EXHIBIT 10.12
FINANCIAL INDUSTRIES CORPORATION
as Issuer
INDENTURE
Dated as of May 22, 2003
WILMINGTON TRUST COMPANY
as Trustee
FLOATING RATE SENIOR DEBT SECURITIES DUE 2033
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................. 1
SECTION 1.01 Definitions.......................................... 1
ARTICLE II DEBT SECURITIES.............................................. 5
SECTION 2.01 Authentication and Dating............................ 5
SECTION 2.02 Form of Trustee's Certificate of Authentication...... 5
SECTION 2.03 Form and Denomination of Debt Securities............. 6
SECTION 2.04 Execution of Debt Securities......................... 6
SECTION 2.05 Exchange and Registration of Transfer of Debt
Securities........................................... 6
SECTION 2.06 Mutilated, Destroyed, Lost or Stolen Debt Securities. 9
SECTION 2.07 Temporary Debt Securities........................... 10
SECTION 2.08 Payment of Interest................................. 11
SECTION 2.09 Cancellation of Debt Securities Paid, etc........... 12
SECTION 2.10 Computation of Interest............................. 12
SECTION 2.11 CUSIP Numbers....................................... 14
ARTICLE III PARTICULAR COVENANTS OF THE COMPANY......................... 14
SECTION 3.01 Payment of Principal, Premium and Interest.......... 14
SECTION 3.02 Offices for Notices and Payments, etc............... 14
SECTION 3.03 Appointments to Fill Vacancies in Trustee's Office.. 15
SECTION 3.04 Provision as to Paying Agent........................ 15
SECTION 3.05 Certificate to Trustee.............................. 16
SECTION 3.06 Compliance with Consolidation Provisions............ 16
ARTICLE IV LISTS AND REPORTS........................................... 16
SECTION 4.01 Securityholders' Lists.............................. 16
SECTION 4.02 Preservation and Disclosure of Lists................ 17
SECTION 4.03 Reports............................................. 18
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS................. 19
SECTION 5.01 Events of Default................................... 19
SECTION 5.02 Payment of Debt Securities on Default; Suit Therefor 20
SECTION 5.03 Application of Moneys Collected by Trustee.......... 22
SECTION 5.04 Proceedings by Securityholders...................... 22
SECTION 5.05 Proceedings by Trustee.............................. 22
SECTION 5.06 Remedies Cumulative and Continuing.................. 23
SECTION 5.07 Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders......................... 23
SECTION 5.08 Notice of Defaults.................................. 24
SECTION 5.09 Undertaking to Pay Costs............................ 24
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ARTICLE VI CONCERNING THE TRUSTEE...................................... 24
SECTION 6.01 Duties and Responsibilities of Trustee.............. 24
SECTION 6.02 Reliance on Documents, Opinions, etc................ 25
SECTION 6.03 No Responsibility for Recitals, etc................. 26
SECTION 6.04 Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Debt Securities......... 27
SECTION 6.05 Moneys to be Held in Trust.......................... 27
SECTION 6.06 Compensation and Expenses of Trustee................ 27
SECTION 6.07 Officers' Certificate as Evidence................... 28
SECTION 6.08 Eligibility of Trustee.............................. 28
SECTION 6.09 Resignation or Removal of Trustee................... 29
SECTION 6.10 Acceptance by Successor Trustee..................... 30
SECTION 6.11 Succession by Merger, etc........................... 31
SECTION 6.12 Authenticating Agents............................... 31
ARTICLE VII CONCERNING THE SECURITYHOLDERS.............................. 32
SECTION 7.01 Action by Securityholders........................... 32
SECTION 7.02 Proof of Execution by Securityholders............... 33
SECTION 7.03 Who Are Deemed Absolute Owners...................... 33
SECTION 7.04 Debt Securities Owned by Company Deemed Not
Outstanding......................................... 33
SECTION 7.05 Revocation of Consents; Future Holders Bound........ 34
ARTICLE VIII SECURITYHOLDERS MEETINGS.................................... 34
SECTION 8.01 Purposes of Meetings................................ 34
SECTION 8.02 Call of Meetings by Trustee......................... 35
SECTION 8.03 Call of Meetings by Company or Securityholders...... 35
SECTION 8.04 Qualifications for Voting........................... 35
SECTION 8.05 Regulations......................................... 35
SECTION 8.06 Voting.............................................. 36
SECTION 8.07 Quorum; Actions..................................... 36
ARTICLE IX SUPPLEMENTAL INDENTURES..................................... 37
SECTION 9.01 Supplemental Indentures without Consent of
Securityholders..................................... 37
SECTION 9.02 Supplemental Indentures with Consent of
Securityholders..................................... 38
SECTION 9.03 Effect of Supplemental Indentures................... 39
SECTION 9.04 Notation on Debt Securities......................... 39
SECTION 9.05 Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee................................ 40
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ARTICLE X REDEMPTION OF SECURITIES.................................... 40
SECTION 10.01 Optional Redemption................................. 40
SECTION 10.02 Notice of Redemption; Selection of Debt Securities.. 40
SECTION 10.03 Payment of Debt Securities Called for Redemption.... 41
ARTICLE XI CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE........... 41
SECTION 11.01 Company May Consolidate, etc., on Certain Terms..... 41
SECTION 11.02 Successor Entity to be Substituted.................. 42
SECTION 11.03 Opinion of Counsel to be Given to Trustee........... 43
ARTICLE XII SATISFACTION AND DISCHARGE OF INDENTURE..................... 43
SECTION 12.01 Discharge of Indenture.............................. 43
SECTION 12.02 Deposited Moneys to be Held in Trust by Trustee..... 43
SECTION 12.03 Paying Agent to Repay Moneys Held................... 44
SECTION 12.04 Return of Unclaimed Moneys.......................... 44
ARTICLE XIII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS................................................... 44
SECTION 13.01 Indenture and Debt Securities Solely Corporate
Obligations......................................... 44
ARTICLE XIV MISCELLANEOUS PROVISIONS.................................... 44
SECTION 14.01 Successors.......................................... 44
SECTION 14.02 Official Acts by Successor Entity................... 45
SECTION 14.03 Surrender of Company Powers......................... 45
SECTION 14.04 Addresses for Notices, etc.......................... 45
SECTION 14.05 Governing Law....................................... 45
SECTION 14.06 Evidence of Compliance with Conditions Precedent.... 45
SECTION 14.07 Business Day Convention............................. 46
SECTION 14.08 Table of Contents, Headings, etc.................... 46
SECTION 14.09 Execution in Counterparts........................... 46
SECTION 14.10 Separability........................................ 46
SECTION 14.11 Assignment.......................................... 46
EXHIBITS
EXHIBIT A Form of Debt Security
EXHIBIT B Form of Officers' Certificate
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THIS INDENTURE, dated as of May 22, 2003, between Financial Industries
Corporation, a holding company incorporated in the State of Texas (hereinafter
sometimes called the "Company"), and Wilmington Trust Company, a Delaware
banking corporation, as trustee (hereinafter sometimes called the "Trustee").
W I T N E S S E T H :
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issuance of its Floating Rate Senior Debt Securities due 2033 (the "Debt
Securities") under this Indenture and to provide, among other things, for the
execution and authentication, delivery and administration thereof, the Company
has duly authorized the execution of this Indenture.
NOW, THEREFORE, in consideration of the premises, and the purchase of the
Debt Securities by the holders thereof, the Company covenants and agrees with
the Trustee for the equal and proportionate benefit of the respective holders
from time to time of the Debt Securities as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.01. 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.
"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.
"Board of Directors" means the board of directors or the executive
committee or any other duly authorized designated officers of the Company.
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"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in Wilmington, Delaware, The City of New York or
Austin, Texas are permitted or required by law or executive order to close.
"Calculation Agent" means the Person identified as "Trustee" in the first
paragraph hereof with respect to the Debt 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.
"Company" means Financial Industries Corporation, a holding company
incorporated in the State of Texas, and, subject to the provisions of Article
XI, shall include its successors and assigns.
"Debt Security" or "Debt Securities" has the meaning stated in the first
recital of this Indenture.
"Debt Security Register" has the meaning specified in Section 2.05.
"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 2.08.
"Event of Default" means any event specified in Section 5.01, which has
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.
"Indenture" means this Indenture as originally executed or, if amended or
supplemented as herein provided, as so amended or supplemented, or both.
"Interest Payment Date" means February 23, May 23, August 23 and November
23 of each year, commencing on August 23, 2003, subject to Section 14.07.
"Interest Period" has the meaning set forth in Section 2.08.
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"Interest Rate" means, with respect to any Interest Period, a per annum
rate of interest equal to LIBOR, as determined on the LIBOR Determination Date
for such Interest Period, plus 4.20%; provided, however, that the Interest Rate
for any Interest Period prior to the Interest Period commencing on the Interest
Payment Date in May 2008 may not exceed 12.5% per annum; provided, further, that
the Interest Rate for any Interest Period may not exceed the highest rate
permitted by New York law, as the same may be modified by United States law of
general application.
"LIBOR" means the London Interbank Offered Rate for three-month U.S. Dollar
deposits in Europe as determined by the Calculation Agent according to Section
2.10(b).
"LIBOR Banking Day" has the meaning set forth in Section 2.10(b)(i).
"LIBOR Business Day" has the meaning set forth in Section 2.10(b)(i).
"LIBOR Determination Date" has the meaning set forth in Section 2.10(b)(i).
"Maturity Date" means May 23, 2033, subject to Section 14.07.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Vice Chairman, the President or any Vice President, and by the Chief
Financial Officer, 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 14.06 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 who may be other counsel
reasonably satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 14.06 if and to the extent required by the
provisions of such Section.
The term "outstanding," when used with reference to Debt Securities,
subject to the provisions of Section 7.04, means, as of any particular time, all
Debt Securities authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except
(a) Debt Securities theretofore canceled by the Trustee or the
Authenticating Agent or delivered to the Trustee for
cancellation;
(b) Debt Securities, 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 shall have been set aside and
segregated in trust by the Company (if the Company shall act as
its own Paying Agent); provided, that, if such Debt Securities,
or portions thereof, are to be redeemed prior to maturity
thereof, notice of such redemption shall have been given as
provided in Articles X and XIV or provision satisfactory to the
Trustee shall have been made for giving such notice; and
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(c) Debt Securities paid pursuant to Section 2.06 or in lieu of or in
substitution for which other Debt Securities shall have been
authenticated and delivered pursuant to the terms of Section 2.06
unless proof satisfactory to the Company and the Trustee is
presented that any such Debt Securities are held by bona fide
holders in due course.
