustee of any such designation
and any change in the location of any such other office or agency.
SECTION 1003. MONEY FOR SUBORDINATED DEBT SECURITIES PAYMENTS TO BE HELD IN
TRUST.
(a) If the Issuer shall at any time act as its own Paying Agent with respect to
any series of Subordinated Debt Securities, it will, on or before each due date
of the principal of (and premium, if any) or interest on any of the Subordinated
Debt Securities of such series, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will promptly notify
the Trustee in writing of its action or failure so to act.
(b) Whenever the Issuer shall have one or more Paying Agents with respect to any
series of Subordinated Debt Securities, it will, prior to each due date of the
principal of (and premium, if any) or interest on any Subordinated Debt
Securities of such series, deposit with a Paying Agent
54
a sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Issuer will promptly notify the Trustee in writing of its
action or failure so to act; provided, however, that money held by any such
Paying Agent for the benefit of holders of Senior Indebtedness pursuant to the
provisions of Article Fifteen hereof or the payment of which to holders of
Subordinated Debt Securities is prohibited by Article Fifteen shall not be
considered designated for payment of any principal of or interest on the
Subordinated Debt Securities within the meaning of this Section 1003.
(c) The Issuer will cause each Paying Agent with respect to any series of
Subordinated Debt Securities, other than the Trustee, to execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Subordinated Debt Securities of such
series in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as
herein provided;
(2) give the Trustee written notice of any default by the Issuer or the
Guarantor (or any other obligor upon the Subordinated Debt Securities
of such series or Guarantee endorsed thereon) in the making of any
payment of principal of (and premium, if any) or interest on the
Subordinated Debt Securities of such series or the Guarantee endorsed
thereon; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
(d) The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Issuer
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Issuer or the Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Issuer or the Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, the Paying
Agent shall be released from all further liability with respect to such money.
(e) Any money deposited with the Trustee or any Paying Agent, or then held by
the Issuer or the Guarantor, in trust for the payment of the principal of (and
premium, if any) or interest on any Subordinated Debt Security of any series and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the Issuer or the Guarantor
on Issuer Request or Guarantor Request, as the case may be, or (if then held by
the Issuer or the Guarantor) shall be discharged from such trust; and the Holder
of such Subordinated Debt Security shall thereafter, as an unsecured general
creditor, look only to the Issuer or the Guarantor, as the case may be, for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuer or the Guarantor,
as the case may be, as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the
55
expense of the Issuer or the Guarantor, as the case may be, cause to be
published once, in an Authorized Newspaper of general circulation in the Borough
of Manhattan, the City of New York, and each Place of Payment or mailed to each
such Holder, or both, 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 or mailing, any unclaimed balance of such money then remaining
will be repaid to the Issuer or the Guarantor, as the case may be.
SECTION 1004. COMPLIANCE CERTIFICATE.
The Issuer and the Guarantor shall each deliver an Officers' Certificate to the
Trustee within 120 days after the end of each fiscal year thereof stating
whether the signers know of any Event of Default that occurred during the fiscal
year. If an Event of Default shall have occurred, the applicable certificate
shall describe the nature of the Event of Default and its current status. The
certificate shall be in a form in compliance with the Trust Indenture Act.
SECTION 1005. WAIVER OF CERTAIN COVENANTS.
The Issuer and the Guarantor may omit in any particular instance to comply with
any covenant or condition with respect to the Subordinated Debt Securities of
any series if, before the time for such compliance, the Holders of a majority in
principal amount of the Outstanding Subordinated Debt Securities of such series
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Issuer and the Guarantor and the duties of the Trustee in respect of any
such covenant or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SUBORDINATED DEBT SECURITIES
SECTION 1101. APPLICABILITY OF ARTICLE.
Subordinated Debt Securities of any series that are redeemable before their
Stated Maturity Date shall be redeemable in accordance with their terms and
(except as otherwise specified pursuant to Section 301 for Subordinated Debt
Securities of any series) in accordance with this Article.
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
If the Issuer elects to redeem less than all of the Subordinated Debt Securities
of any series, the Issuer shall, at least 45 days prior to the Redemption Date
fixed by the Issuer (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal amount
of Subordinated Debt Securities of any series to be redeemed.
56
SECTION 1103. SELECTION BY TRUSTEE OF SUBORDINATED DEBT SECURITIES TO BE
REDEEMED.
(a) Except as otherwise specified pursuant to Section 301 for Subordinated Debt
Securities of any series, if less than all the Subordinated Debt Securities of
any series are to be redeemed, the particular Subordinated Debt Securities to be
redeemed shall be selected not more than 45 days prior to the Redemption Date by
the Trustee from the Outstanding Subordinated Debt Securities of such series not
previously called for redemption, by a method that complies with the
requirements of the principal national securities exchange or quotation system
(which shall be provided or caused to be provided by the Issuer to the Trustee),
if any, on which the Subordinated Debt Securities are listed or quoted or, if
the Subordinated Debt Securities are not so listed or quoted, by such method as
the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Subordinated Debt Securities of such series or any integral
multiple thereof that is also an authorized denomination, but in no event shall
such portion be less than $1,000) of the principal amount of Subordinated Debt
Securities (if issued in more than one authorized denomination) of such series
of a denomination larger than the minimum authorized denomination for
Subordinated Debt Securities of such series.
(b) The Trustee shall promptly notify the Issuer and the Guarantor in writing of
the Subordinated Debt Securities selected for redemption and, in the case of any
Subordinated Debt Securities selected for partial redemption, the principal
amount thereof to be redeemed.
