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SAFECO CORPORATION
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INDENTURE
DATED AS OF JULY 15, 1997
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THE CHASE MANHATTAN BANK
AS TRUSTEE
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6 7/8% NOTES DUE JULY 15, 2007
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TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as of
July 15 , 1997 between SAFECO Corporation and The Chase Manhattan Bank as
Trustee:
ACT SECTION INDENTURE SECTION
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
310(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
310(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10, 6.11
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
311(a) and (b) . . . . . . . . . . . . . . . . . . . . . . . . . N/A
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.01, 4.02(a)
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
312(b) and (c) . . . . . . . . . . . . . . . . . . . . . . . . . 4.04
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04
313(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04
313(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
314(c)(1) and (2). . . . . . . . . . . . . . . . . . . . . . . . 6.07
314(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
315(a)(c) and (d). . . . . . . . . . . . . . . . . . . . . . . . 6.01
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.09
316(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
316(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
316(a) last sentence . . . . . . . . . . . . . . . . . . . . . . 2.09
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.02
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.05
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.08
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THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
CONTENTS
Page
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2. Execution and Authentication. . . . . . . . . . . . . . . . . . 6
2.3. Form and Payment. . . . . . . . . . . . . . . . . . . . . . . . 6
2.4. Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5. Global Security . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6. Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.7. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . 8
2.8. Replacement Securities. . . . . . . . . . . . . . . . . . . . . 14
2.9. Temporary Securities. . . . . . . . . . . . . . . . . . . . . . 14
2.10. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.11. Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . 15
2.12. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE III PARTICULAR COVENANTS OF THE COMPANY . . . . . . . . . . . . . . 16
3.1. Payment of Principal and Interest . . . . . . . . . . . . . . . 16
3.2. Offices for Notices and Payments, etc.. . . . . . . . . . . . . 16
3.3. Appointments to Fill Vacancies in Trustee's Office. . . . . . . 17
3.4. Provision as to Paying Agent. . . . . . . . . . . . . . . . . . 17
3.5. Certificate to Trustee. . . . . . . . . . . . . . . . . . . . . 17
3.6. Compliance with Consolidation Provisions. . . . . . . . . . . . 18
3.7. Limitation Upon Sales of Capital Stock of Restricted
Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.8. Limitation Upon Mortgages and Liens . . . . . . . . . . . . . . 19
3.9. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . 20
ARTICLE IV SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.1. Securityholders' Lists. . . . . . . . . . . . . . . . . . . . . 20
4.2. Preservation and Disclosure of Lists. . . . . . . . . . . . . . 20
4.3. Reports by Company. . . . . . . . . . . . . . . . . . . . . . . 21
4.4. Reports by the Trustee. . . . . . . . . . . . . . . . . . . . . 22
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . 22
5.2. Acceleration of Maturity; Rescission and Annulment. . . . . . . 24
5.3. Payment of Securities on Default; Suit Therefor . . . . . . . . 25
5.4. Application of Moneys Collected by Trustee. . . . . . . . . . . 27
5.5. Proceedings by Securityholders. . . . . . . . . . . . . . . . . 27
5.6. Unconditional Right of Holders to Receive Principal and
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.7. Proceedings by Trustee. . . . . . . . . . . . . . . . . . . . . 28
i
Page
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5.8. Remedies Cumulative and Continuing. . . . . . . . . . . . . . . 28
5.9. Direction of Proceedings and Waiver of Defaults by Majority
of Securityholders. . . . . . . . . . . . . . . . . . . . . . . 28
5.10. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . 29
5.11. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . 29
5.12. Undertaking to Pay Costs. . . . . . . . . . . . . . . . . . . . .29
ARTICLE VI CONCERNING THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . 30
6.1. Duties and Responsibilities of Trustee. . . . . . . . . . . . . 30
6.2. Reliance on Documents, Opinions, etc. . . . . . . . . . . . . . 31
6.3. No Responsibility for Recitals, etc.. . . . . . . . . . . . . . 32
6.4. Trustee, Authenticating Agent, Paying Agents, Transfer Agents
or Registrar May Own Securities . . . . . . . . . . . . . . . . 32
6.5. Moneys to be Held in Trust. . . . . . . . . . . . . . . . . . . 32
6.6. Compensation and Expenses of Trustee. . . . . . . . . . . . . . 32
6.7. Officers' Certificate as Evidence . . . . . . . . . . . . . . . .33
6.8. Conflicting Interest of Trustee . . . . . . . . . . . . . . . . .33
6.9. Eligibility of Trustee. . . . . . . . . . . . . . . . . . . . . 33
6.10. Resignation or Removal of Trustee . . . . . . . . . . . . . . . 34
6.11. Acceptance by Successor Trustee . . . . . . . . . . . . . . . . 35
6.12. Succession by Merger, etc.. . . . . . . . . . . . . . . . . . . 35
6.13. Limitation on Rights of Trustee as a Creditor . . . . . . . . . 36
6.14. Authenticating Agents . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VII CONCERNING THE SECURITYHOLDERS. . . . . . . . . . . . . . . . . 37
7.1. Action by Securityholders . . . . . . . . . . . . . . . . . . . 37
7.2. Proof of Execution by Securityholders . . . . . . . . . . . . . 37
7.3. Who Are Deemed Absolute Owners. . . . . . . . . . . . . . . . . 38
7.4. Securities Owned by Company Deemed Not Outstanding. . . . . . . 38
7.5. Revocation of Consents; Future Holders Bound. . . . . . . . . . 38
ARTICLE VIII SECURITYHOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . . 39
8.1. Purposes of Meetings. . . . . . . . . . . . . . . . . . . . . . 39
8.2. Call of Meetings by Trustee . . . . . . . . . . . . . . . . . . 39
8.3. Call of Meetings by Company or Securityholders. . . . . . . . . 39
8.4. Qualifications for Voting . . . . . . . . . . . . . . . . . . . 39
8.5. Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.6. Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IX AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.1. Without Consent of Securityholders. . . . . . . . . . . . . . . 41
9.2. Supplemental Indentures with Consent of Holders . . . . . . . . 42
9.3. Compliance with Trust Indenture Act; Effect of Supplemental
Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.4. Notation on Securities. . . . . . . . . . . . . . . . . . . . . 43
9.5. Evidence of Compliance of Supplemental Indenture to be
Furnished Trustee . . . . . . . . . . . . . . . . . . . . . . . 43
ii
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ARTICLE X CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE . . . . . . . 43
10.1. Company May Consolidate, Etc., Only on Certain Terms. . . . . . 43
10.2. Successor Corporation Substituted . . . . . . . . . . . . . . . 44
10.3. Limitation on Lease of Properties as an Entirety. . . . . . . . 44
ARTICLE XI SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . . . . 45
11.1. Discharge of Indenture. . . . . . . . . . . . . . . . . . . . . 45
11.2. Deposited Moneys and U.S. Government Obligations to be Held
in Trust by Trustee . . . . . . . . . . . . . . . . . . . . . . 46
11.3. Paying Agent to Repay Moneys Held . . . . . . . . . . . . . . . 46
11.4. Return of Unclaimed Moneys. . . . . . . . . . . . . . . . . . . 46
11.5. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE XII IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND
DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.1. Indenture and Securities Solely Corporate Obligations . . . . . 48
ARTICLE XIII MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . 48
13.1. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
13.2. Official Acts by Successor Corporation. . . . . . . . . . . . . 48
13.3. Surrender of Company Powers . . . . . . . . . . . . . . . . . . 48
13.4. Addresses for Notices, etc. . . . . . . . . . . . . . . . . . . 48
13.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 49
13.6. Evidence of Compliance with Conditions Precedent. . . . . . . . 49
13.7. Business Days . . . . . . . . . . . . . . . . . . . . . . . . . 49
13.8. Trust Indenture Act to Control. . . . . . . . . . . . . . . . . 49
13.9. Table of Contents, Headings, etc. . . . . . . . . . . . . . . . 50
13.10. Execution in Counterparts . . . . . . . . . . . . . . . . . . . 50
13.11. Separability. . . . . . . . . . . . . . . . . . . . . . . . . . 50
13.12. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
EXHIBIT A (FORM OF FACE OF ORIGINAL SECURITY) . . . . . . . . . . . . . . A-1
EXHIBIT B (FORM OF FACE OF EXCHANGE SECURITY) . . . . . . . . . . . . . . B-1
Testimonium
Signatures
Acknowledgements
iii
THIS INDENTURE, dated as of July 15, 1997, between SAFECO Corporation,
a Washington corporation (hereinafter sometimes called the "Company"), and
The Chase Manhattan Bank, a New York banking corporation, as trustee
(hereinafter sometimes called the "Trustee"),
W I T N E S S E T H :
In consideration of the premises, and the purchase of the Securities
by the holders thereof, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of the respective holders from time to
time of the Securities, as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS
The terms defined in this Section 1.1 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes
of this Indenture shall have the respective meanings specified in this
Section 1.1. All other terms used in this Indenture which are defined in the
Trust Indenture Act or which are by reference therein defined in the
Securities Act, shall (except as herein otherwise expressly provided or
unless the context otherwise requires) have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as in force at
the date of this Indenture as originally executed. All accounting terms used
herein and not expressly defined shall have the meanings assigned to such
terms in accordance with generally accepted accounting principles and the
term "generally accepted accounting principles" means such accounting
principles as are generally accepted at the time of any computation. The
words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section
or other subdivision. Headings are used for convenience of reference only
and do not affect interpretation. The singular includes the plural and vice
versa.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding the power to vote 10%
or more of the outstanding voting securities or other ownership interests of
the specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control
with the specified Person, (d) a partnership in which the specified Person is
a general partner, (e) any officer or director of the specified Person, and
(f) if the specified Person is an individual, any entity of which the
specified Person is an officer, director or general partner.
"Authenticating Agent" shall mean any agent or agents of the Trustee
which at the time shall be appointed and acting pursuant to Section 6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of that board.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" shall mean, with respect to any series of Securities,
any day other than a Saturday or a Sunday or a day on which banking
institutions in The City of New York or in The City of Seattle, Washington
are authorized or required by law or executive order to close.
"Commission" shall mean the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any
time after the execution of this Indenture such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
"Company" shall mean SAFECO Corporation, a Washington corporation,
and, subject to the provisions of Article X, shall include its successors and
assigns.
"Company Request" or "Company Order" shall mean a written request or
order signed in the name of the Company by the Chairman, the Chief Executive
Officer, the President, the Chief Financial Officer, a Vice President, the
Treasurer or an Assistant Treasurer, the Controller or an Assistant
Controller, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Definitive Securities" shall mean those securities issued in fully
registered certificated form not otherwise in global form.
"Depositary" shall mean, with respect to Securities the Company shall
determine will be issued as a Global Security, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a
clearing agency under the Exchange Act or other applicable statute or
regulation, which, in each case, shall be designated by the Company pursuant
to Section 2.5(c).
"Event of Default" shall mean any event specified in Section 5.1,
continued for the period of time, if any, and after the giving of the notice,
if any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement by the Company to exchange Exchange Securities
for Original Securities.
"Exchange Securities" shall mean the 6 7/8% Notes due July 15, 2007,
as authenticated and issued under this Indenture in exchange for an Original
Security or Original Securities pursuant to the offer to be made pursuant to
the Registration Rights Agreement to exchange Exchange Securities for
Original Securities.