"Optional Redemption Date" has the meaning set forth in Section 10.01.
"Optional Redemption Price" means an amount in cash equal to 100% of the
principal amount of the Debt Securities being redeemed plus unpaid interest
accrued on such Debt Securities to the Optional Redemption Date.
"Paying Agent" has the meaning set forth in Section 3.04(e).
"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 Debt Security means every previous
Debt Security evidencing all or a portion of the same debt as that evidenced by
such particular Debt Security; and, for the purposes of this definition, any
Debt Security authenticated and delivered under Section 2.06 in lieu of a lost,
destroyed or stolen Debt Security shall be deemed to evidence the same debt as
the lost, destroyed or stolen Debt Security.
"Principal Office of the Trustee" means the office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered, which at all times shall be located within the United States and
at the time of the execution of this Indenture shall be Rodney Square North,
1100 North Market Street, Wilmington, DE 19890-0001.
"Reference Banks" has the meaning set forth in Section 2.10(b)(ii).
"Resale Restriction Termination Date" means, with respect to any Debt
Security, the date which is the later of (i) two years (or such shorter period
of time as permitted by Rule 144(k) under the Securities Act of 1933, as
amended) after the later of (y) the date of original issuance of such Debt
Security and (z) the last date on which the Company or any Affiliate (as defined
in Rule 405 under the Securities Act of 1933, as amended) of the Company was the
holder of such Debt Security (or any predecessor thereto) and (ii) such later
date, if any, as may be required by any subsequent change in applicable law.
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"Responsible Officer" means, with respect to the Trustee, any officer
within the Principal Office of the Trustee with direct responsibility for the
administration of the Indenture, 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 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.
"Securityholder," holder of Debt Securities" or other similar terms, means
any Person in whose name at the time a particular Debt Security is registered on
the Debt Security Register.
"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 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 one or more of
its Subsidiaries or by such Person and one or more of its Subsidiaries, and
(iii) any limited partnership of which such Person or any of its Subsidiaries is
a general partner. For the purposes of this definition, "voting stock" means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trustee" means the Person identified as "Trustee" in the first paragraph
hereof, and, subject to the provisions of Article VI hereof, shall also include
its successors and assigns as Trustee hereunder.
"United States" means the United States of America and the District of
Columbia.
"U.S. Person" has the meaning given to United States Person as set forth in
Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.
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ARTICLE II
DEBT SECURITIES
SECTION 2.01 Authentication and Dating.
Upon the execution and delivery of this Indenture, or from time to time
thereafter, Debt Securities in an aggregate principal amount not in excess of
$15,000,000 may be executed and delivered by the Company to the Trustee for
authentication, and the Trustee shall thereupon authenticate and make available
for delivery said Debt Securities to or upon the written order of the Company,
signed by its Chairman of the Board of Directors or President, without any
further action by the Company hereunder. In authenticating such Debt Securities,
and accepting the additional responsibilities under this Indenture in relation
to such Debt Securities, the Trustee shall be entitled to receive, and (subject
to Section 6.01) shall be fully protected in relying upon 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 or other officers with
appropriate delegated authority of the Company, as the case may be.
The Trustee shall have the right to decline to authenticate and deliver any
Debt Securities under this Section if the Trustee, being advised 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 Securityholders.
The definitive Debt Securities 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 Debt Securities, as evidenced by
their execution of such Debt Securities.
SECTION 2.02 Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication on all Debt Securities shall be
in substantially the following form:
This is one of the Debt Securities referred to in the within-mentioned
Indenture.
Wilmington Trust Company,
not in its individual capacity
but solely as trustee
By: ___________________________
Authorized Officer
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SECTION 2.03 Form and Denomination of Debt Securities.
The Debt Securities shall be substantially in the form of Exhibit A hereto.
The Debt Securities shall be in registered, certificated form without coupons
and in minimum denominations of $100,000 and any multiple of $1,000 in excess
thereof. The Debt Securities 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 2.04 Execution of Debt Securities.
The Debt Securities 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 or President under its corporate seal (if legally required) which may
be affixed thereto or printed, engraved or otherwise reproduced thereon, by
facsimile or otherwise, and which need not be attested. Only such Debt
Securities 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 officer, 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 Debt Security
executed by the Company shall be conclusive evidence that the Debt Security 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 Debt
Securities shall cease to be such officer before the Debt Securities so signed
shall have been authenticated and delivered by the Trustee or the Authenticating
Agent, or disposed of by the Company, such Debt Securities nevertheless may be
authenticated and delivered or disposed of as though the Person who signed such
Debt Securities had not ceased to be such officer of the Company; and any Debt
Security may be signed on behalf of the Company by such Persons as, at the
actual date of the execution of such Debt Security, 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 Debt Security shall be dated the date of its authentication.
SECTION 2.05 Exchange and Registration of Transfer of Debt Securities.
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
3.02, a register (the "Debt Security Register") for the Debt Securities issued
hereunder in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration and transfer of all Debt
Securities as provided in this Article II. Such register shall be in written
form or in any other form capable of being converted into written form within a
reasonable time.
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Debt Securities 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 3.02, 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 Debt Security or Debt Securities which the Securityholder making the
exchange shall be entitled to receive. Upon due presentment for registration of
transfer of any Debt Security at the Principal Office of the Trustee or at any
office or agency of the Company maintained for such purpose as provided in
Section 3.02, 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 Debt
Security for a like aggregate principal amount. Registration or registration of
transfer of any Debt Security by the Trustee or by any agent of the Company
appointed pursuant to Section 3.02, and delivery of such Debt Security, shall be
deemed to complete the registration or registration of transfer of such Debt
Security.
All Debt Securities 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
either the Trustee or the Authenticating Agent duly executed by, the holder or
such holder's attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Debt Securities, 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 other than exchanges pursuant to Section
2.07, Section 9.04 or Section 10.03 not involving any transfer.
The Company or the Trustee shall not be required to exchange or register a
transfer of any Debt Security for a period of 15 days immediately preceding the
date of selection of Debt Securities for redemption.
Notwithstanding the foregoing, Debt Securities may not be transferred prior
to the Resale Restriction Termination Date except in compliance with the legend
set forth below, unless otherwise determined by the Company in accordance with
applicable law, which legend shall be placed on each Debt Security:
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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. 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. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT)
AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE
COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER", AS
DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN 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, (D)
PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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
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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 THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION 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 THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN
WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR
THEREOF, AS THE CASE MAY BE, 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 AND HOLDING 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.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY 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.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.
SECTION 2.06 Mutilated, Destroyed, Lost or Stolen Debt Securities.
In case any Debt Security 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 Debt Security bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
Debt Security, or in lieu of and in substitution for the Debt Security so
destroyed, lost or stolen. In every case the applicant for a substituted Debt
Security 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 the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of
such Debt Security and of the ownership thereof.
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The Trustee may authenticate any such substituted Debt Security and deliver
the same upon the written request or authorization of any officer of the
Company. Upon the issuance of any substituted Debt Security, 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 Debt Security 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 Debt Security,
pay or authorize the payment of the same (without surrender thereof except in
the case of a mutilated Debt Security) 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 Security and of the ownership thereof.
Every substituted Debt Security issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any such Debt Security is destroyed,
lost or stolen shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Debt Security 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 Debt Securities duly issued
hereunder. All Debt Securities 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 Debt Securities 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 2.07 Temporary Debt Securities.
Pending the preparation of definitive Debt Securities, the Company may
execute and the Trustee shall authenticate and make available for delivery
temporary Debt Securities that are typed, printed or lithographed. Temporary
Debt Securities shall be issuable in any authorized denomination, and
substantially in the form of the definitive Debt Securities but with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the Company. Every such temporary Debt
Security 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 Debt Securities. Without unreasonable delay, the
Company will execute and deliver to the Trustee or the Authenticating Agent
definitive Debt Securities and thereupon any or all temporary Debt Securities
may be surrendered in exchange therefor, at the Principal Office of the Trustee
or at any office or agency maintained by the Company for such purpose as
provided in Section 3.02, and the Trustee or the Authenticating Agent shall
authenticate and make available for delivery in exchange for such temporary Debt
Securities a like aggregate principal amount of such definitive Debt Securities.
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 Debt Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Debt
Securities authenticated and delivered hereunder.
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SECTION 2.08 Payment of Interest.
Each Debt Security will bear interest at the then applicable Interest Rate
(i) in the case of the initial Interest Period, for the period from, and
including, the date of original issuance of such Debt Security to, but
excluding, the initial Interest Payment Date and (ii) thereafter, for the period
from, and including, the first day following the end of the preceding Interest
Period to, but excluding, the related Interest Payment Date or, in the case of
the last Interest Period, the related Optional Redemption Date or Maturity Date,
as applicable (each such period, an "Interest Period"), on the principal
thereof, on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest (including Defaulted Interest), payable (subject to the provisions of
Article XII) on each Interest Payment Date. Interest on any Debt Security that
is payable, and is punctually paid or duly provided for by the Company, on any
Interest Payment Date shall be paid to the Person in whose name such Debt
Security (or one or more Predecessor Securities) is registered at the close of
business on the regular record date for such interest installment, except that
interest payable on the Maturity Date or any Optional Redemption Date, as the
case may be, shall be paid to the Person to whom principal is paid. In case
(i) the Maturity Date of any Debt Security or (ii) any Debt Security or portion
thereof is called for redemption and the related Optional Redemption Date is
subsequent to the regular record date with respect to any Interest Payment Date
and either on or prior to such Interest Payment Date, interest on such Debt
Security will be paid upon presentation and surrender of such Debt Security.