(c) For all purposes of this Indenture, unless the context otherwise requires,
all provisions related to the redemption of Subordinated Debt Securities shall
relate, in the case of any Subordinated Debt Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Subordinated Debt
Security that has been or is to be redeemed.
SECTION 1104. NOTICE OF REDEMPTION.
(a) Notice of redemption shall be given in the manner provided in Section 106
not less than 20 or more than 60 days prior to the Redemption Date, to each
Holder of Subordinated Debt Securities, at such Holder's address shown on the
Security Register maintained by the Security Registrar, to be redeemed.
(b) All notices of redemption shall state: (1) the Redemption Date; (2) the
Redemption Price; (3) if less than all Outstanding Subordinated Debt Securities
of any series are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular Subordinated Debt
Securities to be redeemed; (4) that on the Redemption Date, the Redemption Price
will become due and payable upon each such Subordinated Debt Security to be
redeemed, and that interest thereon shall cease to accrue on and after said
date; (5) the Place or Places of Payment where such Subordinated Debt Securities
are to be surrendered for payment of the Redemption Price; and (6) that the
redemption is for a sinking fund, if such is the case.
(c) Notice of redemption of Subordinated Debt Securities to be redeemed at the
election of the Issuer shall be given by the Issuer or, at the Issuer's request,
by the Trustee in the name and at the expense of the Issuer.
57
(d) The notice if mailed in the manner herein provided shall be conclusively
presumed to have been 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 Subordinated Debt Security designated for redemption in whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Subordinated Debt Securities or portion thereof.
SECTION 1105. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Issuer shall deposit with the Trustee or
with a Paying Agent (or, if the Issuer is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Subordinated
Debt Securities or portions thereof that are to be redeemed on that date;
provided, however, that any funds deposited on the Redemption Date shall be
deposited by the Issuer no later than 12:00 p.m., New York City time on such
Redemption Date. The Trustee or the Paying Agent shall promptly return to the
Issuer any money not required for that purpose.
SECTION 1106. SUBORDINATED DEBT SECURITIES PAYABLE ON REDEMPTION DATE.
(a) Notice of redemption having been given as aforesaid, the Subordinated Debt
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price specified in such notice. From and after such
date (unless the Issuer shall default in the payment of the Redemption Price and
accrued interest) such Subordinated Debt Securities shall cease to bear
interest. Upon surrender of any such Subordinated Debt Security for redemption
in accordance with the notice, such Subordinated Debt Security shall be paid by
the Issuer at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that installments of interest on
Subordinated Debt Securities whose Stated Maturity Date is on or prior to the
Redemption Date shall be payable to the Holders of such Subordinated Debt
Securities, or one or more Predecessor Securities, registered as such on the
relevant Regular Record Dates according to their terms and the provisions of
Section 307.
(b) If any Subordinated Debt Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Subordinated Debt Security.
SECTION 1107. SUBORDINATED DEBT SECURITY REDEEMED IN PART.
Any Subordinated Debt Security that is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Issuer, the Security
Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Issuer, the Security
Registrar and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Issuer shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Subordinated Debt Security
without service charge, a new Subordinated Debt Security or Subordinated Debt
Securities of the same series, each having endorsed thereon the Guarantee
executed by the Guarantor, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to and in exchange for the unredeemed
portion of the
58
principal of the Subordinated Debt Security so surrendered; except that if a
Global Security is so surrendered, the Issuer shall execute, and the Trustee
shall authenticate and deliver to the Depositary for such Global Security,
without service charge, a new Global Security, each having endorsed thereon the
Guarantee executed by the Guarantor, in a denomination equal to and in exchange
for the unredeemed portion of the principal of the Global Security so
surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund for the
retirement of Subordinated Debt Securities of a series except as otherwise
specified pursuant to Section 301 for Subordinated Debt Securities of such
series. The minimum amount of any sinking fund payment provided for by the terms
of Subordinated Debt Securities of any series is herein referred to as a
"mandatory sinking fund payment", and any payment in excess of such minimum
amount provided for by the terms of Subordinated Debt Securities of any series
is herein referred to as an "optional sinking fund payment". If provided for by
the terms of Subordinated Debt Securities of any series, the amount of any
sinking fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Subordinated
Debt Securities of any series as provided for by the terms of such Subordinated
Debt Securities.
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SUBORDINATED DEBT
SECURITIES.
The Issuer or the Guarantor may deliver Outstanding Subordinated Debt Securities
of a series (other than any previously called for redemption) and may apply as a
credit Subordinated Debt Securities of a series that have been redeemed either
at the election of the Issuer pursuant to the terms of such Subordinated Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Subordinated Debt Securities, in each
case, in satisfaction of all or any part of any sinking fund payment with
respect to such Subordinated Debt Securities of such series required to be made
pursuant to, and as provided for by, their terms; provided that such
Subordinated Debt Securities have not been previously so credited. Such
Subordinated Debt Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Subordinated Debt
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly.
SECTION 1203. REDEMPTION OF SUBORDINATED DEBT SECURITIES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date for any series of
Subordinated Debt Securities (unless a shorter period shall be satisfactory to
the Trustee), the Issuer will deliver to the Trustee an Officers' Certificate of
such entity specifying the amount of the next sinking fund payment for that
series pursuant to the terms of that series, the portion thereof, if any, that
is to be satisfied by
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payment of cash, the portion thereof, if any, that is to be satisfied by
delivering and crediting Subordinated Debt Securities of that series pursuant to
Section 1202 and the basis for any such credit and, prior to or concurrently
with the delivery of such Officers' Certificate, will also deliver to the
Trustee any Subordinated Debt Securities to be so credited and not theretofore
delivered to the Trustee. Not less than 45 days (unless a shorter period shall
be satisfactory to the Trustee) before each such sinking fund payment date the
Trustee shall select the Subordinated Debt Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Issuer in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Subordinated Debt Securities shall be made
upon the terms and in the manner stated in Sections 1105, 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE
SECTION 1301. DISCHARGE BY DEPOSIT OF MONEY OR SUBORDINATED DEBT SECURITIES.
