EXHIBIT 4.1
Hallmark Financial Services, Inc.,
as Company
INDENTURE
Dated as of June 21, 2005
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Trustee
JUNIOR SUBORDINATED DEBT SECURITIES
Due June 15, 2035
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions..................................... 1
Additional Interest....................................... 1
Additional Provisions..................................... 1
Authenticating Agent...................................... 1
Bankruptcy Law............................................ 1
Board of Directors........................................ 1
Board Resolution.......................................... 2
Business Day.............................................. 2
Calculation Agent......................................... 2
Capital Securities........................................ 2
Capital Securities Guarantee.............................. 2
Certificate............................................... 2
Common Securities......................................... 2
Company................................................... 3
Debt Security............................................. 3
Debt Security Register.................................... 3
Declaration............................................... 3
Default................................................... 3
Defaulted Interest........................................ 3
Deferred Interest......................................... 3
Event of Default.......................................... 3
Extension Period.......................................... 3
Indenture................................................. 3
Institutional Trustee..................................... 3
Interest Payment Date..................................... 3
Interest Rate............................................. 3
Investment Company Event.................................. 3
LIBOR..................................................... 4
LIBOR Banking Day......................................... 4
LIBOR Business Day........................................ 4
LIBOR Determination Date.................................. 4
Liquidation Amount........................................ 4
Maturity Date............................................. 4
Notice.................................................... 4
Officers' Certificate..................................... 4
Opinion of Counsel........................................ 4
Outstanding,.............................................. 4
Paying Agent.............................................. 5
Person.................................................... 5
Predecessor Security...................................... 5
Principal Office of the Trustee........................... 5
Redemption Date........................................... 5
Redemption Price.......................................... 5
Responsible Officer....................................... 5
Securityholder............................................ 5
Senior Indebtedness....................................... 5
Special Event............................................. 6
Special Redemption Date................................... 6
Special Redemption Price.................................. 6
Subsidiary................................................ 6
Tax Event................................................. 6
Trust..................................................... 7
Trust Indenture Act....................................... 7
Trust Securities.......................................... 7
Trustee................................................... 7
United States............................................. 7
U.S. Person............................................... 7
ARTICLE II
DEBT SECURITIES
SECTION 2.01. Authentication and Dating....................... 7
SECTION 2.02. Form of Trustee's Certificate of Authentication. 8
SECTION 2.03. Form and Denomination of Debt Securities........ 8
SECTION 2.04. Execution of Debt Securities.................... 8
SECTION 2.05. Exchange and Registration of Transfer of Debt
Securities...................................... 9
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Debt
Securities...................................... 12
SECTION 2.07. Temporary Debt Securities....................... 12
SECTION 2.08. Payment of Interest............................. 13
SECTION 2.09. Cancellation of Debt Securities Paid, etc....... 14
SECTION 2.10. Computation of Interest......................... 14
SECTION 2.11. Extension of Interest Period.................... 16
SECTION 2.12. CUSIP Numbers................................... 17
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest;
Agreed Treatment of the Debt Securities......... 17
SECTION 3.02. Offices for Notices and Payments, etc........... 18
SECTION 3.03. Appointments to Fill Vacancies in Trustee's
Office.......................................... 18
SECTION 3.04. Provision as to Paying Agent.................... 19
SECTION 3.05. Certificate to Trustee.......................... 20
SECTION 3.06. Additional Interest............................. 20
SECTION 3.07. Compliance with Consolidation Provisions........ 20
SECTION 3.08. Limitation on Dividends......................... 20
SECTION 3.09. Covenants as to the Trust....................... 21
ARTICLE IV
LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists.......................... 22
SECTION 4.02. Preservation and Disclosure of Lists............ 22
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF
DEFAULT
SECTION 5.01. Events of Default............................... 23
SECTION 5.02. Payment of Debt Securities on Default; Suit
Therefor........................................ 25
SECTION 5.03. Application of Moneys Collected by Trustee...... 26
SECTION 5.04. Proceedings by Securityholders.................. 27
SECTION 5.05. Proceedings by Trustee.......................... 27
SECTION 5.06. Remedies Cumulative and Continuing.............. 28
SECTION 5.07. Direction of Proceedings and Waiver of Defaults
by Majority of Securityholders.................. 28
SECTION 5.08. Notice of Defaults.............................. 29
SECTION 5.09. Undertaking to Pay Costs........................ 29
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.......... 29
SECTION 6.02. Reliance on Documents, Opinions, etc............ 31
SECTION 6.03. No Responsibility for Recitals, etc............. 32
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own Debt
Securities...................................... 32
SECTION 6.05. Moneys to be Held in Trust...................... 32
SECTION 6.06. Compensation and Expenses of Trustee............ 32
SECTION 6.07. Officers' Certificate as Evidence............... 33
SECTION 6.08. Eligibility of Trustee.......................... 33
SECTION 6.09. Resignation or Removal of Trustee, Calculation
Agent, Paying Agent or Debt Security Registrar.. 34
SECTION 6.10. Acceptance by Successor......................... 35
SECTION 6.11. Succession by Merger, etc....................... 36
SECTION 6.12. Authenticating Agents........................... 36
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders....................... 38
SECTION 7.02. Proof of Execution by Securityholders........... 38
SECTION 7.03. Who Are Deemed Absolute Owners.................. 39
SECTION 7.04. Debt Securities Owned by Company Deemed Not
Outstanding..................................... 39
SECTION 7.05. Revocation of Consents; Future Holders Bound.... 39
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings............................ 40
SECTION 8.02. Call of Meetings by Trustee..................... 40
SECTION 8.03. Call of Meetings by Company or Securityholders.. 40
SECTION 8.04. Qualifications for Voting....................... 41
SECTION 8.05. Regulations..................................... 41
SECTION 8.06. Voting.......................................... 41
SECTION 8.07. Quorum; Actions................................. 41
SECTION 8.08. Written Consent Without a Meeting............... 44
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of
Securityholders................................. 43
SECTION 9.02. Supplemental Indentures with Consent of
Securityholders................................. 44
SECTION 9.03. Effect of Supplemental Indentures............... 45
SECTION 9.04. Notation on Debt Securities..................... 45
SECTION 9.05. Evidence of Compliance of Supplemental
Indenture to be Furnished to Trustee............ 45
ARTICLE X
REDEMPTION OF SECURITIES
SECTION 10.01. Optional Redemption............................. 46
SECTION 10.02. Special Event Redemption........................ 46
SECTION 10.03. Notice of Redemption; Selection of Debt
Securities...................................... 46
SECTION 10.04. Payment of Debt Securities Called for
Redemption...................................... 47
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 11.01. Company May Consolidate, etc., on Certain
Terms........................................... 47
SECTION 11.02. Successor Entity to be Substituted.............. 48
SECTION 11.03. Opinion of Counsel to be Given to Trustee....... 48
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 12.01. Discharge of Indenture.......................... 49
SECTION 12.02. Deposited Moneys to be Held in Trust by
Trustee......................................... 49
SECTION 12.03. Paying Agent to Repay Moneys Held............... 50
SECTION 12.04. Return of Unclaimed Moneys...................... 50
ARTICLE XIII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 13.01. Indenture and Debt Securities Solely Corporate
Obligations..................................... 50
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 14.01. Successors...................................... 50
SECTION 14.02. Official Acts by Successor Entity............... 51
SECTION 14.03. Surrender of Company Powers..................... 51
SECTION 14.04. Addresses for Notices, etc...................... 51
SECTION 14.05. Governing Law................................... 51
SECTION 14.06. Evidence of Compliance with Conditions
Precedent....................................... 51
SECTION 14.07. Non-Business Days............................... 52
SECTION 14.08. Table of Contents, Headings, etc................ 52
SECTION 14.09. Execution in Counterparts....................... 52
SECTION 14.10. Separability.................................... 52
SECTION 14.11. Assignment...................................... 53
SECTION 14.12. Acknowledgment of Rights........................ 53
ARTICLE XV
SUBORDINATION OF DEBT SECURITIES
SECTION 15.01. Agreement to Subordinate........................ 53
SECTION 15.02. Default on Senior Indebtedness.................. 54
SECTION 15.03. Liquidation; Dissolution; Bankruptcy............ 54
SECTION 15.04. Subrogation..................................... 55
SECTION 15.05. Trustee to Effectuate Subordination............. 56
SECTION 15.06. Notice by the Company........................... 56
SECTION 15.07. Rights of the Trustee. Holders of Senior
Indebtedness.................................... 57
SECTION 15.08. Subordination May Not Be Impaired............... 57
EXHIBITS
EXHIBIT A FORM OF DEBT SECURITY
THIS INDENTURE, dated as of June 21, 2005, between Hallmark
Financial Services, Inc., a company incorporated in Nevada (hereinafter
sometimes called the "Company"), and JPMorgan Chase Bank, National
Association 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 Junior Subordinated Debt Securities due June
15, 2035 (the "Debt Securities") under this Indenture and to provide for,
among other things, 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 1.1. 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.
