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MORTGAGEIT, INC.,
AS ISSUER
MORTGAGEIT HOLDINGS, INC.,
AS GUARANTOR
INDENTURE
DATED AS OF MARCH 24, 2006
WILMINGTON TRUST COMPANY,
AS TRUSTEE
FLOATING RATE JUNIOR SUBORDINATED DEBENTURES
DUE 2036
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TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS.........................................................................................1
Section 1.1. Definitions............................................................................1
ARTICLE II. DEBENTURES.........................................................................................8
Section 2.1. Authentication and Dating..............................................................8
Section 2.2. Form of Trustee's Certificate of Authentication........................................8
Section 2.3. Form and Denomination of Debentures....................................................9
Section 2.4. Execution of Debentures................................................................9
Section 2.5. Exchange and Registration of Transfer of Debentures....................................9
Section 2.6. Mutilated, Destroyed, Lost or Stolen Debentures.......................................11
Section 2.7. Temporary Debentures..................................................................12
Section 2.8. Payment of Interest and Additional Interest...........................................12
Section 2.9. Cancellation of Debentures Paid, etc..................................................13
Section 2.10. Computation of Interest...............................................................14
Section 2.11. CUSIP Numbers.........................................................................15
Section 2.12. Global Debentures.....................................................................15
ARTICLE III. PARTICULAR COVENANTS OF THE COMPANY..............................................................17
Section 3.1. Payment of Principal, Premium and Interest; Agreed Treatment of the Debentures........17
Section 3.2. Offices for Notices and Payments, etc.................................................17
Section 3.3. Appointments to Fill Vacancies in Trustee's Office....................................18
Section 3.4. Provision as to Paying Agent..........................................................18
Section 3.5. Certificate to Trustee................................................................19
Section 3.6. Additional Sums.......................................................................19
Section 3.7. Compliance with Consolidation Provisions..............................................19
Section 3.8. Limitation on Dividends...............................................................19
Section 3.9. Covenants as to the Trust.............................................................20
Section 3.10. REIT Status...........................................................................20
ARTICLE IV. SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.................................20
Section 4.1. Securityholders' Lists................................................................20
Section 4.2. Preservation and Disclosure of Lists..................................................20
ARTICLE V. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT...............................22
Section 5.1. Events of Default.....................................................................22
Section 5.2. Payment of Debentures on Default; Suit Therefor.......................................23
Section 5.3. Application of Moneys Collected by Trustee............................................25
Section 5.4. Proceedings by Securityholders........................................................25
Section 5.5. Proceedings by Trustee................................................................25
Section 5.6. Remedies Cumulative and Continuing; Delay or Omission Not a Waiver....................26
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Section 5.7. Direction of Proceedings and Waiver of Defaults by Majority of Securityholders........26
Section 5.8. Notice of Defaults....................................................................26
Section 5.9. Undertaking to Pay Costs..............................................................27
ARTICLE VI. CONCERNING THE TRUSTEE............................................................................27
Section 6.1. Duties and Responsibilities of Trustee................................................27
Section 6.2. Reliance on Documents, Opinions, etc..................................................28
Section 6.3. No Responsibility for Recitals, etc...................................................29
Section 6.4. Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May
Own Debentures........................................................................29
Section 6.5. Moneys to be Held in Trust............................................................29
Section 6.6. Compensation and Expenses of Trustee..................................................29
Section 6.7. Officers' Certificate as Evidence.....................................................30
Section 6.8. Eligibility of Trustee................................................................30
Section 6.9. Resignation or Removal of Trustee.....................................................31
Section 6.10. Acceptance by Successor Trustee.......................................................32
Section 6.11. Succession by Merger, etc.............................................................32
Section 6.12. Authenticating Agents.................................................................33
ARTICLE VII. CONCERNING THE SECURITYHOLDERS...................................................................33
Section 7.1. Action by Securityholders.............................................................33
Section 7.2. Proof of Execution by Securityholders.................................................34
Section 7.3. Who Are Deemed Absolute Owners........................................................34
Section 7.4. Debentures Owned by Company Deemed Not Outstanding....................................34
Section 7.5. Revocation of Consents; Future Holders Bound..........................................35
ARTICLE VIII. SECURITYHOLDERS' MEETINGS.......................................................................35
Section 8.1. Purposes of Meetings..................................................................35
Section 8.2. Call of Meetings by Trustee...........................................................35
Section 8.3. Call of Meetings by Company or Securityholders........................................36
Section 8.4. Qualifications for Voting.............................................................36
Section 8.5. Regulations...........................................................................36
Section 8.6. Voting................................................................................36
Section 8.7. Quorum; Actions.......................................................................37
ARTICLE IX. SUPPLEMENTAL INDENTURES...........................................................................37
Section 9.1. Supplemental Indentures without Consent of Securityholders............................37
Section 9.2. Supplemental Indentures with Consent of Securityholders...............................39
Section 9.3. Effect of Supplemental Indentures.....................................................39
Section 9.4. Notation on Debentures................................................................39
Section 9.5. Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee...........40
ARTICLE X. REDEMPTION OF SECURITIES...........................................................................40
Section 10.1. Optional Redemption...................................................................40
Section 10.2. Special Event Redemption..............................................................40
Section 10.3. Notice of Redemption; Selection of Debentures.........................................40
Section 10.4. Payment of Debentures Called for Redemption...........................................41
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ARTICLE XI. CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.................................................41
Section 11.1. Company and Guarantor May Consolidate, etc., on Certain Terms.........................41
Section 11.2. Successor Entity to be Substituted....................................................42
Section 11.3. Opinion of Counsel to be Given to Trustee.............................................42
ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE..........................................................42
Section 12.1. Discharge of Indenture................................................................42
Section 12.2. Deposited Moneys to be Held in Trust by Trustee.......................................43
Section 12.3. Paying Agent to Repay Moneys Held.....................................................43
Section 12.4. Return of Unclaimed Moneys............................................................43
ARTICLE XIII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.................................43
Section 13.1. Indenture and Debentures Solely Corporate Obligations.................................43
ARTICLE XIV. MISCELLANEOUS PROVISIONS.........................................................................44
Section 14.1. Successors............................................................................44
Section 14.2. Official Acts by Successor Entity.....................................................44
Section 14.3. Surrender of Powers...................................................................44
Section 14.4. Addresses for Notices, etc............................................................44
Section 14.5. Governing Law.........................................................................44
Section 14.6. Evidence of Compliance with Conditions Precedent......................................44
Section 14.7. Table of Contents, Headings, etc......................................................45
Section 14.8. Execution in Counterparts.............................................................45
Section 14.9. Separability..........................................................................45
Section 14.10. Assignment............................................................................45
Section 14.11. Acknowledgment of Rights..............................................................45
ARTICLE XV. SUBORDINATION OF DEBENTURES.......................................................................45
Section 15.1. Agreement to Subordinate..............................................................45
Section 15.2. Default on Senior Indebtedness........................................................46
Section 15.3. Liquidation, Dissolution, Bankruptcy..................................................46
Section 15.4. Subrogation...........................................................................47
Section 15.5. Trustee to Effectuate Subordination...................................................48
Section 15.6. Notice by the Company.................................................................48
Section 15.7. Rights of the Trustee; Holders of Senior Indebtedness.................................49
Section 15.8. Subordination May Not Be Impaired.....................................................49
ARTICLE XVI. GUARANTEE........................................................................................49
Section 16.1. The Guarantee.........................................................................49
Section 16.2. Guarantee Unconditional, etc..........................................................50
Section 16.3. Reinstatement.........................................................................50
Section 16.4. Subrogation...........................................................................50
ARTICLE XVII. SUBORDINATION OF GUARANTEE......................................................................50
Section 17.1. Debentures Subordinate to Senior Debt of the Guarantor................................50
Section 17.2. No Payment When Senior Indebtedness of the Guarantor in Default:
Payment Over of Proceeds Upon Dissolution, Etc........................................50
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Section 17.3. Payment Permitted If No Default.......................................................52
Section 17.4. Subrogation to Rights of Holders of Senior Indebtedness of the Guarantor..............52
Section 17.5. Provisions Solely to Define Relative Rights...........................................52
Section 17.6. Trustee to Effectuate Subordination...................................................53
Section 17.7. No Waiver of Subordination Provisions.................................................53
Section 17.8. Notice to Trustee.....................................................................53
Section 17.9. Reliance on Judicial Order or Certificate of Liquidating Agent........................54
Section 17.10. Trustee Not Fiduciary for Holders of Senior Indebtedness of the Guarantor.............54
Section 17.11. Rights of Trustee as Holder of Senior Indebtedness of the Guarantor;
Preservation of Trustee's Rights......................................................54
Section 17.12. Article Applicable to Paying Agents...................................................54
Exhibit A Form of Floating Rate Junior Subordinated Debenture
Exhibit B Form of Certificate to Trustee
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THIS INDENTURE, dated as of March 24, 2006, between MortgageIT, Inc., a
New York corporation (the "Company"), MortgageIT Holdings, Inc., a Maryland
corporation (the "Guarantor") and Wilmington Trust Company, a Delaware banking
corporation, as debenture trustee (the "Trustee").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its Floating Rate Junior Subordinated Debentures due
2036 (the "Debentures") under this Indenture to provide, among other things, for
the execution and authentication, delivery and administration thereof, and the
Company has duly authorized the execution of this Indenture and the Guarantor
has duly authorized the issuance of its guarantee of the Debentures (the
"Guarantee"); and
WHEREAS, all acts and things necessary to make this Indenture a valid
agreement according to its terms, have been done and performed;
NOW, THEREFORE, This Indenture Witnesseth:
In consideration of the premises, and the purchase of the Debentures by
the holders thereof, the Company covenants and agrees with the Trustee for the
equal and proportionate benefit of the respective holders from time to time of
the Debentures as follows:
ARTICLE I.
DEFINITIONS
SECTION 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 and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. 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 in the United States 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.
"Additional Interest" means the interest, if any, that shall accrue on any
amounts payable on the Debenture, the payment of which has not been made on the
applicable Interest Payment Date or otherwise and which shall accrue at the rate
per annum specified or determined as set forth in Section 2.8, in each case to
the extent legally enforceable.
"Additional Sums" has the meaning set forth in Section 3.6.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Applicable Depositary Procedures" means, with respect to any transfer or
transaction involving a Global Debenture or beneficial interest therein, the
rules and procedures of the Depositary for such Debenture, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any agent or agents of the Trustee which at
the time shall be appointed and acting pursuant to Section 6.12.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
B-1
"Board of Directors" means the board of directors or the executive
committee or any other duly authorized designated officers of the Company or the
Guarantor, as the context requires.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or the Guarantor, as the context
requires, 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" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York City or Wilmington, Delaware are
permitted or required by any applicable law or executive order to close.
"Capital Securities" means undivided beneficial interests in the assets of
the Trust which rank pari passu with Common Securities issued by the Trust;
provided, however, that upon the occurrence and continuance of an Event of
Default (as defined in the Declaration), the rights of holders of such Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights of holders of such
Capital Securities.
"Certificate" means a certificate signed by any one of the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company or the Guarantor, as the context requires.
"Common Securities" means undivided beneficial interests in the assets of
the Trust which rank pari passu with Capital Securities issued by the Trust;
provided, however, that upon the occurrence and continuance of an Event of
Default (as defined in the Declaration), the rights of holders of such Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights of holders of such
Capital Securities.
"Company" means MortgageIT, Inc., a New York corporation, and, subject to
the provisions of Article XI, shall include its successors and assigns.
"Coupon Rate" has the meaning set forth in Section 2.8.
"Debenture" or "Debentures" has the meaning stated in the first recital of
this Indenture.
"Debenture Register" has the meaning specified in Section 2.5.
"Declaration" means the Amended and Restated Declaration of Trust of the
Trust, as amended or supplemented from time to time.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning set forth in Section 2.8.
"Depositary" means an organization registered as a clearing agency under
the Exchange Act that is designated as Depositary by the Company or any
successor thereto. The initial Depositary will be DTC.
"Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Depositary effects
book-entry transfers and pledges of securities deposited with the Depositary.
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"Determination Date" has the meaning set forth in Section 2.10.
"Distribution Period" means (i) with respect to interest paid on the first
Interest Payment Date, the period beginning on (and including) the date of
original issuance and ending on (but excluding) the Interest Payment Date in
June 2006 and (ii) thereafter, with respect to interest paid on each successive
Interest Payment Date, the period beginning on (and including) the preceding
Interest Payment Date and ending on (but excluding) such current Interest
Payment Date.
"DTC" means the Depository Trust Company, a New York corporation.
"Event of Default" means 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" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Global Debenture" means a security that evidences all or part of the
Debentures, the ownership and transfers of which shall be made through book
entries by a Depositary.
"Guarantee" has the meaning specified in the first recital of this
Indenture.
"Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean such successor corporation.
"Indenture" means this instrument as originally executed or, if amended or
supplemented as herein provided, as so amended or supplemented, or both.
"Institutional Trustee" has the meaning set forth in the Declaration.
"Interest Payment Date" means March 15, June 15, September 15 and December
15 of each year during the term of this Indenture, or if such day is not a
Business Day, then the next succeeding Business Day (it being understood that
interest accrues for any such non-Business Day), commencing in June 2006.
"Interest Rate" means for the Distribution Period beginning on (and
including) the date of original issuance and ending on (but excluding) the
Interest Payment Date in June 2006 the rate per annum of 8.56%, and for each
Distribution Period beginning on or after the Interest Payment Date in June
2006, the Coupon Rate for such Distribution Period.
"Investment Company Event" means the receipt by the Company and the Trust
of an opinion of counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or written change
(including any announced prospective change) in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the Trust is
or, within 90 days of the date of such opinion will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended which change or prospective change becomes effective or would
become effective, as the case may be, on or after the date of the issuance of
the Debentures.
"Liquidation Amount" means the stated amount of $1,000.00 per Trust
Security.
"Maturity Date" means June 15, 2036.
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"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the Chief Financial Officer, the Vice
Chairman, the President, any Managing Director or any Vice President, and by the
Treasurer, an Assistant Treasurer, the Comptroller, an Assistant Comptroller,
the Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee. Each such certificate shall include the statements provided for in
Section 14.6 if and to the extent required by the provisions of such Section.
"Opinion of Counsel" means an opinion in writing signed by legal counsel,
who may be an employee of or counsel to the Company, or may be other counsel
reasonably satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 14.6 if and to the extent required by the
provisions of such Section.