(a) This Section 1301 shall be applicable to Subordinated Debt Securities of a
series if so provided pursuant to Section 301. All obligations, covenants and
agreements of the Issuer and the Guarantor under this Indenture with respect to
Subordinated Debt Securities and the related Guarantee of a particular series or
for the benefit of the Holders thereof (except as to any surviving rights of
registration of transfer or exchange of Subordinated Debt Securities or herein
expressly provided for) shall cease, terminate and be discharged if:
(1) the Issuer or the Guarantor has, at least 91 days prior thereto,
irrevocably deposited with the Trustee, as specific security pledged
for, and dedicated solely to, the due payment and ultimate
satisfaction of its obligations under the Indenture with respect to
the Subordinated Debt Securities of the series affected,
(i) funds in the currency, currencies or currency units in which the
Subordinated Debt Securities are payable, and/or
(ii) an amount of direct obligations of, or obligations the payment of
principal of and interest, if any, on are fully guaranteed by, the
government that issued the currency or currencies in which
Subordinated Debt Securities of such series are payable, and that are
not subject to prepayment, redemption or call,
as will together with the predetermined and certain income to accrue
thereon without consideration of any reinvestment thereof, be sufficient
(in the case of such obligations, through the payment of interest and
principal thereunder) to pay (A) the principal of (and premium, if any) and
interest on the Outstanding Subordinated Debt Securities of the particular
series on the Stated Maturity Date of such principal or interest or of any
installment thereof, and (B) any mandatory prepayments or analogous
payments applicable to such Subordinated Debt Securities on the day on
which such payments are due and payable in accordance with the terms of
this Indenture and such Subordinated Debt Securities;
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(2) the Issuer and the Guarantor shall have received an Opinion of Counsel
to the effect that Holders of such Subordinated Debt Securities will
not recognize income, gain or loss for United States federal income
tax purposes as a result of such deposit and defeasance in respect of
the Issuer's and Guarantor's obligations and will be subject to United
States federal income tax as if such deposit and defeasance had not
occurred;
(3) the Issuer and the Guarantor shall have received an Opinion of Counsel
to the effect that the Holders of the Subordinated Debt Securities
affected will not recognize income (whether taxable to them by
deduction or withholding by the Issuer or the Guarantor or otherwise),
gain or loss for Canadian federal income tax purposes as a result of
such deposit and defeasance in respect of the Issuer's and Guarantor's
obligations and will be subject to Canadian federal income tax as if
such deposit and defeasance had not occurred;
(4) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other material
agreement or instrument to which the Issuer or the Guarantor is a
party or by which it is bound;
(5) no Event of Default with respect to the Subordinated Debt Securities
of such series or event that, with notice or lapse of time, would
become an Event of Default shall have occurred and be continuing on
the date of such deposit;
(6) if such Subordinated Debt Securities are listed on the New York Stock
Exchange, the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit and defeasance will not cause
such Subordinated Debt Securities to be delisted; and
(7) the Issuer or the Guarantor, as the case may be, shall have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating compliance with all conditions precedent to the
defeasance contemplated by Section 1301 or Section 1302.
(b) Notwithstanding any defeasance under this Indenture with respect to such
series of Subordinated Debt Securities, the obligation of the Issuer to
indemnify and compensate the Trustee under this Indenture and the obligations of
the Trustee under Sections 1003 and 1303 shall survive with respect to such
series of Subordinated Debt Securities.
SECTION 1302. DEFEASANCE OF CERTAIN OBLIGATIONS.
The Issuer and the Guarantor, as the case may be, or both, may omit to comply
with the terms, provisions and conditions set forth in any covenant contained in
Article Ten and any such omission shall not be an Event of Default, with respect
to any series of Subordinated Debt Securities, provided the following conditions
have been satisfied:
(1) the conditions set forth in clauses (1) to (7), inclusive of Section
1301(a); and
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(2) such deposit shall not cause the Trustee with respect to such series
of Subordinated Debt Securities to have a conflicting interest, within
the meaning of this Indenture, and for purposes of the Trust Indenture
Act with respect to such Subordinated Debt Securities.
SECTION 1303. APPLICATION OF TRUST MONEY.
All money deposited with the Trustee pursuant to Sections 1301 and 1302 shall be
held in trust and applied by it, in accordance with the provisions of the
Subordinated Debt Securities and this Indenture and any applicable direction of
the Issuer or the Guarantor to the payment, either directly or through any
Paying Agent (including the Issuer acting as its own Paying Agent), as the
Trustee may determine, to the persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee.
SECTION 1304. REPAYMENT TO THE ISSUER.
(a) The Trustee and any Paying Agent shall promptly pay to the Issuer or the
Guarantor upon Issuer Request or Guarantor Request, as the case may be, any
money or governmental obligations not required for the payment of the principal
of (and premium, if any) and interest on Subordinated Debt Securities of any
series for which currency or government obligations have been deposited pursuant
to Section 1301 or Section 1302 held by them at any time.