"Additional Interest" shall have the meaning set forth in Section
3.06.
"Additional Provisions" shall have the meaning set forth in
Section 15.01.
"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.
"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, New York
City or the city of the Principal Office of the Trustee are permitted or
required by any applicable 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 and the
Institutional Trustee with respect to the Trust Securities.
"Capital Securities" means undivided beneficial interests in the
assets of the Trust which are designated as "Capital Securities" and rank
pari passu with Common Securities issued by the Trust; provided, however,
that if an Event of Default has occurred and is continuing, the rights of
holders of such Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of such Capital Securities.
"Capital Securities Guarantee" means the guarantee agreement that
the Company has entered into as of the date hereof with JPMorgan Chase Bank,
National Association that operates directly or indirectly for the benefit of
holders of Capital Securities of the Trust.
"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.
"Common Securities" means undivided beneficial interests in the
assets of the Trust which are designated as "Common Securities" and rank
pari passu with Capital Securities issued by the Trust; provided, however,
that if an Event of Default has occurred and is continuing, the rights of
holders of such Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of such Capital Securities.
"Company" means Hallmark Financial Services, Inc., a company
incorporated in Nevada, 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.
"Declaration" means the Amended and Restated Declaration of Trust
of the Trust dated as of June 21, 2005, as amended or supplemented from time
to time.
"Default" means any event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning set forth in Section 2.08.
"Deferred Interest" has the meaning set forth in Section 2.11.
"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.
"Extension Period" has the meaning set forth in Section 2.11.
"Fixed Rate" means a per annum rate of interest, equal to 7.725%
commencing the date hereof.
"Fixed Rate Period" has the meaning set forth in Section 2.10.
"Indenture" means this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented,
or both.
"Institutional Trustee" has the meaning set forth in the
Declaration.
"Interest Payment Date" means March 15, June 15, September 15 and
December 15 of each year, commencing on September 15, 2005, during the term
of this Indenture.
"Interest Period" has the meaning set fort in Section 2.08.
"Interest Rate" means the Fixed Rate and Variable Rate, as
applicable.
"Investment Company Event" means the receipt by the Company and
the Trust of an Opinion of Counsel experienced in such matters to the effect
that, as a result of a change in law or regulation or written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or, within 90 days of the date of such
opinion, will be an "investment company" that is required to be registered
under the Investment Company Act of 1940, as amended, which change or
prospective change becomes effective or would become effective, as the case
may be, on or after the date of the original issuance of the Debt
Securities.
"LIBOR" means the London Interbank Offered Rate for 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)(1).
"LIBOR Business Day" has the meaning set forth in Section
2.10(b)(1).
"LIBOR Determination Date" has the meaning set forth in Section
2.10(b)(1).
"Liquidation Amount" means the liquidation amount of $1,000 per
Trust Security.
"Maturity Date" means June 15, 2035.
"Notice" has the meaning set forth in Section 2.11.
"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 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.
"Outstanding" means when used with reference to Debt Securities,
subject to the provisions of Section 7.04, 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
(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.
"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
600 Travis Street, 50th Floor, Houston, Texas 77002.
"Redemption Date" has the meaning set forth in Section 10.01.
"Redemption Price" means 100% of the principal amount of the Debt
Securities being redeemed plus accrued and unpaid interest on such Debt
Securities to the Redemption Date.
"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.
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of
the Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company;
(ii) all capital lease obligations of the Company; (iii) all obligations of
the Company issued or assumed as the deferred purchase price of property,
all conditional sale obligations of the Company and all obligations of the
Company under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all obligations of
the Company for the reimbursement of any letter of credit, any banker's
acceptance, any security purchase facility, any repurchase agreement or
similar arrangement, any interest rate swap, any other hedging arrangement,
any obligation under options or any similar credit or other transaction; (v)
all obligations of the type referred to in clauses (i) through (iv) above of
other Persons for the payment of which the Company is responsible or liable
as obligor, guarantor or otherwise; and (vi) all obligations of the type
referred to in clauses (i) through (v) above of other Persons secured by any
lien on any property or asset of the Company (whether or not such obligation
is assumed by the Company), whether incurred on or prior to the date of this
Indenture or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are not superior or are pari passu in right
of payment to the Debt Securities; provided, however, that Senior
Indebtedness shall not include (X) any debt securities issued to any trust
other than the Trust (or a trustee of such trust) that is a financing
vehicle of the Company (a "financing entity"), in connection with the
issuance by such financing entity of equity or other securities in
transactions substantially similar in structure to the transactions
contemplated hereunder and in the Declaration or (Y) any guarantees of the
Company in respect of the equity or other securities of any financing entity
referred to in clause (X) above.
"Special Event" means either a Tax Event or an Investment Company
Event.
"Special Redemption Date" has the meaning set forth in Section
10.02.
"Special Redemption Price" means (1) if the Special Redemption
Date is before June 15, 2010, 107.5% of the principal amount to be redeemed
plus any accrued and unpaid interest thereon to the date of such redemption
and (2) if the Special Redemption Date is on or after June 15, 2010, the
Redemption Price.
"Subsidiary" means, with respect to any Person, (i) any
corporation, at least a majority of the outstanding voting stock of which is
owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries, (ii)
any general partnership, joint venture or similar entity, at least a
majority of the outstanding partnership or similar interests of which shall
at the time be owned by such Person, or by one or more of its Subsidiaries,
or by such Person and one or more of its Subsidiaries, and (iii) any limited
partnership of which such Person or any of its Subsidiaries is the general
partner. For the purposes of this definition, "voting stock" means shares,
interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having
such power only by reason of the occurrence of a contingency.
"Tax Event" means the receipt by the Company or the Trust of an
Opinion of Counsel experienced in such matters to the effect that, as a
result of any amendment to or change (including any announced prospective
change) in the laws or any regulations thereunder of the United States or
any political subdivision or taxing authority thereof or therein, or as a
result of any official administrative pronouncement (including any private
letter ruling, technical advice memorandum, regulatory procedure, notice or
announcement (an "Administrative Action")) or judicial decision interpreting
or applying such laws or regulations, regardless of whether such
Administrative Action or judicial decision is issued to or in connection
with a proceeding involving the Company or the Trust and whether or not
subject to review or appeal, which amendment, clarification, change,
Administrative Action or decision is enacted, promulgated or announced, in
each case on or after the date of original issuance of the Debt Securities,
there is more than an insubstantial risk that: (i) the Trust is, or will be
within 90 days of the date of such opinion, subject to United States federal
income tax with respect to income received or accrued on the Debt
Securities; (ii) interest payable by the Company on the Debt Securities is
not, or within 90 days of the date of such opinion, will not be, deductible
by the Company, in whole or in part, for United States federal income tax
purposes; or (iii) the Trust is, or will be within 90 days of the date of
such opinion, subject to or otherwise required to pay, or required to
withhold from distributions to holders of Trust Securities, more than a de
minimis amount of other taxes (including withholding taxes), duties,
assessments or other governmental charges.