2
"Global Security" shall mean, with respect to the Securities, a
Security executed by the Company and delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary
or its nominee.
"Indenture" shall mean this instrument as originally executed or, if
amended as herein provided, as so amended.
"Interest Payment Date" shall have the meaning set forth in Section 2.6.
"Issue Date" shall mean July 15, 1997.
The term "lien" shall have, for purposes of Section 3.8, the meaning
set forth therein.
"Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement.
"Maturity Date" shall mean July 15, 2007.
"Officers" shall mean any of the Chairman, the Chief Executive
Officer, the President, the Chief Financial Officer, a Vice President, the
Treasurer, any Assistant Treasurer, the Controller or the Secretary of the
Company.
"Officers' Certificate" shall mean a certificate signed by two
Officers and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be an employee of the Company, and who shall be acceptable to the Trustee.
"Original Securities" shall mean the 6 7/8% Notes due July 15, 2007,
as authenticated and issued under this Indenture on the Issue Date.
The term "outstanding" when used with reference to Securities, shall,
subject to the provisions of Section 7.4, mean, as of any particular time,
all Securities authenticated and delivered by the Trustee or the
Authenticating Agent under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or the
Authenticating Agent or delivered to the Trustee for cancellation;
(b) Securities for whose payment moneys in the necessary amount shall
have been deposited in trust with the Trustee or with any paying agent (other
than the Company) or shall have been set aside and segregated in trust by the
Company (if the Company shall act as its own paying agent); and
(c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to the terms of
Section 2.8 unless proof satisfactory to the Company and the Trustee is
presented that any such Securities are held by bona fide holders in due course.
3
"Payment Default" shall have the meaning set forth in Section 5.1.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 2.8 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Purchase Agreement" shall mean the Purchase Agreement dated July 10,
1997 between the Company and Xxxxx Xxxxxx Inc.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company and the
Initial Purchaser named therein as such agreement may be amended, modified or
supplemented from time to time.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any
vice-president, any assistant vice-president, any assistant secretary, the
treasurer, any assistant treasurer or other officer of the Corporate Trust
Office of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Restricted Security" shall mean any Security that is subject to the
transfer restrictions set forth in Section 2.7 (a).
"Restricted Subsidiary" shall have the meaning set forth in Section 3.7.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or under any similar rule or regulation
hereafter adopted by the Commission.
"Securities" means, collectively, the Original Securities and the
Exchange Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholder", "holder of Securities", or other similar terms,
shall mean any person in whose name at the time a particular Security is
registered on the register kept by the Company or the Trustee for that
purpose in accordance with the terms hereof.
"Security Register" shall mean the list of holders provided to the
Trustee pursuant to Section 4.1 or any security register maintained by a
security registrar for the Securities appointed by the Company.
4
"Stated Maturity" shall mean, when used with respect to any Security
or any installment of interest thereon, the date specified in such Security
as the fixed date on which the principal of such Security or such installment
of interest is due and payable.
"Subsidiary" shall mean with respect to any Person, (i) any
corporation at least a majority of whose outstanding voting stock is owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries,
or by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiaries, or by such Person and one
or more of its Subsidiaries and (iii) any limited partnership of which such
Person or any of its Subsidiaries is a general partner. For the purposes of
this definition, "voting stock" means shares, interests, participation or
other equivalents in the equity interest (however designated) in such Person
having ordinary voting power for the election of a majority of the directors
(or the equivalent) of such Person, other than shares, interests,
participation or other equivalents having such power only by reason of the
occurrence of a contingency.
"Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder. The term
"Trustee" as used with respect to a particular series of the Securities shall
mean the trustee with respect to that series.
"Trust Indenture Act of 1939" shall mean the Trust Indenture Act of
1939 as in force at the date of execution of this Indenture, except as
provided in Section 9.3.
"U.S. Government Obligations" shall mean securities that are (i)
direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America, which,
in either case under clauses (i) or (ii) are not callable or redeemable at
the option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by
the custodian in respect of the U.S. Government Obligation or the specific
payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
ARTICLE II
SECURITIES
2.1. FORMS GENERALLY
The Original Securities and related Trustee's certificate of
authentication shall be substantially in the form of Exhibit A and the
Exchange Securities and related Trustee's certificate of authentication shall
be substantially in the form of Exhibit B, the terms of each of which are
incorporated in and
5
made a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject or usage. Each Security shall be dated the date of its
authentication. The Securities shall be issued in denominations of $1,000
and integral multiples thereof. Notwithstanding the foregoing Definitive
Securities issued to any "institutional accredited investor" within the
meaning of Rule 502 (A) (1), (2), (3) or (7) under the Securities Act shall
be issued only in minimum denominations of $100,000 and any amount in excess
thereof that is an integral multiple of $1,000.
2.2. EXECUTION AND AUTHENTICATION
Two Officers shall sign the Securities for the Company by manual or
facsimile signature in the manner set forth in Exhibits A and B. If an
Officer whose signature is on a Security no longer holds that office at the
time the Security is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized officer of the Trustee. The signature of the
Trustee shall be conclusive evidence that the Security has been authenticated
under this Indenture. The form of Trustee's certificate of authentication to
be borne by the Securities shall be substantially as set forth in Exhibits A
and B hereto.
The Trustee shall, upon a Company Order, authenticate for original
issue up to, and the aggregate principal amount of Securities outstanding at
any time may not exceed the sum of, $200,000,000 principal amount of the
Securities, except as provided in Sections 2.7, 2.8 and 2.9. The series of
Securities to be initially issued hereunder shall be the Original Securities.
2.3. FORM AND PAYMENT
Except as provided in Section 2.5, the Securities shall be issued in
fully registered certificated form without interest coupons. Principal of
and interest on the Securities issued in certificated form will be payable,
the transfer of such Securities will be registrable and such Securities will
be exchangeable for Securities bearing identical terms and provisions at the
office or agency of the Company maintained for such purpose under Section
3.2; PROVIDED, HOWEVER, that payment of interest with respect to the
Securities may be made at the option of the Company (i) by check mailed to
the holder at such address as shall appear in the Security Register or (ii)
by transfer to an account maintained by the Person entitled thereto, provided
that proper transfer instructions have been received in writing by the
relevant record date.
6
2.4. LEGENDS
(a) Except as permitted by subsection (b) of this Section 2.4 or as
otherwise determined by the Company in accordance with applicable law, each
Security shall bear the applicable legends relating to restrictions on
transfer pursuant to the securities laws in substantially the form set forth
in Section 2.7 (g) (1).
(b) The Company shall issue and the Trustee shall authenticate
Exchange Securities in exchange for Original Securities accepted for exchange
in the Exchange Offer, which Exchange Securities shall not bear the legends
required by subsection (a) above. Pursuant to the terms of the Exchange
Offer as set forth in the Registration Rights Agreement, certain Persons are
not eligible to tender their Original Securities in the Exchange Offer.
Accordingly, a holder of Original Securities who is either (A) a
broker-dealer who purchased such Original Securities directly from the
Company for resale pursuant to Rule 144A or any other available exemption
under the Securities Act, (B) a Person participating in the distribution of
the Original Securities or (C) a Person who is an affiliate (as defined in
Rule 144 under the Securities Act) of the Company shall, pursuant to the
terms of the Registration Rights Agreement, only receive Exchange Securities
other than in connection with the Exchange Offer, which Exchange Securities,
notwithstanding anything else herein to the contrary, shall bear the legends
required by subsection (a) above and shall not be represented by a Global
Security.
2.5. GLOBAL SECURITY
(a) The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; PROVIDED, that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. At such time as all beneficial interests in a Global Security have
either been exchanged for Definitive Securities, redeemed, repurchased or
cancelled, such Global Security shall be returned to or retained and cancelled
by the Trustee. Any endorsement of a Global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee, in accordance with instructions given by
the Company as required by this Section 2.5.
(b) The Global Securities may be transferred, in whole but not in
part, only to the Depositary, another nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a nominee of
such successor Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or the Depositary has ceased to
be a clearing agency registered under the Exchange Act, and a successor
Depositary is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as the case may be,
the Company will execute, and the Trustee, upon written notice from the
Company, will authenticate and make available for delivery the Definitive
Securities, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such
Global Security. If there is an Event of Default, the Depositary shall have
the right to exchange the Global Securities for Definitive Securities. In
addition, the Company may at any time determine that the Securities shall no
longer be represented by a Global Security. In the event of such an Event of
Default or such a determination, the Company shall execute, and subject to
Section 2.7, the Trustee, upon receipt of an Officers' Certificate evidencing
such determination by the Company, will authenti-
7
cate and make available for delivery the Definitive Securities, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security, in exchange for such Global Security. Upon
the exchange of the Global Security for such Definitive Securities, in
authorized denominations, the Global Security shall be cancelled by the
Trustee. Such Definitive Securities issued in exchange for the Global
Security shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Definitive Securities to the Depositary for delivery to
the Persons in whose names such Definitive Securities are so registered.
2.6. INTEREST
(a) Each Security will bear interest at the rate of 6 7/8% per annum
from the most recent date to which interest has been paid or duly provided
for or, if no interest has been paid or duly provided for, from the Issue
Date, until the principal thereof becomes due and payable, and at the rate of
6 7/8% per annum on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment
of interest, compounded semi-annually, payable semi-annually in arrears on
January 15 and July 15 of each year (each, an "Interest Payment Date")
commencing on January 15, 1998 to the Person in whose name such Security or
any Predecessor Security is registered, at the close of business on the
regular record date for such interest installment, which shall be the first
day of the month in which the relevant Interest Payment Date occurs.
(b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days lapsed in such month. In the event that
any Interest Payment Date falls on a day that is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), with the same force and effect as if made on such
date.
(c) The Company will not be responsible for, and will not be required
to compensate holders of or investors in the Securities for, any withholding
taxes that are imposed on interest payments on the Securities.
2.7. TRANSFER AND EXCHANGE
(a) TRANSFER RESTRICTIONS. The Original Securities, and those
Exchange Securities with respect to which any Person described in Section
2.4(b)(A), (B) or (C) is the beneficial owner, may not be transferred except
in compliance with the legend contained in Exhibit A unless otherwise
determined by the Company in accordance with applicable law.
(b) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES. Upon
surrender for registration of transfer of any Security at the office or
agency of the Company maintained for such purpose pursuant to Section 3.2,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount.
8
All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Definitive Securities or Global Securities surrendered upon such registration
of transfer or exchange.
No service charge shall be made to a holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith.
Prior to due presentment for registration or transfer of any Security,
the Trustee and the Company may deem and treat the Person in whose name the
Security is registered as the absolute owner of such Security, and neither
the Trustee nor the Company shall be affected by notice to the contrary.