Any interest on any Debt Security that is payable, but is not punctually
paid or duly provided for by the Company, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the holder
on the relevant regular record date by virtue of having been such holder, and
such Defaulted Interest shall be paid by the Company to the Persons in whose
names such Debt Securities (or their respective Predecessor Securities) are
registered at the close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following manner: the
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Debt Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements reasonably 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 provided in this paragraph. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest,
which shall not be more than fifteen nor less than ten days prior to the date of
the proposed payment and not less than ten 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
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Company, shall cause notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be mailed, first class postage prepaid,
to each Securityholder at his or her address as it appears in the Debt Security
Register, not less than ten 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 Debt Securities (or their respective
Predecessor Securities) are registered on such special record date and
thereafter the Company shall have no further payment obligation in respect of
the Defaulted Interest.
The term "regular record date", as used in this Section, shall mean the
fifteenth day prior to the applicable Interest Payment Date, whether or not such
day is a Business Day.
Subject to the foregoing provisions of this Section, each Debt Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debt Security shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other Debt
Security.
SECTION 2.09 Cancellation of Debt Securities Paid, etc.
All Debt Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer, shall, if surrendered to the 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 Debt Securities shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. All Debt
Securities canceled by any Authenticating Agent shall be delivered to the
Trustee. The Trustee shall destroy all canceled Debt Securities unless the
Company otherwise directs the Trustee in writing, in which case the Trustee
shall dispose of such Debt Securities as directed by the Company. If the Company
shall acquire any of the Debt Securities, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Debt Securities unless and until the same are surrendered to the Trustee for
cancellation.
SECTION 2.10 Computation of Interest.
(a) The amount of interest payable for any Interest Period will be computed
on the basis of a 360-day year and the actual number of days elapsed in such
Interest Period.
(b) LIBOR shall be determined by the Calculation Agent for each Interest
Period in accordance with the following provisions:
(i) On the second LIBOR Business Day (provided, that on such day
commercial banks are open for business (including dealings in
foreign currency deposits) in London (a "LIBOR Banking Day"), and
otherwise the next preceding LIBOR Business Day that is also a
LIBOR Banking Day) prior to the March 1, June 1, September 1 or
December 1, as the case may be, immediately succeeding the
commencement of such Interest Period (or, in the case of the
first Interest Period, on May 20, 2003) (each such day, a "LIBOR
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Determination Date"), LIBOR shall equal the rate, as obtained by
the Calculation Agent, for three-month U.S. Dollar deposits in
Europe, which appears on Telerate (as defined in the
International Swaps and Derivatives Association, Inc. 2000
Interest Rate and Currency Exchange Definitions) page 3750 or
such other page as may replace such page 3750, as of 11:00 a.m.
(London time) on such LIBOR Determination Date, as reported by
Bloomberg Financial Markets Commodities News or any successor
service ("Telerate Page 3750"). "LIBOR Business Day" means any
day that is not a Saturday, Sunday or other day on which
commercial banking institutions in The City of New York or
Wilmington, Delaware are authorized or obligated by law or
executive order to be closed. If such rate is superseded on
Telerate Page 3750 by a corrected rate before 12:00 noon (London
time) on such LIBOR Determination Date, the corrected rate as so
substituted will be LIBOR for such LIBOR Determination Date.
(ii) If, on such LIBOR Determination Date, such rate does not appear
on Telerate Page 3750, the Calculation Agent shall determine the
arithmetic mean of the offered quotations of the Reference Banks
to leading banks in the London interbank market for three-month
U.S. Dollar deposits in Europe (in an amount determined by the
Calculation Agent) by reference to requests for quotations as of
approximately 11:00 a.m. (London time) on such LIBOR
Determination Date made by the Calculation Agent to the Reference
Banks. If, on such LIBOR Determination Date, at least two of the
Reference Banks provide such quotations, LIBOR shall equal the
arithmetic mean of such quotations. If, on such LIBOR
Determination Date, only one or none of the Reference Banks
provide such a quotation, LIBOR shall be deemed to be the
arithmetic mean of the offered quotations that at least two
leading banks in The City of New York (as selected by the
Calculation Agent) are quoting on such LIBOR Determination Date
for three-month U.S. Dollar deposits in Europe at approximately
11:00 a.m. (London time) (in an amount determined by the
Calculation Agent). As used herein, "Reference Banks" means four
major banks in the London interbank market selected by the
Calculation Agent.
(iii)If the Calculation Agent is required but is unable to determine a
rate in accordance with at least one of the procedures provided
above, LIBOR for such Interest Period shall be LIBOR in effect
for the immediately preceding Interest Period.
(c) All percentages resulting from any calculations on the Debt Securities
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).
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(d) On each LIBOR Determination Date, the Calculation Agent shall notify,
in writing, the Company and the Paying Agent of the applicable Interest Rate
that applies to the related Interest Period. The Calculation Agent shall, upon
the request of a holder of any Debt Securities, inform such holder of the
Interest Rate that applies to the related Interest Period. All calculations made
by the Calculation Agent in the absence of manifest error shall be conclusive
for all purposes and binding on the Company and the holders of the Debt
Securities. The Paying Agent shall be entitled to rely on information received
from the Calculation Agent or the Company as to the applicable Interest Rate.
The Company shall, from time to time, provide any necessary information to the
Paying Agent relating to any original issue discount and interest on the Debt
Securities that is included in any payment and reportable for taxable income
calculation purposes.
SECTION 2.11 CUSIP Numbers.
The Company in issuing the Debt Securities may use a "CUSIP" number (if
then generally in use), and, if so, the Trustee shall use a "CUSIP" number in
notices of redemption as a convenience to Securityholders; provided, that any
such notice may state that no representation is made as to the correctness of
such number either as printed on the Debt Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Debt Securities, 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 number.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01 Payment of Principal, Premium and Interest.
(a) The Company covenants and agrees that it will duly and punctually pay
or cause to be paid all payments due in respect of the Debt Securities at the
place, at the respective times and in the manner provided in this Indenture and
the Debt Securities. Payment of the principal of and premium, if any, and
interest on the Debt Securities due on the Maturity Date or any Optional
Redemption Date, as the case may be, will be made by the Company in immediately
available funds against presentation and surrender of such Debt Securities. At
the option of the Company, each installment of interest on the Debt Securities
due on an Interest Payment Date other than the Maturity Date or any Optional
Redemption Date, as the case may be, may be paid (i) by mailing checks for such
interest payable to the order of the holders of Debt Securities entitled thereto
as they appear on the Debt Security Register or (ii) by wire transfer of
immediately available funds to any account with a banking institution located in
the United States designated by such holders to the Paying Agent no later than
the related record date. Notwithstanding anything to the contrary contained in
this Indenture or any Debt Security, if InCapS Funding I, Ltd. or a trustee
thereof is the holder of any Debt Security, then all payments in respect of such
Debt Security shall be made bythe Company in immediately available funds when
due.
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(b) The Company will treat the Debt Securities as indebtedness, and the
interest payable in respect of such Debt Securities as interest, for all U.S.
federal income tax purposes. All payments in respect of such Debt Securities
will be made free and clear of U.S. withholding tax to any beneficial owner
thereof that has provided an Internal Revenue Service Form W-8 BEN (or any
substitute or successor form) establishing its non-U.S. status for U.S. federal
income tax purposes.
SECTION 3.02 Offices for Notices and Payments, etc.
So long as any of the Debt Securities remain outstanding, the Company will
maintain in Wilmington, Delaware or in Austin, Texas an office or agency where
the Debt Securities may be presented for payment, an office or agency where the
Debt Securities may be presented for registration of transfer and for exchange
as provided in this Indenture and an office or agency where notices and demands
to or upon the Company in respect of the Debt Securities or of this Indenture
may be served. The Company will give to the Trustee written notice of the
location of any such office or agency and of any change of location thereof.
Until otherwise designated from time to time by the Company in a notice to the
Trustee, or specified as contemplated by Section 2.05, such office or agency for
all of the above purposes shall be the Principal Office of the Trustee. In case
the Company shall fail to maintain any such office or agency in Wilmington,
Delaware or in Austin, Texas, 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 or
Austin, Texas where the Debt Securities 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 or in Austin, Texas for the
purposes above mentioned. The Company will give to the Trustee prompt written
notice of any such designation or rescission thereof.
SECTION 3.03 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 6.09, a Trustee, so
that there shall at all times be a Trustee hereunder.
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SECTION 3.04 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 3.04,
(i) that it will hold all sums held by it as such agent for the
payment of all payments due in respect of the Debt Securities
(whether such sums have been paid to it by the Company or by any
other obligor on the Debt Securities) in trust for the benefit of
the holders of the Debt Securities;
(ii) that it will give the Trustee prompt written notice of any
failure by the Company (or by any other obligor on the Debt
Securities) to make any payment in respect of the Debt Securities
when the same shall be due and payable; and
(iii)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 payments due in respect of the Debt Securities, set aside,
segregate and hold in trust for the benefit of the holders of the Debt
Securities a sum sufficient to make such 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 Debt Securities) to
make any payment in respect of the Debt Securities when the same shall become
due and payable.
Whenever the Company shall have one or more Paying Agents for the Debt
Securities, it will, on or prior to each due date of the payments in respect of
the Debt Securities, deposit with a Paying Agent a sum sufficient to pay all
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.
(c) Anything in this Section 3.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Debt Securities, 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
same terms and conditions herein contained.
(d) Anything in this Section 3.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.04 is subject to
Sections 12.03 and 12.04.
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(e) The Company hereby initially appoints the Trustee to act as paying
agent for the Debt Securities (the "Paying Agent").
SECTION 3.05 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 Debt Securities 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 by the Company in the performance of any covenants of the Company
contained herein, stating whether or not they have knowledge of any such default
and, if so, specifying each such default of which the signers have knowledge and
the nature thereof.
SECTION 3.06 Compliance with Consolidation Provisions.
The Company will not, while any of the Debt Securities remain outstanding,
consolidate with, or merge into, any other Person, or merge into itself, or
sell, convey, transfer or otherwise dispose of all or substantially all of its
property and assets to any other Person unless the provisions of Article XI
hereof are complied with.
ARTICLE IV
LISTS AND REPORTS
SECTION 4.01 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 an Interest Payment Date, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Securityholders of the Debt Securities 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
4.01 so long as the Trustee is in possession thereof by reason of its acting as
Debt Security registrar.