"Trust" means Hallmark Statutory Trust I, the Delaware statutory
trust, or any other similar trust created for the purpose of issuing Capital
Securities in connection with the issuance of Debt Securities under this
Indenture, of which the Company is the sponsor.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time-to-time, or any successor legislation.
"Trust Securities" means Common Securities and Capital Securities
of Hallmark Statutory Trust I.
"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.
"Variable Rate" means a per annum rate of interest, reset
quarterly, equal to LIBOR, as determined on the LIBOR Determination Date for
such Interest Payment Date, plus 3.25%; provided, however, that the Variable
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 laws of general
application.
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 $30,928,000 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, Vice
Chairman, President or Chief Financial Officer or one of its Vice
Presidents, 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 Trustee shall also be entitled to receive an opinion
of counsel to the effect that (1) all conditions precedent to the execution,
delivery and authentication of the Securities have been complied with; (2)
the Securities are not required to be registered under the Securities Act;
and (3) the Indenture is not required to be qualified under the Trust
Indenture Act.
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.
JPMorgan Chase Bank, National Association, not in its individual
capacity but solely as Trustee.
By --------------------------
Authorized Officer
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, Vice Chairman, President or Chief Financial Officer or
one of its Executive Vice Presidents, Senior Vice Presidents or Vice
Presidents, 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.
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 and duly executed
by, the holder or such holder's attorney duly authorized in writing.
Neither the Trustee nor the Debt Security Registrar shall be
responsible for ascertaining whether any transfer hereunder complies with
the registration provisions of or any exemptions from the Securities Act
(under and as defined in the Declaration), applicable state securities laws
or the applicable laws of any other jurisdiction, ERISA, the United States
Internal Revenue Code of 1986, as amended, or the Investment Company Act
(under and as defined in the Declaration).
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.
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 except in compliance with the restricted securities legend set
forth below, unless otherwise determined by the Company in accordance with
applicable law, which legend shall be placed on each Debt 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 BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY
PRIOR TO 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) 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 THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF 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 CLAUSES (C) OR
(D) 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
BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES,
REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS
INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE
SECURITIES ACT OR AN APPLICABLE EXEMPTION THEREFROM.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"),
(EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS"
BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING
"PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST
THEREIN, 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 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 THEREIN
WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT
EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION
3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A
TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR
PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT
PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT
IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE
EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL
DELIVER TO THE COMPANY AND TRUSTEE 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 BLOCKS
HAVING A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000
IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING
A PRINCIPAL AMOUNT 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 FOR ANY PURPOSE, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY.
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.
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.
SECTION 2.08. Payment of Interest.
--------------------
During the Fixed Rate Period, each Debt Security will bear
interest at the Fixed Rate. Thereafter, each Debt Security will bear
interest at the then applicable Variable Rate. Interest shall accrue at the
Interest Rate defined to include the Fixed Rate and Variable Rate (as
applicable), from and including each Interest Payment Date or, in the case
of the first Interest Period, the original date of issuance of such Debt
Security to, but excluding, the next succeeding Interest Payment Date or, in
the case of the last Interest Period, the Redemption Date, Special
Redemption Date or Maturity Date, as applicable, (each 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 Deferred
Interest and on any overdue installment of interest (including Defaulted
Interest), payable (subject to the provisions of Article XV) on each
Interest Payment Date commencing on September 15, 2005. Interest and any
Deferred 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 said Debt Security (or one or more
Predecessor Securities) is registered at the close of business on the
regular record date for such Interest Period, except that interest and any
Deferred Interest payable on the Maturity Date, any Redemption Date or
Special 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 redemption date is subsequent to a 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, other than Deferred Interest,
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 registered holder on the relevant
regular record date by virtue of having been such holder, and such Defaulted
Interest shall be paid by the Company to the Persons in whose names such
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 in this clause
provided. Thereupon the Trustee shall fix a special record date for the
payment of such Defaulted Interest which shall not be more than 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 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.
Any interest scheduled to become payable on an Interest Payment
Date occurring during an Extension Period shall not be Defaulted Interest
and shall be payable on such other date as may be specified in the terms of
such Debt Securities.
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, 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. The Trustee
shall dispose of all canceled Debt Securities in accordance with its
customary practices 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) From the date hereof until June 15, 2015 (the "Fixed Rate
Period"), the interest shall be computed on the basis of a 360-day year of
twelve 30-day months and the amount payable for any partial period shall be
computed on the basis of the number of days elapsed in a 360-day year of
twelve 30-day months. Upon expiration of the Fixed Rate Period, 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 the relevant
interest period; provided, however, that upon the occurrence of a Special
Event Redemption pursuant to Section 10.02, the amount payable pursuant to
this Indenture shall be calculated as set forth in the definition of Special
Redemption Price.
(b) Upon expiration of the Fixed Rate Period, LIBOR, for any
Interest Period, shall be determined by the Calculation Agent in accordance
with the following provisions:
(1) 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 March 15, June 15, September 15 and
December 15 (except, with respect to the first Interest Period, on
June 15, 2015) (each such day, a "LIBOR 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 Page 3750 (as defined in the International Swaps and
Derivatives Association, Inc. 2000 Interest Rate and Currency
Exchange Definitions) 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. "LIBOR Business Day" means any day that
is not a Saturday, Sunday or other day on which commercial banking
institutions in New York, 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.
(2) If, on any LIBOR Determination Date, such rate does not
appear on Telerate Page 3750 as reported by Bloomberg Financial
Markets Commodities News or such other page as may replace such
Telerate Page 3750, the Calculation Agent shall determine the
arithmetic mean of the offered quotations of the Reference Banks
(as defined below) 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 the
LIBOR Determination Date made by the Calculation Agent to the
Reference Banks. If, on any LIBOR Determination Date, at least two
of the Reference Banks provide such quotations, LIBOR shall equal
the arithmetic mean of such quotations. If, on any 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 the relevant 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.
(3) 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).
(d) On each LIBOR Determination Date, the Calculation Agent shall
notify, in writing, the Company and the Paying Agent of the applicable
Interest Rate in effect for the related Interest Period. The Calculation
Agent shall, upon the request of the holder of any Debt Securities, provide
the Interest Rate applicable 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
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. Extension of Interest Period.
-----------------------------
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, from time to time and without causing an Event
of Default, to defer payments of interest on the Debt Securities by
extending the Interest Period on the Debt Securities at any time and from
time to time during the term of the Debt Securities, for up to twenty
consecutive quarterly periods (each such extended Interest Period, together
with all previous and further consecutive extensions thereof, is referred to
herein as an "Extension Period"), during which Extension Period no interest
shall be due and payable (except any Additional Interest that may be due and
payable). No Extension Period may end on a date other than an Interest
Payment Date or extend beyond the Maturity Date, any Redemption Date or the
Special Redemption Date, as the case may be. During any Extension Period,
interest will continue to accrue on the Debt Securities, and interest on
such accrued interest (such accrued interest and interest thereon referred
to herein as "Deferred Interest") will accrue at an annual rate equal to the
Interest Rate in effect for such Extension Period, compounded quarterly from
the date such Deferred Interest would have been payable were it not for the
Extension Period, to the extent permitted by law. No interest or Deferred
Interest (except any Additional Interest that may be due and payable) shall
be due and payable during an Extension Period, except at the end thereof. At
the end of any such Extension Period the Company shall pay all Deferred
Interest then accrued and unpaid on the Debt Securities; provided, however,
that during any such Extension Period, the Company shall be subject to the
restrictions set forth in Section 3.08 of this Indenture. Prior to the
termination of any Extension Period, the Company may further extend such
Extension Period; provided, that no Extension Period (including all previous
and further consecutive extensions that are part of such Extension Period)
shall exceed twenty consecutive quarterly periods, or extend beyond the
Maturity Date. Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Company may commence a new Extension
Period, subject to the foregoing requirements. The Company must give the
Trustee notice of its election to begin such Extension Period ("Notice") not
later than the related regular record date for the next succeeding Interest
Payment Date. The Notice shall describe, in reasonable detail, why the
Company has elected to begin an Extension Period. The Notice shall
acknowledge and affirm the Company's understanding that it is prohibited
from issuing dividends and other distributions during the Extension Period.