The term "outstanding," when used with reference to Debentures, means,
subject to the provisions of Section 7.4, as of any particular time, all
Debentures authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except:
(a) Debentures theretofore canceled by the Trustee or the Authenticating
Agent or delivered to the Trustee for cancellation;
(b) Debentures, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company or the Guarantor) or
shall have been set aside and segregated in trust by the Company (if the Company
shall act as its own paying agent); provided, however, that, if such Debentures,
or portions thereof, are to be redeemed prior to maturity thereof, notice of
such redemption shall have been given as provided in Section 10.3 or provision
satisfactory to the Trustee shall have been made for giving such notice; and
(c) Debentures paid pursuant to Section 2.6 or in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered pursuant to the terms of Section 2.6 unless proof satisfactory to the
Company and the Trustee is presented that any such Debentures are held by bona
fide holders in due course.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for purposes of this definition, any Debenture
authenticated and delivered under Section 2.6 in lieu of a lost, destroyed or
stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.
"Principal Office of the Trustee," or other similar term, means the office
of the Trustee, at which at any particular time its corporate trust business
shall be principally administered, which at the time of the execution of this
Indenture shall be Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000-0000, Attention: Corporate Trust Administration.
"Redemption Date" has the meaning set forth in Section 10.1.
"Redemption Price" means 100% of the principal amount of the Debentures
being redeemed, plus accrued and unpaid interest (including any Additional
Interest) on such Debentures to the Redemption Date.
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"Responsible Officer" means, with respect to the Trustee, any officer
within the Principal Office of the Trustee, including any vice-president, any
assistant vice-president, any secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or other officer of the Principal
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.
"Securities Act" means the Securities Act of 1933, as amended from time to
time or any successor legislation.
"Securityholder," "holder of Debentures," or other similar terms, means
any Person in whose name at the time a particular Debenture is registered on the
register kept by the Company or the Trustee for that purpose in accordance with
the terms hereof.
"Senior Indebtedness" means, with respect to the Company or the Guarantor,
as the context requires, (i) the principal, premium, if any, and interest in
respect of (A) indebtedness of the Company or the Guarantor, as applicable, for
all borrowed and purchased money and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company or
the Guarantor, as applicable; (ii) all capital lease obligations of the Company
or the Guarantor, as applicable; (iii) all obligations of the Company or the
Guarantor, as applicable, issued or assumed as the deferred purchase price of
property, all conditional sale obligations of the Company or the Guarantor, as
applicable, and all obligations of the Company or the Guarantor, as applicable,
under any title retention agreement; (iv) all obligations of the Company or the
Guarantor, as applicable, for the reimbursement of any letter of credit, any
banker's acceptance, any security purchase facility, any repurchase agreement or
similar arrangement, any interest rate swap, any other hedging arrangement, any
obligation under options or any similar credit or other transaction; (v) all
obligations of the Company or the Guarantor, as applicable, associated with
derivative products such as interest and foreign exchange rate contracts,
commodity contracts, and similar arrangements; (vi) all obligations of the type
referred to in clauses (i) through (v) above of other Persons for the payment of
which the Company or the Guarantor, as applicable, is responsible or liable as
obligor, guarantor or otherwise including, without limitation, similar
obligations arising from off-balance sheet guarantees and direct credit
substitutes; and (vii) all obligations of the type referred to in clauses (i)
through (vi) above of other Persons secured by any lien on any property or asset
of the Company or the Guarantor, as applicable (whether or not such obligation
is assumed by the Company or the Guarantor, as the context requires), whether
incurred on or prior to the date of this Indenture or thereafter incurred.
Notwithstanding the foregoing, "Senior Indebtedness" shall not include (1)
Debentures issued pursuant to this Indenture and guarantees in respect of such
Debentures, (2) obligations with respect to which in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are pari passu, junior or otherwise not superior in right
of payment to the Debentures, (3) trade amounts payable or other accrued
liabilities arising in the ordinary course of business, or (4) obligations
issued to any trust other than the Trust (or a trustee of any such trust) in
connection with the issuance by such trust of trust preferred securities and the
issuance of debentures by the Company or the Guarantor, as applicable, or any of
their subsidiaries pursuant to an instrument that, by its terms, rank pari passu
with or junior in right of payment to this Indenture. Senior Indebtedness shall
continue to be Senior Indebtedness and be entitled to the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
"Special Event" means either an Investment Company Event or a Tax Event.
"Special Redemption Date" has the meaning set forth in Section 10.2.
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"Special Redemption Price" means the price set forth in the following
table for any Special Redemption Date that occurs on the date indicated below
(or if such day is not a Business Day, then the next succeeding Business Day),
expressed as the percentage of the principal amount of the Debentures being
redeemed:
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MONTH IN WHICH SPECIAL SPECIAL REDEMPTION PRICE
REDEMPTION DATE OCCURS
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June 2006 104.625%
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September 2006 104.300%
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December 2006 104.000%
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March 2007 103.650%
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June 2007 103.350%
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September 2007 103.000%
--------------------------------------------------------------------------------
December 2007 102.700%
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March 2008 102.350%
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June 2008 102.050%
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September 2008 101.700%
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December 2008 101.400%
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March 2009 101.050%
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June 2009 100.750%
--------------------------------------------------------------------------------
September 2009 100.450%
--------------------------------------------------------------------------------
December 2009 100.200%
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March 2010 and thereafter 100.000%
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plus, in each case, accrued and unpaid interest (including any Additional
Interest) on such Debentures to the Special Redemption Date.
"Subsidiary" means with respect to any Person, (i) any corporation at
least a majority of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of the outstanding partnership or
similar interests of which shall at the time be owned by such Person, or by one
or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries and (iii) any limited partnership of which such Person or any of
its Subsidiaries is a general partner. For the purposes of this definition,
"voting stock" means shares, interests, participations or other equivalents in
the equity interest (however designated) in such Person
6
having ordinary voting power for the election of a majority of the directors (or
the equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.
"Tax Event" means the receipt by the Company and the Trust of an opinion
of counsel experienced in such matters to the effect that, as a result of any
amendment to or change (including any announced prospective change) in the laws
or any regulations thereunder of the United States or any political subdivision
or taxing authority thereof or therein, or as a result of any official
administrative pronouncement (including any private letter ruling, technical
advice memorandum, field service advice, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations) (an "Administrative Action") or judicial decision
interpreting or applying such laws or regulations, regardless of whether such
Administrative Action or judicial decision is issued to or in connection with a
proceeding involving the Company or the Trust and whether or not subject to
review or appeal, which amendment, clarification, change, Administrative Action
or decision is enacted, promulgated or announced, in each case on or after the
date of original issuance of the Debentures, there is more than an insubstantial
risk that: (i) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Debentures; (ii) interest payable by the Company on
the Debentures is not, or within 90 days of the date of such opinion, will not
be, deductible by the Company, in whole or in part, for United States federal
income tax purposes; or (iii) the Trust is, or will be within 90 days of the
date of such opinion, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"3-Month LIBOR" has the meaning set forth in Section 2.10.
"Telerate Page 3750" has the meaning set forth in Section 2.10.
"Trust" shall mean MortgageIT Capital Trust III, a Delaware statutory
trust, or any other similar trust created for the purpose of issuing Capital
Securities in connection with the issuance of Debentures under this Indenture,
of which the Company is the sponsor.
"Trust Securities" means Common Securities and Capital Securities of the
Trust.
"Trustee" means Wilmington Trust Company, and, subject to the provisions
of Article VI hereof, shall also include its successors and assigns as Trustee
hereunder.
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ARTICLE II.
DEBENTURES
SECTION 2.1. AUTHENTICATION AND DATING. Upon the execution and delivery
of this Indenture, or from time to time thereafter, Debentures in an aggregate
principal amount not in excess of $51,547,000.00 may be executed and delivered
by the Company to the Trustee for authentication, and the Trustee, upon receipt
of a written authentication order from the Company, shall thereupon authenticate
and make available for delivery said Debentures to or upon the written order of
the Company or the Guarantor, signed by its Chairman of the Board of Directors,
Chief Executive Officer, Chief Financial Officer, Vice Chairman, the President,
one of its Managing Directors or one of its Vice Presidents without any further
action by the Company or Guarantor hereunder. Notwithstanding anything to the
contrary contained herein, the Trustee shall be fully protected in relying upon
the aforementioned authentication order and written order in authenticating and
delivering said Debentures. In authenticating such Debentures, and accepting the
additional responsibilities under this Indenture in relation to such Debentures,
the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon:
(a) a copy of any Board Resolution or Board Resolutions relating thereto
and, if applicable, an appropriate record of any action taken pursuant to such
resolution, in each case certified by the Secretary or an Assistant Secretary of
the Company or the Guarantor, as the case may be; and
(b) an Opinion of Counsel prepared in accordance with Section 14.6 which
shall also state:
(1) that such Debentures, when authenticated and delivered
by the Trustee and issued by the Company in each case in the manner
and subject to any conditions specified in such Opinion of Counsel,
will constitute valid and legally binding obligations of the
Company, subject to or limited by applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, moratorium and other
statutory or decisional laws relating to or affecting creditors'
rights or the reorganization of financial institutions (including,
without limitation, preference and fraudulent conveyance or transfer
laws), heretofore or hereafter enacted or in effect, affecting the
rights of creditors generally; and
(2) that all laws and requirements in respect of the
execution and delivery by the Company of the Debentures have been
complied with and that authentication and delivery of the Debentures
by the Trustee will not violate the terms of this Indenture.
The Trustee shall have the right to decline to authenticate and deliver
any Debentures under this Section if the Trustee, being advised in writing by
counsel, determines that such action may not lawfully be taken or if a
Responsible Officer of the Trustee in good faith shall determine that such
action would expose the Trustee to personal liability to existing holders.
The definitive Debentures shall be typed, printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Debentures, as evidenced by their
execution of such Debentures.
SECTION 2.2. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificate of authentication on all Debentures shall be in
substantially the following form:
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This is one of the Debentures referred to in the within-mentioned
Indenture.
WILMINGTON TRUST COMPANY, as Trustee
By _________________________________
Authorized Signer
SECTION 2.3. FORM AND DENOMINATION OF DEBENTURES. The Debentures shall
be substantially in the form of Exhibit A attached hereto. The Debentures shall
be in registered, certificated form without coupons and in minimum denominations
of $100,000.00 and any multiple of $1,000.00 in excess thereof. Any attempted
transfer of the Debentures in a block having an aggregate principal amount of
less than $100,000.00 shall be deemed to be void and of no legal effect
whatsoever. Any such purported transferee shall be deemed not to be a holder of
such Debentures for any purpose, including, but not limited to the receipt of
payments on such Debentures, and such purported transferee shall be deemed to
have no interest whatsoever in such Debentures. The Debentures shall be
numbered, lettered, or otherwise distinguished in such manner or in accordance
with such plans as the officers executing the same may determine with the
approval of the Trustee as evidenced by the execution and authentication
thereof.
SECTION 2.4. EXECUTION OF DEBENTURES. The Debentures shall be signed in
the name and on behalf of the Company by the manual or facsimile signature of
its Chairman of the Board of Directors, Chief Executive Officer, Chief Financial
Officer, Vice Chairman, President, one of its Managing Directors or one of its
Executive Vice Presidents, Senior Vice Presidents or Vice Presidents. Only such
Debentures as shall bear thereon a certificate of authentication substantially
in the form herein before recited, executed by the Trustee or the Authenticating
Agent by the manual signature of an authorized signer, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee or the Authenticating Agent upon any Debenture
executed by the Company shall be conclusive evidence that the Debenture so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee or the Authenticating
Agent, or disposed of by the Company, such Debentures nevertheless may be
authenticated and delivered or disposed of as though the Person who signed such
Debentures had not ceased to be such officer of the Company; and any Debenture
may be signed on behalf of the Company by such Persons as, at the actual date of
the execution of such Debenture, shall be the proper officers of the Company,
although at the date of the execution of this Indenture any such person was not
such an officer.
Every Debenture shall be dated the date of its authentication.
SECTION 2.5. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBENTURES. To the
extent there is more than one holder, the Company shall cause to be kept, at the
office or agency maintained for the purpose of registration of transfer and for
exchange as provided in Section 3.2, a register (the "Debenture Register") for
the Debentures issued hereunder in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration and transfer
of all Debentures as in this Article II provided. The Debenture Register shall
be in written form or in any other form capable of being converted into written
form within a reasonable time.
Debentures to be exchanged may be surrendered at the Principal Office of
the Trustee or at any office or agency to be maintained by the Company for such
purpose as provided in Section 3.2, and the Company shall execute, the Company
or the Trustee shall register and the Trustee or the Authenticating Agent shall
authenticate and make available for delivery in exchange therefor the Debenture
or
9
Debentures which the Securityholder making the exchange shall be entitled to
receive. Upon due presentment for registration of transfer of any Debenture at
the Principal Office of the Trustee or at any office or agency of the Company
maintained for such purpose as provided in Section 3.2, the Company shall
execute, the Company or the Trustee shall register and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery in the
name of the transferee or transferees a new Debenture for a like aggregate
principal amount. Registration or registration of transfer of any Debenture by
the Trustee or by any agent of the Company appointed pursuant to Section 3.2,
and delivery of such Debenture, shall be deemed to complete the registration or
registration of transfer of such Debenture.
All Debentures presented for registration of transfer or for exchange or
payment shall (if so required by the Company or the Trustee or the
Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the Trustee or the Authenticating Agent duly executed by the holder or his
attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Debentures, but the Company or the Trustee may require payment of a
sum sufficient to cover any tax, fee or other governmental charge that may be
imposed in connection therewith.
The Company or the Trustee shall not be required to exchange or register a
transfer of any Debenture for a period of 15 days next preceding the date of
selection of Debentures for redemption.
Notwithstanding anything herein to the contrary, Debentures may not be
transferred except in compliance with the restricted securities legend set forth
below, unless otherwise determined by the Company, upon the advice of counsel
expert in securities law, in accordance with applicable law:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), 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, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE
WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH (A) 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 OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
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SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE
OBTAINED FROM THE COMPANY. HEDGING TRANSACTIONS INVOLVING THIS SECURITY MAY NOT
BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH
A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN ASSETS" OF
ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF
THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF
ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH
PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING
AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000.00 AND MULTIPLES OF
$1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED TO
BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY
THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
SECTION 2.6. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company shall execute, and upon its written request the Trustee shall
authenticate and deliver, a new Debenture bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen. In
every case the applicant for a substituted Debenture shall furnish to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless, and, in every case of destruction, loss or theft,
the applicant shall also furnish to
11
the Company and the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Debenture and of the ownership thereof.
The Trustee may authenticate any such substituted Debenture and deliver
the same upon the written request or authorization of any officer of the
Company. Upon the issuance of any substituted Debenture, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses connected
therewith. In case any Debenture which has matured or is about to mature or has
been called for redemption in full shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Debenture) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless and, in case of destruction, loss or theft, evidence
satisfactory to the Company and to the Trustee of the destruction, loss or theft
of such Debenture and of the ownership thereof.