(b) The Trustee and any Paying Agent shall pay to the Issuer or the Guarantor
upon Issuer Request or Guarantor Request, as the case may be, any money held by
them for the payment of principal (and premium, if any) and interest that
remains unclaimed for two years after the Maturity of the Subordinated Debt
Securities for which a deposit has been made pursuant to Section 1301 or Section
1302. After such payment to the Issuer or the Guarantor, as the case may be, the
Holders of Subordinated Debt Securities of such series shall thereafter, as
unsecured general creditors, look only to the Issuer or the Guarantor, as the
case may be, for payment thereof.
ARTICLE FOURTEEN
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 1401. EXTENSION OF INTEREST PAYMENT PERIOD.
To the extent so provided in a Board Resolution and set forth in an Officers'
Certificate or one or more indentures supplemental hereto pursuant to Section
301, the Issuer shall have the right, at any time and from time to time during
the term of any series of Subordinated Debt Securities, to defer payments of
interest by extending the interest payment period of all Subordinated Debt
Securities of such series (an "Extended Interest Payment Period"). Before the
termination of any Extended Interest Payment Period, the Issuer may further
extend such period to the extent provided in accordance with Section 301.
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ARTICLE FIFTEEN
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
SECTION 1501. AGREEMENT TO SUBORDINATE.
(a) The Issuer covenants and agrees, and each Holder of Subordinated Debt
Securities issued hereunder by such Holder's acceptance thereof likewise
covenants and agrees, that all Subordinated Debt Securities shall be issued
subject to the provisions of this Article Fifteen; and each Holder of a
Subordinated Debt Security, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such provisions.
(b) The payment by the Issuer of the principal of, premium, if any, and interest
on all Subordinated Debt Securities issued hereunder shall, to the extent and in
the manner hereinafter set forth, be subordinated and junior in right of payment
to the prior payment in full of all Senior Indebtedness of the Issuer, whether
outstanding at the date of this Indenture or thereafter incurred. Senior
Indebtedness of the Issuer shall continue to be Senior Indebtedness and entitled
to the benefits of these subordination provisions irrespective of any amendment,
modification or waiver of any term of the Senior Indebtedness or extension or
renewal of the Senior Indebtedness.
(c) No provision of this Article Fifteen shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 1502. DEFAULT ON SENIOR INDEBTEDNESS OF THE ISSUER.
(a) In the event and during the continuation of any default by the Issuer in the
payment of principal, premium, if any, interest or any other payment due on any
Senior Indebtedness of the Issuer and any applicable grace period relating 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 of the
Issuer has been accelerated because of a default, then, in either case, no
payment shall be made by the Issuer with respect to the principal (including
redemption payments) of, or premium, if any, or interest on, the Subordinated
Debt Securities or to acquire any of the Subordinated Debt Securities (except
sinking fund payments, if any, made in respect of Subordinated Debt Securities
acquired by the Issuer prior to such default and any payments or other
distributions from any defeasance trust created pursuant to Section 1301 or 1302
prior to such default).
(b) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee, by any Holder or by any Paying Agent (or, if the Issuer
is acting as its own Paying Agent, money for any such payment is segregated and
held in trust) when such payment is prohibited by the preceding paragraph of
this Section 1502, before all Senior Indebtedness of the Issuer is paid in full,
or provision is made for such payment in money in accordance with its terms,
such payment shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Indebtedness of the Issuer 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, ratably according to the aggregate
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amount remaining unpaid on account of the principal, premium, interest or any
other payment due on the Senior Indebtedness held or represented by each, for
application to the payment of all Senior Indebtedness of the Issuer remaining
unpaid to the extent necessary to pay such Senior Indebtedness in full in money
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of such Senior Indebtedness,
but only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in writing
within 90 days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Senior Indebtedness.
SECTION 1503. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(a) Upon any payment by the Issuer or distribution of assets of the Issuer of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution; winding-up; liquidation or reorganization of the Issuer,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all principal, premium, if any, and interest due or to become
due (including any post-petition interest) on all Senior Indebtedness of the
Issuer shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Issuer on account
of the principal (and premium, if any) or interest on the Subordinated Debt
Securities; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Issuer, or distribution of assets of the
Issuer of any kind or character, whether in cash, property or securities, to
which the Holders of the Subordinated Debt Securities or the Trustee would be
entitled to receive, except for the provisions of this Article Fifteen, shall be
paid by the Issuer or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Holders of the Subordinated Debt Securities or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior
Indebtedness of the Issuer (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated by
the Issuer) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior Indebtedness in full, in
money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of Subordinated Debt Securities
or to the Trustee.
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Issuer of any kind or character on any
Subordinated Debt Security, whether in cash, property or securities, prohibited
by the foregoing, shall be received by the Trustee, by any Holder or by any
Paying Agent (or, if the Issuer is acting as its own Paying Agent, money for any
such payment is segregated and held in trust) before all Senior Indebtedness of
the Issuer 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 of such Senior
Indebtedness may have been issued, as their respective interests may appear,
ratably according to the aggregate amount remaining unpaid on account of the
principal, premium, interest (including any post-petition interest) or any other
payment due on the Senior Indebtedness held or represented by each, as
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calculated by the Issuer, for application to the payment of all Senior
Indebtedness of the Issuer remaining unpaid to the extent necessary to pay such
Senior Indebtedness in full in money in accordance with its terms, after giving
effect to any concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness.