Upon receipt of the Notice, the Placement Agent has the right, at its sole
discretion, to disclose the name of the Company, the fact that the Company
has elected to begin an Extension Period and other information that the
Placement Agent, at its sole discretion, deems relevant to the Company's
election to begin an Extension Period. The Trustee shall give notice of the
Company's election to begin a new Extension Period to the Securityholders.
SECTION 2.12. 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; Agreed
--------------------------------------------------
Treatment of the Debt Securities.
---------------------------------
(a) The Company covenants and agrees that it will duly and
punctually pay, or cause to be paid, all payments due on the Debt Securities
at the place, at the respective times and in the manner provided in this
Indenture and the Debt Securities. At the option of the Company, each
installment of interest on the Debt Securities 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 the Trust or the Trustee of the Trust is the holder of any Debt Security,
then all payments in respect of such Debt Security shall be made by the
Company in immediately available funds when due.
(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.
(c) As of the date of this Indenture, the Company represents that
it has no intention to exercise its right under Section 2.11 to defer
payments of interest on the Debt Securities by commencing an Extension
Period.
(d) As of the date of this Indenture, the Company represents that
the likelihood that it would exercise its right under Section 2.11 to defer
payments of interest on the Debt Securities by commencing an Extension
Period at any time during which the Debt Securities are outstanding is
remote because of the restrictions that would be imposed on the Company's
ability to declare or pay dividends or distributions on, or to redeem,
purchase or make a liquidation payment with respect to, any of its
outstanding equity and on the Company's ability to make any payments of
principal of or interest on, or repurchase or redeem, any of its debt
securities that rank pari passu in all respects with (or junior in interest
to) the Debt Securities.
SECTION 3.02. Offices for Notices and Payments, etc.
--------------------------------------
So long as any of the Debt Securities remain outstanding, the
Company will maintain in New York, New York 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 hereby appoints the Trustee at ITS
Unit Trust Window, 4 New York Plaza, Ground Floor, New York, New York 10004,
attention: ITS (Houston) Hallmark Statutory Trust I as such office or
agency. In case the Company shall fail to maintain any such office or agency
in New York, New York or shall fail to give such notice of the location or
of any change in the location thereof, presentations and demands may be made
and notices may be served at the Principal Office of the Trustee.
In addition to any such office or agency, the Company may, from
time to time, designate one or more offices or agencies outside Houston,
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 New York, New York 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.
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;
(1) that it will hold all sums held by it as such agent for
the payment of all payments due on 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;
(2) 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 on the Debt Securities when the
same shall be due and payable; and
(3) that it will, at any time during the continuance of any
Event of Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such
Paying Agent.
(b) If the Company shall act as its own Paying Agent, it will, on
or before each due date of the payments due on the Debt Securities, set
aside, segregate and hold in trust for the benefit of the holders of the
Debt Securities a sum sufficient to pay 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 on 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 on
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.
(e) The Company hereby initially appoints the Trustee to act as
Paying Agent (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. Additional Interest.
--------------------
If and for so long as the Trust is the holder of all Debt
Securities and is subject to or otherwise required to pay, or is required to
withhold from distributions to holders of Trust Securities, any additional
taxes (including withholding taxes), duties, assessments or other
governmental charges as a result of a Tax Event, the Company will pay such
additional amounts (the "Additional Interest") on the Debt Securities as
shall be required so that the net amounts received and retained by the
Trust for distribution to holders of Trust Securities after paying all
taxes (including withholding taxes on distributions to holders of Trust
Securities), duties, assessments or other governmental charges will be equal
to the amounts the Trust would have received and retained for distribution
to holders of Trust Securities after paying all taxes (including withholding
taxes on distributions to holders of Trust Securities), duties, assessments
or other governmental charges if no such additional taxes, duties,
assessments or other governmental charges had been imposed.
Whenever in this Indenture or the Debt Securities there is a
reference in any context to the payment of principal of, or premium, if any,
or interest on the Debt Securities, such mention shall be deemed to include
mention of payments of the Additional Interest provided for in this Section
to the extent that, in such context, Additional Interest is, was or would be
payable in respect thereof pursuant to the provisions of this Section and
express mention of the payment of Additional Interest (if applicable) in any
provisions hereof shall not be construed as excluding Additional Interest in
those provisions hereof where such express mention is not made; provided,
however, that, notwithstanding anything to the contrary contained in this
Indenture or any Debt Security, the deferral of the payment of interest
during an Extension Period pursuant to Section 2.11 shall not defer the
payment of any Additional Interest that may be due and payable.
SECTION 3.07. 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 or convey all or substantially all of its property or
capital stock to any other Person unless the provisions of Article XI hereof
are complied with.
SECTION 3.08. Limitation on Dividends.
------------------------
If Debt Securities are initially issued to the Trust or a trustee
of such Trust in connection with the issuance of Trust Securities by the
Trust (regardless of whether Debt Securities continue to be held by such
Trust) and (i) there shall have occurred and be continuing an Event of
Default, (ii) the Company shall be in default with respect to its payment of
any obligations under the Capital Securities Guarantee or (iii) the Company
shall have given notice of its election to defer payments of interest on the
Debt Securities by extending the Interest Period as provided herein and such
period, or any extension thereof, shall have commenced and be continuing,
then the Company may not (A) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect
to, any of the Company's capital stock, (B) make any payment of principal of
or interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu in all respects with or
junior in interest to the Debt Securities or (C) make any payment under any
guarantees of the Company that rank in all respects pari passu with or
junior in interest to the Capital Securities Guarantee (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Company (I) in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of one or more employees,
officers, directors or consultants, (II) in connection with a dividend
reinvestment or stockholder stock purchase plan or (III) in connection with
the issuance of capital stock of the Company (or securities convertible into
or exercisable for such capital stock), as consideration in an acquisition
transaction entered into prior to the occurrence of (i), (ii) or (iii)
above, (b) as a result of any exchange, reclassification, combination or
conversion of any class or series of the Company's capital stock (or any
capital stock of a subsidiary of the Company) for any class or series of the
Company's capital stock or of any class or series of the Company's
indebtedness for any class or series of the Company's capital stock, (c) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (d) any declaration of a dividend
in connection with any stockholder's rights plan, or the issuance of rights,
stock or other property under any stockholder's rights plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in
the form of stock, warrants, options or other rights where the dividend
stock or the stock issuable upon exercise of such warrants, options or other
rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock).
SECTION 3.09. Covenants as to the Trust.
--------------------------
For so long as such Trust Securities remain outstanding, the
Company shall maintain 100% ownership of the Common Securities; provided,
however, that any permitted successor of the Company under this Indenture
that is a U.S. Person may succeed to the Company's ownership of such Common
Securities. The Company, as owner of the Common Securities, shall use
commercially reasonable efforts to cause the Trust (a) to remain a statutory
trust, except in connection with a distribution of Debt Securities to the
holders of Trust Securities in liquidation of the Trust, the redemption
of all of the Trust Securities or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration, (b) to otherwise
continue to be classified as a grantor trust for United States federal
income tax purposes and (c) to cause each holder of Trust Securities to be
treated as owning an undivided beneficial interest in the Debt Securities.
SECTION 3.10. Make-whole Provision.