Every substituted Debenture issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any such Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debentures duly issued hereunder. All
Debentures shall be held and owned upon the express condition that, to the
extent permitted by applicable law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
SECTION 2.7. TEMPORARY DEBENTURES. Pending the preparation of definitive
Debentures, the Company may execute and the Trustee shall authenticate and make
available for delivery temporary Debentures that are typed, printed or
lithographed. Temporary Debentures shall be issuable in any authorized
denomination, and substantially in the form of the definitive Debentures in lieu
of which they are issued but with such omissions, insertions and variations as
may be appropriate for temporary Debentures, all as may be determined by the
Company. Every such temporary Debenture shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with the same effect, as the definitive Debentures. Without
unreasonable delay the Company will execute and deliver to the Trustee or the
Authenticating Agent definitive Debentures and thereupon any or all temporary
Debentures may be surrendered in exchange therefor, at the principal corporate
trust office of the Trustee or at any office or agency maintained by the Company
for such purpose as provided in Section 3.2, and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery in
exchange for such temporary Debentures a like aggregate principal amount of such
definitive Debentures. Such exchange shall be made by the Company at its own
expense and without any charge therefor except that in case of any such exchange
involving a registration of transfer the Company may require payment of a sum
sufficient to cover any tax, fee or other governmental charge that may be
imposed in relation thereto. Until so exchanged, the temporary Debentures shall
in all respects be entitled to the same benefits under this Indenture as
definitive Debentures authenticated and delivered hereunder.
SECTION 2.8. PAYMENT OF INTEREST AND ADDITIONAL INTEREST. Interest at
the Interest Rate and any Additional Interest on any Debenture that is payable,
and is punctually paid or duly provided for, on any Interest Payment Date for
Debentures shall be paid to the Person in whose name said Debenture (or one or
more Predecessor Securities) is registered at the close of business on the
regular record date for
12
such interest installment except that interest and any Additional Interest
payable on the Maturity Date shall be paid to the Person to whom principal is
paid.
Each Debenture shall bear interest for the period beginning on (and
including) the date of original issuance and ending on (but excluding) the
Interest Payment Date in June 2006 at a rate per annum of 8.56%, and shall bear
interest for each successive Distribution Period beginning on or after the
Interest Payment Date in June 2006 at a rate per annum equal to the 3-Month
LIBOR, determined as described in Section 2.10, plus 3.60% (the "Coupon Rate"),
applied to the principal amount thereof, until the principal thereof becomes due
and payable; provided, however, that any overdue principal, premium, if any, or
Additional Sums and any overdue installment of interest shall bear Additional
Interest at the Interest Rate in effect for each applicable period, compounded
quarterly, from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand. Interest
shall be payable quarterly in arrears on each Interest Payment Date with the
first installment of interest to be paid on the Interest Payment Date in June
2006.
Any interest on any Debenture, including Additional Interest, 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 registered holder on the relevant regular record date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Company to the Persons in whose names such Debentures (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 at least
25 days prior to the date of the proposed payment of the amount of Defaulted
Interest proposed to be paid on each such Debenture and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest which shall not
be more than 15 nor less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first class postage prepaid, to each Securityholder
at its address as it appears in the Debenture Register, not less than 10 days
prior to such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
such Debentures (or their respective Predecessor Securities) are registered on
such special record date and shall be no longer payable.
The Company may make payment of any Defaulted Interest on any Debentures
in any other lawful manner after notice given by the Company to the Trustee of
the proposed payment method; provided, however, the Trustee in its sole
discretion deems such payment method to be practical.
The term "regular record date" as used in this Section shall mean the
close of business on the 15th Business Day preceding the applicable Interest
Payment Date.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debenture shall carry the rights to interest accrued
and unpaid, and to accrue, that were carried by such other Debenture.
SECTION 2.9. CANCELLATION OF DEBENTURES PAID, ETC. All Debentures
surrendered for the purpose of payment, redemption, exchange or registration of
transfer, shall, if surrendered to the
13
Company or any paying agent, be surrendered to the Trustee and promptly canceled
by it, or, if surrendered to the Trustee or any Authenticating Agent, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. All
Debentures canceled by any Authenticating Agent shall be delivered to the
Trustee. The Trustee shall destroy all canceled Debentures unless the Company
otherwise directs the Trustee in writing. If the Company shall acquire any of
the Debentures, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Debentures unless and until
the same are surrendered to the Trustee for cancellation.
SECTION 2.10. COMPUTATION OF INTEREST. The amount of interest payable for
each Distribution Period will be calculated by applying the Interest Rate to the
principal amount outstanding at the commencement of the Distribution Period on
the basis of the actual number of days in the Distribution Period concerned
divided by 360. All percentages resulting from any calculations on the
Debentures will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655),
and all dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward)).
(a) "3-Month LIBOR" means the London interbank offered interest rate for
three-month, U.S. dollar deposits determined by the Trustee in the following
order of priority:
(1) the rate (expressed as a percentage per annum) for U.S. dollar
deposits having a three-month maturity that appears on Telerate Page 3750
as of 11:00 a.m. (London time) on the related Determination Date (as
defined below). "Telerate Page 3750" means the display designated as "Page
3750" on the Moneyline Telerate Service or such other page as may replace
Page 3750 on that service or such other service or services as may be
nominated by the British Bankers' Association as the information vendor
for the purpose of displaying London interbank offered rates for U.S.
dollar deposits;
(2) if such rate cannot be identified on the related Determination
Date, the Trustee will request the principal London offices of four
leading banks in the London interbank market to provide such banks'
offered quotations (expressed as percentages per annum) to prime banks in
the London interbank market for U.S. dollar deposits having a three-month
maturity as of 11:00 a.m. (London time) on such Determination Date. If at
least two quotations are provided, 3-Month LIBOR will be the arithmetic
mean of such quotations;
(3) if fewer than two such quotations are provided as requested in
clause (2) above, the Trustee will request four major New York City banks
to provide such banks' offered quotations (expressed as percentages per
annum) to leading European banks for loans in U.S. dollars as of 11:00
a.m. (London time) on such Determination Date. If at least two such
quotations are provided, 3-Month LIBOR will be the arithmetic mean of such
quotations; and
(4) if fewer than two such quotations are provided as requested in
clause (3) above, 3-Month LIBOR will be a 3-Month LIBOR determined with
respect to the Distribution Period immediately preceding such current
Distribution Period.
If the rate for U.S. dollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
related Determination Date is superseded on the Telerate Page 3750 by a
corrected rate by 12:00 noon (London time) on such Determination Date, then the
corrected rate as so substituted on the applicable page will be the applicable
3-Month LIBOR for such Determination Date.
14
(b) The Interest Rate for any Distribution Period will at no time be
higher than the maximum rate then permitted by New York law as the same may be
modified by United States law.
(c) "Determination Date" means the date that is two London Banking Days
(i.e., a business day in which dealings in deposits in U.S. dollars are
transacted in the London interbank market) preceding the commencement of the
particular Distribution Period for which a Coupon Rate is being determined.
(d) The Trustee shall notify the Company, the Institutional Trustee and
any securities exchange or interdealer quotation system on which the Capital
Securities are listed, of the Coupon Rate and the Determination Date for each
Distribution Period, in each case as soon as practicable after the determination
thereof but in no event later than the thirtieth (30th) day of the relevant
Distribution Period. Failure to notify the Company, the Institutional Trustee or
any securities exchange or interdealer quotation system, or any defect in said
notice, shall not affect the obligation of the Company to make payment on the
Debentures at the applicable Coupon Rate. Any error in the calculation of the
Coupon Rate by the Trustee may be corrected at any time by notice delivered as
above provided. Upon the request of a holder of a Debenture, the Trustee shall
provide the Coupon Rate then in effect and, if determined, the Coupon Rate for
the next Distribution Period.
(e) Subject to the corrective rights set forth above, all certificates,
communications, opinions, determinations, calculations, quotations and decisions
given, expressed, made or obtained for the purposes of the provisions relating
to the payment and calculation of interest on the Debentures and distributions
on the Capital Securities by the Trustee or the Institutional Trustee will (in
the absence of willful default, bad faith and manifest error) be final,
conclusive and binding on the Trust, the Company and all of the holders of the
Debentures and the Capital Securities, and no liability shall (in the absence of
willful default, bad faith or manifest error) attach to the Trustee or the
Institutional Trustee in connection with the exercise or non-exercise by either
of them or their respective powers, duties and discretion.
SECTION 2.11. CUSIP NUMBERS. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use CUSIP numbers in notices of redemption as a convenience to Securityholders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Debentures or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Debentures, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee in writing of any change in the
CUSIP numbers.
SECTION 2.12. GLOBAL DEBENTURES.
(a) Upon the election of the holder of outstanding Debentures, which
election need not be in writing, the Debentures owned by such holder shall be
issued in the form of one or more Global Debentures registered in the name of
the Depositary or its nominee. Each Global Debenture issued under this Indenture
shall be registered in the name of the Depositary designated by the Company for
such Global Debenture or a nominee thereof, delivered to such Depositary or a
nominee thereof or custodian therefor and shall contain such legends as may be
required by the Depositary and each such Global Debenture shall constitute a
single Debenture for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Debenture may be exchanged in whole or in part for Debentures registered, and no
transfer of a Global Debenture in whole or in part may be registered, in the
name of any Person other than the Depositary for such Global Debenture or a
nominee thereof unless (i) such Depositary advises the Trustee and the Company
in writing that such Depositary is no longer willing or able to properly
discharge its responsibilities as Depositary with respect to such Global
Debenture, and no qualified successor is appointed by the
15
Company within ninety (90) days of receipt by the Company of such notice, (ii)
such Depositary ceases to be a clearing agency registered under the Exchange Act
and no successor is appointed by the Company within ninety (90) days after
obtaining knowledge of such event, (iii) the Company executes and delivers to
the Trustee a Company order stating that the Company elects to terminate the
book-entry system through the Depositary or (iv) an Event of Default shall have
occurred and be continuing. Upon the occurrence of any event specified in clause
(i), (ii), (iii) or (iv) above, the Trustee shall notify the Depositary and
instruct the Depositary to notify all owners of beneficial interests in such
Global Debenture of the occurrence of such event and of the availability of
Debentures to such owners of beneficial interests requesting the same. Upon the
issuance of such Debentures and the registration in the Debenture Register of
such Debentures in the names of the holders of the beneficial interests therein,
the Trustee shall recognize such holders of beneficial interests as holders.
(c) If any Global Debenture is to be exchanged for other Debentures or
canceled in part, or if another Debenture is to be exchanged in whole or in part
for a beneficial interest in any Global Debenture, then either (i) such Global
Debenture shall be so surrendered for exchange or cancellation as provided in
this Article II or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Debentures to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Debenture registrar, whereupon
the Trustee, in accordance with the Applicable Depositary Procedures, shall
instruct the Depositary or its authorized representative to make a corresponding
adjustment to its records. Upon any such surrender or adjustment of a Global
Debenture by the Depositary, accompanied by registration instructions, the
Company shall execute and the Trustee shall authenticate and deliver any
Debentures issuable in exchange for such Global Debenture (or any portion
thereof) in accordance with the instructions of the Depositary. The Trustee
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions.
(d) Every Debenture authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Debenture or any portion
thereof shall be authenticated and delivered in the form of, and shall be, a
Global Debenture, unless such Debenture is registered in the name of a Person
other than the Depositary for such Global Debenture or a nominee thereof.
(e) Debentures distributed to holders of Book-Entry Capital Securities
(as defined in the Declaration) upon the dissolution of the Trust shall be
distributed in the form of one or more Global Debentures registered in the name
of a Depositary or its nominee, and deposited with the Debentures registrar, as
custodian for such Depositary, or with such Depositary, for credit by the
Depositary to the respective accounts of the beneficial owners of the Debentures
represented thereby (or such other accounts as they may direct). Debentures
distributed to holders of Capital Securities other than Book-Entry Capital
Securities upon the dissolution of the Trust shall not be issued in the form of
a Global Debenture or any other form intended to facilitate book-entry trading
in beneficial interests in such Debentures.
(f) The Depositary or its nominee, as the registered owner of a Global
Debenture, shall be the holder of such Global Debenture for all purposes under
this Indenture and the Debentures, and owners of beneficial interests in a
Global Debenture shall hold such interests pursuant to the Applicable Depositary
Procedures. Accordingly, any such owner's beneficial interest in a Global
Debenture shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Depositary Participants. The Debentures registrar and the Trustee shall be
entitled to deal with the Depositary for all purposes under this Indenture
relating to a Global Debenture (including the payment of principal and interest
thereon and the giving of instructions or directions by owners of beneficial
interests therein and the giving of notices) as the sole holder of the Debenture
and
16
shall have no obligations to the owners of beneficial interests therein. Neither
the Trustee nor the Debentures registrar shall have any liability in respect of
any transfers effected by the Depositary.
(g) The rights of owners of beneficial interests in a Global Debenture
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Depositary Participants.
(h) No holder of any beneficial interest in any Global Debenture held on
its behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Debenture, and such Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the owner of
such Global Debenture for all purposes whatsoever. None of the Company, the
Trustee nor any agent of the Company or the Trustee will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a Global Debenture or maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by a
Depositary or impair, as between a Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominee) as holder of any Debenture.
ARTICLE III.
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST; AGREED
TREATMENT OF THE DEBENTURES.
(a) The Company covenants and agrees that it will duly and punctually
pay or cause to be paid the principal of and premium, if any, and interest and
any Additional Interest and other payments on the Debentures at the place, at
the respective times and in the manner provided in this Indenture and the
Debentures. Each installment of interest on the Debentures may be paid (i) by
mailing checks for such interest payable to the order of the holders of
Debentures entitled thereto as they appear on the registry books of the Company
if a request for a wire transfer has not been received by the Company or (ii) by
wire transfer to any account with a banking institution located in the United
States designated in writing by such Person to the paying agent no later than
the related record date. Notwithstanding the foregoing, so long as the holder of
this Debenture is the Institutional Trustee, the payment of the principal of and
interest on this Debenture will be made in immediately available funds at such
place and to such account as may be designated by the Institutional Trustee.
(b) The Company will treat the Debentures as indebtedness, and the
amounts payable in respect of the principal amount of such Debentures as
interest, for all United States federal income and withholding tax purposes. All
payments in respect of such Debentures will be made free and clear of United
States withholding tax to any beneficial owner thereof that has provided an
Internal Revenue Service Form W8 BEN (or any substitute or successor form)
establishing its non-United States status for United States federal income and
withholding tax purposes.