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SECTION 4.02 Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debt Securities (1) contained in the most recent list furnished to it as
provided in Section 4.01 or (2) received by it in the capacity of Debt
Securities registrar (if so acting) hereunder. The Trustee may destroy any list
furnished to it as provided in Section 4.01 upon receipt of a new list so
furnished.
(b) In case three or more holders of Debt Securities (hereinafter referred
to as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debt Security for a period
of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Debt Securities with respect to their rights under this Indenture or under
such Debt Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall
within five Business Days after the receipt of such application, at its
election, either:
(i) 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 4.02, or
(ii) inform such applicants as to the approximate number of holders of
Debt Securities whose names and addresses appear in the
information preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this Section 4.02, and
as to the approximate cost of mailing to such Securityholders the
form of proxy or other communication, if any, specified in such
application.
If the 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 of Debt Securities 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 4.02 a copy of the form of proxy or
other communication which is specified in such request with reasonable
promptness after a tender to the 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 Debt
Securities, as the case may be, or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If said Commission,
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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 Debt Securities, by receiving and holding the
same, agrees with the Company and the Trustee that none of the Company, the
Trustee or 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 Debt Securities in accordance with the provisions of subsection (b) of this
Section 4.02, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under said subsection (b).
SECTION 4.03 Reports.
(a) The Company shall deliver to each holder of Debt Securities: (i) within
45 days after the end of each quarterly fiscal period, (1) unaudited
consolidated financial statements of the Company (including balance sheet and
income statement) covering such period and (2) an Officer's Certificate of the
Company to the effect specified in Exhibit B hereto; (ii) within the earlier of
(x) 90 days after the end of each fiscal year and (y) such earlier number of
days prescribed by the Securities and Exchange Commission for the filing with it
of a Form 10-K by companies subject to the informational reporting requirements
of the Securities Exchange Act of 1934, as amended, (1) audited consolidated
financial statements of the Company (including balance sheet and income
statement) covering such fiscal year, (2) the report of the independent
accountants with respect to such financial statements and (3) an Officer's
Certificate of the Company detailing any material differences between the
unaudited financial statements for such fiscal year delivered pursuant to clause
(i) (1) above and those delivered pursuant to this clause; and (iii) within 7
days after the filing thereof, each Form 10-K and Form 10-Q that is prepared and
filed by the Company with the Securities and Exchange Commission in accordance
with the Securities Exchange Act of 1934, as amended,
if any.
(b) So long as the holder of the Debt Securities is InCapS Funding I, Ltd.
or a trustee thereof, the Company will cause copies of the annual financial
statements of the Company and/or Affiliates that are filed with the insurance
regulator in the state in which the Company or any such Affiliate is
incorporated to be delivered to the holder of the Debt Securities promptly
following their filing.
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ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
SECTION 5.01 Events of Default.
The following events shall be "Events of Default" with respect to Debt
Securities:
(a) the Company defaults in the payment of any interest upon any Debt
Security 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 Debt Securities as and when the same shall
become due and payable, whether at maturity, upon redemption, by acceleration of
maturity pursuant to this Section or otherwise; or
(c) the Company defaults in the performance of, or breaches, any of its
covenants or agreements in Section 3.06 of 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 90 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the holders
of not less than 25% in aggregate principal amount of the outstanding Debt
Securities, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(d) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appoints a receiver, liquidator, assignee, custodian, trustee,
sequestrator or other similar official of the Company or for any substantial
part of its property, or orders the winding-up or liquidation of its affairs and
such decree, appointment or order shall remain unstayed and in effect for a
period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Company or of any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due.
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If an Event of Default specified under clause (a), (b) or (c) of this
Section 5.01 occurs and is continuing with respect to the Debt Securities, then,
in each and every such case, either the Trustee or the holders of not less than
25% in aggregate principal amount of the Debt Securities then outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal of the Debt Securities and
any premium and interest accrued, but unpaid, thereon to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable. If an Event of Default specified under clause (d) or (e) of this
Section 5.01 occurs, then, in each and every such case, the entire principal
amount of the Debt Securities and any premium and interest accrued, but unpaid,
thereon shall ipso facto become immediately due and payable without further
action.
The foregoing provisions, however, are subject to the condition that if, at
any time after the principal of the Debt Securities shall have become due by
acceleration, and before any judgment or decree for the payment of the moneys
due shall have been obtained or entered as hereinafter provided, (i) the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Debt Securities and all payments in
respect of the Debt Securities which shall have become due otherwise than by
acceleration (with interest upon all such payments, to the extent permitted by
law) 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 6.06, if
any, and (ii) all Events of Default under this Indenture, other than the
non-payment of the payments in respect of Debt Securities which shall have
become due by acceleration, shall have been cured, waived or otherwise remedied
as provided herein, then, in each and every such case, the holders of a majority
in aggregate principal amount of the Debt Securities then outstanding, by
written notice to the Company and to the Trustee, may waive all defaults and
rescind and annul such acceleration 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 Trustee and the holders of the Debt Securities shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the Debt
Securities shall continue as though no such proceeding had been taken.
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SECTION 5.02 Payment of Debt Securities on Default; Suit Therefor.
The Company covenants that upon the occurrence of an Event of Default
pursuant to clause (a) or (b) of Section 5.01 and upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the Debt
Securities, the whole amount that then shall have become due and payable on all
Debt Securities; 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 6.06. In case the Company shall fail
forthwith to pay such amounts upon such demand, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered to institute any
actions or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
any other obligor on such Debt Securities and collect in the manner provided by
law out of the property of the Company or any other obligor on such Debt
Securities wherever situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Debt Securities under
Bankruptcy Law, or in case a receiver or trustee shall have been appointed for
the property of the Company or such other obligor, or in the case of any other
similar judicial proceedings relative to the Company or other obligor upon the
Debt Securities, or to the creditors or property of the Company or such other
obligor, the Trustee, irrespective of whether the principal of the Debt
Securities shall then be due and payable as therein expressed or by acceleration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 5.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal and interest owing and unpaid
in respect of the Debt Securities and, in case of any judicial proceedings, to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including 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 6.06) and of the Securityholders
allowed in such judicial proceedings relative to the Company or any other
obligor on the Debt Securities, or to the creditors or property of the Company
or such other obligor, unless prohibited by applicable law and regulations, to
vote on behalf of the holders of the Debt Securities in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or Person performing similar
functions in comparable proceedings, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses; and any receiver, assignee
or trustee in bankruptcy or reorganization is hereby authorized by each of the
Securityholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other amounts due to the
Trustee under Section 6.06.
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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
Debt Securities or the rights of any holder thereof or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or under
any of the Debt Securities, may be enforced by the Trustee without the
possession of any of the Debt Securities, 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 any recovery of judgment shall be for the ratable benefit of the holders of
the Debt Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
holders of the Debt Securities, and it shall not be necessary to make any
holders of the Debt Securities parties to any such proceedings.
SECTION 5.03 Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee 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 Debt Securities in respect of which
moneys have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses incurred by, and reasonable
fees of, the Trustee, its agents, attorneys and counsel, and of all other
amounts due to the Trustee under Section 6.06;
Second: To the payment of the amounts then due and unpaid in respect of
Debt Securities, 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 in respect of such Debt Securities; and
Third: The balance, if any, to the Company.
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SECTION 5.04 Proceedings by Securityholders.
No holder of any Debt Security 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 Debt Securities and unless the holders of not less than 25% in
aggregate principal amount of the Debt Securities 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;
provided, that no holder of Debt Securities shall have any right to prejudice
the rights of any other holder of Debt Securities, obtain priority or preference
over any other such holder or enforce any right under this Indenture except in
the manner herein provided and for the equal, ratable and common benefit of all
holders of Debt Securities.
Notwithstanding any other provisions in this Indenture, the right of any
holder of any Debt Security to receive payment of the principal of and premium,
if any, and interest on such Debt Security 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. 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 5.05 Proceedings by Trustee.
In case of an Event of Default, 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 5.06 Remedies Cumulative and Continuing.
Except as otherwise provided in Section 2.06, 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 Debt Securities, by
judicial proceedings or otherwise, to enforce the performance or observance of
the covenants and agreements contained in this Indenture or otherwise
established with respect to the Debt Securities, and no delay or omission of the
Trustee or of any holder of any of the Debt Securities to exercise any right or
power accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be a waiver of
any such default or an acquiescence therein; and, subject to the provisions of
Section 5.04, every power and remedy given by this Article V or by law to the
Trustee or to the Securityholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Securityholders.
SECTION 5.07 Direction of Proceedings and Waiver of Defaults by Majority of
Securityholders.
The holders of a majority in aggregate principal amount of the Debt
Securities affected 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 Debt Securities; provided, however, that (subject to the
provisions of Section 6.01) 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. Prior to any declaration of
acceleration, or ipso facto acceleration, of the maturity of the Debt
Securities, the holders of a majority in aggregate principal amount of the Debt
Securities at the time outstanding may on behalf of the holders of all of the
Debt Securities 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 or premium, if any, or interest on any of the Debt
Securities or (b) in respect of covenants or provisions hereof which cannot be
modified or amended without the consent of the holder of each Debt Security
affected. Upon any such waiver or modification to such waiver, the Default or
Event of Default covered thereby shall be deemed to be cured for all purposes of
this Indenture and the Company, the Trustee and the holders of the Debt
Securities shall be restored to their former positions and rights hereunder,
respectively; but no such waiver or modification to 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 Debt Securities and this Indenture be deemed to
have been cured and to be not continuing.
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SECTION 5.08 Notice of Defaults.
The Trustee shall, within 90 days after a Responsible Officer of the
Trustee shall have actual knowledge or received written notice of the occurrence
of a default with respect to the Debt Securities, mail to all Securityholders,
as the names and addresses of such holders appear upon the Debt Security
Register, notice of all defaults with respect to the Debt Securities known to
the Trustee, unless such defaults shall have been cured before the giving of
such notice (the term "default" for the purpose of this Section is hereby
defined to be any event specified in Section 5.01, not including periods of
grace, if any, provided for therein); provided, that, except in the case of
default in the payment of the principal of or premium, if any, or interest on
any of the Debt Securities, the 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 5.09 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Debt Security
by such holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 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 Debt Securities outstanding, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of or premium, if any, or
interest on any Debt Security against the Company on or after the same shall
have become due and payable.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01 Duties and Responsibilities of Trustee.