---------------------
If the Company repurchases the Debt Securities between June 15,
2010 (the "Call Date") and June 15, 2015, the Company hereby unconditionally
agrees to repurchase the Debt Securities at a price equal to the aggregate
amount of Debt Securities Outstanding plus the difference between the 10-
year swap rate entered into June 21, 2005 ("Initial Swap Rate") and the swap
rate as of the repurchase date for the period remaining between the
repurchase date and June 15, 2015 ("Determining Swap Rate"), calculated as
follows (the "Purchase Price"):
If at the time the Debt Securities are repurchased by
the Company, the Determining Swap Rate is greater than
the Initial Swap Rate, then the Purchase Price will
equal the aggregate amount of Debt Securities then
Outstanding. If at the time of repurchase, the
Determining Swap Rate is lower than the Initial Swap
Rate, then the Purchase Price will equal (1) the
aggregate amount of Debt Securities then Outstanding
plus (2) (a) the Initial Swap Rate less the Determining
Swap Rate (b) multiplied by the number of years
(including partial years) from the date of repurchase
until the end of the Fixed Rate Period discounted based
on the 1 year Treasury Rate at the time of the
repurchase (c) times the aggregate amount of Debt
Securities then Outstanding.
For example: Assuming (i) the period from the date of
repurchase to the end of the Fixed Rate Period is 2
years, (ii) the Initial Swap Rate is 6%, (iii) the
Determining Swap Rate is 5.5%, (iv) and the 1 year
Treasury Rate is 4%, then the Purchase Price would equal
$31,213,947, which includes a premium of $285,947 (.9%
of the aggregate amount of Debt Securities then
Outstanding).
ARTICLE IV
LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
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, 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; 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.
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:
(1) afford such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.02, or
(2) 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 (the "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, 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 neither the
Company nor the Trustee nor any Paying Agent shall be held accountable by
reason of the disclosure of any such information as to the names and
addresses of the holders of 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. Financial and Other Information.
--------------------------------
(a) The Company shall deliver to each holder of Debt Securities:
(1) within 45 days after the end of each quarterly fiscal period other than
year end, unaudited consolidated financial statements of the Company
(including balance sheet and income statement) covering such period; and (2)
within the earlier of (y) 90 days after the end of each fiscal year and (z)
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 Exchange Act, (i) audited
consolidated financial statements of the Company (including balance sheet
and income statement) covering such fiscal year, and (ii) in the case of
(a)(2), the report of the independent accountants with respect to such
financial statements; (3) 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 Exchange Act, if
any; (4) if the Company is not then (y) subject to Section 13 or 15(d) of
the Exchange Act or (z) exempt from reporting pursuant to Rule 12g3-2(b)
thereunder, the information required to be provided by Rule 144A(d)(4) under
the Securities Act unless all of such information has been previously
delivered to holders of the Debt Securities under clause (1) and (2) above;
and (5) within 30 days after the end of the fiscal year of the Company, Form
1099 or such other annual U.S. federal income tax information statement
required by the Code containing such information with regard to the Debt
Securities held by such holder as is required by the Code and the income tax
regulations of the U.S. Treasury thereunder; provided, however, that so long
as the Company files the information required by this Section 4.03(a)(1),
(2) and (3) with the Commission, the Company's obligations under this
Section 4.03(a)(1), (2) and (3) shall be deemed to be complied with.
(b) The Company will cause copies of the annual financial
statements of the Company and/or Affiliates that are filed with the
insurance regulator in each jurisdiction in which the Company or any such
Affiliate is incorporated to be delivered to the holder of the Debt
Securities promptly following their filing.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT
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; for the avoidance of doubt, an extension of
any Interest Period by the Company in accordance with Section 2.11 of this
Indenture shall not constitute a default under this clause 5.01(a); 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 either at maturity, upon redemption, by
acceleration of Maturity pursuant to Section 5.01 of this Indenture or
otherwise; or
(c) the Company defaults in the performance of, or breaches, any
of its covenants or agreements in Sections 3.06, 3.07, 3.08 or 3.09 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 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 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; or
(f) the Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence
except in connection with (1) the distribution of the Debt Securities to
holders of the Trust Securities in liquidation of their interests in the
Trust, (2) the redemption of all of the outstanding Trust Securities or (3)
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration.
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, unless the principal of the
Debt Securities shall have already become due and payable, 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, if any, 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), (e) or (f) 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 on the Debt Securities which shall have become
due otherwise than by acceleration (with interest upon all such payments and
Deferred Interest, 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 on Debt Securities which shall have become due by acceleration,
shall have been cured, waived or otherwise remedied as provided herein, then
and in every such case the holders of a majority in aggregate principal
amount of the 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; provided, however, that if the Debt
Securities are held by the Trust or a trustee of the Trust, such waiver or
rescission and annulment shall not be effective until the holders of
a majority in aggregate liquidation amount of the outstanding Capital
Securities of the Trust shall have consented to such waiver or rescission
and annulment.
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.
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 5.01(a) or 5.01(b) 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 including Deferred Interest accrued on the
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 declaration of 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.
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 all Senior Indebtedness of the Company
if and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon 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 on such Debt Securities; and
Fourth: The balance, if any, to the Company.
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, however,
the right of any holder of any Debt Security to receive payment of the
principal of, 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 hereunder the Trustee may, in its
discretion, proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained
in this Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law.
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 and, if the Debt Securities
are held by the Trust or a trustee of the Trust, the holders of a majority
in aggregate liquidation amount of the outstanding Capital Securities of the
Trust 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 if the Debt Securities are held by
the Trust or a trustee of the Trust, such time, method and place or such
exercise, as the case may be, may not be so directed until the holders of
a majority in aggregate liquidation amount of the outstanding Capital
Securities of the Trust shall have directed such time, method and place or
such exercise, as the case may be; provided, further, 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, premium,
if any, or interest on any of the Debt Securities, (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, or (c) in respect
of the covenants contained in Section 3.09; provided, however, that if the
Debt Securities are held by the Trust or a trustee of such trust, such
waiver or modification to such waiver shall not be effective until the
holders of a majority in aggregate liquidation amount of the outstanding
Trust Securities of the Trust shall have consented to such waiver or
modification to such waiver; provided, further, that if the consent of the
holder of each outstanding Debt Security is required, such waiver or
modification to such waiver shall not be effective until each holder of the
outstanding Capital Securities of the Trust shall have consented to such
waiver or modification to such waiver. 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 5.07, 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.
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 5.08 is hereby defined to be any event that is, or after notice or
lapse of time or both would become, an Event of Default, 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, 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 5.09 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 Outstanding Debt
Securities (or, if such Debt Securities are held by the Trust or a trustee
of the Trust, more than 10% in liquidation amount of the outstanding Capital
Securities), 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 or to any suit instituted in accordance with
Section 14.12.
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 with respect to
the Debt Securities and after the curing or waiving of all Events of Default
which may have occurred, with respect to the Debt Securities, undertakes to
perform such duties and only such duties as are specifically set forth in
this Indenture. In case an Event of Default with respect to the Debt
Securities 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.
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, its own willful misconduct or bad faith, except that:
(a) prior to the occurrence of an Event of Default with respect to
the Debt Securities and after the curing or waiving of all Events of Default
which may have occurred,
(1) the duties and obligations of the Trustee with respect to
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
(2) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in the case
of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform 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;
(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 with respect to
an Event of Default pursuant to Sections 5.01 (a) or 5.01 (b) hereof (other
than an Event of Default resulting from the default in the payment of
Additional Interest if the Trustee does not have actual knowledge or written
notice that such payment is due and payable), of which the Trustee shall be
deemed to have knowledge; and
(e) in the absence of bad faith on the part of the Trustee, the
Trustee may seek and rely on reasonable instructions from the Company.
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.
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 with respect to
the Debt Securities (that has not been cured or waived) to exercise with
respect to the Debt Securities 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 not less than 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
(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.
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 6.06 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
(and the Company hereby grants and pledges to the Trustee) 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 subsections (d), (e) or
(f) 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.