(c) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When Definitive
Securities are presented to the Security registrar with a request:
(y) to register the transfer of such Definitive Securities; or
(z) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized denominations,
the Security registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met; PROVIDED,
HOWEVER, that the Definitive Securities surrendered for registration of transfer
or exchange:
(1) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company and the
Security registrar duly executed by the Securityholder or such holder's attorney
duly authorized in writing; and
(2) in the case of Definitive Securities that are Restricted
Securities, such request shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Restricted Securities are being delivered to
the Security registrar by a Securityholder for registration in the
name of such Securityholder, without transfer, a certification from
such Securityholder to that effect (in substantially the form set
forth on the reverse of the Security); or
(B) if such Restricted Security is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A) in
accordance with Rule 144A a certification to that effect (in
substantially the form set forth on the reverse of the Security); or
(C) if such Restricted Security is being transferred (i)
pursuant to an exemption from registration in accordance with Rule 144
or Regulation S under the Securities Act or (ii) pursuant to an
effective registration statement under the Securities Act, or (iii) in
a minimum principal amount of $100,000 to an "institutional accredited
investor" within the meaning of Rule 501(A)(1), (2), (3) or (7) under
the Securities
9
Act that is acquiring the security for its own account, or for the
account of such an institutional accredited investor, not with a
view to or for offer or sale in connection with any distribution in
violation of the Securities Act, or (iv) in reliance on another
exemption from the registration requirements of the Securities Act,
a certification to that effect (in substantially the form set forth
on the reverse of the Security) and in the case of (i), (iii) and
(iv) above, if the Company or the Security registrar so request, an
Opinion of Counsel reasonably acceptable to the Company and to the
Security registrar to the effect that such transfer is in
compliance with the Securities Act.
(d) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the
Security registrar of a Definitive Security, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Security
registrar, together with:
(1) if such Definitive Security is a Restricted Security,
certification, substantially in the form set forth on the reverse of the
Security, that such Definitive Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A) in accordance with Rule 144A;
and
(2) whether or not such Definitive Security is a Restricted
Security, written instructions of the Securityholder directing the Security
registrar to make, or to direct the Trustee to make, an endorsement on the
Global Security to reflect an increase in the aggregate principal amount of
the Securities represented by the Global Security,
then the Security registrar shall cancel such Definitive Security and cause,
or direct the Trustee to cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Trustee, the aggregate
principal amount of Securities represented by the Global Security to be
increased accordingly. If no Global Securities are then outstanding, the
Company shall issue and the Trustee shall authenticate a new Global Security
in the appropriate principal amount.
(e) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and
exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depositary therefor which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act.
(f) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
DEFINITIVE SECURITY.
(1) Any Person having a beneficial interest in a Global Security
may upon request exchange such beneficial interest for a Definitive Security.
Upon receipt by the Security registrar of written instructions or such other
form of instructions as is customary for the Depositary from the Depositary
or its nominee on behalf of any Person having a beneficial interest in a
Global Security and upon receipt by the Security registrar of a written order
or such other form of instructions as is customary for the Depositary or the
Person designated by the Depositary as having such a beneficial interest in a
Restricted Security only, the following additional information and documents
(all of which may be submitted by facsimile):
10
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification from such person to that effect (in substantially the
form set forth on the reverse of the Security); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A) in
accordance with Rule 144A a certification to that effect from the
transferor (in substantially the form set forth on the reverse of the
Security); or
(C) if such beneficial interest is being transferred (i)
pursuant to an exemption from registration in accordance with Rule 144
or Regulation S under the Securities Act or (ii) pursuant to an
effective registration statement under the Securities Act, or (iii) in
a minimum principal amount of $100,000 to an "institutional accredited
investor" within the meaning of Rule 501(A)(1), (2), (3) or (7) under
the Securities Act that is acquiring the security for its own account,
or for the account of such an institutional accredited investor, not
with any distribution in violation of the Securities Act, or (iv) in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect from the transferee
or transferor (in substantially the form set forth on the reverse of
the Security) and in the case of (i), (iii) and (iv) above, if the
Company or the Security registrar so requests, an Opinion of Counsel
from the transferee or transferor reasonably acceptable to the Company
and to the Security registrar to the effect that such transfer is in
compliance with the Securities Act;
then the Security registrar, or the Trustee, will cause, in accordance with the
standing instructions and procedures existing between the Depositary and the
Trustee, the aggregate principal amount of the Global Security to be reduced
and, following such reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate, the Trustee or the
Trustee's authenticating agent will authenticate and deliver to the transferee a
Definitive Security.
(2) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.7(f) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Security registrar. The Security registrar
shall deliver such Definitive Securities to the persons in whose names such
Securities are so registered.
(g) LEGENDS.
(1) Except as permitted by the following paragraph (2), each
Security certificate evidencing the Global Securities and the Definitive
Securities (and all securities issued in exchange therefor or substitution
thereof, but not including Exchange Securities as defined herein) shall bear
legends in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICI-
11
PATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) IN A MINIMUM PRINCIPAL AMOUNT OF
$100,000 TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT
TO THE RIGHT OF THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR
OTHER INFORMATION SATISFACTORY TO THE COMPANY, AND
(ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE
COMPANY. SUCH HOLDER FURTHER AGREES THAT IT
12
WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
(2) Upon any sale or transfer of a Restricted Security
(including any Restricted Security represented by a Global Security) pursuant
to Rule 144 under the Securities Act or an effective registration statement
under the Securities Act:
(A) in the case of any Restricted Security that is a Definitive
Security, the Security registrar shall permit the Securityholder to
exchange such Restricted Security for a Definitive Security that does
not bear the legend set forth above and rescind any restriction on the
transfer of such Restricted Security in the case of a sale or transfer
pursuant to Rule 144 under the Securities Act, after the Resale
Restriction Termination Date (as defined in clause (g)(1) above) or
delivery of an Opinion of Counsel; and
(B) any such Restricted Security represented by a Global
Security shall not be subject to the provisions set forth in (1) above
(such sales or transfers being subject only to the provisions of
Section 2.7(e) hereof); PROVIDED, HOWEVER, that with respect to any
request for an exchange of a Restricted Security that is represented
by a Global Security for a Definitive Security that does not bear a
legend, which request is made in reliance upon Rule 144 under the
Securities Act, the Securityholder shall certify in writing (to be
accompanied by an Opinion of Counsel) to the Security registrar that
such request is being made pursuant to Rule 144 under the Securities
Act (such certification to be substantially in the form set forth on
the reverse of the Security).
(h) EXCHANGE OF ORIGINAL SECURITIES FOR EXCHANGE SECURITIES. The
Original Securities may be exchanged for Exchange Securities pursuant to the
terms of the Exchange Offer and in accordance with the provisions set forth
in this Section 2.7, as may be applicable. The Trustee shall make the
exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Exchange Securities, the transactions
contemplated by the Exchange Offer have been consummated; and
(B) the principal amount of Original Securities properly tendered in
the Exchange Offer that are represented by a Global Security and the principal
amount of Original Securities properly tendered in the Exchange Offer that are
represented by Definitive Securities, the name of each holder of such Definitive
Securities, the principal amount properly tendered in the Exchange Offer by each
such holder and the name and address to which Definitive Securities representing
Exchange Securities shall be registered and sent for each such holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Exchange Securities have been
registered under Section 5 of the Securities Act and the Indenture has been
qualified under the Trust Indenture Act and (y) with respect to the matters
set forth in Section 3(p) of the Registration Rights Agreement and (iii) a
Company Order, shall authenticate (A) a Global Security representing Exchange
Securities in aggregate principal amount equal to the aggregate principal
amount of Original Securities represented by a Global Security indicated in
such
13
Officers' Certificate as having been properly tendered and (B) Definitive
Securities representing Exchange Securities registered in the names of, and
in the principal amounts indicated in, such Officers' Certificate.
If the principal amount of the Global Security representing Exchange
Securities is less than the principal amount of the Global Security
representing Original Securities, the Trustee shall make an endorsement on
such Global Security representing Original Securities indicating a reduction
in the principal amount represented thereby.
The Trustee shall deliver such Definitive Securities representing
Exchange Securities to the holders thereof as indicated in such Officers'
Certificate.
2.8. REPLACEMENT SECURITIES
If any mutilated Security is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's
requirements for replacements of Securities are met. An indemnity bond must
be supplied by the holder that is sufficient in the judgment of the Trustee
and the Company to protect the Company, the Trustee, any agent thereof or any
authenticating agent from any loss that any of them may suffer if a Security
is replaced. The Company or the Trustee may charge for its expenses in
replacing a Security.
Every replacement Security is an obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
2.9. TEMPORARY SECURITIES
Pending the preparation of Definitive Securities, the Company may
execute, and upon receipt of a Company Order the Trustee shall authenticate
and make available for delivery, temporary Securities that are printed,
lithographed, typewritten, mimeographed or otherwise reproduced, in any
authorized denomination, substantially of the tenor of the Definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company shall cause Definitive
Securities to be prepared without unreasonable delay. The Definitive
Securities shall be printed, lithographed or engraved, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable securities exchange, all as determined by the
officers executing such Definitive Securities. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at the
office or agency maintained by the Company for such purpose pursuant to
Section 3.2 hereof, without charge to the holder of Securities. Upon
surrender for cancellation of any one or more temporary Securities, the
Company shall execute, and the Trustee shall authenticate and make available
for delivery, in exchange therefor the same aggregate principal amount of
Definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as Definitive Securities.
14
2.10. CANCELLATION
The Company at any time may deliver Securities to the Trustee for
cancellation. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall retain or dispose of cancelled Securities in
accordance with its normal practices (subject to the record retention
requirement of the Exchange Act) unless the Company directs them to be
returned to it. The Company may not issue new Securities to replace
Securities that have been paid or that have been delivered to the Trustee for
cancellation.
2.11. DEFAULTED INTEREST
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the holder of
Securities on the relevant regular record date by virtue of having been such
holder; and such Defaulted Interest shall be paid by the Company, at its
election, as provided in clause (a) or clause (b) below:
(a) The Company may make payment of any Defaulted Interest on
Securities to the Persons in whose names such Securities (or their respective
Predecessor Securities) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed
in the following manner: the Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each such Security
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a special record date for
the payment of such Defaulted Interest which shall not be more than 15 nor
less than 10 days prior to the date of the proposed payment and not less than
10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special
record date therefor to be mailed, first class postage prepaid, to each
Securityholder at his or her address as it appears in the Security Register,
not less than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date
therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names such Securities (or their respective
Predecessor Securities) are registered on such special record date and shall
be no longer payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on any
Securities in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
15
2.12. CUSIP NUMBERS
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use). The Company will promptly notify the Trustee of any
change in the CUSIP numbers of the Securities.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
3.1. PAYMENT OF PRINCIPAL AND INTEREST
The Company covenants and agrees for the benefit of the holders of the
Securities that it will duly and punctually pay or cause to be paid the
principal of and interest on the Securities at the place, at the respective
times and in the manner provided herein. Except as provided in Section 2.3,
each installment of interest on the Securities may be paid by mailing checks
for such interest payable to the order of the holders of the Securities
entitled thereto as they appear in the Security Register. The Company
further covenants to pay any and all amounts including, without limitation,
Liquidated Damages, if any, on the dates and in the manner required under the
Registration Rights Agreement.
3.2. OFFICES FOR NOTICES AND PAYMENTS, ETC.
So long as any of the Securities remain outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or
agency where the Securities may be presented for payment, an office or agency
where the Securities may be presented for registration of transfer and for
exchange as in this Indenture provided and an office or agency where notices
and demands to or upon the Company in respect of the Securities or of this
Indenture may be served. The Company will give to the Trustee written notice
of the location of any such office or agency and of any change of location
thereof. Until otherwise designated from time to time by the Company in a
notice to the Trustee, any such office or agency for all of the above
purposes shall be the Principal Office of the Trustee. In case the Company
shall fail to maintain any such office or agency in the Borough of Manhattan,
The City of New York, or shall fail to give such notice of the location or of
any change in the location thereof, presentations and demands may be made and
notices may be served at the principal office of the Trustee.