SECTION 3.2. OFFICES FOR NOTICES AND PAYMENTS, ETC. So long as any of
the Debentures remain outstanding, the Company will maintain in Wilmington,
Delaware, an office or agency where the Debentures may be presented for payment,
an office or agency where the Debentures may be presented for registration of
transfer and for exchange as in this Indenture provided and an office or agency
where notices and demands to or upon the Company in respect of the Debentures or
of this Indenture may be served. The Company will give to the Trustee written
notice of the location of any such office or agency and of any change of
location thereof. Until otherwise designated from time to time by the Company in
a
17
notice to the Trustee, or specified as contemplated by Section 2.5, such office
or agency for all of the above purposes shall be the office or agency of the
Trustee. In case the Company shall fail to maintain any such office or agency in
Wilmington, Delaware, or shall fail to give such notice of the location or of
any change in the location thereof, presentations and demands may be made and
notices may be served at the Principal Office of the Trustee.
In addition to any such office or agency, the Company may from time to
time designate one or more offices or agencies outside Wilmington, Delaware,
where the Debentures may be presented for 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 Wilmington, Delaware, for the purposes above mentioned. The Company
will give to the Trustee prompt written notice of any such designation or
rescission thereof.
SECTION 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 6.9, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 3.4. PROVISION AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the Trustee,
it will cause such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provision of this Section 3.4,
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest, if
any, on the Debentures (whether such sums have been paid to it by
the Company or by any other obligor on the Debentures) in trust for
the benefit of the holders of the Debentures;
(2) that it will give the Trustee prompt written notice of any
failure by the Company (or by any other obligor on the Debentures)
to make any payment of the principal of and premium, if any, or
interest, if any, on the Debentures when the same shall be due and
payable; and
(3) that it will, at any time during the continuance of any Event
of Default, upon the written request of the Trustee, forthwith pay
to the Trustee all sums so held in trust by such paying agent.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of and premium, if any, or interest or
other payments, if any, on the Debentures, set aside, segregate and hold in
trust for the benefit of the holders of the Debentures a sum sufficient to pay
such principal, premium, interest or other payments so becoming due and will
notify the Trustee in writing of any failure to take such action and of any
failure by the Company (or by any other obligor under the Debentures) to make
any payment of the principal of and premium, if any, or interest or other
payments, if any, on the Debentures when the same shall become due and payable.
Whenever the Company shall have one or more paying agents for the
Debentures, it will, on or prior to each due date of the principal of and
premium, if any, or interest, if any, on the Debentures, deposit with a paying
agent a sum sufficient to pay the principal, premium, interest or other payments
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled thereto and (unless such paying agent is the Trustee) the Company shall
promptly notify the Trustee in writing of its action or failure to act.
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(c) Anything in this Section 3.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Debentures, or for any other reason, pay, or
direct any paying agent to pay to the Trustee all sums held in trust by the
Company or any such paying agent, 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 12.3 and 12.4.
SECTION 3.5. CERTIFICATE TO TRUSTEE. The Company will deliver to the
Trustee on or before 120 days after the end of each fiscal year, so long as
Debentures are outstanding hereunder, a Certificate stating that in the course
of the performance by the signers of their duties as officers of the Company
they would normally have knowledge of any default during such fiscal year by the
Company in the performance of any covenants contained herein, stating whether or
not they have knowledge of any such default and, if so, specifying each such
default of which the signers have knowledge and the nature and status thereof. A
form of this Certificate is attached hereto as Exhibit B.
SECTION 3.6. ADDITIONAL SUMS. If and for so long as the Trust is the
holder of all Debentures and the Trust is required to pay any additional taxes
(including withholding taxes), duties, assessments or other governmental charges
as a result of a Tax Event, the Company will pay such additional amounts
("Additional Sums") on the Debentures as shall be required so that the net
amounts received and retained by the Trust after paying such taxes (including
withholding taxes), duties, assessments or other governmental charges will be
equal to the amounts the Trust would have received if no such taxes, duties,
assessments or other governmental charges had been imposed. Whenever in this
Indenture or the Debentures there is a reference in any context to the payment
of principal of or interest on the Debentures, such mention shall be deemed to
include mention of payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made.
SECTION 3.7. COMPLIANCE WITH CONSOLIDATION PROVISIONS. The Company will
not, while any of the Debentures remain outstanding, consolidate with, or merge
into, or merge into itself, or sell or convey all or substantially all of its
property to any other Person unless the provisions of Article XI hereof are
complied with.
SECTION 3.8. LIMITATION ON DIVIDENDS. If Debentures are initially issued
to the Trust or a trustee of such Trust in connection with the issuance of Trust
Securities by the Trust (regardless of whether Debentures continue to be held by
such Trust) and there shall have occurred and be continuing an Event of Default,
then the Company shall not, and shall not allow any Affiliate of the Company to,
(x) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock or its Affiliates' capital stock (other than payments of dividends
or distributions to the Company or payments of dividends from direct or indirect
subsidiaries of the Company to their parent corporations, which also shall be
direct or indirect subsidiaries of the Company) or make any guarantee payments
with respect to the foregoing or (y) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company or any Affiliate that rank pari passu in all respects
with or junior in interest to the Debentures (other than, with respect to
clauses (x) and (y) above, (1) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company or a subsidiary of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company or a subsidiary of
19
the Company (or securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered into prior to the
applicable default, if any, (2) as a result of any exchange or conversion of any
class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company's capital
stock (or in the case of a subsidiary of the Company, any class or series of
such subsidiary's capital stock) or of any class or series of the Company's
indebtedness for any class or series of the Company's capital stock (or in the
case of indebtedness of a subsidiary of the Company, of any class or series of
such subsidiary's indebtedness for any class or series of such subsidiary's
capital stock), (3) the purchase of fractional interests in shares of the
Company's capital stock (or the capital stock of a subsidiary of the Company)
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (4) any declaration of a dividend in
connection with any stockholders' rights plan, or the issuance of rights, stock
or other property under any stockholders' rights plan, or the redemption or
repurchase of rights pursuant thereto, or (5) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior to
such stock and any cash payments in lieu of fractional shares issued in
connection therewith).
SECTION 3.9. COVENANTS AS TO THE TRUST. For so long as the Trust
Securities remain outstanding, the Company shall maintain 100% ownership of the
Common Securities; provided, however, that any permitted successor of the
Company under this Indenture may succeed to the Company's ownership of such
Common Securities. The Company, as owner of the Common Securities, shall, except
in connection with a distribution of Debentures to the holders of Trust
Securities in liquidation of the Trust, the redemption of all of the Trust
Securities or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration, cause the Trust (a) to remain a statutory trust,
(b) to otherwise continue to be classified as a grantor trust for United States
federal income tax purposes, and (c) to cause each holder of Trust Securities to
be treated as owning an undivided beneficial interest in the Debentures.
SECTION 3.10. REIT STATUS. The Guarantor agrees to maintain its status as
a real estate investment trust under the Internal Revenue Code of 1986, as
amended.
ARTICLE IV.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 4.1. SECURITYHOLDERS' LISTS. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee:
(a) on each regular record date for the Debentures, a list, in such form
as the Trustee may reasonably require, of the names and addresses of the
Securityholders of the Debentures 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 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 under this Section 4.1 so long as
the Trustee is in possession thereof by reason of its acting as Debenture
registrar.
SECTION 4.2. RESERVATION 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
Debentures (1) contained in the most recent
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list furnished to it as provided in Section 4.1 or (2) received by it in the
capacity of Debentures registrar (if so acting) hereunder. The Trustee may
destroy any list furnished to it as provided in Section 4.1 upon receipt of a
new list so furnished.
(b) In case three or more holders of Debentures (hereinafter referred to
as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debenture for a period of
at least 6 months preceding the date of such application, and such application
states that the applicants desire to communicate with other holders of
Debentures with respect to their rights under this Indenture or under such
Debentures 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 Debentures whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, and as to the
approximate cost of mailing to such 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 Securities and Exchange Commission, if permitted or required by
applicable law, 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 all Debentures, as the case
may be, or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If said Commission, as permitted or required
by applicable law, 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, said 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 Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any paying agent shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the holders
of Debentures in accordance with the provisions of subsection (b) of this
Section 4.2, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under said subsection (b).
21
ARTICLE V.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT
SECTION 5.1. EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means 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):
(a) the Company defaults in the payment of any interest upon any
Debenture, including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days; or
(b) the Company defaults in the payment of all or any part of the
principal of (or premium, if any, on) any Debentures as and when the same shall
become due and payable either at maturity, upon redemption, by declaration of
acceleration or otherwise; or
(c) the Company or the Guarantor defaults in the performance of, or
breaches, any of its covenants or agreements in this Indenture or in the terms
of the Debentures established as contemplated in this Indenture (other than a
covenant or agreement 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 and the Guarantor by the Trustee or
to the Company, the Guarantor and the Trustee by the holders of at least 25% in
aggregate principal amount of the outstanding Debentures, a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(d) a court of competent jurisdiction shall enter a decree or order for
relief in respect of the Company or the Guarantor in an involuntary case under
any applicable bankruptcy, insolvency, reorganization or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Company or the
Guarantor or for any substantial part of either of their property, or ordering
the winding-up or liquidation of either of their affairs and such decree or
order shall remain unstayed and in effect for a period of 90 consecutive days;
or
(e) the Company or the Guarantor shall commence a voluntary case under
any applicable bankruptcy, insolvency, reorganization or other similar law now
or hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or the Guarantor or of
any substantial part of the property of the Company or the Guarantor, or the
Company or the Guarantor shall make any general assignment for the benefit of
creditors, or the Company or the Guarantor shall fail generally to pay its
respective debts as they become due; or
(f) the Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence except in
connection with (i) the distribution of the Debentures to holders of such Trust
Securities in liquidation of their interests in the Trust, (ii) the redemption
of all of the outstanding Trust Securities or (iii) certain mergers,
consolidations or amalgamations, each as permitted by the Declaration; or
(g) The Guarantee shall cease to be in full force and effect or the
Guarantor shall, in writing to the Trustee, to a holder of the Capital
Securities or to any governmental agency or regulatory authority, deny or
disaffirm its obligations under the Guarantee.
22
If an Event of Default occurs and is continuing with respect to the
Debentures, then, and in each and every such case, unless the principal of the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debentures
then outstanding hereunder, by notice in writing to the Company and the
Guarantor (and to the Trustee if given by Securityholders), may declare the
entire principal of the Debentures and the interest accrued thereon, if any, to
be due and payable immediately, and upon any such declaration the same shall
become immediately due and payable; provided, however, that upon any such
declaration prior to the Interest Payment Date in June, 2011, there shall become
immediately due and payable, in addition to the principal amount of and the
accrued interest (including any Additional Interest) on the Debentures, a
premium equal to seven and one-half percent (7.5%) of the principal amount of
the Debentures.
The foregoing provisions, however, are subject to the condition that if,
at any time after the principal of the Debentures shall have been so declared
due and payable, and before any judgment or decree for the payment of the moneys
due shall have been obtained or entered as hereinafter provided, (i) the Company
or the Guarantor shall pay or shall deposit with the Trustee a sum sufficient to
pay all matured installments of interest upon all the Debentures and the
principal of and premium, if any, on the Debentures which shall have become due
otherwise than by acceleration (with interest upon such principal and premium,
if any, and Additional Interest) and such amount as shall be sufficient to cover
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other amounts due to the
Trustee pursuant to Section 6.6, if any, and (ii) all Events of Default under
this Indenture, other than the non-payment of the principal of or premium, if
any, on Debentures which shall have become due by acceleration, shall have been
cured, waived or otherwise remedied as provided herein -- then and in every such
case the holders of a majority in aggregate principal amount of the Debentures
then outstanding, by written notice to the Company, the Guarantor and to the
Trustee, may waive all defaults and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case the Company,
the Guarantor, the Trustee and the holders of the Debentures shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Guarantor, the Trustee and the holders
of the Debentures shall continue as though no such proceeding had been taken.
SECTION 5.2. PAYMENT OF DEBENTURES ON DEFAULT; SUIT THEREFOR. The
Company covenants that upon the occurrence of an Event of Default then, upon
demand of the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Debentures the whole amount that then shall have become due
and payable on all Debentures for principal and premium, if any, or interest, or
both, as the case may be, with Additional Interest accrued on the Debentures (to
the extent that payment of such interest is enforceable under applicable law
and, if the Debentures are held by the Trust or a trustee of such Trust, without
duplication of any other amounts paid by the Trust or a trustee of the Trust in
respect thereof); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any other
amounts due to the Trustee under Section 6.6. In case the Company or the
Guarantor shall fail forthwith to pay such amounts upon such demand, the
Trustee, in its own name and as trustee of an express trust, shall be entitled
and empowered to institute any actions or proceedings at law or in equity for
the collection of the sums so due and unpaid, and may prosecute any such action
or proceeding to judgment or final decree, and may enforce any such judgment or
final decree against the Company, the Guarantor or any other obligor on such
Debentures and collect in the manner provided by
23
law out of the property of the Company, the Guarantor or any other obligor on
such Debentures wherever situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or the Guarantor or any other obligor on the
Debentures under Bankruptcy Law, or in case a receiver or trustee shall have
been appointed for the property of the Company or the Guarantor or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Company or the Guarantor or other obligor upon the Debentures, or to the
creditors or property of the Company or the Guarantor or such other obligor, the
Trustee, irrespective of whether the principal of the Debentures shall then be
due and payable as therein expressed or by declaration of acceleration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 5.2, shall be entitled and empowered,
by intervention in such proceedings or otherwise,
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the
Debentures,
(ii) in case of any judicial proceedings, to file such proofs of claim
and other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all other amounts due to the Trustee under
Section 6.6), and of the Securityholders allowed in such judicial
proceedings relative to the Company or the Guarantor or any other
obligor on the Debentures, or to the creditors or property of the
Company or the Guarantor or such other obligor, unless prohibited
by applicable law and regulations, to vote on behalf of the
holders of the Debentures in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or Person performing
similar functions in comparable proceedings,
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims, and
(iv) to distribute the same after the deduction of its charges and
expenses.
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
amounts due to the Trustee under Section 6.6.
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
Debentures 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 Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at 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, subject to Section 5.3, any recovery of judgment shall be for the ratable
benefit of the holders of the Debentures.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to
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represent all the holders of the Debentures, and it shall not be necessary to
make any holders of the Debentures parties to any such proceedings.
SECTION 5.3. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys
collected by the Trustee pursuant to this Article V shall be applied in the
following order, at the date or dates fixed by the Trustee for the distribution
of such moneys, upon presentation of the several Debentures in respect of which
moneys have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses incurred by, and reasonable
fees of, the Trustee, its agents, attorneys and counsel, and of all other
amounts due to the Trustee under Section 6.6;
Second: To the payment of all Senior Indebtedness of the Company if and to
the extent required by Article XV and XVII;
Third: To the payment of the amounts then due and unpaid upon Debentures
for principal (and premium, if any), and interest on the Debentures, in respect
of which or for the benefit of which money has been collected, ratably, without
preference or priority of any kind, according to the amounts due on such
Debentures (including Additional Interest); and
Fourth: The balance, if any, to the Company.