With respect to the holders of Debt Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
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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 or bad faith, except that:
(a) prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee with respect to the
Debt Securities 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 Debt Securities as are specifically set forth in
this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) 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 on their face to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
(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 5.07, 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;
and
(d) the Trustee shall not be charged with knowledge of any Default or Event
of Default with respect to the Debt Securities unless either (1) a Responsible
Officer shall have actual knowledge of such Default or Event of Default or (2)
written notice of such Default or Event of Default shall have been given to the
Trustee by the Company or any other obligor on the Debt Securities or by any
holder of the Debt Securities, except that the Trustee shall be deemed to have
knowledge of any Event of Default pursuant to Sections 5.01(a) or 5.01(b)
hereof.
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.
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SECTION 6.02 Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(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 in good faith to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned herein
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 reasonably 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 (which has not been cured or waived) to
exercise such of the rights and powers vested in it by this Indenture, and to
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
coupon or other paper or document, unless requested in writing to do so by the
holders of a majority in aggregate principal amount of the outstanding Debt
Securities 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 Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding; and
- 29 -
(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.
SECTION 6.03 No Responsibility for Recitals, etc.
The recitals contained herein and in the Debt Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent) shall
be taken as the statements of the Company, and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the same.
The Trustee and the Authenticating Agent make no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities. The Trustee
and the Authenticating Agent shall not be accountable for the use or application
by the Company of any Debt Securities or the proceeds of any Debt Securities
authenticated and delivered by the Trustee or the Authenticating Agent in
conformity with the provisions of this Indenture.
SECTION 6.04 Trustee, Authenticating Agent, Paying Agents, Transfer Agents
or Registrar May Own Debt Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any transfer agent
or any Debt Security registrar, in its individual or any other capacity, may
become the owner or pledgee of Debt Securities with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, transfer agent
or Debt Security registrar.
SECTION 6.05 Moneys to be Held in Trust.
Subject to the provisions of Section 12.04, 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, if any, shall be paid from time to time to
the Company upon the written order of the Company, signed by the Chairman of the
Board of Directors, the President, the Chief Operating Officer, a Vice
President, the Treasurer or an Assistant Treasurer of the Company.
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SECTION 6.06 Compensation and Expenses of Trustee.
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation as shall be agreed to in
writing between the Company and the Trustee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust), and the Company will pay or reimburse the Trustee upon its written
request for all documented 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 reasonable expenses and
disbursements of its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance that arises from its
negligence, willful misconduct or bad faith. The Company also covenants to
indemnify each of the Trustee (including in its individual capacity) and 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),
except to the extent such loss, damage, claim, liability or expense results from
the negligence, willful misconduct or bad faith of such indemnitee, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in the premises. The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
documented expenses, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by a lien
prior to that of the Debt Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Debt Securities.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in clause (d) or (e) of Section
5.01, 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.
- 31 -
SECTION 6.07 Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02, whenever in the
administration of the provisions of this Indenture the 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,
willful misconduct or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such certificate, in the absence of negligence, willful misconduct
or bad faith on the part of the Trustee, shall be full warrant to the Trustee
for any action taken or omitted by it under the provisions of this Indenture
upon the faith thereof.
SECTION 6.08 Eligibility of Trustee.
The Trustee hereunder shall at all times be a U.S. Person that is a banking
corporation or national association organized and doing business under the laws
of the United States of America or any state thereof or of the District of
Columbia and authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least fifty million U.S. dollars
($50,000,000) and subject to supervision or examination by federal, state, or
District of Columbia authority. If such corporation or national association
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 the combined capital and surplus of such corporation or
national association shall be deemed to be its combined capital and surplus as
set forth in its most recent records of condition so published.
The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee,
notwithstanding that such corporation or national association shall be otherwise
eligible and qualified under this Article.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.09.
If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to, this Indenture.
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SECTION 6.09 Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign by giving written notice of such resignation to the Company and by
mailing notice thereof, at the Company's expense, to the holders of the Debt
Securities at their addresses as they shall appear on the Debt Security
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 Debt Security or Debt Securities for at
least six months may, subject to the provisions of Section 5.09, on behalf of
himself or herself 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:
(i) the Trustee shall fail to comply with the provisions of the last
paragraph of Section 6.08 after written request therefor by the
Company or by any Securityholder who has been a bona fide holder
of a Debt Security or Debt Securities for at least six months;
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.08 and shall fail to resign after written
request therefor by the Company or by any such Securityholder; or
(iii)the Trustee shall become incapable of acting, or shall be
adjudged 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 5.09, if no successor Trustee shall have
been so appointed and have accepted appointment within 30 days of
the occurrence of any of (i), (ii) or (iii) above, any
Securityholder who has been a bona fide holder of a Debt Security
or Debt Securities for at least six months may, on behalf of
himself or herself 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.
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(c) Upon prior written notice to the Company and the Trustee, the holders
of a majority in aggregate principal amount of the Debt Securities at the time
outstanding may at any time remove the Trustee and nominate a successor Trustee,
which shall be deemed appointed as successor Trustee unless within ten Business
Days after such nomination the Company 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, 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.
SECTION 6.10 Acceptance by Successor Trustee.
Any successor Trustee appointed as provided in Section 6.09 shall execute,
acknowledge and deliver to the Company and to its predecessor Trustee an
indenture supplemental hereto which shall contain such provisions as shall be
deemed necessary or desirable to confirm that all of the rights, powers, trusts
and duties of the retiring Trustee shall be vested in the successor Trustee, 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 Debt Securities of its predecessor hereunder,
with like effect as if originally named as Trustee herein; but, nevertheless, on
the written request of the Company or of the successor Trustee, the Trustee
ceasing to act shall, upon payment of the amounts then due it pursuant to the
provisions of Section 6.06, execute and deliver an instrument transferring to
such successor Trustee all the rights and powers of the Trustee so ceasing to
act and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder. Upon request of any
such successor Trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
Trustee all such rights and powers. Any Trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the provisions of Section
6.06.
No successor Trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor Trustee shall be eligible
and qualified under the provisions of Section 6.08.
In no event shall a retiring Trustee be liable for the acts or omissions of
any successor Trustee hereunder.
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Upon acceptance of appointment by a successor Trustee as provided in this
Section, the Company shall mail notice of the succession of such Trustee
hereunder to the holders of Debt Securities at their addresses as they shall
appear on the Debt Security Register. If the Company fails to mail such notice
within ten 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, that 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 Debt Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such Debt
Securities so authenticated; and in case at that time any of the Debt Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Debt Securities either in the name of any predecessor hereunder or in the
name of the successor Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Debt Securities 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 Debt Securities 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 Debt Securities 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 Debt Securities; provided, however, that the Trustee
shall not have any liability to the Company for any acts or omissions of the
Authenticating Agent with respect to the authentication and delivery of Debt
Securities. Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of any state
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
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$50,000,000 and being subject to supervision or examination by federal, state 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 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 without the execution or filing of any
paper or any further act on the part of the parties hereto or such
Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent with respect to the Debt
Securities by giving written notice of termination to such Authenticating Agent
and to the Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section, the Trustee may, and upon the request of the
Company shall, promptly appoint a successor Authenticating Agent eligible under
this Section, shall give written notice of such appointment to the Company and
shall mail notice of such appointment to all holders of Debt Securities as the
names and addresses of such holders appear on the Debt Security Register. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein.
The 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.
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ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01 Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a specified
percentage in aggregate principal amount of the Debt Securities may take any
action (including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that at the time
of taking any such action the holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by such Securityholders in person or by agent or proxy
appointed in writing, or (b) by the record of such holders of Debt Securities
voting in favor thereof at any meeting of such Securityholders duly called and
held in accordance with the provisions of Article VIII, or (c) by a combination
of such instrument or instruments and any such record of such a meeting of such
Securityholders, 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 Debt Securities 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
Debt Securities 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 Debt Securities shall be
computed as of the record date; provided, however, that no such authorization,
agreement or consent by such Securityholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 7.02 Proof of Execution by Securityholders.
Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of the
execution of any instrument by a Securityholder or such Securityholder's 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 Debt Securities shall be proved
by the Debt Security Register or by a certificate of the Debt Security
registrar. The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
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The record of any Securityholders' meeting shall be proved in the manner
provided in Section 8.06.
SECTION 7.03 Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any Debt Security,
the Company, the Trustee, any Authenticating Agent, any Paying Agent, any
transfer agent and any Debt Security registrar may deem the Person in whose name
such Debt Security shall be registered upon the Debt Security Register to be,
and may treat such Person as, the absolute owner of such Debt Security (whether
or not such Debt Security shall be overdue) for the purpose of receiving payment
of or on account of the principal of and premium, if any, and interest on such
Debt Security and for all other purposes; and none of the Company, the Trustee,
any Authenticating Agent, any Paying Agent, any transfer agent or any Debt
Security registrar shall be affected by any notice to the contrary. All such
payments so made to any holder for the time being or upon such holder's 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 Debt
Security.
SECTION 7.04 Debt Securities Owned by Company Deemed Not Outstanding.
In determining whether the holders of the requisite aggregate principal
amount of Debt Securities have concurred in any direction, consent or waiver
under this Indenture, Debt Securities which are owned by the Company or any
other obligor on the Debt Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Debt Securities shall be disregarded and
deemed not to be outstanding for the purpose of any such determination,
provided, that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver, only Debt
Securities which a Responsible Officer of the Trustee actually knows are so
owned shall be so disregarded. Debt Securities so owned which have been pledged
in good faith may be regarded as outstanding for the purposes of this Section if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Debt Securities and that the pledgee is not the Company or
any such other obligor or Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
such other obligor. In the case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
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SECTION 7.05 Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Debt Securities specified in
this Indenture in connection with such action, any holder (in cases where no
record date has been set pursuant to Section 7.01) or any holder as of an
applicable record date (in cases where a record date has been set pursuant to
Section 7.01) of a Debt Security (or any Debt Security 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 Debt Securities 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
7.02, revoke such action so far as concerns such Debt Security (or so far as
concerns the principal amount represented by any exchanged or substituted Debt
Security). Except as aforesaid any such action taken by the holder of any Debt
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Debt Security, and of any Debt Security 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
Debt Security or any Debt Security issued in exchange or substitution therefor.