In addition to any such office or agency, the Company may from time to
time designate one or more offices or agencies outside the Borough of
Manhattan, The City of New York, where the Securities may be presented for
payment, registration of transfer and for exchange in the manner provided in
this Indenture, and the Company may from time to time rescind such
designation, as the Company may deem desirable or expedient; provided,
however, that no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain any such office or agency in the
Borough of Manhattan, The City of New York, for the purposes above mentioned.
The Company will give to the Trustee prompt written notice of any such
designation or rescission thereof.
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3.3. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 6.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
3.4. PROVISION AS TO PAYING AGENT
(a) If the Company shall appoint a paying agent other than the
Trustee with respect to the Securities, it will cause such paying agent to
execute and deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provision of this Section 3.4,
(1) that it will hold all sums held by it as such agent for
the payment of the principal of or interest on the Securities (whether such
sums have been paid to it by the Company or by any other obligor on the
Securities of such series) in trust for the benefit of the holders of the
Securities;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Securities) to make any payment of
the principal of and premium or interest on the Securities when the same
shall be due and payable; and
(3) that it will at any time during the continuance of any
such failure, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by it as such paying agent.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of or interest on the Securities, set
aside, segregate and hold in trust for the benefit of the holders of the
Securities a sum sufficient to pay such principal or interest so becoming due
and will notify the Trustee of any failure to take such action and of any
failure by the Company (or by any other obligor under the Securities) to make
any payment of the principal of or interest on the Securities when the same
shall become due and payable.
(c) Anything in this Section 3.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Securities hereunder, or for any other reason,
pay or cause to be paid to the Trustee all sums held in trust for any such
series by the Trustee or any paying agent hereunder, as required by this
Section 3.4, such sums to be held by the Trustee upon the trusts herein
contained.
(d) Anything in this Section 3.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.4 is subject to
Sections 11.3 and 11.4.
3.5. CERTIFICATE TO TRUSTEE
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year, a written statement signed by the President or a
Vice President and by the Treasurer, an Assistant Treasurer, the Controller
or an Assistant Controller of the Company, stating, as to each signer
thereof, that
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(1) a review of the activities of the Company during such year and of
performance under this Indenture has been made under such signer's
supervision, and
(2) to the best of such signer's knowledge, based on such review,
(a) the Company has fulfilled all its obligations under this Indenture
throughout such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such signer and
the nature and status thereof, and (b) no event has occurred and is
continuing which is, or after notice or lapse of time or both would become,
an Event of Default under Section 5.1(c) or (d), or, if such an event has
occurred and is continuing, specifying each such event known to such signer
and the nature and status thereof.
3.6. COMPLIANCE WITH CONSOLIDATION PROVISIONS
The Company will not, while any of the Securities remain outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all
or substantially all of its property to any other Person unless the
provisions of Article X hereof are complied with.
3.7. LIMITATION UPON SALES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES
The Company will not sell, transfer or otherwise dispose of (except
to a Restricted Subsidiary), and it will not permit any Restricted Subsidiary
to sell, transfer or otherwise dispose of (except to the Company or to a
Restricted Subsidiary), any shares of capital stock of a Restricted Subsidiary,
unless the entire capital stock of such Restricted Subsidiary at the time
owned by the Company and its Restricted Subsidiaries shall be disposed of at
the same time for a consideration consisting of cash or other property, which,
in the opinion of the Board of Directors, is at least equal to the fair value
thereof.
For the purposes of the foregoing paragraph, "Restricted Subsidiary"
shall mean a Subsidiary including Subsidiaries of any such Subsidiary, which
meets any of the following conditions:
(a) the Company's and its other Subsidiaries' investments in and
advances to the Subsidiary exceed 10% of the total assets of the Company and
its Subsidiaries consolidated as of the end of the most recently completed
fiscal year;
(b) the Company's and its other Subsidiaries' proportionate share
of the total assets (after inter-company eliminations) of the Subsidiary
exceeds 10% of the total assets of the Company and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; or
(c) the Company's and its other Subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of the Subsidiary
exceeds 10% of such income of the Company and its Subsidiaries consolidated
for the most recently completed fiscal year.
For purposes of making the prescribed income test in clause (c) of
the preceding sentence, when a loss has been incurred by either the Company
and its Subsidiaries consolidated or the tested Subsidiary, but not both, the
equity in the income or loss of the tested subsidiary shall be excluded from
the income of the Company and its Subsidiaries consolidated for purposes of
the computation and if income of the Company and its Subsidiaries
consolidated for the most recent fiscal year is at
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least 10% lower than the average of the income for the last five fiscal
years, such average income shall be substituted for purposes of the
computation and any loss years shall be omitted for purposes of computing
average income.
3.8. LIMITATION UPON MORTGAGES AND LIENS
The Company will not at any time directly or indirectly issue,
assume, guarantee or permit to exist any indebtedness secured by a mortgage,
pledge, lien or other encumbrance (any mortgage, pledge, lien or other
encumbrance being hereinafter in this Section referred to as a "lien") on any
of its property or assets, whether now owned or hereafter acquired, without
making effective provisions whereby the Securities then outstanding (and, if
the Company so elects, any other indebtedness ranking on a parity with the
Securities) shall be equally and ratably secured with any such secured
indebtedness, so long as any such other indebtedness shall be secured;
PROVIDED, HOWEVER, that the foregoing covenant shall not be applicable to the
following:
(a) liens in existence at the Issue Date;
(b) liens on real estate (including liens existing in respect of
such real estate at the time of acquisition thereof) securing indebtedness in
an amount not in excess of 100% of the fair value of the real estate at the
time of creation of such indebtedness (as determined by the Board of
Directors);
(c) liens arising from the acquisition of a business as a going
concern (whether by merger, acquisition of a controlling stock interest,
acquisition of assets or otherwise) or to which assets acquired by the
Company in partial or complete satisfaction of secured indebtedness are
subject;
(d) liens to secure the extension, renewal or replacement of any
indebtedness secured by any of the liens referred to in (a), (b) and (c)
above, provided that there shall not be an increase in the amount of
indebtedness secured by such extension, renewal or replacement; and
(e) liens of taxes or assessments or governmental charges or levies
not then due and delinquent or the validity of which is being contested in
good faith or which are less than $10,000,000 in amount; pledges or deposits
to secure public or statutory obligations including liens and deposits
required or provided for under state insurance laws and similar regulatory
statutes; materialmen's, mechanics', carrier's, workmen's, repairmen's, or
other like liens, and pledges or deposits made in the ordinary course of
business to obtain the release of such liens; liens created by or resulting
from any litigation or legal proceeding which is being contested in good
faith by appropriate proceedings or which involve claims of less than
$10,000,000; deposits to secure (or in lieu of) surety, stay, appeal or
customs bonds; deposits to secure the payment of taxes, assessments, customs
duties or other similar charges; landlords, liens on property held under
lease; and any other liens similar to those described in this Subsection, the
existence of which does not, in the opinion of the Company, materially impair
the use by the Company of the affected property in the operation of its
business, or the value of such property for the purpose of such business.
3.9. WAIVER OF CERTAIN COVENANTS
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 3.7 and 3.8, with respect to the
Securities if before or after the time for such
19
compliance the Holders of at least 66-2/3% in principal amount of the
outstanding Securities 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 Companies in respect of any
such covenant or condition shall remain in full force and effect.
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
4.1. SECURITYHOLDERS' LISTS
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:
(a) on a semi-annual basis on each regular record date for the
Securities, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Securityholders as of such record date; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company, of any such request, a list of
similar form and content with respect to the Securityholders as of a date not
more than 15 days prior to the time such list is furnished, except that, no
such lists need be furnished so long as the Trustee is in possession thereof
by reason of its acting as Security registrar.
4.2. PRESERVATION AND DISCLOSURE OF LISTS
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of the Securities (1) contained in the most recent list furnished to
it as provided in Section 4.1 or (2) received by it in the capacity of
Securities registrar (if so acting) hereunder. The Trustee may destroy any
list furnished to it as provided in Section 4.1 upon receipt of a new list so
furnished.
(b) In case three or more holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to
the Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application,
and such application states that the applicants desire to communicate with
other holders of Securities or with holders of all Securities with respect to
their rights under this Indenture and is accompanied by a copy of the form of
proxy or other communication which such applicants propose to transmit, then
the Trustee shall within 5 Business Days after the receipt of such
application, at its election, either:
(1) afford such applicants access to the information preserved
at the time by the Trustee in accordance with the provisions of subsection
(a) of this Section 4.2, or
(2) inform such applicants as to the approximate number of
holders of all Securities, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, and as to the approximate
cost
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of mailing to such Securityholders the form of proxy or other communication,
if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder whose name and address appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy
or other communication which is specified in such request with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders
of Securities of such series or all Securities, as the case may be, or would
be in violation of applicable law. Such written statement shall specify the
basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter
an order refusing to sustain any of such objections or if, after the entry of
an order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Securityholders with
reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.
(c) Each and every holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any paying agent shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
holders of Securities in accordance with the provisions of subsection (b) of
this Section 4.2, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under said subsection (b).
4.3. REPORTS BY COMPANY
(a) The Company covenants and agrees to file with the Trustee,
within 15 days after the date on which the Company is required to file the
same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any
of the foregoing as said Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if the Company is not required to file information, documents or reports
pursuant to either of such sections, then to file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations.
(b) The Company covenants and agrees to file with the Trustee and
the Commission, in accordance with the rules and regulations prescribed from
time to time by said Commission, such additional information, documents and
reports with respect to compliance by the Company with the
21
conditions and covenants provided for in this Indenture as may be required
from time to time by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail to all
holders of Securities, as the names and addresses of such holders appear upon
the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to
be filed by the Company pursuant to subsections (a) and (b) of this Section
4.3 as may be required by rules and regulations prescribed from time to time
by the Commission.
(d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(e) So long as is required for an offer or sale of the Securities
to qualify for an exemption under Rule 144A under the Securities Act, the
Company shall, upon request, provide the information required by clause
(d)(4) thereunder to each Holder and to each beneficial owner and prospective
purchaser of Securities identified by any holder of Restricted Securities,
unless such information is furnished to the Commission pursuant to Section 13
or 15(d) of the Exchange Act.