Notwithstanding anything in this Indenture or any Debt Security to
the contrary, the Trustee shall have no obligation whatsoever to advance
funds to pay any principal of or interest on or other amounts with respect
to the Debt Securities or otherwise advance funds to or on behalf of the
Company.
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
6.08, 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 6.08, 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 S 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.
SECTION 6.09. Resignation or Removal of Trustee, Calculation Agent,
-----------------------------------------------------
Paying Agent or Debt Security Registrar.
----------------------------------------
(a) The Trustee, or any trustee or trustees hereafter appointed,
the Calculation Agent, the Paying Agent and any Debt Security registrar 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 or successors by written
instrument, in duplicate, executed by order of its Board of Directors, one
copy of which instrument shall be delivered to the resigning party and one
copy to the successor. If no successor 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 party may
petition any court of competent jurisdiction for the appointment of a
successor, 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. Such court may thereupon, after such notice, if any, as it may
deem proper and prescribe, appoint a successor.
(b) In case at any time any of the following shall occur:
(1) 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,
(2) 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
(3) 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 (1), (2) or (3) 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.
(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 6.09 provided, may petition any court of competent jurisdiction for
an appointment of a successor.
(d) Any resignation or removal of the Trustee, the Calculation
Agent, the Paying Agent or any Debt Security registrar and the appointment
of a successor pursuant to any of the provisions of this Section 6.09 shall
become effective upon acceptance of appointment by the successor as provided
in Section 6.10.
SECTION 6.10. Acceptance by Successor.
------------------------
Any successor Trustee, Calculation Agent, Paying Agent or Debt
Security registrar appointed as provided in Section 6.09 shall execute,
acknowledge and deliver to the Company and to its predecessor an instrument
accepting such appointment hereunder, and thereupon the resignation or
removal of the retiring party shall become effective and such successor,
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 herein; but, nevertheless, on the written request of the Company or of
the successor, the party 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 all the rights and powers of
the party so ceasing to act and shall duly assign, transfer and deliver to
such successor all property and money held by such retiring party hereunder.
Upon request of any such successor, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in and
confirming to such successor all such rights and powers. Any party ceasing
to act shall, nevertheless, retain a lien upon all property or funds held or
collected to secure any amounts then due it pursuant to the provisions of
Section 6.06.
If a successor Trustee is appointed, the Company, the retiring
Trustee and the successor Trustee shall execute and deliver an indenture
supplemental hereto which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Debt Securities as to
which the predecessor Trustee is not retiring shall continue to be vested in
the predecessor Trustee and shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the Trust hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be Trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee.
No successor Trustee shall accept appointment as provided in this
Section 6.10 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, Calculation Agent, Paying
Agent or Debt Security registrar be liable for the acts or omissions of any
successor hereunder.
Upon acceptance of appointment by a successor Trustee, Calculation
Agent, Paying Agent or Debt Security registrar as provided in this Section
6.10, the Company shall mail notice of the succession 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, the successor shall
cause such notice to be mailed at the expense of the Company.
SECTION 6.11. Succession by Merger, etc.
--------------------------
Any Person into which the Trustee may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Person 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 Person 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,
that the Trustee shall have no liability to the Company for any acts or
omissions of the Authenticating Agent with respect to the authentication and
delivery of Debt Securities. Any such Authenticating Agent shall at all
times be a Person organized and doing business under the laws of the United
States or of any state or territory thereof or of the District of Columbia
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of at least $50,000,000 and being subject to supervision
or examination by federal, state, territorial or District of Columbia
authority. If such Person publishes reports of condition at least annually
pursuant to law or the requirements of such authority, then for the purposes
of this Section 6.12 the combined capital and surplus of such Person 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 Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any Person 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 Person
is otherwise eligible under this Section 6.12 without the execution or
filing of any paper or any further act on the part of the parties hereto or
such Authenticating Agent.
Any Authenticating Agent may, at any time, resign by giving
written notice of resignation to the Trustee and to the Company. 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 6.12, the
Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent eligible under this Section 6.12, shall give
written notice of such appointment to the Company and shall mail notice of
such appointment to all holders of 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 with respect to the Debt Securities 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 and shall receive such
reasonable indemnity as it may require against the costs, expenses and
liabilities incurred in furtherance of its duties under this Section 6.12.
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 or
aggregate liquidation amount of Capital 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 or holders of
Capital Securities, as the case may be, in person or by agent or proxy
appointed in writing, (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 of such
holders of Capital Securities duly called and held in accordance with the
provisions of the Declaration, (c) by a combination of such instrument or
instruments and any such record of such a meeting of such Securityholders or
holders of Capital Securities, as the case may be, 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.
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,
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 (other than the Trust) 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 7.04 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.
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 or 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.
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 Houston,
Texas, 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 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 with respect to which
the meeting is being held or (b) a Person appointed by an instrument in
writing as proxy by a holder of one or more such 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.
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 or 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. 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 outstanding principal
amount of the Debt Securities 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 outstanding principal amount of
the Debt Securities, the Persons holding or representing such specified
percentage in outstanding principal amount of the Debt Securities 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 outstanding principal amount of the Debt Securities 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 not less than a majority in outstanding
principal amount of the Debt Securities; 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 outstanding principal amount of the Debt
Securities.
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.
SECTION 8.08. Written Consent Without a Meeting.
----------------------------------
Whenever under this Indenture Securityholders are required or
permitted to take any action by vote, such action may be taken without a
meeting on written consent, setting forth the action so taken, signed by the
Securityholders of all outstanding Debt Securities entitled to vote thereon.
No consent shall be effective to take the action referred to therein unless,
within sixty days of the earliest dated consent delivered in the manner
required by this paragraph to the Trustee, written consents signed by a
sufficient number of Securityholders to take action are delivered to the
Trustee at its Principal Office. Delivery made to the Trustee at its
Principal Office, shall be by hand or by certificated or registered mail,
return receipt requested. Written consent thus given by the Securityholders
of such number of Debt Securities as is required hereunder shall have the
same effect as a valid vote of Securityholders of such number of Debt
Securities.
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 Person to the Company,
or successive successions, and the assumption by the successor Person 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 or amend 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;
(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, including
to provide for transfer procedures and restrictions substantially similar to
those applicable to the Capital Securities, as required by Section 2.05 (for
purposes of assuring that no registration of Debt Securities is required
under the Securities Act; provided, that any such action shall not adversely
affect the interests of the holders of the Debt Securities then outstanding
(it being understood, for purposes of this proviso, that transfer
restrictions on Debt Securities substantially similar to those applicable to
Capital Securities shall not be deemed to adversely affect the holders of
the Debt Securities);
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debt Securities 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
paragraph) that does not adversely affect the rights of any Securityholder
in any material respect; or
(g) to provide for the issuance of and establish the form and
terms and conditions of the 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 9.01 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 not less than 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 (which shall conform to the provisions of the
Trust Indenture Act, then in effect, applicable to indentures qualified
thereunder) 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 such 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 any amount payable on
redemption thereof or make the principal thereof or any interest or premium
thereon payable in any coin or currency other than United States Dollars or
impair or affect the right of any Securityholder to institute suit for
payment thereof or impair the right of repayment, if any, at the option of
the holder, or (ii) reduce the aforesaid percentage of Debt Securities the
holders of which are required to consent to any such supplemental indenture;
and provided, further, that if the Debt Securities are held by the Trust or
a trustee of such trust, such supplemental indenture shall not be effective
until the holders of a majority in aggregate liquidation amount of the
outstanding Capital Securities shall have consented to such supplemental
indenture; provided, further, that if the consent of the Securityholder of
each outstanding Debt Security is required, such supplemental indenture
shall not be effective until each holder of the outstanding Capital
Securities shall have consented to such supplemental indenture.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders (and
holders of Capital Securities, if required) 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 9.02 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 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, 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.
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 and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant hereto complies with the
requirements of this Article IX. The Trustee shall receive an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed
pursuant to this Article IX is authorized or permitted by, and conforms to,
the terms of this Article IX and that it is proper for the Trustee under the
provisions of this Article IX to join in the execution thereof.