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01 Purposes of Meetings.
A meeting of Securityholders may be called at any time and from time to
time pursuant to the provisions of this Article VIII for any of the following
purposes:
(a) to give any notice to the 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 9.02; or
(d) to take any other action authorized to be taken by or on behalf of the
holders of any specified aggregate principal amount of such Debt Securities
under any other provision of this Indenture or under applicable law.
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SECTION 8.02 Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders to take any
action specified in Section 8.01, to be held at such time and at such place in
The City of New York, the Borough of Manhattan, or Wilmington, Delaware, 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 Debt
Securities affected at their addresses as they shall appear on the Debt
Securities Register. Such notice shall be mailed not less than 20 nor more than
180 days prior to the date fixed for the meeting.
SECTION 8.03 Call of Meetings by 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 Debt Securities, 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 in Austin, Texas for such meeting and may call such meeting to take any
action authorized in Section 8.01, by mailing notice thereof as provided in
Section 8.02.
SECTION 8.04 Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a Person shall be
(a) a holder of one or more Debt Securities or (b) a Person appointed by an
instrument in writing as proxy by a holder of one or more Debt Securities. The
only Persons who shall be entitled to be present or to speak at any meeting of
Securityholders shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 8.05 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 Debt Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate.
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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 8.03, 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 at the meeting.
Subject to the provisions of Section 7.04, at any meeting each holder of
Debt Securities with respect to which such meeting is being held or proxy
therefor shall be entitled to one vote for each $1,000 principal amount of Debt
Securities held or represented by such holder; provided, however, that no vote
shall be cast or counted at any meeting in respect of any Debt Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debt Securities held by such chairman or instruments in writing as
aforesaid duly designating such chairman as the Person to vote on behalf of
other Securityholders. Any meeting of Securityholders duly called pursuant to
the provisions of Section 8.02 or 8.03 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.
SECTION 8.06 Voting.
The vote upon any resolution submitted to any meeting of holders of Debt
Securities 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 Debt Securities
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in triplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Securityholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 8.02. The record
shall show the serial numbers of the Debt Securities voting in favor of or
against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting.
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Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 8.07 Quorum; Actions.
The Persons entitled to vote a majority in aggregate principal amount of
the Debt Securities 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 aggregate principal amount of the Debt
Securities then outstanding, the Persons holding or representing such specified
percentage in aggregate principal amount of the Debt Securities 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 8.02, except that such notice need be given only once not less than five
days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the aggregate principal amount of the Debt
Securities then outstanding which shall constitute a quorum.
Except as limited by the proviso in the first paragraph of Section 9.02,
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 aggregate principal amount of the Debt Securities
then outstanding; provided, however, that, except as limited by the proviso in
the first paragraph of Section 9.02, any resolution with respect to any consent,
waiver, request, demand, notice, authorization, direction or other action that
this Indenture expressly provides may be given by the holders of not less than a
specified percentage in outstanding principal amount of the Debt Securities 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
not less than such specified percentage in aggregate principal amount of the
Debt Securities then outstanding.
Any resolution passed or decision taken at any meeting of holders of Debt
Securities duly held in accordance with this Section shall be binding on all the
Securityholders, whether or not present or represented at the meeting.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures without Consent of Securityholders.
The Company, 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, without the consent of the Securityholders, for one or more
of the following purposes:
(a) to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company, pursuant to Article XI
hereof;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the holders of Debt Securities
as the Board of Directors shall consider to be for the protection of the holders
of such Debt Securities, 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 adversely
affect the interests of the holders of the Debt Securities then outstanding;
(d) to add to, delete from, or revise the terms of Debt Securities,
including, without limitation, any terms relating to the issuance, exchange,
registration or transfer of Debt Securities as required by Section 2.05 (for
purposes of assuring that no registration of Debt Securities is required under
the Securities Act of 1933, as amended), provided, that any such action shall
not adversely affect the interests of the holders of the Debt Securities then
outstanding;
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(e) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee 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, pursuant to the requirements
of Section 6.10;
(f) to make any change (other than as elsewhere provided in this Section)
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 Debt Securities, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or the Debt
Securities, or to add to the rights of the holders of Debt Securities.
The Trustee is hereby authorized to join with the Company 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 may
be executed by the Company and the Trustee without the consent of the holders of
any of the Debt Securities at the time outstanding, notwithstanding any of the
provisions of Section 9.02.
SECTION 9.02 Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Section 7.01) of the holders of
a majority in aggregate principal amount of the Debt Securities at the time
outstanding affected by such supplemental indenture, the Company, 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 Debt Securities;
provided, however, that no such supplemental indenture shall, without the
consent of the holders of each Debt Security then outstanding and affected
thereby, (i) change the Maturity Date of any Debt Security, or reduce the
principal amount thereof or any premium thereon, or reduce the rate (or manner
of calculation of the rate) or extend the time of payment of interest thereon,
or reduce (other than as a result of the maturity or earlier redemption of any
such Debt Security in accordance with the terms of this Indenture and such Debt
Security) or increase the aggregate principal amount of Debt Securities then
outstanding, or change any of the redemption provisions, or make the principal
thereof or any interest or premium thereon payable in any coin or currency other
than United States Dollars, or impair or affect the right of any Securityholder
to institute suit for payment thereof, or (ii) reduce the aforesaid percentage
of Debt Securities the holders of which are required to consent to any such
supplemental indenture.
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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 shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Debt Security 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 to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance thereof.
SECTION 9.03 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions
of this Article IX, this Indenture shall be, and shall be deemed to be, modified
and amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Company and the holders of Debt Securities shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 9.04 Notation on Debt Securities.
Debt Securities 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 determine, new Debt Securities 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 Debt Securities then
outstanding.
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SECTION 9.05 Evidence of Compliance of Supplemental Indenture to be Furnished
to Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02, shall, in
addition to the documents required by Section 14.06, receive an Officers'
Certificate as conclusive evidence that any supplemental indenture executed
pursuant hereto complies with the requirements of this Article IX. The Trustee
shall also 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 10.01 Optional Redemption.
The Company shall have the right to redeem the Debt Securities, in whole or
(provided that all accrued and unpaid interest has been paid on all Debt
Securities for all Interest Periods terminating on or prior to such date) from
time to time in part, on any Interest Payment Date on or after May 23, 2008
(each, an "Optional Redemption Date"), at the Optional Redemption Price.
SECTION 10.02 Notice of Redemption; Selection of Debt Securities.
In case the Company shall desire to exercise the right to redeem all, or,
as the case may be, any part of the Debt Securities, it shall fix a date for
redemption and shall mail, or cause the Trustee to mail (at the expense of the
Company), a notice of such redemption at least 30 and not more than 60 days
prior to the date fixed for redemption to the holders of Debt Securities so to
be redeemed as a whole or in part at their last addresses as the same appear on
the Debt Security Register. Such mailing shall be by first class mail. The
notice if mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the holder receives such notice. In any
case, failure to give such notice by mail or any defect in the notice to the
holder of any Debt Security designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Debt Security.
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Each such notice of redemption shall specify the CUSIP number, if any, of
the Debt Securities to be redeemed, the date fixed for redemption, the price (or
manner of calculation of the price) at which Debt Securities are to be redeemed,
the place or places of payment, that payment will be made upon presentation and
surrender of such Debt Securities, 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 Debt Securities are to be redeemed, the notice of
redemption shall specify the numbers of the Debt Securities to be redeemed. In
case the Debt Securities 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 Debt Security, a new Debt Security or Debt Securities in
principal amount equal to the unredeemed portion thereof will be issued.
Prior to 10:00 a.m., New York City time, on the Optional Redemption Date
specified in the notice of redemption given as provided in this Section, the
Company will deposit with the Trustee or with one or more Paying Agents an
amount of money sufficient to redeem on such date all the Debt Securities so
called for redemption at the applicable price therefor, together with unpaid
interest accrued to such date.
The Company will give the Trustee notice not less than 45 nor more than 60
days prior to the date fixed for redemption as to the price at which the Debt
Securities are to be redeemed and the aggregate principal amount of Debt
Securities to be redeemed and the Trustee shall select, in such manner as in its
sole discretion it shall deem appropriate and fair, the Debt Securities or
portions thereof (in integral multiples of $1,000) to be redeemed.
SECTION 10.03 Payment of Debt Securities Called for Redemption.
If notice of redemption has been given as provided in Section 10.02, the
Debt Securities or portions of Debt Securities with respect to which such notice
has been given shall become due and payable on the related Optional Redemption
Date and at the place or places stated in such notice at the applicable price
therefor, together with unpaid interest accrued thereon to said Optional
Redemption Date, and on and after said Optional Redemption Date (unless the
Company shall default in the payment of such Debt Securities at the redemption
price, together with unpaid interest accrued thereon to said date) interest on
the Debt Securities or portions of Debt Securities so called for redemption
shall cease to accrue. On presentation and surrender of such Debt Securities at
a place of payment specified in said notice, such Debt Securities or the
specified portions thereof shall be paid and redeemed by the Company at the
applicable price therefor, together with unpaid interest accrued thereon to said
Optional Redemption Date.
Upon presentation of any Debt Security 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 Debt Security or
Debt Securities of authorized denominations in principal amount equal to the
unredeemed portion of the Debt Security so presented.