(c) For purposes of this Article Fifteen, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Issuer as
reorganized or readjusted, or securities of the Issuer 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 Fifteen with
respect to the Subordinated Debt Securities to the payment of all Senior
Indebtedness of the Issuer 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 amalgamation or
consolidation of the Issuer with, or the merger of the Issuer into, another
corporation or the liquidation or dissolution of the Issuer following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
Article Eight shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 1503 if such other corporation
shall, as a part of such amalgamation, consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Eight. Nothing in Section
1502 or in this Section 1503 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 606.
SECTION 1504. SUBROGATION.
(a) Subject to the payment in full of all Senior Indebtedness of the Issuer, the
rights of the Holders of the Subordinated Debt Securities shall be subrogated to
the rights of the holders of such indebtedness to receive payments or
distributions of cash, property or securities of the Issuer applicable to such
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Subordinated Debt Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Holders of the
Subordinated Debt Securities or the Trustee would be entitled except for the
provisions of this Article Fifteen, and no payment over pursuant to the
provisions of this Article Fifteen to or for the benefit of the holders of such
Senior Indebtedness by Holders of the Subordinated Debt Securities or the
Trustee, shall, as between the Issuer, its creditors other than Holders of
Senior Indebtedness of the Issuer, and the holders of the Subordinated Debt
Securities, be deemed to be a payment by the Issuer to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article
Fifteen are intended solely for the purposes of defining the relative rights of
the Holders of the Subordinated Debt Securities, on the one hand, and the
holders of such Senior Indebtedness on the other hand.
(b) Nothing contained in this Article Fifteen or elsewhere in this Indenture or
in the Subordinated Debt Securities is intended to or shall impair, as between
the Issuer, its creditors other than the holders of Senior Indebtedness of the
Issuer, and the Holders of the Subordinated Debt Securities, the obligation of
the Issuer, which is absolute and unconditional, to pay to the Holders of the
Subordinated Debt Securities the principal of (and premium, if any) and interest
on the Subordinated Debt Securities as and when the same shall become due and
payable in
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accordance with their terms (including as it may be deferred pursuant to Article
Fourteen), or is intended to or shall affect the relative rights of the Holders
of the Subordinated Debt Securities and creditors of the Issuer other than the
holders of Senior Indebtedness of the Issuer nor shall anything herein or
therein prevent the Trustee or the Holder of any Subordinated Debt Security from
exercising all remedies otherwise permitted by applicable law upon default under
the Indenture, subject to the rights, if any, under this Article Fifteen of the
holders of such Senior Indebtedness in respect of cash, property or securities
of the Issuer received upon the exercise of any such remedy.
(c) Upon any payment or distribution of assets of the Issuer referred to in this
Article Fifteen, the Trustee, subject to the provisions of Sections 601 and 602,
and the Holders of the Subordinated Debt Securities shall be entitled to
conclusively rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Subordinated Debt Securities, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness of the Issuer the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Fifteen.
SECTION 1505. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of Subordinated Debt Securities by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Fifteen and appoints the Trustee such Holder's attorney-in-fact for
any and all such purposes.
SECTION 1506. NOTICE BY THE ISSUER.
(a) The Issuer shall give prompt written notice to a Responsible Officer of the
Trustee of any fact known to the Issuer that would prohibit the making of any
payment of monies to or by the Trustee in respect of the Subordinated Debt
Securities pursuant to the provisions of this Article Fifteen. Notwithstanding
the provisions of this Article Fifteen or any other provision of this Indenture,
the Trustee shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment of monies to or by the Trustee in
respect of the Subordinated Debt Securities pursuant to the provisions of this
Article Fifteen, unless and until a Responsible Officer of the Trustee shall
have received written notice thereof from the Issuer or a holder or holders of
Senior Indebtedness or their representative or representatives or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Sections 601 and 602, 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 1506 at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on any Subordinated
Debt Securities), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which they were
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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.
(b) The Trustee, subject to the provisions of Sections 601 and 602, 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 Issuer
(or a trustee on behalf of such holder), to establish that such notice has been
given by a holder of such Senior Indebtedness or a trustee on behalf of any such
holder or holders. In the event that the 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 Fifteen, 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 Fifteen, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 1507. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS OF THE
ISSUER.
(a) The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article Fifteen in respect of any Senior Indebtedness of the
Issuer at any time held by it, to the same extent as any other holder of Senior
Indebtedness of the Issuer, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder.
(b) With respect to the holders of Senior Indebtedness of the Issuer, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Fifteen, and no
implied covenants or obligations with respect to the holders of such 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 such Senior
Indebtedness and, subject to the provisions of Sections 601 and 602, the Trustee
shall not be liable to any holder of such Senior Indebtedness if it shall pay
over or deliver to Holders of Subordinated Debt Securities, the Issuer or any
other Person money or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article Fifteen or otherwise.
SECTION 1508. SUBORDINATION MAY NOT BE IMPAIRED.
(a) No right of any present or future holder of any Senior Indebtedness of the
Issuer 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 Issuer
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Issuer 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.
(b) Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of the Issuer may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Subordinated Debt Securities, without incurring responsibility to the Holders of
the Subordinated Debt Securities and without impairing or
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releasing the subordination provided in this Article Fifteen or the obligations
hereunder of the Holders of the Subordinated Debt Securities to the holders of
such Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any manner
for the collection of such Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Issuer and any other Person.
ARTICLE SIXTEEN
SUBORDINATION OF THE GUARANTEE
SECTION 1601. AGREEMENT TO SUBORDINATE.