ARTICLE X
REDEMPTION OF SECURITIES
SECTION 10.01. 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
June 15, 2010 (each, a "Redemption Date") at the Redemption Price.
SECTION 10.02. Special Event Redemption
------------------------
If a Special Event shall occur and be continuing, the Company
shall have the right to redeem the Debt Securities, in whole but not in
part, at any time within 90 days following the occurrence of such Special
Event (the "Special Redemption Date") at the Special Redemption Price. In
the event that the Special Redemption Date falls on a day prior to the LIBOR
Determination Date for any Interest Period, then the Company shall be
required to pay to Securityholders, on the Business Day following such LIBOR
Determination Date, any additional amount of interest that would have been
payable on the Special Redemption Date had the amount of interest determined
on such LIBOR Determination Date been known on the first day of such
Interest Period
SECTION 10.03. 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.
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 redemption price at which Debt Securities are to be redeemed, the place
or places of payment at which 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 Redemption Date or
the Special Redemption Date specified in the notice of redemption given as
provided in this Section, the Company will deposit with the Trustee or with
one or more Paying Agents an amount of money sufficient to redeem on the
redemption date all the Debt Securities so called for redemption at the
appropriate redemption price, together with unpaid accrued interest to the
date fixed for redemption.
The Company will give the Trustee notice not less than 45 nor more
than 60 days prior to the Redemption Date or the Special Redemption Date as
to the redemption 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 10.04. Payment of Debt Securities Called for Redemption.
-------------------------------------------------
If notice of redemption has been given as provided in Section
10.03, 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
Redemption Date or the Special Redemption Date (as the case may be) and at
the place or places stated in such notice at the applicable redemption
price, together with unpaid interest accrued thereon to said Redemption Date
or the Special Redemption Date (as the case may be), and on and after said
Redemption Date or the Special Redemption Date (as the case may be) (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 redemption price, together with unpaid
interest accrued thereon to said Redemption Date or the Special Redemption
Date (as the case may be).
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.
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 (1) agreed to make all payments due in respect
of the Debt Securities or, if outstanding, the Trust Securities and the
Capital Securities Guarantee 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) or 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 holders of such Debt Securities Trust Securities, as the
case may be, after payment of all taxes (including withholding taxes),
duties, assessments or other governmental charges, will be equal to the
amounts that such holders would have received and retained had no such taxes
(including withholding taxes, duties, assessments or other governmental
charges been imposed, (2) irrevocably and unconditionally consented and
submitted to the jurisdiction of any United States federal court or New York
state court, in each case located in the City of New York, the Borough of
Manhattan, in respect of any action, suit or proceeding against it arising
out of or in connection with this Indenture, the Debt Securities, the
Capital Securities Guarantee or the Declaration and irrevocably and
unconditionally waived, to the fullest extent permitted by law, any
objection to the laying of venue in any such court or that any such action,
suit or proceeding has been brought in an inconvenient forum and (3)
irrevocably appointed an agent in The City of New York for service of
process in any action, suit or proceeding referred to in clause (2) above)
and such corporation expressly assumes all of the obligations of the Company
under the Debt Securities, this Indenture, the Capital Securities Guarantee
and the Declaration 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 and upon the assumption by the successor
entity, 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 entity 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 entity 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 Trustee or the Authenticating
Agent; and, upon the order of such successor entity instead of the Company
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee or the Authenticating Agent shall authenticate and
deliver any 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 entity 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 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, any Redemption or the
Special 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 clause (b) the Company
shall also pay or cause to be paid all other sums payable hereunder by the
Company, then this Indenture shall cease to be of further effect except for
the provisions of Sections 2.05, 2.06, 3.01, 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, the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee in connection
with this Indenture or the 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, and 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 the principal of,
and premium, if any, or interest on such Debt Securities, as the case may
be, shall have become due and payable, shall be repaid to the Company by the
Trustee or such Paying Agent on 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.
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 issue 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.
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:
Hallmark Financial Services, Inc.
777 Main Street, Suite 1000
Fort Worth, TX 76102
Attention: Mark J. Morrison
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 JPMorgan Chase Bank, National Association at:
600 Travis Street, 50th Floor
Houston, TX 77002
Attention: Worldwide Securities Services
SECTION 14.05. Governing Law.
--------------
This Indenture and each Debt Security shall be deemed to be a
contract made under the law of the State of New York, and for all purposes
shall be governed by and construed in accordance with the law of said State,
without regard to conflict of laws principles 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 and
the definitions relating thereto; (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.
SECTION 14.07. Business Day Convention.
------------------------
Notwithstanding anything to the contrary contained herein, if any
Interest Payment Date, other than the Maturity Date, any Redemption Date or
the Special 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, Redemption Date or the Special 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), except that, if such Business Day
falls in the next succeeding calendar year, then such payment shall be made
on the immediately preceding Business Day with the same force and effect as
if such payment had been made on such Maturity Date, Redemption Date or
Special Redemption Date.
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. Severability.
-------------
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 or 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, that, in the event of any such assignment, the Company
will remain liable for all such obligations. Subject to the foregoing, this
Indenture is binding upon and inures to the benefit of the parties hereto
and their respective successors and assigns. This Indenture may not
otherwise be assigned by the parties thereto.
SECTION 14.12. Acknowledgment of Rights.
-------------------------
The Company acknowledges that, with respect to any Debt Securities
held by the Trust or the Institutional Trustee of the Trust, if the
Institutional Trustee of the Trust fails to enforce its rights under this
Indenture as the holder of Debt Securities held as the assets of the Trust
after the holders of a majority in Liquidation Amount of the Capital
Securities of the Trust have so directed in writing such Institutional
Trustee, a holder of record of such Capital Securities may to, the fullest
extent permitted by law, institute legal proceedings directly against the
Company to enforce such Institutional Trustee's rights under this Indenture
without first instituting any legal proceedings against such Institutional
Trustee or any other Person. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest (or premium, if any) or principal on
the Debt Securities on the date such interest (or premium, if any) or
principal is otherwise due and payable (or in the case of redemption, on the
Redemption Date or the Special Redemption date, as applicable), the Company
acknowledges that a holder of record of Capital Securities of the Trust may
directly institute a proceeding against the Company for enforcement of
payment to such holder directly of the principal of (or premium, if any) or
interest on the Debt Securities having an aggregate principal amount equal
to the aggregate Liquidation Amount of the Capital Securities of such holder
on or after the respective due date (or, in the case of redemption, on the
Redemption Date or the Special Redemption Date, as applicable) specified in
the Debt Securities.
ARTICLE XV
SUBORDINATION OF DEBT SECURITIES
SECTION 15.01. Agreement to Subordinate.
-------------------------
The Company covenants and agrees, and each holder of Debt
Securities issued hereunder and under any supplemental indenture (the
"Additional Provisions") by such Securityholder's acceptance thereof
likewise covenants and agrees, that all Debt Securities shall be issued
subject to the provisions of this Article XV; and each holder of a Debt
Security, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions.
The payment by the Company of the payments due on all Debt
Securities issued hereunder and under any Additional Provisions shall, to
the extent and in the manner hereinafter set forth, be subordinated and
junior in right of payment to the prior payment in full of all Senior
Indebtedness of the Company, whether outstanding at the date of this
Indenture or hereafter incurred.
No provision of this Article XV shall prevent the occurrence of
any Default or Event of Default hereunder.
SECTION 15.02. Default on Senior Indebtedness.