4.4. REPORTS BY THE TRUSTEE
(a) The Trustee shall transmit to Securityholders such reports
concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust
Indenture Act, the Trustee shall, within 60 days after each December 31
following the date of this Indenture, commencing December 31, 1997, deliver
to Securityholders a brief report which complies with the provisions of such
Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange, if any, upon which the Securities are listed, with the Commission
and with the Company. The Company will promptly notify the Trustee when the
Securities are listed on any stock exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
5.1. EVENTS OF DEFAULT
"Event of Default", wherever used herein means with respect to the
Securities, any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
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(a) default in the payment of any interest upon any Security when
it becomes due and payable, and continuance of such default for a period of
30 days; or
(b) default in the payment of the principal of any Security as and
when the same shall become due and payable either at maturity, by declaration
or otherwise; or
(c) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or warranty
a default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by the
holders of at least 25% in principal amount of the outstanding Securities a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; or
(d) a default occurs under any bond, mortgage, indenture (including
this Indenture) or instrument under which there may be issued, or by which
there may be secured or evidenced, any indebtedness for money borrowed of the
Company or any Restricted Subsidiary, whether such indebtedness now exists or
shall hereafter be created, which default (a) is caused by a failure to pay
principal on such indebtedness prior to the expiration of the grace period
provided in such indebtedness (a "Payment Default") or (b) results in the
acceleration of such indebtedness prior to its express maturity, and in each
case, the principal amount of any such indebtedness together with the
principal amount of any other such indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$25 million or more, without such acceleration having been rescinded, stayed
or annulled, or such indebtedness having been discharged or, in the case of
indebtedness contested in good faith by the Company, a bond, letter of
credit, escrow deposit or other cash equivalent in an amount sufficient to
discharge such indebtedness having been set aside by the Company, within a
period of 10 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the outstanding Securities a
written notice specifying such event of default and requiring the Company to
cause such acceleration to be rescinded or annulled or to cause such
indebtedness to be discharged and stating that such notice is a "Notice of
Default" hereunder; or
(e) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Company a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company under the Bankruptcy Law or
any other applicable Federal or State law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Company or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 90 consecutive days; or
(f) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy
or insolvency proceedings against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under the Bankruptcy Law
or any other applicable Federal or State law, or the consent by it to
23
the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due and
its willingness to be adjudicated a bankrupt, or the taking of corporate
action by the Company in furtherance of any such action.
Upon receipt by the Trustee of any Notice of Default pursuant to
this Section 5.1 with respect to Securities all or part of which are
represented by a Global Security, a record date shall be established for
determining Holders of outstanding Securities entitled to join in such Notice
of Default, which record date shall be at the close of business on the day
the Trustee receives such Notice of Default. The holders as of such record
date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such Notice of Default, whether or not such holders
remain holders after such record date; PROVIDED, that unless holders of at
least 25% in principal amount of the outstanding Securities, or their
proxies, shall have joined in such Notice of Default prior to the day which
is 90 days after such record date, such Notice of Default shall automatically
and without further action by any holder be cancelled and of no further
effect. Nothing in this paragraph shall prevent a holder, or a proxy of a
holder, from giving, after expiration of such 90-day period, a new Notice of
Default identical to a Notice of Default which has been cancelled pursuant to
the proviso to the preceding sentence, in which event a new record date shall
be established pursuant to the provisions of this Section 5.1.
5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
If an Event of Default with respect to Securities outstanding occurs
and is continuing, then and in every such case the Trustee or the holders of
not less than 25% in principal amount of the outstanding Securities may
declare the principal of all Securities to be due and payable immediately, by
a notice in writing to the Company (and to the Trustee if given by holders),
and upon any such declaration such principal shall become immediately due and
payable.
At any time after such a declaration of acceleration with respect to
Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the holders of a majority in principal amount of the outstanding
Securities, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all Securities,
(B) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is legally
enforceable, interest upon overdue installments of interest at the
rate borne by the Securities, and
24
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to the Securities, other
than the non-payment of the principal of Securities which have become
due solely by such acceleration, have been cured or waived as provided
in Section 5.10.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities
all or part of which are represented by a Global Security, a record date
shall be established for determining holders of outstanding Securities
entitled to join in such notice, which record date shall be at the close of
business on the day the Trustee receives such notice. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall
be entitled to join in such notice, whether or not such holders remain
holders after such record date; PROVIDED, that unless such declaration of
acceleration, or rescission and annulment, as the case may be, shall have
become effective by virtue of the requisite percentage having joined in such
notice prior to the day which is 90 days after such record date, such notice
of declaration of acceleration, or rescission and annulment, as the case may
be, shall automatically and without further action by any holder be cancelled
and of no further effect. Nothing in this paragraph shall prevent a holder,
or a proxy of a holder, from giving, after expiration of such 90-day period,
a new written notice of declaration of acceleration, or rescission and
annulment thereof, as the case may be, that is identical to a written notice
which has been cancelled pursuant to the proviso to the preceding sentence,
in which event a new record date shall be established pursuant to the
provisions of this Section 5.2. Notwithstanding anything to the contrary
herein, the Trustee shall not be deemed to have notice of defaults or Events
of Default until a Responsible Officer has received written notice of such
default or Event of Default.
5.3. PAYMENT OF SECURITIES ON DEFAULT; SUIT THEREFOR
The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Securities as and when
the same shall become due and payable, and such default shall have continued
for a period of 30 days, or (b) in case default shall be made in the payment
of the principal of any of the Securities as and when the same shall have
become due and payable, whether at maturity of the Securities or by
declaration or otherwise, then, upon demand of the Trustee, the Company will
pay to the Trustee, for the benefit of the holders of the Securities, the
whole amount that then shall have become due and payable on all such
Securities for principal or interest, or both, as the case may be, with
interest upon the overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) upon the overdue installments
of interest at the rate borne by the Securities; and, in addition thereto,
such further amount as shall be sufficient to cover all sums paid or advanced
by the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at
law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such
25
judgment or final decree against the Company or any other obligor on the
Securities and collect in the manner provided by law out of the property of
the Company or any other obligor on the Securities wherever situated the
moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Securities
under the Bankruptcy Law, or any other applicable law, or in case a receiver
or trustee shall have been appointed for the property of the Company or such
other obligor, or in the case of any other similar judicial proceedings
relative to the Company or other obligor upon the Securities, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand pursuant to the provisions
of this Section 5.3, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the
Securities and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including for all sums paid or advanced by
the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of the
Securityholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Securities, or to the creditors or property of
the Company or such other obligor, unless prohibited by applicable law and
regulations, to vote on behalf of the holders of the Securities in any
election of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or person
performing similar functions in comparable proceedings, and to collect and
receive any moneys or other property payable or deliverable on any such
claims, and to distribute the same after the deduction of its charges and
expenses; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, in the event that the Trustee shall
consent to the making of such payments directly to the Securityholders, to
pay to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith.
Nothing herein contained shall be construed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any holder thereof or to authorize the
Trustee to vote in respect of the claim of any Securityholder in any such
proceeding.
All rights of action and of asserting claims under this Indenture,
or under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof on any trial
or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit
of the holders of the Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Securities, and it shall not be necessary to make any holders
of the Securities parties to any such proceedings.
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5.4. APPLICATION OF MONEYS COLLECTED BY TRUSTEE
Any moneys collected by the Trustee shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the Securities in respect of which moneys
have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
Second: To the payment of the amounts then due and unpaid upon
Securities for principal of and interest on the Securities, in respect of
which or for the benefit of which money has been collected, ratably, without
preference of priority of any kind, according to the amounts due on such
Securities for principal and interest, respectively; and
Third: To the Company.
5.5. PROCEEDINGS BY SECURITYHOLDERS
No holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) or for any other remedy hereunder, unless
(1) such holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities;
(2) the holders of not less than 25% in principal amount of the
outstanding Securities shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such holder or holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the holders of a
majority in principal amount of the outstanding Securities;
it being understood and intended that no one or more holders of Securities
shall have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the rights of
any other holders of Securities, or to obtain or to seek to obtain priority
or preference over any other holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all the holders of Securities.
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5.6. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST
Notwithstanding any other provision in this Indenture, the holder of
any Security shall have the right which is absolute and unconditional to
receive payment of the principal of and (subject to Section 2.11) interest on
such Security on the Stated Maturity and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
5.7. PROCEEDINGS BY TRUSTEE
In case an Event of Default occurs with respect to Securities and is
continuing, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any of such rights, either by suit in equity or by action at law or by
proceeding in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
5.8. REMEDIES CUMULATIVE AND CONTINUING
All powers and remedies given by this Article V to the Trustee or to
the Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies available to
the Trustee or the holders of the Securities, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture or otherwise established with respect
to the Securities, and no delay or omission of the Trustee or of any holder
of any of the Securities to exercise any right or power accruing upon any
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or
an acquiescence therein; and, subject to the provisions of Section 5.5, every
power and remedy given by this Article V or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Securityholders.
5.9. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF
SECURITYHOLDERS
The holders of a majority in principal amount of the outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, with respect to the
Securities, PROVIDED that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall
have the right to decline to follow such direction if the Trustee in
good faith shall determine that the proceeding so directed would be
unjustly prejudicial to the holders not joining in any such direction
or would involve the Trustee in personal liability.
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Upon receipt by the Trustee of any written notice directing the
time, method or place of conducting any such proceeding or exercising any
such trust or power, with respect to Securities all or part of which are
represented by a Global Security, a record date shall be established for
determining holders of outstanding Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such holders remain holders after such record date;
PROVIDED, that unless the holders of a majority in principal amount of the
outstanding Securities shall have joined in such notice prior to the day
which is 90 days after such record date, such notice shall automatically and
without further action by any holder be cancelled and of no further effect.
Nothing in this paragraph shall prevent a holder, or a proxy of a holder,
from giving, after expiration of such 90-day period, a new notice identical
to a notice which has been cancelled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to
the provisions of this Section 5.9.
5.10. WAIVER OF PAST DEFAULTS
The Holders of not less than a majority in principal amount of the
outstanding Securities may on behalf of the holders of all the Securities
waive any past default hereunder with respect to such Securities and its
consequences, except a default
(1) in the payment of the principal of or interest on any
Security, or
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the
holder of each outstanding Security.
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; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
5.11. NOTICE OF DEFAULTS
Within 90 days after the occurrence of any default hereunder with
respect to the Securities, the Trustee shall transmit by mail to all holders
of Securities, as their names and addresses appear in the Securities
Register, notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; PROVIDED, HOWEVER, that, except in
the case of a default in the payment of the principal of or interest on any
Security, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee
of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the
holders of Securities; and PROVIDED, FURTHER, that in the case of any default
of the character specified in Section 5.1(c) or (d) no such notice to holders
of Securities shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities.
5.12. UNDERTAKING TO PAY COSTS
All parties to this Indenture agree, and each holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the
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enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section 5.12 shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Securityholder, or group of Securityholders, holding
in the aggregate more than 10% in aggregate principal amount of the
Securities outstanding, or to any suit instituted by any Securityholder for
the enforcement of the payment of the principal of or interest on any
Security against the Company on or after the same shall have become due and
payable.
ARTICLE VI
CONCERNING THE TRUSTEE
6.1. DUTIES AND RESPONSIBILITIES OF TRUSTEE
With respect to the holders of the Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in
this Indenture. In case an Event of Default has occurred (which has not been
cured or waived) the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
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(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.5, relating to the
time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
6.2. RELIANCE ON DOCUMENTS, OPINIONS, ETC.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, Security or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel 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;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, indenture, Security or other paper or document, but the Trustee in its
discretion may make such inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such inquiry
or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible
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for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
6.3. NO RESPONSIBILITY FOR RECITALS, ETC.
The recitals contained herein and in the Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent)
shall be taken as the statements of the Company and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the
same. The Trustee and the Authenticating Agent make no representations as to
the validity or sufficiency of this Indenture or of the Securities. The
Trustee and the Authenticating Agent shall not be accountable for the use or
application by the Company of any Securities or the proceeds of any
Securities authenticated and delivered by the Trustee or the Authenticating
Agent in conformity with the provisions of this Indenture.
6.4. TRUSTEE, AUTHENTICATING AGENT, PAYING AGENTS, TRANSFER AGENTS OR
REGISTRAR MAY OWN SECURITIES
The Trustee or any Authenticating Agent or any paying agent or any
transfer agent or any Security registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights
it would have if it were not Trustee, Authenticating Agent, paying agent,
transfer agent or Security registrar.