SECTION 5.4. PROCEEDINGS BY SECURITYHOLDERS. No holder of any Debenture
shall have any right to institute any suit, action or proceeding for any remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default with respect to the Debentures and unless the
holders of not less than 25% in aggregate principal amount of the Debentures
then outstanding shall have given the Trustee a written request to institute
such action, suit or proceeding and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred thereby, and the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity shall have failed to
institute any such action, suit or proceeding.
Notwithstanding any other provisions in this Indenture, however, the right
of any holder of any Debenture to receive payment of the principal of, premium,
if any, and interest, on such Debenture when due, or to institute suit for the
enforcement of any such payment, shall not be impaired or affected without the
consent of such holder and by accepting a Debenture hereunder it is expressly
understood, intended and covenanted by the taker and holder of every Debenture
with every other such taker and holder and the Trustee, that no one or more
holders of Debentures shall have any right in any manner whatsoever by virtue or
by availing itself of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other Debentures, or to obtain or
seek to obtain priority over or preference to any other such holder, or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all holders of Debentures. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 5.5. PROCEEDINGS BY TRUSTEE. In case of an Event of Default
hereunder 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.
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SECTION 5.6. REMEDIES CUMULATIVE AND CONTINUING; DELAY OR OMISSION NOT A
WAIVER. Except as otherwise provided in Section 2.6, 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 Debentures,
by judicial proceedings or otherwise, to enforce the performance or observance
of the covenants and agreements contained in this Indenture or otherwise
established with respect to the Debentures, and no delay or omission of the
Trustee or of any holder of any of the Debentures to exercise any right, remedy
or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right, remedy or power, or shall be construed to
be a waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.4, every power and remedy given by this Article V or by
law to the Trustee or to the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee (in accordance with
its duties under Section 6.1) or by the Securityholders.
SECTION 5.7. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY
OF SECURITYHOLDERS. The holders of a majority in aggregate principal amount of
the Debentures affected (voting as one class) at the time outstanding shall have
the right to direct the time, method, and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to such Debentures; provided, however, that (subject
to the provisions of Section 6.1) the Trustee shall have the right to decline to
follow any such direction if the Trustee shall determine that the action so
directed would be unjustly prejudicial to the holders not taking part in such
direction or if the Trustee being advised by counsel determines that the action
or proceeding so directed may not lawfully be taken or if a Responsible Officer
of the Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability.
The holders of a majority in aggregate principal amount of the Debentures
at the time outstanding may on behalf of the holders of all of the Debentures
waive (or modify any previously granted waiver of) any past default or Event of
Default, and its consequences, except a default (a) in the payment of principal
of, premium, if any, or interest on any of the Debentures, (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Debenture affected, or (c) in respect of the
covenants contained in Section 3.9; provided, however, that if the Debentures
are held by the Trust or a trustee of such trust, such waiver or modification to
such waiver shall not be effective until the holders of a majority in
Liquidation Amount of Trust Securities of the Trust shall have consented to such
waiver or modification to such waiver, provided, further, that if the consent of
the holder of each outstanding Debenture is required, such waiver shall not be
effective until each holder of the Trust Securities of the Trust shall have
consented to such waiver. Upon any such waiver, the default covered thereby
shall be deemed to be cured for all purposes of this Indenture and the Company,
the Guarantor, the Trustee and the holders of the Debentures shall be restored
to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon. Whenever any default or Event of Default hereunder
shall have been waived as permitted by this Section, said default or Event of
Default shall for all purposes of the Debentures and this Indenture be deemed to
have been cured and to be not continuing.
SECTION 5.8. NOTICE OF DEFAULTS. The Trustee shall, within 90 days after
the actual knowledge by a Responsible Officer of the Trustee of the occurrence
of a default with respect to the Debentures, mail to all Securityholders, as the
names and addresses of such holders appear upon the Debenture Register, notice
of all defaults with respect to the Debentures known to the Trustee, unless such
defaults shall have been cured before the giving of such notice (the term
"defaults" for the purpose of this Section 5.8 being hereby defined to be the
events specified in clauses (a), (b), (c), (d), (e), (f) and (g) of Section 5.1,
not including periods of grace, if any, provided for therein); provided,
however, that, except in the case of default in the payment of the principal of,
premium, if any, or interest on any of the Debentures, the
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Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Trustee in good faith determines that the withholding
of such notice is in the interests of the Securityholders.
SECTION 5.9. UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided, however, that the provisions of
this Section 5.9 shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Securityholder, or group of Securityholders, holding in
the aggregate more than 10% in principal amount of the Debentures outstanding,
or to any suit instituted by any Securityholder for the enforcement of the
payment of the principal of (or premium, if any) or interest on any Debenture
against the Company on or after the same shall have become due and payable.
ARTICLE VI.
CONCERNING THE TRUSTEE
SECTION 6.1. DUTIES AND RESPONSIBILITIES OF TRUSTEE. With respect to the
holders of Debentures issued hereunder, the Trustee, prior to the occurrence of
an Event of Default with respect to the Debentures and after the curing or
waiving of all Events of Default which may have occurred, with respect to the
Debentures, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants shall be read
into this Indenture against the Trustee. In case an Event of Default with
respect to the Debentures 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 person 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 with respect to
Debentures and after the curing or waiving of all Events of Default which may
have occurred
(1) the duties and obligations of the Trustee with respect to
Debentures 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 with respect to the
Debentures 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;
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(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent facts;
and
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith, in accordance with the direction of the
Securityholders pursuant to Section 5.7, relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is ground for believing that the repayment of
such funds or liability is not assured to it under the terms of this Indenture
or indemnity satisfactory to the Trustee against such risk is not reasonably
assured to it.
SECTION 6.2. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise
provided in Section 6.1:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, note,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company or Guarantor
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any Board Resolution may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any advice
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the occurrence of an
Event of Default with respect to the Debentures (that has not been cured or
waived) to exercise with respect to Debentures such of the rights and powers
vested in it by this Indenture, and to use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
coupon or other paper or document, unless requested in writing to do so by the
holders of not less than a majority in aggregate principal amount of the
outstanding Debentures affected thereby; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the
28
Trustee may require reasonable indemnity against such expense or liability as a
condition to so proceeding;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents (including
any Authenticating Agent) or attorneys, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed by it with due care; and
(h) with the exceptions of defaults under Sections 5.1(a) or (b), the
Trustee shall not be charged with knowledge of any Default or Event of Default
with respect to the Debentures unless a written notice of such Default or Event
of Default shall have been given to the Trustee by the Company or any other
obligor on the Debentures or by any holder of the Debentures.
SECTION 6.3. NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained
herein and in the Debentures (except in the certificate of authentication of the
Trustee or the Authenticating Agent) shall be taken as the statements of the
Company or the Guarantor, and the Trustee and the Authenticating Agent assume no
responsibility for the correctness of the same. The Trustee and the
Authenticating Agent make no representations as to the validity or sufficiency
of this Indenture or of the Debentures. The Trustee and the Authenticating Agent
shall not be accountable for the use or application by the Company of any
Debentures or the proceeds of any Debentures authenticated and delivered by the
Trustee or the Authenticating Agent in conformity with the provisions of this
Indenture.
SECTION 6.4. TRUSTEE, AUTHENTICATING AGENT, PAYING AGENTS, TRANSFER
AGENTS OR REGISTRAR MAY OWN DEBENTURES. The Trustee or any Authenticating Agent
or any paying agent or any transfer agent or any Debenture registrar, in its
individual or any other capacity, may become the owner or pledgee of Debentures
with the same rights it would have if it were not Trustee, Authenticating Agent,
paying agent, transfer agent or Debenture registrar.
SECTION 6.5. MONEYS TO BE HELD IN TRUST. Subject to the provisions of
Section 12.4, 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 Chief Executive Officer, the Chief
Financial Officer, the President, a Managing Director, a Vice President, the
Treasurer or an Assistant Treasurer of the Company.
SECTION 6.6. COMPENSATION AND EXPENSES OF TRUSTEE. The Company and the
Guarantor, jointly and severally, covenant and agree to 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 willful misconduct. For purposes of clarification, this Section
6.6 does not contemplate the payment by the Company or the Guarantor of
acceptance or annual administration fees owing to the Trustee pursuant to the
services to be provided by the Trustee under this Indenture or the fees and
expenses of the Trustee's counsel in connection with the closing of the
transactions contemplated by this Indenture. The Company and the Guarantor,
jointly and severally, also covenant 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 willful misconduct on the part of the Trustee and
arising out of or in connection with the
29
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim of liability. The obligations of the Company
and the Guarantor 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 Debentures upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the holders of particular Debentures.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d), (e)or (f), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the resignation or removal of
the Trustee and the defeasance or other termination of this Indenture.
Notwithstanding anything in this Indenture or any Debenture to the
contrary, the Trustee shall have no obligation whatsoever to advance funds to
pay any principal of or interest on or other amounts with respect to the
Debentures or otherwise advance funds to or on behalf of the Company.
SECTION 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 be herein
specifically prescribed) may, in the absence of negligence or willful misconduct
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 willful misconduct 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.
SECTION 6.8. 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 authorized under such laws to exercise
corporate trust powers, having (or whose obligations under this Indenture are
guaranteed by an affiliate having) a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000.00) 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 6.8 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 records of condition so published.
None of the Company, the Guarantor nor any Person directly or indirectly
controlling, controlled by, or under common control with the Company or the
Guarantor, serve as Trustee.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.8, the Trustee shall resign immediately in
the manner and with the effect specified in Section 6.9.
If the Trustee has or shall acquire any "conflicting interest" within the
meaning of SS. 310(b) of the Trust Indenture Act of 1939, the Trustee shall
either eliminate such interest or resign, to the extent and in the manner
described by this Indenture.
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SECTION 6.9. 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
the Guarantor and by mailing notice thereof, at the Company's expense, to the
holders of the Debentures at their addresses as they shall appear on the
Debenture Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee or trustees by written instrument, in
duplicate, executed by order of its Board of Directors, 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 30 days after the mailing of such notice of
resignation to the affected 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 Debenture or
Debentures 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 Debenture or
Debentures for at least 6 months, or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.8 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 as 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, executed by order of the
Board of Directors, 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 Debenture or Debentures for at least 6 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) Upon prior written notice to the Company, the Guarantor and the
Trustee, the holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor Trustee, which shall be deemed appointed as successor
Trustee unless within 10 Business Days after such nomination the Company or the
Guarantor objects thereto, in which case, or in the case of a failure by such
holders to nominate a successor Trustee, the Trustee so removed or any
Securityholder, upon the terms and conditions and otherwise as in subsection (a)
of this Section 6.9 provided, may petition any court of competent jurisdiction
for an appointment of a successor.
(d) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor Trustee as provided in
Section 6.10.
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SECTION 6.10. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor Trustee
appointed as provided in Section 6.9 shall execute, acknowledge and deliver to
the Company, the Guarantor 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 with respect to the Debentures of its
predecessor hereunder, with like effect as if originally named as Trustee
herein; but, nevertheless, on the written request of the Company, the Guarantor
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 and
the Guarantor 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.
If a successor Trustee is appointed, the Company, the Guarantor, the
retiring Trustee and the successor Trustee shall execute and deliver an
indenture supplemental hereto which shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Debentures as to which the
predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the Trust hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be Trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee.
No successor Trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor Trustee shall be eligible
under the provisions of Section 6.8.
In no event shall a retiring Trustee be liable for the acts or omissions
of any successor Trustee hereunder.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 6.10, the Company shall mail notice of the succession of such Trustee
hereunder to the holders of Debentures at their addresses as they shall appear
on the Debenture Register. If the Company fails to mail such notice within 10
Business 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.
SECTION 6.11. 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; provided such corporation
shall be otherwise eligible and qualified under this Article.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such
Debentures so authenticated; and in case at that time any of the Debentures
shall not have been authenticated, any successor to the Trustee may authenticate
such Debentures either in the name of any predecessor hereunder or in the name
of the successor Trustee; and in all such cases such certificates shall
32
have the full force which it is anywhere in the Debentures or in this Indenture
provided that the certificate of the Trustee shall have; provided, however, that
the right to adopt the certificate of authentication of any predecessor Trustee
or authenticate Debentures in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, conversion or consolidation.
SECTION 6.12. AUTHENTICATING AGENTS. There may be one or more
Authenticating Agents appointed by the Trustee upon the request of the Company
with power to act on its behalf and subject to its direction in the
authentication and delivery of Debentures issued upon exchange or registration
of transfer thereof as fully to all intents and purposes as though any such
Authenticating Agent had been expressly authorized to authenticate and deliver
Debentures; provided, however, that the Trustee shall have no liability to the
Company for any acts or omissions of the Authenticating Agent with respect to
the authentication and delivery of Debentures. Any such Authenticating Agent
shall at all times be a corporation organized and doing business under the laws
of the United States or of any state or territory thereof or of the District of
Columbia authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of at least $50,000,000.00 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 6.12 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 6.12 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 and the Guarantor. The Trustee
may at any time terminate the agency of any Authenticating Agent with respect to
the Debentures by giving written notice of termination to such Authenticating
Agent and to the Company and the Guarantor. 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 6.12, the
Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent eligible under this Section 6.12, shall give
written notice of such appointment to the Company and shall mail notice of such
appointment to all holders of Debentures as the names and addresses of such
holders appear on the Debenture Register. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities with respect to the Debentures of
its predecessor hereunder, with like effect as if originally named as
Authenticating Agent herein.
The Company 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
SECTION 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 Debentures may take any action
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(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 Debentures 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 or (d) by any other method the Trustee deems satisfactory.
If the Company shall solicit from the Securityholders any request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such Debentures for the
determination of Securityholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, 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 of the same may be given before or after
the record date, but only the Securityholders of record at the close of business
on the record date shall be deemed to be Securityholders for the purposes of
determining whether Securityholders of the requisite proportion of outstanding
Debentures have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, and for that purpose the outstanding Debentures shall be computed
as of the record date; provided, however, that no such authorization, agreement
or consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than 6 months after the record date.
SECTION 7.2. PROOF OF EXECUTION BY SECURITYHOLDERS. Subject to the
provisions of Section 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 Debentures shall be proved by the Debenture Register or by a
certificate of the Debenture registrar. The Trustee may require such additional
proof of any matter referred to in this Section as it shall deem necessary.
The record of any Securityholders' meeting shall be proved in the manner
provided in Section 8.6.