(a) The Guarantor covenants and agrees, and each Holder of Subordinated Debt
Securities issued hereunder by such Holder's acceptance thereof likewise
covenants and agrees, that the obligations of the Guarantor shall be subject to
the provisions of this Article Sixteen; and each Holder, whether upon original
issue or upon transfer or assignment thereof, accepts and agrees to be bound by
such provisions.
(b) The payment by the Guarantor of the principal of (premium, if any) and
interest on all Subordinated Debt Securities issued hereunder shall, to the
extent and in the manner hereinafter set forth, be subordinated and junior in
right of payment to the prior payment in full of all Senior Indebtedness of the
Guarantor, whether outstanding at the date of this Indenture or thereafter
incurred. Senior Indebtedness of the Guarantor shall continue to be Senior
Indebtedness and entitled to the benefits of these subordination provisions
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness or extension or renewal of such Senior Indebtedness.
(c) Each Holder agrees that the subordination of the Guarantee is for the
benefit of and enforceable by the holders of such Senior Indebtedness.
(d) No provision of this Article Sixteen shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 1602. DEFAULT ON SENIOR INDEBTEDNESS OF THE GUARANTOR.
(a) In the event and during the continuation of any default by the Guarantor in
the payment of principal, premium, if any, interest or any other payment due on
any Senior Indebtedness of the Guarantor and any applicable grace period
relating 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
of the Guarantor has been accelerated because of a default, then, in either
case, no payment shall be made by the Guarantor with respect to the principal
(including redemption payments) of, or premium, if any, or interest on, the
Subordinated Debt Securities or to acquire
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any of the Subordinated Debt Securities (except payments or other distributions
from any defeasance trust created pursuant to Section 1201 by the Guarantor
prior to such default).
(b) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee, by any Holder or by any Paying Agent when such payment
is prohibited by the preceding paragraph of this Section 1602, before all Senior
Indebtedness of the Guarantor is paid in full, or provision is made for such
payment in money in accordance with its terms, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness of the Guarantor 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,
ratably according to the aggregate amount remaining unpaid on account of the
principal, premium, interest or any other payment due on the Senior Indebtedness
of the Guarantor held or represented by each, for application to the payment of
all Senior Indebtedness of the Guarantor remaining unpaid to the extent
necessary to pay such Senior Indebtedness in full in money in accordance with
its terms, after giving effect to any concurrent payment or distribution to or
for the benefit of the holders of such Senior Indebtedness, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 1603. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(a) Upon any payment by the Guarantor or distribution of assets of the Guarantor
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution, winding-up, liquidation or reorganization of the
Guarantor, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all principal, premium, if any, and interest
due or to become due (including any post-petition interest) on all Senior
Indebtedness of the Guarantor shall first be paid in full, or payment thereof
provided for in money in accordance with its terms, before any payment is made
by the Guarantor on account of the principal (and premium, if any) or interest
on the Subordinated Debt Securities; and upon any such dissolution or winding-up
or liquidation or reorganization, any payment by the Guarantor, or distribution
of assets of the Guarantor of any kind or character, whether in cash, property
or securities, to which the Holders of the Subordinated Debt Securities or the
Trustee would be entitled to receive, except for the provisions of this Article
Sixteen, shall be paid by the Guarantor or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders of the Subordinated Debt Securities or by the
Trustee under this Indenture if received by them or it, directly to the holders
of Senior Indebtedness of the Guarantor (pro rata to such holders on the basis
of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Guarantor) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of Subordinated Debt Securities
or to the Trustee.
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(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Guarantor of any kind or character on any
Subordinated Debt Security, whether in cash, property or securities, prohibited
by the foregoing, shall be received by the Trustee, by any Holder or by any
Paying Agent before all Senior Indebtedness of the Guarantor 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 of such Senior Indebtedness may have been
issued, as their respective interests may appear, ratably according to the
aggregate amount remaining unpaid on account of the principal, premium, interest
(including any post-petition interest) or any other payment due on the Senior
Indebtedness of the Guarantor held or represented by each, as calculated by the
Guarantor, for application to the payment of all Senior Indebtedness of the
Guarantor remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the benefit of the holders
of such Senior Indebtedness.
(c) For purposes of this Article Sixteen, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Guarantor as
reorganized or readjusted, or securities of the Guarantor 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
Sixteen with respect to the Subordinated Debt Securities to the payment of all
Senior Indebtedness of the Guarantor 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 amalgamation or
consolidation of the Guarantor with, or the merger of the Guarantor into,
another corporation or the liquidation or dissolution of the Guarantor following
the conveyance or transfer of its property as an entirety, or substantially as
an entirety, to another corporation upon the terms and conditions provided for
in Article Eight shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 1603 if such other corporation
shall, as a part of such amalgamation consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Eight.
SECTION 1604. SUBROGATION.
(a) Subject to the payment in full of all Senior Indebtedness of the Guarantor,
the rights of the Holders of the Guarantee endorsed on the Subordinated Debt
Securities shall be subrogated to the rights of the holders of such indebtedness
to receive payments or distributions of cash, property or securities of the
Guarantor applicable to such Senior Indebtedness until the principal of (and
premium, if any) and interest on the Subordinated Debt Securities shall be paid
in full; and, for the purposes of such subrogation, no payments or distributions
to the holders of such Senior Indebtedness of any cash, property or securities
to which the Holders of the Guarantee endorsed on the Subordinated Debt
Securities or the Trustee would be entitled except for the provisions of this
Article Sixteen, and no payment over pursuant to the provisions of this Article
Sixteen to or for the benefit of the holders of such Senior Indebtedness by
Holders of the Guarantee endorsed on the Subordinated Debt Securities or the
Trustee, shall, as between the Guarantor, its creditors other than Holders of
Senior Indebtedness of the Guarantor, and the
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Holders of the Guarantee endorsed on the Subordinated Debt Securities, be deemed
to be a payment by the Guarantor to or on account of such Senior Indebtedness.