6.5. MONEYS TO BE HELD IN TRUST
Subject to the provisions of Section 11.4, all moneys received by
the Trustee or any paying agent shall, until used or applied as herein
provided, be held in trust for the purpose for which they were received, but
need not be segregated from other funds except to the extent required by law.
The Trustee and any paying agent shall be under no liability for interest on
any money received by it hereunder except as otherwise agreed in writing with
the Company. So long as no Event of Default shall have occurred and be
continuing, all interest allowed on any such moneys shall be paid from time
to time upon the written order of the Company, signed by the Chairman of the
Board of Directors, the President, the Chief Financial Officer or a Vice
President or the Treasurer or an Assistant Treasurer of the Company.
6.6. COMPENSATION AND EXPENSES OF TRUSTEE
The Company, as borrower, covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing between the Company and the Trustee (which
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust), and the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Company also covenants to indemnify
each of the Trustee or any predecessor Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any and all
loss, damage, claim, liability or expense including taxes (other than taxes
based on the income of the Trustee) incurred without negligence or bad faith
on the part of the Trustee and arising out of or in
32
connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim of liability in the
premises. The obligations of the Company under this Section 6.6 to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder. Such additional indebtedness shall be secured by a lien prior to
that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Securities.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d) or Section
5.1(e), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
6.7. OFFICERS' CERTIFICATE AS EVIDENCE
Except as otherwise provided in Sections 6.1 and 6.2, whenever in
the administration of the provisions of this Indenture the Trustee shall deem
it necessary or desirable that a matter be proved or established prior to
taking or omitting any action hereunder, such matter (unless other evidence
in respect thereof is herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to
the Trustee, and such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the Trustee for any
action taken or omitted by it under the provisions of this Indenture upon the
faith thereof.
6.8. CONFLICTING INTEREST OF TRUSTEE
If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee
and the Company shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
6.9. ELIGIBILITY OF TRUSTEE
The Trustee hereunder shall at all times be a corporation organized
and doing business under the laws of the United States of America or any
state or territory thereof or of the District of Columbia or a corporation or
other Person permitted to act as trustee by the Commission authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000) and subject to
supervision or examination by federal, state, territorial, or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 6.9
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve
as Trustee.
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In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.9, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
6.10. RESIGNATION OR REMOVAL OF TRUSTEE
(a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice of such resignation to the
Company and by mailing notice thereof to the holders of the Securities at
their addresses as they shall appear on the Security register. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Trustee and one copy
to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 60 days after the mailing of
such notice of resignation to the Securityholders, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Securityholder who has been a bona fide holder of a
Security for at least six months may, subject to the provisions of Section
5.9, on behalf of himself and all others similarly situated, petition any
such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
Section 6.8 after written request therefor by the Company or by any
Securityholder who has been a bona fide holder of a Security or Securities
for at least six months, or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.9 and shall fail to resign after written request
therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 5.9, any
Securityholder who has been a bona fide holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor trustee, which shall be deemed appointed as successor
trustee unless within 10 days after such nomination the Company objects
thereto or if no successor trustee shall have been so appointed and shall
have accepted appointment within 30 days after such removal, in which case
the Trustee so removed or any
34
Securityholder, upon the terms and conditions and otherwise as in subsection
(a) of this Section 6.10 provided, may petition any court of competent
jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 6.10
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 6.11.
6.11. ACCEPTANCE BY SUCCESSOR TRUSTEE
Any successor trustee appointed as provided in Section 6.10 shall
execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the retiring trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Company or of the
successor trustee, the trustee ceasing to act shall, upon payment of any
amounts then due it pursuant to the provisions of Section 6.6, execute and
deliver an instrument transferring to such successor trustee all the rights
and powers of the trustee so ceasing to act and shall duly assign, transfer
and deliver to such successor trustee all property and money held by such
retiring trustee thereunder. Upon request of any such successor trustee, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a lien
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.
No successor trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 6.8 and eligible under the
provisions of Section 6.9.
Upon acceptance of appointment by a successor trustee as provided in
this Section 6.11, the Company shall mail notice of the succession of such
trustee hereunder to the holders of Securities at their addresses as they
shall appear on the Security Register. If the Company fails to mail such
notice within 10 days after the acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Company.
6.12. SUCCESSION BY MERGER, ETC.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder
without the execution or filing of any paper or any further act on the part
of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder
or in the name of the successor trustee; and in all such cases such
certificates
35
shall have the full force which the Securities or this Indenture elsewhere
provides that the certificate of the Trustee shall have; provided, however,
that the right to adopt the certificate of authentication of any predecessor
Trustee or authenticate Securities in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
6.13. LIMITATION ON RIGHTS OF TRUSTEE AS A CREDITOR
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
6.14. AUTHENTICATING AGENTS
There may be one or more Authenticating Agents appointed by the
Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentication and delivery of Securities
issued upon exchange or transfer thereof as fully to all intents and purposes
as though any such Authenticating Agent had been expressly authorized to
authenticate and deliver Securities; PROVIDED, that the Trustee shall have no
liability to the Company for any acts or omissions of the Authenticating
Agent with respect to the authentication and delivery of Securities. Any
such Authenticating Agent shall at all times be a corporation organized and
doing business under the laws of the United States or of any state or
territory thereof or of the District of Columbia authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of at
least $5,000,000 and being subject to supervision or examination by federal,
state, territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually pursuant to law or the
requirements of such authority, then for the purposes of this Section 6.14
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect herein specified in this
Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating
Agent shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of any Authenticating Agent, shall be the
successor of such Authenticating Agent hereunder, if such successor
corporation is otherwise eligible under this Section 6.14 without the
execution or filing of any paper or any further act on the part of the
parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at
any time terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case
at any time any Authenticating Agent shall cease to be eligible under this
Section 6.14, the Trustee may, and upon the request of the Company shall,
promptly appoint a successor Authenticating Agent eligible under this Section
6.14, shall give written notice of such appointment to the Company and shall
mail notice of such appointment to all Securityholders as the names and
addresses of such holders appear on the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment
36
hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent herein.
The Company, as borrower, agrees to pay to any Authenticating Agent
from time to time reasonable compensation for its services. Any
Authenticating Agent shall have no responsibility or liability for any action
taken by it as such in accordance with the directions of the Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
7.1. ACTION BY SECURITYHOLDERS
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Securities may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action) the fact that at
the time of taking any such action the holders of such specified percentage
have joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by such Securityholders in person or by
agent or proxy appointed in writing, or (b) by the record of such holders of
Securities voting in favor thereof at any meeting of such Securityholders
duly called and held in accordance with the provisions of Article VIII, or
(c) by a combination of such instrument or instruments and any such record of
such a meeting of such Securityholders.
If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action,
the Company may, at its option, as evidenced by an Officers' Certificate, fix
in advance a record date for the determination of Securityholders entitled to
give such request, demand, authorization, direction, notice, consent, waiver
or other action or to revoke any such action, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action or
revocation may be given before or after the record date, but only the
Securityholders of record at the close of business on the record date shall
be deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of Securities outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
Securities outstanding shall be computed as of the record date; PROVIDED,
HOWEVER, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
six months after the record date.
7.2. PROOF OF EXECUTION BY SECURITYHOLDERS
Subject to the provisions of Sections 6.1, 6.2 and 8.5, proof of the
execution of any instrument by a Securityholder or his agent or proxy shall
be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Securities shall be proved by
the Security Register or by a certificate of the Security registrar. The
Trustee may require such additional proof of any matter referred to in this
Section as it shall deem necessary.
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The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.6.
7.3. WHO ARE DEEMED ABSOLUTE OWNERS
Prior to due presentment for registration of transfer of any Security,
the Company, the Trustee, any Authenticating Agent, any paying agent, any
transfer agent and any Security registrar may deem the person in whose name
such Security shall be registered upon the Security Register to be, and may
treat him or her as, the absolute owner of such Security (whether or not such
Security shall be overdue) for the purpose of receiving payment of or on
account of the principal of and (subject to Section 2.6) interest on such
Security and for all other purposes; and neither the Company nor the Trustee
nor any Authenticating Agent nor any paying agent nor any transfer agent nor
any Security registrar shall be affected by any notice to the contrary. All
such payments so made to any holder for the time being or upon his order
shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for moneys payable upon any such Security.
7.4. SECURITIES OWNED BY COMPANY DEEMED NOT OUTSTANDING
In determining whether the holders of the requisite aggregate
principal amount of Securities have concurred in any direction, consent or
waiver under this Indenture, Securities which are owned by the Company or any
other obligor on the Securities or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any other obligor on the Securities shall be disregarded and
deemed not to be outstanding for the purpose of any such determination;
PROVIDED THAT for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver, only
Securities which the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may
be regarded as outstanding for the purposes of this Section 7.4 if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Securities and that the pledgee is not the Company or any
such other obligor or person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company or any such
other obligor. In the case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
7.5. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.1, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor),
subject to Section 7.1, the serial number of which is shown by the evidence
to be included in the Securities the holders of which have consented to such
action may, by filing written notice with the Trustee at its principal office
and upon proof of holding as provided in Section 7.2, revoke such action so
far as concerns such Security (or so far as concerns the principal amount
represented by any exchanged or substituted Security). Except as aforesaid
any such action taken by the holder of any Security shall be conclusive and
binding upon such holder and upon all future holders and owners of such
Security, and of any Security issued in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon
such Security or any Security issued in exchange or substitution therefor.
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ARTICLE VIII
SECURITYHOLDERS' MEETINGS
8.1. PURPOSES OF MEETINGS
A meeting of Securityholders may be called at any time and from time
to time pursuant to the provisions of this Article VIII for any of the
following purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be
taken by Securityholders pursuant to any of the provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.2; or
(d) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of such Securities
under any other provision of this Indenture or under applicable law.
8.2. CALL OF MEETINGS BY TRUSTEE
The Trustee may at any time call a meeting of Securityholders to take
any action specified in Section 8.1, to be held at such time and at such
place in the Borough of Manhattan, The City of New York, as the Trustee shall
determine. Notice of every meeting of the Securityholders, setting forth the
time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be mailed to holders of Securities at
their addresses as they shall appear on the Securities Register. Such notice
shall be mailed not less than 20 nor more than 180 days prior to the date
fixed for the meeting.
8.3. CALL OF MEETINGS BY COMPANY OR SECURITYHOLDERS
In case at any time the Company pursuant to a resolution of the Board
of Directors, or the holders of at least 10% in aggregate principal amount of
the Securities then outstanding, shall have requested the Trustee to call a
meeting of Securityholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall
not have mailed the notice of such meeting within 20 days after receipt of
such request, then the Company or such Securityholders may determine the time
and the place in said Borough of Manhattan for such meeting and may call such
meeting to take any action authorized in Section 8.1, by mailing notice
thereof as provided in Section 8.2.
8.4. QUALIFICATIONS FOR VOTING
To be entitled to vote at any meeting of Securityholders a person
shall (a) be a holder of one or more Securities or (b) a person appointed by
an instrument in writing as proxy by a holder of one
39
or more Securities. The only persons who shall be entitled to be present or
to speak at any meeting of Securityholders shall be the persons entitled to
vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.
8.5. REGULATIONS
Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting
of Securityholders, in regard to proof of the holding of Securities and of
the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning
the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.3, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by majority vote of the
meeting.