SECTION 7.3. WHO ARE DEEMED ABSOLUTE OWNERS. Prior to due presentment
for registration of transfer of any Debenture, the Company, the Trustee, any
Authenticating Agent, any paying agent, any transfer agent and any Debenture
registrar may deem the Person in whose name such Debenture shall be registered
upon the Debenture Register to be, and may treat him as, the absolute owner of
such Debenture (whether or not such Debenture shall be overdue) for the purpose
of receiving payment of or on account of the principal of, premium, if any, and
interest on such Debenture and for all other purposes; and neither the Company
nor the Trustee nor any Authenticating Agent nor any paying agent nor any
transfer agent nor any Debenture registrar shall be affected by any notice to
the contrary. All such payments so made to any holder for the time being or upon
his order shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Debenture.
SECTION 7.4. DEBENTURES OWNED BY COMPANY DEEMED NOT OUTSTANDING. In
determining whether the holders of the requisite aggregate principal amount of
Debentures have concurred in any direction, consent or waiver under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any other obligor
on the Debentures shall
34
be disregarded and deemed not to be outstanding for the purpose of any such
determination; provided, however, that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent or
waiver, only Debentures which a Responsible Officer of the Trustee actually
knows are so owned shall be so disregarded. Debentures so owned which have been
pledged in good faith may be regarded as outstanding for the purposes of this
Section 7.4 if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right to vote such Debentures and that the pledgee is not the
Company or any 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.
SECTION 7.5. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Debentures specified in this Indenture in connection
with such action, any holder (in cases where no record date has been set
pursuant to Section 7.1) or any holder as of an applicable record date (in cases
where a record date has been set pursuant to Section 7.1) of a Debenture (or any
Debenture issued in whole or in part in exchange or substitution therefor) the
serial number of which is shown by the evidence to be included in the Debentures
the holders of which have consented to such action may, by filing written notice
with the Trustee at the Principal Office of the Trustee and upon proof of
holding as provided in Section 7.2, revoke such action so far as concerns such
Debenture (or so far as concerns the principal amount represented by any
exchanged or substituted Debenture). Except as aforesaid any such action taken
by the holder of any Debenture shall be conclusive and binding upon such holder
and upon all future holders and owners of such Debenture, and of any Debenture
issued in exchange or substitution therefor or on registration of transfer
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Debenture or any Debenture issued in exchange or substitution
therefor.
ARTICLE VIII.
SECURITYHOLDERS' MEETINGS
SECTION 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 Debentures under
any other provision of this Indenture or under applicable law.
SECTION 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 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 Debentures affected at their addresses as
they shall appear on the Debentures
35
Register and, if the Company is not a holder of Debentures, to the Company. Such
notice shall be mailed not less than 20 nor more than 180 days prior to the date
fixed for the meeting.
SECTION 8.3. CALL OF MEETINGS BY COMPANY OR SECURITYHOLDERS. In case at
any time the Company pursuant to a Board Resolution, or the holders of at least
10% in aggregate principal amount of the Debentures, as the case may be, 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
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.
SECTION 8.4. QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Securityholders a Person shall be (a) a holder of one or more
Debentures with respect to which the meeting is being held or (b) a Person
appointed by an instrument in writing as proxy by a holder of one or more such
Debentures. 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.
SECTION 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 Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by 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 7.4, at any meeting each holder of
Debentures with respect to which such meeting is being held or proxy therefor
shall be entitled to one vote for each $1,000.00 principal amount of Debentures
held or represented by him; provided, however, that no vote shall be cast or
counted at any meeting in respect of any Debenture challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Debentures held
by him or instruments in writing as aforesaid duly designating him as the Person
to vote on behalf of other Securityholders. Any meeting of Securityholders duly
called pursuant to the provisions of Section 8.2 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.
SECTION 8.6. VOTING. The vote upon any resolution submitted to any
meeting of holders of Debentures with respect to which such meeting is being
held shall be by written ballots on which shall be subscribed the signatures of
such holders or of their representatives by proxy and the serial number or
numbers of the Debentures held or represented by them. The permanent chairman of
the meeting shall appoint two inspectors of votes who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in triplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of 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
36
Persons having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was mailed as provided in Section 8.2. The
record shall show the serial numbers of the Debentures voting in favor of or
against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 8.7. QUORUM; ACTIONS. The Persons entitled to vote a majority in
principal amount of the Debentures then outstanding shall constitute a quorum
for a meeting of Securityholders; provided, however, that if any action is to be
taken at such meeting with respect to a consent, waiver, request, demand,
notice, authorization, direction or other action which may be given by the
holders of not less than a specified percentage in principal amount of the
Debentures then outstanding, the Persons holding or representing such specified
percentage in principal amount of the Debentures then outstanding will
constitute a quorum. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the request of
Securityholders, be dissolved. In any other case the meeting may be adjourned
for a period of not less than 10 days as determined by the permanent chairman of
the meeting prior to the adjournment of such meeting. In the absence of a quorum
at any such adjourned meeting, such adjourned meeting may be further adjourned
for a period of not less than 10 days as determined by the permanent chairman of
the meeting prior to the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section 8.2,
except that such notice need be given only once not less than 5 days prior to
the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Debentures then outstanding which
shall constitute a quorum.
Except as limited by the provisos in the first paragraph of Section 9.2,
any resolution presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted by the affirmative vote of
the holders of a majority in principal amount of the Debentures then
outstanding; provided, however, that, except as limited by the provisos in the
first paragraph of Section 9.2, any resolution with respect to any consent,
waiver, request, demand, notice, authorization, direction or other action which
this Indenture expressly provides may be given by the holders of not less than a
specified percentage in principal amount of the Debentures then outstanding may
be adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid only by the affirmative vote of the holders of a
not less than such specified percentage in principal amount of the Debentures
then outstanding.
Any resolution passed or decision taken at any meeting of holders of
Debentures duly held in accordance with this Section shall be binding on all the
Securityholders, whether or not present or represented at the meeting.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS.
The Company and the Guarantor, when authorized by Board Resolutions, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto, without the consent of the Securityholders, for
one or more of the following purposes:
37
(a) to evidence the succession of another Person to the Company or the
Guarantor, or successive successions, and the assumption by the successor Person
of the covenants, agreements and obligations of the Company or the Guarantor,
pursuant to Article XI hereof;
(b) to add to the covenants of the Company or the Guarantor such further
covenants, restrictions or conditions for the protection of the holders of
Debentures as the Board of Directors shall consider to be for the protection of
the holders of such Debentures, 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 several remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant restriction
or condition such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default;
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture; provided that any such action shall not materially
adversely affect the interests of the holders of the Debentures;
(d) to add to, delete from, or revise the terms of Debentures,
including, without limitation, any terms relating to the issuance, exchange,
registration or transfer of Debentures, including to provide for transfer
procedures and restrictions substantially similar to those applicable to the
Capital Securities as required by Section 2.5 (for purposes of assuring that no
registration of Debentures is required under the Securities Act); provided,
however, that any such action shall not adversely affect the interests of the
holders of the Debentures then outstanding (it being understood, for purposes of
this proviso, that transfer restrictions on Debentures substantially similar to
those that were applicable to Capital Securities shall not be deemed to
materially adversely affect the holders of the Debentures);
(e) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Debentures and to add to or change
any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee;
(f) to make any change (other than as elsewhere provided in this
paragraph) that does not adversely affect the rights of any Securityholder in
any material respect; or
(g) to provide for the issuance of and establish the form and terms and
conditions of the Debentures, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or the
Debentures, or to add to the rights of the holders of Debentures.
The Trustee is hereby authorized to join with the Company and the
Guarantor in the execution of any such supplemental indenture, 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 supplemental indenture authorized by the provisions of this Section
9.1 may be executed by the Company, the Guarantor and the Trustee without the
consent of the holders of any of the Debentures at the time outstanding,
notwithstanding any of the provisions of Section 9.2.
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SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Section 7.1) of the holders of not
less than a majority in aggregate principal amount of the Debentures at the time
outstanding affected by such supplemental indenture (voting as a class), the
Company and the Guarantor, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time 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 any supplemental indenture or of modifying in any manner the rights of the
holders of the Debentures; provided, however, that no such supplemental
indenture shall without the consent of the holders of each Debenture then
outstanding and affected thereby (i) change the fixed maturity of any Debenture,
or reduce the principal amount thereof or any premium thereon, or reduce the
rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof or make the principal thereof or any interest or
premium thereon payable in any coin or currency other than that provided in the
Debentures, or impair or affect the right of any Securityholder to institute
suit for payment thereof or impair the right of repayment, if any, at the option
of the holder, or (ii) reduce the aforesaid percentage of Debentures the holders
of which are required to consent to any such supplemental indenture; provided
further, however, that if the Debentures are held by a trust or a trustee of
such trust, such supplemental indenture shall not be effective until the holders
of a majority in Liquidation Amount of Trust Securities shall have consented to
such supplemental indenture; provided further, however, that if the consent of
the Securityholder of each outstanding Debenture is required, such supplemental
indenture shall not be effective until each holder of the Trust Securities shall
have consented to such supplemental indenture.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee and the Guarantor shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
Promptly after the execution by the Company, the Guarantor and the Trustee
of any supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first class postage prepaid, a notice, prepared
by the Company, setting forth in general terms the substance of such
supplemental indenture, to the Securityholders as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 9.3. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company, the Guarantor
and the holders of Debentures shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 9.4. NOTATION ON DEBENTURES. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article IX may bear a notation as to any matter provided for
in such supplemental indenture. If the Company or the Trustee shall so
39
determine, new Debentures so modified as to conform, in the opinion of the Board
of Directors of the Company, to any modification of this Indenture contained in
any such supplemental indenture may be prepared and executed by the Company,
authenticated by the Trustee or the Authenticating Agent and delivered in
exchange for the Debentures then outstanding.
SECTION 9.5. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TO TRUSTEE. The Trustee, subject to the provisions of Sections 6.1 and
6.2, shall, in addition to the documents required by Section 14.6, 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 shall receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to this
Article IX is authorized or permitted by, and conforms to, the terms of this
Article IX and that it is proper for the Trustee under the provisions of this
Article IX to join in the execution thereof.
ARTICLE X.
REDEMPTION OF SECURITIES
SECTION 10.1. OPTIONAL REDEMPTION. The Company shall have the right to
redeem the Debentures, in whole or in part, but in all cases in a principal
amount with integral multiples of $1,000.00, on any Interest Payment Date on or
after the Interest Payment Date in June, 2011 (the "Redemption Date"), at the
Redemption Price.
SECTION 10.2. SPECIAL EVENT REDEMPTION. If a Special Event shall occur
and be continuing, the Company shall have the right to redeem the Debentures in
whole, but not in part, at any Interest Payment Date, within 120 days following
the occurrence of such Special Event (the "Special Redemption Date") at the
Special Redemption Price.
SECTION 10.3. NOTICE OF REDEMPTION; SELECTION OF DEBENTURES. In case the
Company shall desire to exercise the right to redeem all, or, as the case may
be, any part of the Debentures, it shall cause to be mailed a notice of such
redemption at least 30 and not more than 60 days prior to the Redemption Date or
the Special Redemption Date to the holders of Debentures so to be redeemed as a
whole or in part at their last addresses as the same appear on the Debenture
Register. Such mailing shall be by first class mail. The notice if mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the holder of any Debenture
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Debenture.
Each such notice of redemption shall specify the CUSIP number, if any, of
the Debentures to be redeemed, the Redemption Date or the Special Redemption
Date, as applicable, the Redemption Price or the Special Redemption Price, as
applicable, at which Debentures are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Debentures, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, and that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue. If less than all
the Debentures are to be redeemed the notice of redemption shall specify the
numbers of the Debentures to be redeemed. In case the Debentures are to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Debenture, a new Debenture or
Debentures in principal amount equal to the unredeemed portion thereof will be
issued.
Prior to 10:00 a.m. New York City time on the Redemption Date or Special
Redemption Date, as applicable, the Company will deposit with the Trustee or
with one or more paying agents an amount of money sufficient to redeem on the
Redemption Date or the Special Redemption Date, as applicable, all
40
the Debentures so called for redemption at the appropriate Redemption Price or
Special Redemption Price.
If all, or less than all, the Debentures are to be redeemed, the Company
will give the Trustee notice not less than 45 nor more than 60 days,
respectively, prior to the Redemption Date or Special Redemption Date, as
applicable, as to the aggregate principal amount of Debentures to be redeemed
and the Trustee shall select, in such manner as in its sole discretion it shall
deem appropriate and fair, the Debentures or portions thereof (in integral
multiples of $1,000.00) to be redeemed.
SECTION 10.4. PAYMENT OF DEBENTURES CALLED FOR REDEMPTION. If notice of
redemption has been given as provided in Section 10.3, the Debentures or
portions of Debentures with respect to which such notice has been given shall
become due and payable on the Redemption Date or Special Redemption Date, as
applicable, and at the place or places stated in such notice at the applicable
Redemption Price or Special Redemption Price and on and after said date (unless
the Company shall default in the payment of such Debentures at the Redemption
Price or Special Redemption Price, as applicable) interest on the Debentures or
portions of Debentures so called for redemption shall cease to accrue. On
presentation and surrender of such Debentures at a place of payment specified in
said notice, such Debentures or the specified portions thereof shall be paid and
redeemed by the Company at the applicable Redemption Price or Special Redemption
Price.
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Debenture or
Debentures of authorized denominations, in principal amount equal to the
unredeemed portion of the Debenture so presented.
ARTICLE XI.
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 11.1. COMPANY AND GUARANTOR MAY CONSOLIDATE, ETC., ON CERTAIN
TERMS.
(a) Nothing contained in this Indenture or in the Debentures shall
prevent any consolidation or merger of the Company with or into any other Person
(whether or not affiliated with the Company) or successive consolidations or
mergers in which the Company or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance, transfer or other disposition of
the property of the Company or its successor or successors as an entirety, or
substantially as an entirety, to any other Person (whether or not affiliated
with the Company, or its successor or successors) authorized to acquire and
operate the same; provided, however, that the Company hereby covenants and
agrees that, upon any such consolidation, merger (where the Company is not the
surviving corporation), sale, conveyance, transfer or other disposition, the due
and punctual payment of the principal of (and premium, if any) and interest on
all of the Debentures in accordance with their terms, according to their tenor,
and the due and punctual performance and observance of all the covenants and
conditions of this Indenture to be kept or performed by the Company, shall be
expressly assumed by supplemental indenture satisfactory in form to the Trustee
executed and delivered to the Trustee by the entity formed by such
consolidation, or into which the Company shall have been merged, or by the
entity which shall have acquired such property.
(b) Nothing contained in this Indenture or in the Debentures shall
prevent any consolidation or merger of the Guarantor with or into any other
Person or successive consolidations or mergers in which the Guarantor or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or other disposition of the property of the Guarantor or
its successor or successors as an entirety, or substantially as an entirety, to
any other Person authorized to acquire and operate the same; provided, however,
that the Guarantor herby covenants and agrees that, upon any such consolidation,
merger (where the Guarantor is not the surviving corporation), sale, conveyance,
transfer or other
41
disposition, the due and punctual performance and observance of all the
covenants and conditions of this Indenture to be kept or performed by the
Guarantor, shall be expressly assumed by supplemental indenture satisfactory in
form to the Trustee executed and delivered to the trustee by the entity formed
by such consolidation, or into which the Guarantor shall have been merged, or by
the entity which shall have acquired such property.