It is understood that the provisions of this Article Sixteen are intended solely
for the purposes of defining the relative rights of the Holders of the Guarantee
endorsed on the Subordinated Debt Securities, on the one hand, and the holders
of such Senior Indebtedness on the other hand.
(b) Nothing contained in this Article Sixteen or elsewhere in this Indenture or
in the Subordinated Debt Securities or the Guarantee is intended to or shall
impair, as between the Guarantor, its creditors other than the holders of Senior
Indebtedness of the Guarantor, and the Holders of the Guarantee endorsed on the
Subordinated Debt Securities, the obligation of the Guarantor, which is absolute
and unconditional, to pay to the Holders of the Subordinated Debt Securities
pursuant to the Guarantee the principal of (and premium, if any) and interest on
the Subordinated Debt Securities as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders of the Guarantee endorsed on the Subordinated
Debt Securities and creditors of the Guarantor other than the holders of Senior
Indebtedness of the Guarantor, nor shall anything herein or therein prevent the
Trustee or the Holder of any Guarantee endorsed on the Subordinated Debt
Securities from exercising all remedies otherwise permitted by applicable law
upon default under the Indenture, subject to the rights, if any, under this
Article Sixteen of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Guarantor received upon the exercise of any such
remedy.
(c) Upon any payment or distribution of assets of the Guarantor referred to in
this Article Sixteen, the Trustee, subject to the provisions of Sections 601 and
602, and the Holders of the Guarantee endorsed on the Subordinated Debt
Securities shall be entitled to conclusively rely upon any order or decree made
by any court of competent jurisdiction in which such dissolution, winding-up,
liquidation or reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Guarantee endorsed on the Subordinated Debt Securities, for the purposes
of ascertaining the Persons entitled to participate in such distribution, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Sixteen.
SECTION 1605. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of the Guarantee endorsed on the Subordinated Debt Securities by
such Holder's acceptance thereof authorizes and directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article Sixteen and appoints the
Trustee such Holder's attorney-in-fact for any and all such purposes.
SECTION 1606. NOTICE BY THE GUARANTOR.
(a) The Guarantor shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Guarantor that would prohibit the making of
any payment of monies to or by the Trustee under the Guarantee in respect of the
Subordinated Debt Securities pursuant to the provisions of this Article Sixteen.
Notwithstanding the provisions of this Article Sixteen or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the
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existence of any facts that would prohibit the making of any payment of monies
to or by the Trustee under the Guarantee in respect of the Subordinated Debt
Securities pursuant to the provisions of this Article Sixteen, unless and until
a Responsible Officer of the Trustee shall have received written notice thereof
from the Guarantor or a holder or holders of Senior Indebtedness or their
representative or representatives or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 601 and 602, 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 1606 at least two Business Days prior to the
date upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Subordinated Debt Securities), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
(b) The Trustee, subject to the provisions of Sections 601 and 602, 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
Guarantor (or a trustee on behalf of such holder), to establish that such notice
has been given by a holder of such Senior Indebtedness or a trustee on behalf of
any such holder or holders. In the event that the 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 Sixteen, 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 Sixteen,
and, if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 1607. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS OF THE
GUARANTOR.
(a) The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article Sixteen in respect of any Senior Indebtedness of the
Guarantor 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.
(b) With respect to the holders of Senior Indebtedness of the Guarantor, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Sixteen, and no
implied covenants or obligations with respect to the holders of such 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 such Senior
Indebtedness and, subject to the provisions of Sections 601 and 602, the Trustee
shall not be liable to any holder of such Senior Indebtedness if it shall pay
over or deliver to Holders of the Guarantee endorsed on the Subordinated Debt
Securities, the Guarantor or any other Person money or assets to which any
holder of such Senior Indebtedness shall be entitled by virtue of this Article
Sixteen or otherwise.
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SECTION 1608. SUBORDINATION MAY NOT BE IMPAIRED.
(a) No right of any present or future holder of any Senior Indebtedness of the
Guarantor 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
Guarantor, or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Guarantor 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.
(b) Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of the Guarantor may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders of the
Guarantee endorsed on the Subordinated Debt Securities, without incurring
responsibility to the Holders of the Guarantee endorsed on the Subordinated Debt
Securities and without impairing or releasing the subordination provided in this
Article Sixteen or the obligations hereunder of the Holders of the Guarantee
endorsed on the Subordinated Debt Securities to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Guarantor and any other Person.
ARTICLE SEVENTEEN
MEETINGS OF HOLDERS OF SUBORDINATED DEBT SECURITIES
SECTION 1701. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Subordinated Debt Securities of such series may be
called at any time and from time to time pursuant to this Article to make, give
or take any Act provided by this Indenture to be made, given or taken by Holders
of Subordinated Debt Securities of such series.
SECTION 1702. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of Subordinated Debt
Securities of any series for any purpose specified in Section 1701, to be held
at such time and at such place in the Borough of Manhattan, the City of New
York. Notice of every meeting of Holders of Subordinated Debt Securities of any
series, setting forth the time and place of such meeting and in general terms
the action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 or more than 50 days prior to the date
fixed for the meeting.