- 47 -
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 11.01 Company May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in the Debt Securities shall prevent
any consolidation or merger of the Company with or into any other corporation or
corporations (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 all or substantially all of the property or capital stock
of the Company or its successor or successors to any other corporation (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 (i) upon any such consolidation, merger (where the
Company is not the surviving corporation), sale, conveyance, transfer or other
disposition, the successor entity shall be a corporation organized and existing
under the laws of the United States or any state thereof or the District of
Columbia (unless such corporation has agreed to make all payments due in respect
of the Debt Securities without withholding or deduction for, or on account of,
any taxes, duties, assessments or other governmental charges under the laws or
regulations of the jurisdiction of organization or residence (for tax purposes)
of such corporation or any political subdivision or taxing authority thereof or
therein unless required by applicable law, in which case such corporation shall
have agreed to pay such additional amounts as shall be required so that the net
amounts received and retained by the Securityholders, after payment of all taxes
(including withholding taxes), duties, assessments or other governmental
charges, will be equal to the amounts that such Securityholders would have
received and retained had no such taxes (including withholding taxes), duties,
assessments or other governmental charges been imposed) and such corporation
expressly assumes all of the obligations of the Company under the Debt
Securities and this Indenture and (ii) after giving effect to any such
consolidation, merger, sale, conveyance, transfer or other disposition, no
Default or Event of Default shall have occurred and be continuing.
SECTION 11.02 Successor Entity to be Substituted.
In case of any such consolidation, merger, sale, conveyance, transfer or
other disposition contemplated in Section 11.01 and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and reasonably 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 Debt Securities and the due and punctual performance and observance of all
of the covenants and conditions of this Indenture to be performed or observed by
the Company, such successor corporation shall succeed to and be substituted for
the Company, with the same effect as if it had been named herein as the Company,
and thereupon the predecessor entity shall be relieved of any further liability
or obligation hereunder or upon the Debt Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all of the Debt Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
- 48 -
Trustee or the Authenticating Agent; and, upon the order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee or the Authenticating
Agent shall authenticate and deliver any Debt Securities 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 Debt Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee or the Authenticating Agent for that purpose. All the Debt Securities so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Debt Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Debt Securities had been
issued at the date of the execution hereof.
SECTION 11.03 Opinion of Counsel to be Given to Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02, shall
receive, in addition to the Opinion of Counsel required by Section 9.05, 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 12.01 Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for cancellation all Debt
Securities theretofore authenticated (other than any Debt Securities which shall
have been destroyed, lost or stolen and which shall have been replaced or paid
as provided in Section 2.06) and not theretofore canceled, or (b) all the Debt
Securities 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 one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit with the Trustee, in trust, funds, which shall be
immediately due and payable, sufficient to pay at maturity or upon redemption,
as the case may be, all of the Debt Securities (other than any Debt Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.06) not theretofore canceled or
delivered to the Trustee for cancellation, including principal and premium, if
any, and interest due or to become due to the Maturity Date or any Optional
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
Debt Securities (1) theretofore repaid to the Company in accordance with the
provisions of Section 12.04, 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 (b) above 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 2.05, 2.06, 3.01,
- 49 -
3.02, 3.04, 6.06, 6.09 and 12.04 hereof, which shall survive until such Debt
Securities shall mature or are redeemed, as the case may be, and are paid in
full. Thereafter, Sections 6.06, 6.09 and 12.04 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,
provided, however, that the Company hereby 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 Debt Securities.
SECTION 12.02 Deposited Moneys to be Held in Trust by Trustee.
Subject to the provisions of Section 12.04, all moneys deposited with the
Trustee pursuant to Section 12.01 shall be held in trust and applied by it to
the payment, either directly or through any Paying Agent (including the Company
if acting as its own Paying Agent), to the holders of the particular Debt
Securities for the payment of which such moneys have been deposited with the
Trustee, of all sums due and to become due thereon for principal, premium, if
any, and interest.
SECTION 12.03 Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture, all moneys then held
by any Paying Agent of the Debt Securities (other than the Trustee) shall, upon
demand of the Company, be repaid to the Company or paid to the Trustee, and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
SECTION 12.04 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 Debt Securities
and not applied but remaining unclaimed by the holders of Debt Securities for
two years after the date upon which such principal, premium, if any, or
interest, as the case may be, shall have become due and payable, shall be repaid
to the Company by the Trustee or such Paying Agent on written demand; and the
holder of any of the Debt Securities shall thereafter look only to the Company
for any payment which such holder may be entitled to collect and all liability
of the Trustee or such Paying Agent with respect to such moneys shall thereupon
cease.
- 50 -
ARTICLE XIII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 13.01 Indenture and Debt Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Debt Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any such Debt Security, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
officer, director, employee or agent, as such, past, present or future, of the
Company or of any predecessor or successor corporation of the Company, either
directly or through the Company or any successor corporation of the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of the Debt Securities.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 14.01 Successors.
All the covenants, stipulations, promises and agreements of the Company
contained in this Indenture shall bind its successors and assigns, whether so
expressed or not.
SECTION 14.02 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 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.
SECTION 14.03 Surrender of Company Powers.
The Company, by instrument in writing executed by authority of 2/3 (two
thirds) of its Board of Directors and delivered to the Trustee, may surrender
any of the powers reserved to the Company and thereupon such power so
surrendered shall terminate both as to the Company and as to any permitted
successor.
- 51 -
SECTION 14.04 Addresses for Notices, etc.
Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or by the Securityholders on
the Company 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 with the Trustee for such purpose) to
the Company at 6500 River Place Boulevard, Building. 1, Austin, Texas 78730,
Attention: Theodore A. Fleron. Any notice, direction, request 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 Wilmington Trust Company at Rodney Square North, 1100 North
Market Street, Wilmington, DE 19890-0001, Attention: Corporate Trust
Administration.
SECTION 14.05 Governing Law.
This Indenture and the Debt Securities shall each be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to conflict of laws principles of said State other than Section 5-1401 of the
New York General Obligations Law.
SECTION 14.06 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 (except that no such Opinion of Counsel is
required to be furnished to the Trustee in connection with the authentication
and issuance of Debt Securities issued on the date of this Indenture).
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture (except certificates delivered pursuant to Section 3.05) shall
include (a) a statement that the person making such certificate or opinion has
read such covenant or condition; (b) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (c) a statement that, in the
opinion of such person, he or she has made such examination or investigation as
is necessary to enable him or her to express an informed opinion as to whether
or not such covenant or condition has been complied with; and (d) a statement as
to whether or not, in the opinion of such person, such condition or covenant has
been complied with.
- 52 -
SECTION 14.07 Business Day Convention.
Notwithstanding anything to the contrary contained herein, if any Interest
Payment Date, other than the Maturity Date or any Optional Redemption Date,
falls on a day that is not a Business Day, then any interest payable will be
paid on, and such Interest Payment Date will be moved to, the next succeeding
Business Day, and additional interest will accrue for each day that such payment
is delayed as a result thereof. If the Maturity Date or any Optional Redemption
Date falls on a day that is not a Business Day, then the principal, premium, if
any, and/or interest payable on such date will be paid on the next succeeding
Business Day, and no additional interest will accrue in respect of such payment
made on such next succeeding Business Day.
SECTION 14.08 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 14.09 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 14.10 Separability.
In case any one or more of the provisions contained in this Indenture or in
the Debt Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of such Debt
Securities, but this Indenture and such Debt Securities shall be construed as if
such invalid, illegal or unenforceable provision had never been contained herein
or therein.
SECTION 14.11 Assignment.
Subject to Article XI, the Company will have the right at all times to
assign any of its rights or obligations under this Indenture and the Debt
Securities to a direct or indirect wholly owned Subsidiary of the Company;
provided, however, that, in the event of any such assignment, the Company shall
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 thereto.
- 53 -
Wilmington Trust Company, in its capacity as Trustee, hereby accepts the
trusts in this Indenture declared and provided, upon the terms and conditions
herein above set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
FINANCIAL INDUSTRIES CORPORATION
By:____________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Trustee
By: ___________________________________
Name:
Title:
- 54 -
EXHIBIT A
FORM OF DEBT SECURITY
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. 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. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT)
AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE
COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER", AS
DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN 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, (D)
PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.
A-1
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION 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 THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN
WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR
THEREOF, AS THE CASE MAY BE, 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 AND HOLDING 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.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY 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.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.
A-2
Floating Rate Senior Debt Security due 2033
of
FINANCIAL INDUSTRIES CORPORATION
Financial Industries Corporation, a holding company incorporated in the
State of Texas (the "Company", which term includes any successor permitted under
the Indenture (as defined herein)), for value received, promises to pay to
JPMorgan Chase Bank, as Trustee for the benefit of the Noteholders of InCapS
Funding I, Ltd., or registered assigns, the principal amount of FIFTEEN MILLION
Dollars ($15,000,000) on May __, 2033 (the "Maturity Date") (or any Optional
Redemption Date, as defined herein, or any earlier date of acceleration of the
maturity of this Debt Security), and to pay interest on the outstanding
principal amount of this Debt Security from May 22, 2003, or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, quarterly in arrears on February 23, May 23, August 23 and
November 23 of each year, commencing on August 23, 2003 (each, an "Interest
Payment Date"), at a floating rate per annum, which, with respect to any
Interest Period (as defined in the Indenture), will be equal to LIBOR (as
defined in the Indenture), as determined on the LIBOR Determination Date (as
defined in the Indenture) for such Interest Period, plus 4.20% (the "Interest
Rate") (provided that the Interest Rate for any Interest Period prior to the
Interest Period commencing on the Interest Payment Date in May 2008 may not
exceed 12.5% per annum; and provided, further, that the Interest Rate for any
Interest Period may not exceed the highest rate permitted by New York law, as
the same may be modified by United States law of general application) until the
principal hereof shall have been paid or duly provided for, and on any overdue
principal and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at an annual rate equal to the then applicable Interest Rate,
compounded quarterly. The amount of interest payable for any Interest Period
shall be computed on the basis of a 360-day year and the actual number of days
elapsed in such Interest Period.
The interest installment so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Debt Security (or one or more Predecessor
Securities, as defined in the Indenture) is registered at the close of business
on the "regular record date" for such interest installment, which shall be the
fifteenth day prior to such Interest Payment Date, whether or not such day is a
Business Day (as defined herein). Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to the holders on
such regular record date and may be paid to the Person in whose name this Debt
Security (or one or more Predecessor Securities) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the holders of the
Debt Securities not less than 10 days prior to such special record date, all as
more fully provided in the Indenture.