SECTION 11.2. SUCCESSOR ENTITY TO BE SUBSTITUTED. In case of any such
consolidation, merger, sale, conveyance, transfer or other disposition and upon
the assumption by the successor entity, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Debentures and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed or observed by the
Company and the Guarantor, such successor entity shall succeed to and be
substituted for the Company or Guarantor, as applicable, with the same effect as
if it had been named herein as the Company or Guarantor, as applicable, and
thereupon the predecessor entity to the Company or Guarantor, as applicable,
shall be relieved of any further liability or obligation hereunder or upon the
Debentures. Such successor entity thereupon may cause to be signed, and may
issue in its own name, any or all of the Debentures issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee or the Authenticating Agent; and, upon the order of such successor
entity instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee or the Authenticating
Agent shall authenticate and deliver any Debentures which previously shall have
been signed and delivered by the officers of the Company, to the Trustee or the
Authenticating Agent for authentication, and any Debentures which such successor
entity thereafter shall cause to be signed and delivered to the Trustee or the
Authenticating Agent for that purpose. All the Debentures so issued shall in all
respects have the same legal rank and benefit under this Indenture as the
Debentures theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Debentures had been issued at the date of the
execution hereof.
SECTION 11.3. OPINION OF COUNSEL TO BE GIVEN TO TRUSTEE. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall receive, in addition to
the Opinion of Counsel required by Section 9.5, an Opinion of Counsel as
conclusive evidence that any consolidation, merger, sale, conveyance, transfer
or other disposition, and any assumption, permitted or required by the terms of
this Article XI complies with the provisions of this Article XI.
ARTICLE XII.
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 12.1. DISCHARGE OF INDENTURE. When
(a) the Company shall deliver to the Trustee for cancellation all
Debentures theretofore authenticated (other than any Debentures
which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.6) and not
theretofore canceled, or
(b) all the Debentures not theretofore canceled or delivered to the
Trustee for cancellation shall have become due and payable, or are
by their terms to become due and payable within 1 year or are to be
called for redemption within 1 year under arrangements satisfactory
to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds, which shall
be immediately due and payable, sufficient to pay at maturity or
upon redemption all of the Debentures (other than any Debentures
which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.6) not theretofore
canceled or delivered to the
42
Trustee for cancellation, including principal and premium, if any,
and interest due or to become due to such date of maturity or
redemption date, as the case may be, but excluding, however, the
amount of any moneys for the payment of principal of, and premium,
if any, or interest on the Debentures (1) theretofore repaid to the
Company in accordance with the provisions of Section 12.4, or (2)
paid to any state or to the District of Columbia pursuant to its
unclaimed property or similar laws,
and if in the case of either clause (a) or clause (b) the Company shall also pay
or cause to be paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect except for the provisions of
Sections 2.5, 2.6, 2.8, 3.1, 3.2, 3.4, 6.6, 6.8, 6.9 and 12.4 hereof shall
survive until such Debentures shall mature and be paid. Thereafter, Sections 6.6
and 12.4 shall survive, and the Trustee, on demand of the Company accompanied by
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, and at the cost and expense
of the Company, shall execute proper instruments acknowledging satisfaction of
and discharging this Indenture. The Company agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
in connection with this Indenture or the Debentures.
SECTION 12.2. DEPOSITED MONEYS TO BE HELD IN TRUST BY TRUSTEE. Subject to
the provisions of Section 12.4, all moneys deposited with the Trustee pursuant
to Section 12.1 shall be held in trust in a non-interest bearing account and
applied by it to the payment, either directly or through any paying agent
(including the Company if acting as its own paying agent), to the holders of the
particular Debentures for the payment of which such moneys have been deposited
with the Trustee, of all sums due and to become due thereon for principal, and
premium, if any, and interest.
SECTION 12.3. PAYING AGENT TO REPAY MONEYS HELD. Upon the satisfaction
and discharge of this Indenture all moneys then held by any paying agent of the
Debentures (other than the Trustee) shall, upon 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.
SECTION 12.4. RETURN OF UNCLAIMED MONEYS. Any moneys deposited with or
paid to the Trustee or any paying agent for payment of the principal of, and
premium, if any, or interest on Debentures and not applied but remaining
unclaimed by the holders of Debentures for 2 years after the date upon which the
principal of, and premium, if any, or interest on such Debentures, as the case
may be, shall have become due and payable, shall, subject to applicable
escheatment laws, be repaid to the Company by the Trustee or such paying agent
on written demand; and the holder of any of the Debentures shall thereafter look
only to the Company for any payment which such holder may be entitled to
collect, and all liability of the Trustee or such paying agent with respect to
such moneys shall thereupon cease.
ARTICLE XIII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 13.1. INDENTURE AND DEBENTURES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of or premium, if any, or interest on
any Debenture, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company or the Guarantor in this Indenture or in any supplemental indenture, or
in any such Debenture, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, officer or director, as such, past, present or future, of the Company
or the Guarantor or of any successor Person of the Company or the Guarantor,
either directly or through the Company or the Guarantor or any successor Person
of the Company or the Guarantor, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or
43
penalty or otherwise, it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Debentures.
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
SECTION 14.1. SUCCESSORS. All the covenants, stipulations, promises and
agreements of the Company in this Indenture shall bind its successors and
assigns whether so expressed or not.
SECTION 14.2. OFFICIAL ACTS BY SUCCESSOR ENTITY. 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 or the Guarantor shall and may
be done and performed with like force and effect by the like board, committee,
officer or other authorized Person of any entity that shall at the time be the
lawful successor of the Company or the Guarantor.
SECTION 14.3. SURRENDER OF POWERS. The Company or the Guarantor by
instrument in writing executed by authority of at least 2/3 (two-thirds) of its
Board of Directors and delivered to the Trustee may surrender any of the powers
reserved to the Company or the Guarantor and thereupon such power so surrendered
shall terminate both as to the Company or the Guarantor, and as to any permitted
successor of either of them.
SECTION 14.4. ADDRESSES FOR NOTICES, ETC. Any notice, consent, direction,
request, authorization, waiver or demand which by any provision of this
Indenture is required or permitted to be given, made, furnished or served by the
Trustee or by the Securityholders on or to the Company or the Guarantor may be
given or served in writing 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 or the Guarantor, with the Trustee for the purpose) to the
Company, 00 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Financial
Officer and to the Guarantor, 00 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Chief Financial Officer. Any notice, consent, direction, request,
authorization, waiver or demand by any Securityholder or the Company 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, addressed to
the Trustee, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Trust Administration. Any notice, consent,
direction, request, authorization, waiver or demand on or to any Securityholder
shall be deemed to have been sufficiently given or made, for all purposes, if
given or made in writing at the address set forth in the Debenture Register.
SECTION 14.5. GOVERNING LAW. This Indenture and each Debenture shall be
deemed to be a contract made under the law of the State of New York, and for all
purposes shall be governed by and construed in accordance with the law of said
State, without regard to conflict of laws principles thereof.
SECTION 14.6. 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 shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
44
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not in the opinion of such
person, such condition or covenant has been complied with.
SECTION 14.7. TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 14.8. EXECUTION IN COUNTERPARTS. This Indenture may be executed
in any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 14.9. SEPARABILITY. In case any one or more of the provisions
contained in this Indenture or in the Debentures shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Indenture or
of such Debentures, but this Indenture and such Debentures shall be construed as
if such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 14.10. ASSIGNMENT. The Company will have the right at all times to
assign any of its 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 liable for all such obligations.
Subject to the foregoing, this Indenture is binding upon and inures to the
benefit of the parties hereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties hereto, except as
provided by Article XI.
SECTION 14.11. ACKNOWLEDGMENT OF RIGHTS. The Company and the Guarantor
agree that, with respect to any Debentures held by the Trust or the
Institutional Trustee of the Trust, if the Institutional Trustee of the Trust
fails to enforce its rights under this Indenture as the holder of Debentures
held as the assets of such Trust after the holders of a majority in Liquidation
Amount of the Capital Securities of such Trust have so directed such
Institutional Trustee, a holder of record of such Capital Securities may, to the
fullest extent permitted by law, institute legal proceedings directly against
the Company and the Guarantor to enforce such Institutional Trustee's rights
under this Indenture without first instituting any legal proceedings against
such trustee or any other Person. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to (i) the
failure of the Company to pay interest (or premium, if any) or principal on the
Debentures on the date such interest (or premium, if any) or principal is
otherwise payable (or in the case of redemption, on the redemption date) or (ii)
the failure of the Guarantor to make payments under the Guarantee, the Company
and the Guarantor agree that a holder of record of Capital Securities of the
Trust may directly institute a proceeding against the Company or the Guarantor,
as applicable, for enforcement of payment to such holder directly of the
principal of (and premium, if any) and interest on the Debentures having an
aggregate principal amount equal to the aggregate Liquidation Amount of the
Capital Securities of such holder on or after the respective due date specified
in the Debentures.
ARTICLE XV.
SUBORDINATION OF DEBENTURES
SECTION 15.1. AGREEMENT TO SUBORDINATE. The Company covenants and agrees,
and each holder of Debentures by such Securityholder's acceptance thereof
likewise covenants and agrees, that all
45
Debentures shall be issued subject to the provisions of this Article XV; and
each holder of a Debenture, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of, and premium, if any, and
interest on all Debentures shall, to the extent and in the manner hereinafter
set forth, be subordinated and junior in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 15.2. DEFAULT ON SENIOR INDEBTEDNESS. In the event and during the
continuation of any default by the Company in the payment of principal, premium,
interest or any other payment due on any Senior Indebtedness of the Company
following any grace period, or in the event that the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default and such
acceleration has not been rescinded or canceled and such Senior Indebtedness has
not been paid in full, then, in either case, no payment shall be made by the
Company with respect to the principal (including redemption) of, or premium, if
any, or interest on the Debentures, including Additional Interest.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 15.2, such payment shall, subject to Section 15.7, be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in writing
within 90 days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Senior Indebtedness.
SECTION 15.3. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment by
the Company or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due upon all Senior Indebtedness of the Company shall first be paid in
full, or payment thereof provided for in money in accordance with its terms,
before any payment is made by the Company, on account of the principal (and
premium, if any) or interest on the Debentures. Upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Securityholders or the Trustee would be
entitled to receive from the Company, except for the provisions of this Article
XV, shall be paid by the Company, or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Securityholders or by the Trustee under this Indenture if received by
them or it, directly to the holders of Senior Indebtedness (pro rata to such
holders on the basis of the respective amounts of Senior Indebtedness held by
such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay such
Senior Indebtedness in full, in money or money's worth, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Securityholders
or to the Trustee.
46
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness is paid in full, or provision is made for
such payment in money in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness, remaining unpaid to the
extent necessary to pay such Senior Indebtedness in full in money in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article XV with respect to
the Debentures to the payment of all Senior Indebtedness, that may at the time
be outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
Article XI of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article XI of this Indenture.
Nothing in Section 15.2 or in this Section shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 6.6 of this Indenture.
SECTION 15.4. SUBROGATION. Subject to the payment in full of all Senior
Indebtedness of the Company, the Securityholders shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company, applicable to such
Senior Indebtedness until the principal of (and premium, if any) and interest,
including Additional Interest, on the Debentures shall be paid in full. For the
purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
Securityholders or the Trustee would be entitled except for the provisions of
this Article XV, and no payment over pursuant to the provisions of this Article
XV to or for the benefit of the holders of such Senior Indebtedness by
Securityholders or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the holders of the
Debentures be deemed to be a payment or distribution by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article XV are and are intended solely for the purposes of defining the
relative rights of the holders of the Securities, on the one hand, and the
holders of such Senior Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture or in
the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of its Senior Indebtedness, and the holders of
the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Debentures and creditors
of the Company, other than the holders of Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Debenture
from exercising all remedies otherwise permitted by applicable
47
law upon default under this Indenture, subject to the rights, if any, under this
Article XV of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company, received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article XV, the Trustee, subject to the provisions of Article VI of this
Indenture, and the Securityholders shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Securityholders, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.
SECTION 15.5. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Securityholder by
such Securityholder's acceptance thereof authorizes and directs the Trustee on
such Securityholder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XV and
appoints the Trustee such Securityholder's attorney-in-fact for any and all such
purposes.
SECTION 15.6. NOTICE BY THE COMPANY. The Company shall give prompt
written notice to a Responsible Officer of the Trustee at the Principal Office
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debentures
pursuant to the provisions of this Article XV. Notwithstanding the provisions of
this Article XV or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XV, unless and until a
Responsible Officer of the Trustee at the Principal Office of the Trustee shall
have received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least 2 Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest, including Additional Interest, on any Debenture), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected by any notice
to the contrary that may be received by it within 2 Business Days prior to such
date.
The Trustee, subject to the provisions of Article VI of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee or representative on behalf of such holder), to establish
that such notice has been given by a holder of such Senior Indebtedness or a
trustee or representative on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XV, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XV, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
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SECTION 15.7. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS. The
Trustee in its individual capacity shall be entitled to all the rights set forth
in this Article XV in respect of any Senior Indebtedness of the Company at any
time held by it, to the same extent as any other holder of Senior Indebtedness
of the Company, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XV, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Article VI of this Indenture, the Trustee shall not
be liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to Securityholders, the Company or any other Person money or assets to
which any holder of such Senior Indebtedness shall be entitled by virtue of this
Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.
SECTION 15.8. SUBORDINATION MAY NOT BE IMPAIRED. No right of any present
or future holder of any Senior Indebtedness of the Company to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company, or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company, with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of the Company may, at any time and from time to
time, without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Debentures to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company, and any other Person.
ARTICLE XVI.
GUARANTEE
SECTION 16.1. THE GUARANTEE. The Guarantor hereby fully, unconditionally
and irrevocably guarantees to each holder of a Debenture authenticated and
delivered by the Trustee the due and punctual payment of the principal of and
premium, if any, and interest (including Additional Interest) on such Debenture,
when and as the same shall become due and payable, whether at maturity, by
acceleration, upon redemption or otherwise, in accordance with the terms of such
Debenture and this Indenture, as well as the due and punctual performance of all
other obligations contained in the Debentures and this Indenture. In case of the
failure of the Company to punctually pay its obligations on any Debenture, the
Guarantor hereby agrees to cause any such payment to be made punctually when and
as the same shall become due and payable, whether at maturity, by acceleration,
upon redemption or otherwise, and as if such payment were made by the Company.