(b) If at any time the Issuer or the Guarantor, pursuant to a Board Resolution,
or the Holders of at least 10% in principal amount of the Outstanding
Subordinated Debt Securities of any series shall have requested the Trustee to
call a meeting of the Holders of Subordinated Debt Securities of such series for
any purpose specified in Section 1701, by written request setting
73
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of such
meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Issuer or
the Guarantor or the Holders of Subordinated Debt Securities of such series in
the amount above specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, the City of New York for such meeting and may
call such meeting for such purposes by giving notice thereof as provided in
paragraph (a) of this Section.
SECTION 1703. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Subordinated Debt Securities
of any series, a Person shall be: (1) a Holder of one or more Outstanding
Subordinated Debt Securities of such series; or (2) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more
Outstanding Subordinated Debt Securities of such series by such Holder or
Holders. The only Persons who shall be entitled to be present or to speak at any
meeting of Holders of Subordinated Debt Securities of any series shall be the
Persons entitled to vote at such meeting and their counsel, any representatives
of the Trustee and its counsel and any representatives of the Issuer and the
Guarantor and their counsel.
SECTION 1704. QUORUM; ACTION.
(a) The Persons entitled to vote a majority in principal amount of Outstanding
Subordinated Debt Securities of a series shall constitute a quorum for a meeting
of Holders of Subordinated Debt Securities of such series. In the absence of a
quorum within 30 minutes of the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Subordinated Debt Securities of
such series, be dissolved. In the absence of a quorum in any other case the
meeting may be adjourned for a period of not less than 10 days as determined by
the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
paragraph 1702(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
(b) Except as limited by the proviso to Section 902, any resolution presented to
a meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of Outstanding Subordinated Debt Securities of that
series; provided, however, that, except as limited by the proviso to Section
902, any resolution with respect to any Act that this Indenture expressly
provides may be made, given or taken by the Holders of a specified percentage,
which is less than a majority, in principal amount of Outstanding Subordinated
Debt Securities of a series may be adopted at a meeting or an adjourned meeting
duly reconvened and at which a quorum is present as aforesaid by the affirmative
vote of the Holders of such specified percentage in principal amount of
Outstanding Subordinated Debt Securities of that series.
(c) Any resolution passed or decision taken at any meeting of Holders of
Subordinated Debt Securities of any series duly held in accordance with this
Section will be binding on all Holders
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of Subordinated Debt Securities of such series, whether or not present or
represented at the meeting.
SECTION 1705. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(a) Notwithstanding any other provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of Holders
of Subordinated Debt Securities of such series in regard to proof of the holding
of Subordinated Debt Securities of such series and of the appointment of proxies
and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Subordinated Debt Securities shall be proved in the
manner specified in Section 104 and the appointment of any proxy shall be proved
in the manner specified in Section 104. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary chairman
of the meeting, unless the meeting shall have been called by the Issuer, the
Guarantor or by Holders of Subordinated Debt Securities as provided in Section
1702(b), in which case the Issuer, Guarantor or the Holders of Subordinated Debt
Securities of the series calling the meeting, as the case may be, shall in like
manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons entitled to
vote a majority in principal amount of Outstanding Subordinated Debt Securities
of such series represented at the meeting.
(c) At any meeting each Holder of a Subordinated Debt Security of such series or
proxy shall be entitled to one vote for each $1,000 principal amount (or the
equivalent in any composite currency or a Foreign Currency at the date of issue)
of Subordinated Debt Securities of such series held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Subordinated Debt Security challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Subordinated Debt
Security of such series or proxy.
(d) Any meeting of Holders of Subordinated Debt Securities of any series duly
called pursuant to Section 1702 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in principal amount of
Outstanding Subordinated Debt Securities of such series represented at the
meeting; and the meeting may be held as so adjourned without further notice.
SECTION 1706. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
(a) The vote upon any resolution submitted to any meeting of Holders of
Subordinated Debt Securities of any series shall be by written ballots on which
shall be inscribed the signatures of the Holders of Subordinated Debt Securities
of such series or of their representatives by proxy and the principal amounts
and serial numbers of Outstanding Subordinated Debt Securities of
75
such series held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in triplicate of all
votes cast at the meeting. A record, at least in triplicate, of the proceedings
of each meeting of Holders of Subordinated Debt Securities of any series shall
be prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 1702 and, if applicable, Section 1704.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Issuer and the Guarantor and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
* * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed, all
as of the day and year first above written.
HSBC BANK USA, as Trustee
Per:
---------------------------------------
Title:
NORTEL NETWORKS LIMITED,
as Issuer
Per:
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Title:
Per:
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Title:
NORTEL NETWORKS CORPORATION,
as Guarantor
Per:
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Title:
Per:
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Title:
77
Exhibit A
Form of election to receive payments in
[Dollars or other applicable currency]
or to rescind such election
The undersigned, registered owner of certificate number R- , representing
[name of series of Subordinated Debt Securities] (the "Subordinated Debt
Securities") in an aggregate principal amount of , hereby
[ ] elects to receive all payments in respect of the Subordinated Debt
Securities in [Dollars or other applicable currency], it being
understood that such election shall take effect as provided in the
Subordinated Debt Securities and, subject to the terms and conditions
set forth in the indenture under which the Subordinated Debt Securities
were issued, shall remain in effect until it is rescinded by the
undersigned or until such certificate is transferred.
[ ] rescinds the election previously submitted by the undersigned to
receive all payments in respect of the Subordinated Debt Securities in
[Dollars or other applicable currency], it being understood that such
rescission shall take effect as provided in Subordinated Debt
Securities.
-----------------------------------------
(Name of Owner)
----------------------------------------
(Signature of Owner)
A-1