A-3
Payment of the principal of and premium, if any, and interest on this Debt
Security due on the Maturity Date or any Optional Redemption Date, as the case
may be, shall be made in immediately available funds against presentation and
surrender of this Debt Security at the office or agency of the Trustee
maintained for that purpose in Wilmington, Delaware, or at the office or agency
of any other Paying Agent appointed by the Company maintained for that purpose
in Wilmington, Delaware or Austin, Texas. Payment of interest on this Debt
Security due on any Interest Payment Date other than the Maturity Date or any
Optional Redemption Date, as the case may be, shall be made at the option of the
Company by check mailed to the holder thereof at such address as shall appear in
the Debt Security Register or by wire transfer of immediately available funds to
an account appropriately designated by the holder hereof. Notwithstanding the
foregoing, so long as the holder of this Debt Security is InCapS Funding I, Ltd.
or a trustee thereof, payment of the principal of and premium, if any, and
interest on this Debt Security shall be made in immediately available funds when
due at such place and to such account as may be designated by InCapS Funding I,
Ltd. or a trustee thereof. All payments in respect of this Debt Security shall
be payable in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts.
Notwithstanding anything to the contrary contained herein, if any Interest
Payment Date, other than the Maturity Date or any Optional Redemption Date,
falls on a day that is not a Business Day, then any interest payable will be
paid on, and such Interest Payment Date will be moved to, the next succeeding
Business Day, and additional interest will accrue for each day that such payment
is delayed as a result thereof. If the Maturity Date or any Optional Redemption
Date falls on a day that is not a Business Day, then the principal, premium, if
any, and/or interest payable on such date will be paid on the next succeeding
Business Day, and no additional interest will accrue in respect of such payment
made on such next succeeding Business Day.
The Company waives diligence, presentment, demand for payment, notice of
nonpayment, notice of protest, and all other demands and notices.
This Debt Security shall not be entitled to any benefit under the Indenture
and shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debt Security are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has duly executed this certificate.
FINANCIAL INDUSTRIES CORPORATION
By: ___________________________________
Name:
Title:
Dated: May 22, 2003
CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities referred to in the within-mentioned
Indenture.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as the Trustee
By: ___________________________________
Authorized Officer
Dated: May 22, 2003
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[FORM OF REVERSE OF SECURITY]
This Debt Security is one of a duly authorized series of debt securities of
the Company (collectively, the "Debt Securities"), all issued or to be issued
pursuant to an Indenture (the "Indenture"), dated as of May 22, 2003, duly
executed and delivered between the Company and Wilmington Trust Company, as
Trustee (the "Trustee"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Debt Securities of which this Debt Security is a
part.
The Company shall have the right to redeem this Debt Security at its
option, in whole or (provided that all accrued and unpaid interest has been paid
on all Debt Securities for all Interest Periods terminating on or prior to such
date) from time to time in part, on any Interest Payment Date on or after May
23, 2008 (each, an "Optional Redemption Date"), at the Optional Redemption Price
(as defined herein).
Any redemption pursuant to the preceding paragraph will be made upon not
less than 30 days' nor more than 60 days' prior written notice. If the Debt
Securities are only partially redeemed by the Company, the Debt Securities will
be redeemed pro rata or by any other method utilized by the Trustee. In the
event of redemption of this Debt Security in part only, a new Debt Security or
Debt Securities for the unredeemed portion hereof will be issued in the name of
the holder hereof upon the cancellation hereof.
"Optional Redemption Price" means an amount in cash equal to 100% of the
principal amount of this Debt Security being redeemed plus unpaid interest
accrued thereon to the Optional Redemption Date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debt Securities may be
declared, and, in certain cases, shall ipso facto become, due and payable, and
upon any such declaration of acceleration shall become due and payable, in each
case, in the manner, with the effect and subject to the conditions provided in
the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in aggregate principal amount of
the Debt Securities at the time outstanding affected thereby, as specified in
the Indenture, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of the Debt Securities; provided, however, that no such
supplemental indenture shall, among other things, without the consent of the
holders of each Debt Security then outstanding and affected thereby (i) change
the Maturity Date of any Debt Security, or reduce the principal amount thereof
or any premium thereon, or reduce the rate (or manner of calculation of the
rate) or extend the time of payment of interest thereon, or reduce (other than
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as a result of the maturity or earlier redemption of any such Debt Security in
accordance with the terms of the Indenture and such Debt Security) or increase
the aggregate principal amount of Debt Securities then outstanding, or change
any of the redemption provisions, or make the principal thereof or any interest
or premium thereon payable in any coin or currency other than United States
Dollars, or impair or affect the right of any holder to institute suit for
payment thereof, or (ii) reduce the aforesaid percentage of Debt Securities the
holders of which are required to consent to any such supplemental indenture. The
Indenture also contains provisions permitting the holders of a majority in
aggregate principal amount of the Debt Securities at the time outstanding, on
behalf of the holders of all the Debt Securities, to waive any past default in
the performance of any of the covenants contained in the Indenture, or
established pursuant to the Indenture, and its consequences, except (a) a
default in payments due in respect of any of the Debt Securities or (b) in
respect of covenants or provisions of the Indenture which cannot be modified or
amended without the consent of the holder of each Debt Security affected. Any
such consent or waiver by the holder of this Debt Security (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debt Security and of any Debt
Security issued in exchange herefor or in place hereof (whether by registration
of transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Debt Security.
No reference herein to the Indenture and no provision of this Debt Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to make all payments due in respect of this Debt
Security at the time and place and at the rate and in the money herein
prescribed.
As provided in the Indenture and subject to certain limitations herein and
therein set forth, this Debt Security is transferable by the holder hereof on
the Debt Security Register (as defined in the Indenture) of the Company, upon
surrender of this Debt Security for registration of transfer at the office or
agency of the Trustee in Wilmington, Delaware, or at any other office or agency
of the Company in Wilmington, Delaware or Austin, Texas, accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Debt
Securities of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be made for any such registration of transfer, but the Company or
the Trustee may require payment of a sum sufficient to cover any tax, fee or
other governmental charge payable in relation thereto as specified in the
Indenture.
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Prior to due presentment for registration of transfer of this Debt
Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any transfer agent and the Debt Security registrar may deem and treat the holder
hereof as the absolute owner hereof (whether or not this Debt Security shall be
overdue and notwithstanding any notice of ownership or writing hereon) for the
purpose of receiving payment of the principal of and premium, if any, and
interest on this Debt Security and for all other purposes, and none of the
Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar shall be affected by any notice to the
contrary.
As provided in the Indenture and subject to certain limitations herein and
therein set forth, Debt Securities are exchangeable for a like aggregate
principal amount of Debt Securities of different authorized denominations, as
requested by the holder surrendering the same.
The Debt Securities are issuable only in registered certificated form
without coupons.
No recourse shall be had for the payment of the principal of or premium, if
any, or interest on this Debt Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer, director, employee or agent, past,
present or future, as such, of the Company or of any predecessor or successor
corporation of the Company, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.
All terms used but not defined in this Debt Security shall have the
meanings assigned to them in the Indenture.
THIS DEBT SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
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EXHIBIT B
FORM OF OFFICERS' CERTIFICATE
QUARTERLY FINANCIAL REPORT
TO: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
PLEASE COMPLETE FOR EACH INSURANCE SUBSIDIARY
Name of Insurance Company:._________________________________
Date of Report: ___________
Current A.M. Best Insurer's Financial Strength Rating: ___________
Please provide the following information for the most recent quarterly period
ended Quarter: __ March 31 __ June 30 __ September 30 __ December 31 Year: 20___
Most Recently Reported NAIC Risk Based Capital Ratio ___________%
Total Policyholders' Surplus $__________
Ratio of Consolidated Debt and Preferred Stock
to Total Policyholders' Surplus ___________%
Total Admitted Assets $__________
Ratio of NAIC Class 1 & 2 Rated Investments
to Total Fixed Income Investments ___________%
Ratio of NAIC Class 1 & 2 Rated Investments to
Total Investments ___________%
Return on Policyholders' Surplus for the Trailing Twelve Month
Period ___________%
B-1
For Property & Casualty Companies:
Expense Ratio ___________%
Loss and LAE Ratio ___________%
Combined Ratio . ___________%
Net Premiums Written (trailing twelve month period)
to Policyholders' Surplus. ___________%
B-2
CERTIFICATION
The undersigned hereby certifies that he/she has duly executed the attached
Quarterly Financial Report, dated ______, __, for and on behalf of ____________,
that he/she is the _______________ of such Company, and that he/she has
authority to execute and file such instrument. The undersigned further certifies
that he/she is familiar with such instrument and that the facts therein set
forth are true to the best of his/her knowledge, information and belief.
Name: _________________________________
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LEGEND
NAIC Risk Based Capital Ratio-P&C (Total Adjusted Capital (as defined in
the NAIC RBC Instructions for P & C
Insurers)/Authorized Control Level Risk-
Based Capital)
NAIC Risk Based Capital Ratio-Life (Total Adjusted Capital (as defined in
the NAIC RBC Instructions for Life
Insurers)/Authorized Control Level Risk-
Based Capital)
Total Capital and Surplus-Life Common Capital Stock + Preferred Capital
Stock + Aggregate Write-Ins for other
than special surplus funds + Surplus
Notes + Gross Paid-In and Contributed
Surplus +Aggregate Write-Ins for Special
Surplus Funds +Unassigned Funds(Surplus)
+ Asset Valuation Reserve-Treasury Stock
Total Capital and Surplus-P&C Aggregate Write-Ins for Special Surplus
Funds + Common Capital Stock + Preferred
Capital Stock + Aggregate Write-Ins for
other than special surplus funds +
Surplus Notes + Gross Paid-In and Con-
tributed Surplus + Unassigned Funds
(Surplus) - Treasury Stock
Total Admitted Assets Total admitted assets as determined in
accordance with statutory accounting
principles
Return on Policyholders' Surplus Net Income/Policyholders' Surplus for
for the Trailing Twelve Month Period the Trailing Twelve Month Period
Expense Ratio Other Underwriting Expenses Incurred/Net
premiums Earned
Loss and LAE Ratio (Losses Incurred + Loss Expenses
Incurred)/Net Premiums Earned
Combined Ratio Expense Ratio + Loss and LAE Ratio
Net Premiums Written (trailing Net Premiums Written of the trailing
twelve month period) to twelve month period / Policyholders'
Policyholders' Surplus Surplus
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