49
SECTION 16.2. GUARANTEE UNCONDITIONAL, ETC. The Guarantor hereby agrees
that it shall be liable as principal and as debtor hereunder with respect to its
obligations under this Article. This Article creates a guarantee of payment and
not of collection on the part of the Guarantor. The Guarantor's obligations
hereunder shall be absolute, irrevocable and unconditional, irrespective of, and
shall be unaffected by, any invalidity, irregularity or unenforceability of any
Debenture or this Indenture, any failure to enforce the provisions of any
Debenture or this Indenture, or any waiver, modification, consent or indulgence
granted with respect thereto by the holder of such Debenture or the Trustee, the
recovery of any judgment against the Company or any action to enforce the same,
or any other circumstances which may otherwise constitute a legal or equitable
discharge of a surety or guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
merger, insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest or notice with respect to any such
Debenture or the indebtedness evidenced thereby and all demands whatsoever, and
covenants that this Guarantee will not be discharged except by payment in full
of the principal of and premium, if any, and interest (including Additional
Amounts) on the Debentures and the complete performance of all other obligations
contained in the Debentures and this Indenture. The Guarantor further agrees, to
the fullest extent that it lawfully may do so, that, as between the Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand, the
maturity of the Debentures shall or may, as the case may be, be accelerated as
provided in this Indenture for purposes of the Guarantor's obligations under
this Guarantee, notwithstanding any stay, injunction or prohibition existing
under any bankruptcy, insolvency, reorganization or other similar law of any
jurisdiction preventing such acceleration in respect of the obligations
guaranteed hereby.
SECTION 16.3. REINSTATEMENT. This Guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time a payment in
respect of any Debenture, in whole or in part, is rescinded or must otherwise be
restored to the Company or the Guarantor upon the bankruptcy, liquidation or
reorganization of the Company or otherwise.
SECTION 16.4. SUBROGATION. The Guarantor shall be subrogated to all
rights of the holder of any Debenture against the Company in respect of any
amounts paid to such holder by the Guarantor pursuant to the provisions of this
Guarantee; provided, however, that the Guarantor shall not be entitled to
enforce, or to receive any payments arising out of or based upon, such right of
subrogation as a result of payment under this Guarantee, if, after giving effect
to any such payment, any amounts are due and unpaid under this Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the holders of the
Debentures and to pay such amount to the holders of the Debentures.
ARTICLE XVII.
SUBORDINATION OF GUARANTEE
SECTION 17.1. DEBENTURES SUBORDINATE TO SENIOR DEBT OF THE GUARANTOR. The
Guarantor covenants and agrees, and each holder of a Debenture, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article XVII, the payment of the
principal of and any premium and interest (including any Additional Interest) on
each and all of the Debentures are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all Senior Indebtedness of
the Guarantor.
SECTION 17.2. NO PAYMENT WHEN SENIOR INDEBTEDNESS OF THE GUARANTOR IN
DEFAULT: PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. (a) In the event and
during the continuation of any default by the Guarantor in the payment of any
principal of or any premium or interest on any Senior Indebtedness of the
Guarantor (following any grace period, if applicable) when the same becomes due
and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or
50
otherwise, then, upon written notice of such default to the Guarantor by the
holders of such Senior Indebtedness of the Guarantor or any trustee therefor,
unless and until such default shall have been cured or waived or shall have
ceased to exist, no direct or indirect payment (in cash, property, securities,
by set-off or otherwise) shall be made or agreed to be made on account of the
principal of or any premium or interest (including any Additional Interest) on
any of the Debentures, or in respect of any redemption, repayment, retirement,
purchase or other acquisition of any of the Debentures.
(b) In the event of a bankruptcy, insolvency or other proceeding
described in clause (d) or (e) of the definition of Event of Default (each such
event, if any, herein sometimes referred to as a "Proceeding"), all Senior
Indebtedness of the Guarantor (including any interest thereon accruing after the
commencement of any such proceedings) shall first be paid in full before any
payment or distribution, whether in cash, securities or other property, shall be
made to any holder of any of the Debentures on account thereof. Any payment or
distribution, whether in cash, securities or other property (other than
securities of the Guarantor or any other entity provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Debentures, to the payment of all Senior
Indebtedness of the Guarantor at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for these subordination provisions) be
payable or deliverable in respect of the Debentures shall be paid or delivered
directly to the holders of Senior Indebtedness of the Guarantor in accordance
with the priorities then existing among such holders until all Senior
Indebtedness of the Guarantor (including any interest thereon accruing after the
commencement of any Proceeding) shall have been paid in full.
(c) In the event of any Proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness of the Guarantor, the holders of the
Debentures, together with the holders of any obligations of the Guarantor
ranking on a parity with the Debentures, shall be entitled to be paid from the
remaining assets of the Guarantor the amounts at the time due and owing on
account of unpaid principal of and any premium and interest (including any
Additional Interest) on the Debentures and such other obligations before any
payment or other distribution, whether in cash, property or otherwise, shall be
made on account of any capital stock or any obligations of the Guarantor ranking
junior to the Debentures and such other obligations. If, notwithstanding the
foregoing, any payment or distribution of any character or any security, whether
in cash, securities or other property (other than securities of the Guarantor or
any other entity provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in these
subordination provisions with respect to the indebtedness evidenced by the
Debentures, to the payment of all Senior Indebtedness of the Guarantor at the
time outstanding and to any securities issued in respect thereof under any such
plan of reorganization or readjustment) shall be received by the Trustee or any
holder of the Debentures in contravention of any of the terms hereof and before
all Senior Indebtedness of the Guarantor shall have been paid in full, such
payment or distribution or security shall be received in trust for the benefit
of, and shall be paid over or delivered and transferred to, the holders of the
Senior Indebtedness of the Guarantor at the time outstanding in accordance with
the priorities then existing among such holders for application to the payment
of all Senior Indebtedness of the Guarantor remaining unpaid, to the extent
necessary to pay all such Senior Indebtedness of the Guarantor (including any
interest thereon accruing after the commencement of any Proceeding) in full. In
the event of the failure of the Trustee or any holder of the Debentures to
endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness of the Guarantor is hereby irrevocably authorized to endorse
or assign the same.
(d) The Trustee and the holders of the Debentures, at the expense of the
Guarantor, shall take such reasonable action (including the delivery of this
Indenture to an agent for any holders of Senior Indebtedness of the Guarantor or
consent to the filing of a financing statement with respect hereto) as may, in
the opinion of counsel designated by the holders of a majority in principal
amount of the Senior
51
Indebtedness of the Guarantor at the time outstanding, be necessary or
appropriate to assure the effectiveness of the subordination effected by these
provisions.
(e) The provisions of this Section 17.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Guarantor in
respect of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
(f) The securing of any obligations of the Guarantor, otherwise ranking
on a parity with the Debentures or ranking junior to the Debentures, shall not
be deemed to prevent such obligations from constituting, respectively,
obligations ranking on a parity with the Debentures or ranking junior to the
Debentures.
SECTION 17.3. PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in this
Article XVII or elsewhere in this Indenture or in any of the Debentures shall
prevent (a) the Guarantor, at any time, except during the pendency of the
conditions described in paragraph (a) of Section 17.2 or of any Proceeding
referred to in Section 17.2, from making payments at any time of principal of
and any premium or interest (including any Additional Interest) on the
Debentures or (b) the application by the Trustee of any moneys deposited with it
hereunder to the payment of or on account of the principal of and any premium or
interest (including any Additional Interest) on the Debentures or the retention
of such payment by the holders of the Debentures, if, at the time of such
application by the Trustee, it did not have knowledge (in accordance with
Section 17.8) that such payment would have been prohibited by the provisions of
this Article XVII, except as provided in Section 17.8.
SECTION 17.4. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS OF
THE GUARANTOR. Subject to the payment in full of all amounts due or to become
due on all Senior Indebtedness of the Guarantor, or the provision for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Indebtedness of the Guarantor, the holders of the Debentures
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Indebtedness of the Guarantor pursuant to the provisions
of this Article XVII (equally and ratably with the holders of all indebtedness
of the Guarantor that by its express terms is subordinated to Senior
Indebtedness of the Guarantor to substantially the same extent as the Debentures
are subordinated to the Senior Indebtedness of the Guarantor and is entitled to
like rights of subrogation by reason of any payments or distributions made to
holders of such Senior Indebtedness of the Guarantor) to the rights of the
holders of such Senior Indebtedness of the Guarantor to receive payments and
distributions of cash, property and securities applicable to the Senior
Indebtedness of the Guarantor until the principal of and any premium and
interest (including any Additional Interest) on the Debentures shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of the Guarantor of any cash, property or
securities to which the holders of the Debentures or the Trustee would be
entitled except for the provisions of this Article XVII, and no payments made
pursuant to the provisions of this Article XVII to the holders of Senior
Indebtedness of the Guarantor by holders of the Debentures or the Trustee,
shall, as among the Guarantor, its creditors other than holders of Senior
Indebtedness of the Guarantor, and the holders of the Debentures, be deemed to
be a payment or distribution by the Guarantor to or on account of the Senior
Indebtedness of the Guarantor.
SECTION 17.5. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The provisions
of this Article XVII are intended solely for the purpose of defining the
relative rights of the holders of the Debentures on the one hand and the holders
of Senior Indebtedness of the Guarantor on the other hand. Nothing contained in
this Article XVII or elsewhere in this Indenture or in the Debentures is
intended to or shall (a) impair, as between the Guarantor and the holders of the
Debentures, the obligations of the Guarantor; which are absolute and
unconditional, to pay to the holders of the Debentures the principal of and any
premium and interest (including any Additional Interest) on the Debentures as
and when the same shall
52
become due and payable in accordance with their terms, (b) affect the relative
rights against the Guarantor of the holders of the Debentures and creditors of
the Guarantor other than their rights in relation to the holders of Senior
Indebtedness of the Guarantor or (c) prevent the Trustee or the holder of any
Debenture (or to the extent expressly provided herein, the holder of any Capital
Security) from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, including filing and voting claims in any
Proceeding, subject to the rights, if any, under this Article XVII of the
holders of Senior Indebtedness of the Guarantor to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such holder.
SECTION 17.6. TRUSTEE TO EFFECTUATE SUBORDINATION. Each holder of a
Debenture by such holder's acceptance thereof authorizes and directs the Trustee
on such holder's behalf to take such action as may be necessary or appropriate
to acknowledge or effectuate the subordination provided in this Article XVII and
appoints the Trustee such holder's attorney-in-fact for any and all such
purposes.
SECTION 17.7. NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future holder of any Senior Indebtedness
of the Guarantor to enforce subordination as herein provided shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Guarantor with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof that any such
holder may have or be otherwise charged with.
(b) Without in any way limiting the generality of paragraph (a) of this
Section 17.7, the holders of Senior Indebtedness of the Guarantor may, at any
time and from to time, without the consent of or notice to the Trustee or the
holders of the Debentures, without incurring responsibility to such holders of
the Debentures and without impairing or releasing the subordination provided in
this Article XVII or the obligations hereunder of such holders of the Debentures
to the holders of Senior Indebtedness of the Guarantor, do any one or more of
the following: (1) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness of the Guarantor, or
otherwise amend or supplement in any manner Senior Indebtedness of the Guarantor
or any instrument evidencing the same or any agreement under which Senior
Indebtedness of the Guarantor is outstanding, (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness of the Guarantor, (iii) release any Person liable in any manner for
the payment of Senior Indebtedness of the Guarantor and (iv) exercise or refrain
from exercising any rights against the Guarantor and any other Person.
SECTION 17.8. NOTICE TO TRUSTEE.
(a) The Guarantor shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Guarantor that would prohibit
the making of any payment to or by the Trustee in respect of the Debentures.
Notwithstanding the provisions of this Article XVII or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment to or by the Trustee
in respect of the Debentures, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Guarantor or a
holder of Senior Indebtedness of the Guarantor or from any trustee, agent or
representative therefor; provided, that if the Trustee shall not have received
the notice provided for in this Section 17.8 at least two Business Days prior to
the date upon which by the terms hereof any monies may become payable for any
purpose (including, the payment of the principal of and any premium on or
interest (including any Additional Interest) on any Debenture), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such monies and to apply the same to the
53
purpose for which they were received and shall not be affected by any notice to
the contrary that may be received by it within two Business Days prior to such
date.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or herself to be a holder of
Senior Indebtedness of the Guarantor (or a trustee, agent, representative or
attorney-in-fact therefor) to establish that such notice has been given by a
holder of Senior Indebtedness of the Guarantor (or a trustee, agent,
representative or attorney-in-fact therefor). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness of the Guarantor to
participate in any payment or distribution pursuant to this Article XVII, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of the
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XVII, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 17.9. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. Upon any payment or distribution of assets of the Guarantor referred to
in this Article XVII, the Trustee and the holders of the Debentures shall be
entitled to conclusively rely upon any order or decree entered by any court of
competent jurisdiction in which such Proceeding is pending, or a certificate of
the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee
for the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the holders of Debentures, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness of the Guarantor and other
indebtedness of the Guarantor, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article XVII.
SECTION 17.10. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS OF
THE GUARANTOR. The Trustee, in its capacity as trustee under this Indenture,
shall not owe or be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of the Guarantor and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to holders of Debentures
or to the Guarantor or to any other Person cash, property or securities to which
any holders of Senior Indebtedness of the Guarantor shall be entitled by virtue
of this Article XVII or otherwise.
SECTION 17.11. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS OF THE
GUARANTOR; PRESERVATION OF TRUSTEE'S RIGHTS. The Trustee in its individual
capacity shall be entitled to all the rights set forth in this Article XVII with
respect to any Senior Indebtedness of the Guarantor that may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness of the
Guarantor, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder. With respect to the holders of Senior Indebtedness of the
Guarantor, the Trustee undertakes to perform only such of its obligations as are
specifically set forth in this Article XVII, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness of the
Guarantor shall be read into this Indenture against the Trustee. Nothing in this
Article XVII shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.6.
SECTION 17.12. ARTICLE APPLICABLE TO PAYING AGENTS. If at any time any
Paying Agent other than the Trustee shall have been appointed by the Guarantor
and be then acting hereunder, the term "Trustee" as used in this Article XVII
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article XVII in
addition to or in place of the
54
Trustee; provided, that Sections 17.8 and 17.11 shall not apply to the Guarantor
or any Affiliate of the Guarantor if the Guarantor or such Affiliate acts as
Paying Agent.
Signatures appear on the following page
55
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.
MORTGAGEIT, INC.
By /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Executive Officer
MORTGAGEIT HOLDINGS, INC.
By /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
WILMINGTON TRUST COMPANY, as Trustee
By /s/ Xxxxxxxxxxx X. Xxxxxxxxx
-------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxxx
Title: Senior Financial Services Officer
56