Subject to the provisions of Section 8.4, at any meeting each holder
of Securities or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; PROVIDED, HOWEVER,
that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not outstanding and ruled by the chairman of the
meeting to be not outstanding. The chair of the meeting shall have no right
to vote other than by virtue of Securities held by him or her or instruments
in writing as aforesaid duly designating him as the person to vote on behalf
of other Securityholders. Any meeting of Securityholders duly called pursuant
to the provisions of Section 8.2 or 8.3 may be adjourned from time to time by
a majority of those present, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
8.6. VOTING
The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the
serial number or numbers of the Securities held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified
written reports in triplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Securityholders shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was mailed as provided in Section 8.2. The record shall show the
serial numbers of the Securities voting in favor of or against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates
shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting. The holders of the Original Securities and the
Exchange Securities shall vote for all purposes as a single class.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
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ARTICLE IX
AMENDMENTS
9.1. WITHOUT CONSENT OF SECURITYHOLDERS
The Company and the Trustee may from time to time and at any time
amend the Indenture, without the consent of the Securityholders, for one or
more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Company pursuant to Article
X hereof;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the Securityholders as the
Board of Directors and the Trustee shall consider to be for the protection of
the Securityholders, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants, restrictions
or conditions a default or an Event of Default permitting the enforcement of
all or any of the remedies provided in this Indenture as herein set forth;
PROVIDED, HOWEVER, that in respect of any such additional covenant,
restriction or condition such amendment may provide for a particular period
of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the
Trustee upon such default;
(c) to provide for the issuance under this Indenture of Securities in
coupon form (including Securities registrable as to principal only) and to
provide for exchangeability of such Securities with the Securities issued
hereunder in fully registered form and to make all appropriate changes for
such purpose;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture; PROVIDED THAT any such action shall not
materially adversely affect the interests of the holders of the Securities;
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities;
(f) to provide for the issuance and authentication of the Exchange
Securities in exchange for the Original Securities in compliance with this
Indenture and the Registration Rights Agreement;
(g) to qualify or maintain qualification of this Indenture under the
Trust Indenture Act; or
(h) to make any change that does not adversely affect the rights of
any Securityholder in any material respect.
41
The Trustee is hereby authorized to join with the Company in the
execution of any supplemental indenture to effect such amendment, to make any
further appropriate agreements and stipulations which may be therein
contained and to accept the conveyance, transfer and assignment of any
property thereunder, but the Trustee shall not be obligated to, but may in
its discretion, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any amendment to the Indenture authorized by the provisions of this
Section 9.1 may be executed by the Company and the Trustee without the
consent of the holders of any of the Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.2.
9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS
With the consent of the Holders of not less than 66-2/3% in principal
amount of the outstanding Securities affected by such supplemental indenture,
by act of said holders delivered to the Company and the Trustee, the Company,
when authorized by Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights of the holders of
Securities under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the holder of each outstanding
Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any outstanding Security, or reduce the
principal amount thereof or the interest thereon, or change the place
of payment, or the coin or currency in which any outstanding Security
or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated
Maturity thereof, or
(2) reduce the percentage in principal amount of the
outstanding Securities, the consent of whose holders is required for
any such supplemental indenture, or the consent of whose holders is
required for any waiver (of compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section
5.10 or Section 3.9, 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 Security
affected thereby.
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.
9.3. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF SUPPLEMENTAL INDENTURES
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article IX,
this Indenture shall be and be deemed to be modified and amended in
42
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Securities shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
9.4. NOTATION ON SECURITIES
Securities authenticated and delivered after the execution of any
supplemental indenture affecting such series pursuant to the provisions of
this Article IX may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of
this Indenture contained in any such supplemental indenture may be prepared
and executed by the Company, authenticated by the Trustee or the
Authenticating Agent and delivered in exchange for the Securities then
outstanding.
9.5. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED TRUSTEE
The Trustee, subject to the provisions of Sections 6.1 and 6.2, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies
with the requirements of this Article IX.
The Trustee may receive an Opinion of Counsel as conclusive evidence
that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and
that it is proper for the Trustee under the provisions of this Article to
join in the execution thereof.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
10.1. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS
The Company shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as
an entirety to any Person, and no Person shall consolidate with or merge into
the Company or convey or transfer its properties and assets substantially as
an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, the corporation formed by
such consolidation or into which the Company is merged or the Person
which acquires by conveyance or transfer the properties and assets of
the Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of America
or any state or the District of Columbia, and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of and interest on all the Securities
43
and the performance of every covenant of this Indenture on the part of
the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time,
or both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with; and the Trustee, subject to Section 6.1, may rely upon such
Officers' Certificate and Opinion of Counsel as conclusive evidence
that such transaction complies with this Section 10.1.
10.2. SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or the merger by the Company with or into any
other corporation, or any conveyance or transfer by the Company of its
properties and assets substantially as an entirety to any Person in
accordance with Section 10.1, the successor corporation formed by such
consolidation or into which the Company is merged or to which such conveyance
or transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor corporation had been named as the Company
herein; and in the event of any such conveyance or transfer, the Company
(which term shall for this purpose mean any Person named as the "Company" in
the first paragraph of this Indenture or any successor corporation which
shall theretofore become such in the manner described in Section 10.1) shall
be discharged from all obligations and covenants under the Indenture and the
Securities and may be dissolved and liquidated. Such successor corporation
may cause to be signed, and may issue either in its own name or in the name
of the Company prior to such successor, any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication
pursuant to such provisions and any Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Trustee
on its behalf for that purpose pursuant to such provisions. All the
Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though all of such
Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance, such
changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
10.3. LIMITATION ON LEASE OF PROPERTIES AS AN ENTIRETY
The Company shall not lease its properties and assets substantially as
an entirety to any Person.
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ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
11.1. DISCHARGE OF INDENTURE
This Indenture shall cease to be of further effect (except as to (i)
any surviving rights of transfer, substitution and exchange of Securities,
(ii) rights hereunder of Holders to receive payments of principal of and
interest on the Securities and other rights, duties and obligations of the
Holders as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights and obligations of the
Trustee hereunder), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.8 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 3.4) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, and the Company, in the case of (i) or (ii)
above, have deposited or caused to be deposited with the Trustee
as trust funds in trust for the purpose an amount sufficient to
pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated
Maturity;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an opinion of Counsel each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 6.6 shall survive.
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11.2. DEPOSITED MONEYS AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST BY TRUSTEE
Subject to the provisions of Section 11.4, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Sections 11.1
or 11.5 shall be held in trust and applied by it to the payment, either
directly or through any paying agent (including the Company if acting as its
own paying agent), to the holders of the particular Securities for the
payment of which such moneys or U.S. Government Obligations have been
deposited with the Trustee, of all sums due and to become due thereon for
principal, premium, if any, and interest.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 11.5 or the principal and interest
received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the holders of outstanding Securities.
11.3. PAYING AGENT TO REPAY MONEYS HELD
Upon the satisfaction and discharge of this Indenture all moneys then
held by any paying agent of the Securities (other than the Trustee) shall,
upon written demand of the Company, be repaid to it or paid to the Trustee,
and thereupon such paying agent shall be released from all further liability
with respect to such moneys.
11.4. RETURN OF UNCLAIMED MONEYS
Any moneys deposited with or paid to the Trustee or any paying agent
for payment of the principal of or interest on Securities and not applied but
remaining unclaimed by the holders of Securities for two years after the date
upon which the principal of or interest on such Securities, as the case may
be, shall have become due and payable, shall be repaid to the Company by the
Trustee or such paying agent on Company Request; and the holder of any of the
Securities shall thereafter look only to the Company for any payment which
such holder may be entitled to collect and all liability of the Trustee or
such paying agent with respect to such moneys shall thereupon cease.
11.5. DEFEASANCE UPON DEPOSIT OF MONEYS OR U.S. GOVERNMENT OBLIGATIONS
The Company shall be deemed to have been Discharged (as defined below)
from its obligations with respect to the Securities on the 91st day after the
conditions set forth below have been satisfied:
(1) The Company shall have deposited or caused to be deposited
irrevocably with the Trustee or the Defeasance Agent (as defined below) as
trust funds in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the Securities (i) money in an
amount, or (ii) U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in
an amount, or (iii) a combination of (i) and (ii), sufficient, in the opinion
(with respect to (ii) and (iii)) of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee and the Defeasance Agent, if any, to pay and
discharge each installment of principal of and interest and premium, if any,
on the outstanding Securities on the dates such installments of principal,
interest or premium are due;
46
(2) if the Securities are then listed on any national securities
exchange, the Company shall have delivered to the Trustee and the Defeasance
Agent, if any, an Opinion of Counsel to the effect that the exercise of the
option under this Section 11.5 would not cause such Securities to be delisted
from such exchange;
(3) no Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit; and
(4) the Company shall have delivered to the Trustee and the
Defeasance Agent, if any, an Opinion of Counsel to the effect that holders of
the Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of the exercise of the option under
this Section 11.5 and will be subject to United States federal income tax on
the same amount and in the same manner and at the same times as would have
been the case if such option had not been exercised, and such opinion shall
be based on a statute so providing or be accompanied by a private letter
ruling to that effect received from the United States Internal Revenue
Service or a revenue ruling pertaining to a comparable form of transaction to
that effect published by the United States Internal Revenue Service.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except (A) the
rights of holders of Securities to receive, from the trust fund described in
clause (1) above, payment of the principal of and the interest and premium,
if any, on the Securities when such payments are due; (B) the Company's
obligations with respect to the Securities under Sections 2.2, 2.7, 2.8, 3.2,
3.4, 6.10 and 11.4; and (C) the rights, powers, trusts, duties and immunities
of the Trustee hereunder.
"Defeasance Agent" means another financial institution which is
eligible to act as Trustee hereunder and which assumes all of the obligations
of the Trustee necessary to enable the Trustee to act under this Article. In
the event such a Defeasance Agent is appointed pursuant to this Section, the
following conditions shall apply:
(1) The Trustee shall have approval rights over the document
appointing such Defeasance Agent and the document setting forth such
Defeasance Agent's rights and responsibilities;
(2) The Defeasance Agent shall provide verification to the
Trustee acknowledging receipt of sufficient money and/or U.S. Government
Obligations to meet the applicable conditions set forth in this Section 11.5.
47
ARTICLE XII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
12.1. INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS
No recourse for the payment of the principal of or interest on any
Security, or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture, or in any Security, or because of the creation of
any indebtedness represented thereby, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or of any successor Person to the Company, either directly or through
the Company or any successor Person to the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1. SUCCESSORS
All the covenants, stipulations, promises and agreements in this
Indenture contained by the Company shall bind its successors and assigns
whether so expressed or not.
13.2. OFFICIAL ACTS BY SUCCESSOR CORPORATION
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
13.3. SURRENDER OF COMPANY POWERS
The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power
so surrendered shall terminate both as to the Company, as the case may be,
and as to any successor Person.
13.4. ADDRESSES FOR NOTICES, ETC.
Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders
of Securities on the Company may be given or served by being deposited
postage prepaid by registered or certified mail in a post office letter box
addressed (until another address is filed by the Company with the Trustee for
the purpose) to the Company, SAFECO Plaza, 0000 Xxxxxxxx Xxx. X.X., Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Chief Financial
48
Officer, Treasurer or Secretary. Any notice, direction, request or demand by
any Securityholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at
the office of the Trustee, The Chase Manhattan Bank, Attention: Global Trust
Services (unless another address is provided by the Trustee to the Company
for the purpose).
Any notice or communication to a Holder shall be mailed by first class
mail to his or her address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders.
13.5. GOVERNING LAW
This Indenture and each Security shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of said State, without
regard to conflicts of laws principles thereof.
13.6. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that in the opinion
of the signers all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture (except pursuant to Section 3.5)
shall include (1) a statement that the person making such certificate or
opinion has read such covenant or condition; (2) a brief statement as to the
nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
13.7. BUSINESS DAYS
In any case where the date of payment of principal of or interest on
the Securities will not be a Business Day, the payment of such principal of
or interest on the Securities need not be made on such date but may be made
on the next succeeding Business Day, with the same force and effect as if
made on the date of payment and no interest shall accrue for the period from
and after such date.
13.8. TRUST INDENTURE ACT TO CONTROL
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
49
13.9. TABLE OF CONTENTS, HEADINGS, ETC.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
13.10. EXECUTION IN COUNTERPARTS
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute
but one and the same instrument.
13.11. SEPARABILITY
In case any one or more of the provisions contained in this Indenture
or in the Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Securities,
but this Indenture and the Securities shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.
13.12. ASSIGNMENT
The Company will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, PROVIDED that, in the event of any such
assignment, the Company will remain primarily liable for all its obligations.
Subject to the foregoing, the Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns.
This Indenture may not otherwise be assigned by the parties thereto.
50
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
SAFECO CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
THE CHASE MANHATTAN BANK
as Trustee
By /s/ Xxxx X. Xxxxxxx, Xx.
------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: Trust Officer
EXHIBIT A
(FORM OF FACE OF ORIGINAL SECURITY)
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: - THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL IN AS MUCH AS SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY "AFFILIATE" OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY)
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
A-1
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) IN A MINIMUM
PRINCIPAL AMOUNT OF $100,000 TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY,
AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE REVERSE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEREE TO THE COMPANY. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
No. ___________ CUSIP No. 786429 AA 2
A-2
SAFECO CORPORATION
6 7/8% NOTES DUE JULY 15, 2007
SAFECO Corporation, a Washington corporation (the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ____________, or registered assigns,
the principal sum of (__________) on July 15, 2007 (the "Maturity Date"), and to
pay interest on the outstanding principal amount hereof from July 15, 1997, or
from the most recent interest payment date (each such date, an "Interest Payment
Date") to which interest has been paid or duly provided for, semi-annually
(subject to deferral as set forth herein) in arrears on January 15 and July 15
of each year, commencing January 15, 1998 at the rate of 6 7/8% per annum until
the principal hereof shall have become due and payable, and at the same rate per
annum on any overdue principal and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded semi-annually.
The amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months and, for any period less
than a full calendar month, the number of days elapsed in such month. In the
event that any date on which the principal of or interest on this Security is
payable is not a Business Day, then the payment payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), with the same force and effect
as if made on such date. Pursuant to the Registration Rights Agreement, in
certain limited circumstances the Company will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement) with respect to this
Security.
The interest installment so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the person in whose name this Security (or one or more Predecessor Securities,
as defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be the January 1
or July 1 immediately preceding the relevant interest payment date. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the holders on such regular record date and may be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the holders of Securities not less than 10 days prior
to such special record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.
The principal of and interest on this Security shall be payable at the
office or agency of the Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that, payment
of interest may be made at the option of the Company by (i) check mailed to the
holder at such address as shall appear in the Security Register or (ii) by
transfer to an account maintained by the Person entitled thereto, provided that
proper written transfer instructions have been received by the relevant record
date.
A-3
This Security shall not be entitled to any benefit under the Indenture
hereinafter referred to, or be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on behalf
of the Trustee.
The provisions of this Security are continued on the reverse side hereof
and such provisions shall for all purposes have the same effect as though fully
set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
SAFECO CORPORATION
By _______________________________
Name:
Title:
Attest:
By: ________________________________
Name:
Title:
A-4
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated _______________________
The Chase Manhattan Bank
as Trustee
By_____________________________________
Authorized Officer
A-5
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein sometimes
referred to as the "Securities"), specified in the Indenture, all issued or to
be issued under and pursuant to an Indenture, dated as of July 15, 1997 (the
"Indenture"), duly executed and delivered between the Company and The Chase
Manhattan Bank, as Trustee (the "Trustee"), to which Indenture reference is
hereby made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Securities.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in aggregate principal amount of
the Securities at the time outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of
modifying in any manner the rights of the holders of the Securities; provided,
however, that no such supplemental indenture shall, without the consent of each
holder of Securities then outstanding and affected thereby, (i) extend the
Stated Maturity of any Securities, or reduce the principal amount thereof, or
reduce the rate of payment of interest thereon, or make the principal of, or
interest on, the Securities payable in any coin or currency other than U.S.
dollars, or impair or affect the right of any holder of Securities to institute
suit for the payment thereof, or (ii) reduce the aforesaid percentage of
Securities, the holders of which are required to consent to any such
supplemental indenture. The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Securities at the
time outstanding, on behalf of all of the holders of the Securities, to waive
any past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture, and its consequences,
except a default in the payment of the principal of or interest on any of the
Securities or a default in respect of any covenant or provision under which the
Indenture cannot be modified or amended without the consent of each holder of
Securities then outstanding. Any such consent or waiver by the holder of this
Security (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future holders and owners of this Security
and of any Security issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the time and place and at the rate and in the money herein
prescribed.
The Securities are issuable only in registered form without coupons in
denominations of $1,000.00 and any integral multiple thereof. As provided in
the Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Security is transferable by
the holder hereof on the Security Register of the Company, upon surrender of
this Security for registration of transfer at the office or agency of the
Company in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the
A-6
Company or the Security registrar duly executed by the holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
authorized denominations and for the same aggregate principal amount and series
will be issued to the designated transferee or transferees. No service charge
will be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Security, the
Company, the Trustee, any authenticating agent, any paying agent, any transfer
agent and the registrar may deem and treat the holder hereof as the absolute
owner hereof (whether or not this Security shall be overdue and notwithstanding
any notice of ownership or writing hereon made by anyone other than the Security
registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and (subject to the Indenture) interest
due hereon and for all other purposes, and neither the Company nor the Trustee
nor any authenticating agent nor any paying agent nor any transfer agent nor any
registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or interest on
this Security, or for any claim based hereon, or otherwise in respect hereof, or
based on or in respect of the Indenture, against any incorporator, stockholder,
officer or director, past, present or future, as such, of the Company or of any
predecessor or successor Person, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.
A-7
EXHIBIT B
(FORM OF FACE OF EXCHANGE SECURITY)(1)
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: - THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL IN AS MUCH AS SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
No.____________
_____________________________
(1) Except as provided in Section 2.4(b) of the Indenture.
B-1
SAFECO CORPORATION
6 7/8% NOTES DUE JULY 15, 2007
SAFECO Corporation, a Washington corporation (the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ____________, or registered assigns,
the principal sum of (__________) on July 15, 2007 (the "Maturity Date"), and to
pay interest on the outstanding principal amount hereof from July 15, 1997, or
from the most recent interest payment date (each such date, an "Interest Payment
Date") to which interest has been paid or duly provided for, semi-annually
(subject to deferral as set forth herein) in arrears on January 15 and July 15
of each year, commencing January 15, 1998 at the rate of 6 7/8% per annum until
the principal hereof shall have become due and payable, and at the same rate per
annum on any overdue principal and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded semi-annually.
The amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months and, for any period less
than a full calendar month, the number of days elapsed in such month. In the
event that any date on which the principal of or interest on this Security is
payable is not a Business Day, then the payment payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), with the same force and effect
as if made on such date.
The interest installment so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the person in whose name this Security (or one or more Predecessor Securities,
as defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be the January 1
or July 1 immediately preceding the relevant interest payment date. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the holders on such regular record date and may be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the holders of Securities not less than 10 days prior
to such special record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.
The principal of and interest on this Security shall be payable at the
office or agency of the Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that, payment
of interest may be made at the option of the Company by (i) check mailed to the
holder at such address as shall appear in the Security Register or (ii) by
transfer to an account maintained by the Person entitled thereto, provided that
proper written transfer instructions have been received by the relevant record
date.
This Security shall not be entitled to any benefit under the Indenture
hereinafter referred to, or be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on behalf
of the Trustee.
B-2
The provisions of this Security are continued on the reverse side hereof
and such provisions shall for all purposes have the same effect as though fully
set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
SAFECO CORPORATION
By _______________________________
Name: Boh X. Xxxxxx
Title: President
Attest:
By: ________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and Chief
Financial Officer
B-3
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated _________________
The Chase Manhattan Bank
as Trustee
By_____________________________________
Authorized Officer
B-4
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein sometimes
referred to as the "Securities"), specified in the Indenture, all issued or to
be issued under and pursuant to an Indenture, dated as of July 15, 1997 (the
"Indenture"), duly executed and delivered between the Company and The Chase
Manhattan Bank as Trustee (the "Trustee"), to which Indenture reference is
hereby made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Securities.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in aggregate principal amount of
the Securities at the time outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of
modifying in any manner the rights of the holders of the Securities; provided,
however, that no such supplemental indenture shall, without the consent of each
holder of Securities then outstanding and affected thereby, (i) extend the
Stated Maturity of any Securities, or reduce the principal amount thereof, or
reduce the rate of payment of interest thereon, or make the principal of, or
interest on, the Securities payable in any coin or currency other than U.S.
dollars, or impair or affect the right of any holder of Securities to institute
suit for the payment thereof, or (ii) reduce the aforesaid percentage of
Securities, the holders of which are required to consent to any such
supplemental indenture. The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Securities at the
time outstanding, on behalf of all of the holders of the Securities, to waive
any past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture, and its consequences,
except a default in the payment of the principal of or interest on any of the
Securities or a default in respect of any covenant or provision under which the
Indenture cannot be modified or amended without the consent of each holder of
Securities then outstanding. Any such consent or waiver by the holder of this
Security (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future holders and owners of this Security
and of any Security issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the time and place and at the rate and in the money herein
prescribed.
The Securities are issuable only in registered form without coupons in
denominations of $1,000.00 and any integral multiple thereof. As provided in
the Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Security is transferable by
the holder hereof on the Security Register of the Company, upon surrender of
this Security for registration of transfer at the office or agency of the
Company in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the
B-5
Company or the Security registrar duly executed by the holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
authorized denominations and for the same aggregate principal amount and series
will be issued to the designated transferee or transferees. No service charge
will be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Security, the
Company, the Trustee, any authenticating agent, any paying agent, any transfer
agent and the registrar may deem and treat the holder hereof as the absolute
owner hereof (whether or not this Security shall be overdue and notwithstanding
any notice of ownership or writing hereon made by anyone other than the Security
registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and (subject to the Indenture) interest
due hereon and for all other purposes, and neither the Company nor the Trustee
nor any authenticating agent nor any paying agent nor any transfer agent nor any
registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or interest on
this Security, or for any claim based hereon, or otherwise in respect hereof, or
based on or in respect of the Indenture, against any incorporator, stockholder,
officer or director, past, present or future, as such, of the Company or of any
predecessor or successor Person, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.
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