-------------------------------
In the event and during the continuation of any default by the
Company in the payment of principal, premium, if any, interest or any other
payment due on any Senior Indebtedness of the Company following any
applicable grace period, or in the event that the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default, and
such acceleration has not been rescinded or canceled and such Senior
Indebtedness has not been paid in full, then, in either case, no payment
shall be made by the Company with respect to the payments due on the Debt
Securities.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 15.02, such payment shall, subject to
Section 15.06, be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant
to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that the holders of
the Senior Indebtedness (or their representative or representatives or a
trustee) notify the Trustee in writing within 90 days of such payment of the
amounts then due and owing on the Senior Indebtedness and only the amounts
specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
-------------------------------------
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding- up or liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due
upon all Senior Indebtedness of the Company shall first be paid in full, or
payment thereof provided for in money in accordance with its terms, before
any payment is made by the Company on the Debt Securities; and upon any such
dissolution or winding-up or liquidation or reorganization, any payment by
the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the
Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XV, shall be paid by the
Company, or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the
Securityholders or by the Trustee under this Indenture if received by them
or it, directly to the holders of Senior Indebtedness of the Company (pro
rata to such holders on the basis of the respective amounts of Senior
Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear,
to the extent necessary to pay such Senior Indebtedness in full, in money or
money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of such Senior Indebtedness, before any payment or
distribution is made to the Securityholders.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing shall be received
by the Trustee before all Senior Indebtedness of the Company is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit
of and shall be paid over or delivered to the holders of such Senior
Indebtedness or their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing
such Senior Indebtedness may have been issued, as their respective interests
may appear, as calculated by the Company, for application to the payment of
all Senior Indebtedness of the Company remaining unpaid to the extent
necessary to pay such Senior Indebtedness in full in money in accordance
with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of such Senior
Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article XV with respect to the Debt Securities to the payment of all Senior
Indebtedness of the Company, that may at the time be outstanding; provided,
that (a) such Senior Indebtedness is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment, and (b) the rights
of the holders of such Senior Indebtedness are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into,
another corporation or the liquidation or dissolution of the Company
following the conveyance, transfer or other disposition of its property as
an entirety, or substantially as an entirety, to another corporation upon
the terms and conditions provided for in Article XI of this Indenture shall
not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 15.03 if such other corporation shall, as a
part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article XI of this Indenture. Nothing in Section 15.02
or in this Section 15.03 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.06 of this Indenture.
SECTION 15.04. Subrogation.
------------
Subject to the payment in full of all Senior Indebtedness of the
Company, the Securityholders shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company applicable to such Senior
Indebtedness until all payments due on the Debt Securities shall be paid
in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Senior Indebtedness of any cash,
property or securities to which the Securityholders or the Trustee would be
entitled except for the provisions of this Article XV, and no payment over
pursuant to the provisions of this Article XV to or for the benefit of the
holders of such Senior Indebtedness by Securityholders or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness of the Company and the holders of the Debt Securities, be
deemed to be a payment or distribution by the Company to or on account of
such Senior Indebtedness. It is understood that the provisions of this
Article XV are and are intended solely for the purposes of defining the
relative rights of the holders of the Debt Securities, on the one hand, and
the holders of such Senior Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this
Indenture, any Additional Provisions or in the Debt Securities is intended
to or shall impair, as between the Company, its creditors other than the
holders of Senior Indebtedness of the Company and the holders of the Debt
Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debt Securities all payments on
the Debt Securities as and when the same shall become due and payable in
accordance with their terms or is intended to or shall affect the relative
rights of the holders of the Debt Securities and creditors of the Company,
other than the holders of Senior Indebtedness of the Company, nor shall
anything herein or therein prevent the Trustee or the holder of any Debt
Security from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article XV of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred
to in this Article XV, the Trustee, subject to the provisions of Article VI
of this Indenture, and the Securityholders shall be entitled to conclusively
rely upon any order or decree made by any court of competent jurisdiction
in which such dissolution, winding- up, liquidation or reorganization
proceedings are pending, or a certificate of the receiver, trustee in
bankruptcy, liquidation trustee, agent or other Person making such payment
or distribution, delivered to the Trustee or to the Securityholders, for the
purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article XV.
SECTION 15.05. Trustee to Effectuate Subordination.
------------------------------------
Each Securityholder by such Securityholder's acceptance of the
Debt Securities authorizes and directs the Trustee on such Securityholder's
behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article XV and appoints the Trustee such
Securityholder's attorney-in-fact for any and all such purposes.
SECTION 15.06. Notice by the Company.
----------------------
The Company shall give prompt written notice to a Responsible
Officer of the Trustee at the Principal Office of the Trustee of any fact
known to the Company that would prohibit the making of any payment of moneys
to or by the Trustee in respect of the Debt Securities pursuant to the
provisions of this Article XV. Notwithstanding the provisions of this
Article XV or any other provision of this Indenture or any Additional
Provisions, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment of moneys to or
by the Trustee in respect of the Debt Securities pursuant to the provisions
of this Article XV, unless and until a Responsible Officer of the Trustee at
the Principal Office of the Trustee shall have received written notice
thereof from the Company or a holder or holders of Senior Indebtedness or
from any trustee therefor; and before the receipt of any such written
notice, the Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the
notice provided for in this Section 15.06 at least two Business Days prior
to the date upon which by the terms hereof any money may become payable for
any purpose (including, without limitation, the payment of the principal of
(or premium, if any) or interest on any Debt Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have
full power and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected by any
notice to the contrary that may be received by it within two Business Days
prior to such date.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself or herself to be a holder of
Senior Indebtedness of the Company (or a trustee or representative on behalf
of such holder) to establish that such notice has been given by a holder of
such Senior Indebtedness or a trustee or representative on behalf of any
such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any
Person as a holder of such Senior Indebtedness to participate in any payment
or distribution pursuant to this Article XV, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of such Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this
Article XV, and, if such evidence is not furnished, the Trustee may defer
any payment to such Person pending judicial determination as to the right of
such Person to receive such payment.
SECTION 15.07. Rights of the Trustee. Holders of Senior Indebtedness.
------------------------------------------------------
The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article XV in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other holder
of Senior Indebtedness, and nothing in this Indenture or any Additional
Provisions shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants
and obligations as are specifically set forth in this Article XV, and no
implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture or any Additional Provisions
against the Trustee. The Trustee shall not owe or be deemed to owe any
fiduciary duty to the holders of such Senior Indebtedness and, subject to
the provisions of Article VI of this Indenture, the Trustee shall not be
liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to Securityholders, the Company or any other Person money or assets
to which any holder of such Senior Indebtedness shall be entitled by virtue
of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 6.06.
SECTION 15.08. Subordination May Not Be Impaired.
----------------------------------
No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure
to act on the part of the Company, or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company, with the
terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or otherwise be charged
with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at
any time and from time to time, without the consent of or notice to the
Trustee or the Securityholders, without incurring responsibility to the
Securityholders and without impairing or releasing the subordination
provided in this Article XV or the obligations hereunder of the holders of
the Debt Securities to the holders of such Senior Indebtedness, do any one
or more of the following: (a) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, such Senior
Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under
which such Senior Indebtedness is outstanding; sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
such Senior Indebtedness; (c) release any Person liable in any manner for
the collection of such Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against the Company, and any other Person.
JPMorgan Chase Bank, National Association, 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.
Hallmark Financial Services, Inc.
By: ______________________________________
Name:____________________________________
Title:_____________________________________
JPMorgan Chase Bank, National Association, as
Trustee
By: ______________________________________
Name: ____________________________________
Title: _____________________________________
EXHIBIT A
FORM OF JUNIOR SUBORDINATED DEBT SECURITIES
DUE 2035
[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 BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY
PRIOR TO 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) 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 THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF 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, OR (D) 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 CLAUSES (C) OR
(D) 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
BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES,
REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS
INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE
SECURITIES ACT OR AN APPLICABLE EXEMPTION THEREFROM.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"),
(EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS"
BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING
"PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST
THEREIN, 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 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 THEREIN
WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT
EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION
3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A
TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR
PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT
PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT
IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE
EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL
DELIVER TO THE COMPANY AND TRUSTEE 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 BLOCKS
HAVING A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000
IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING
A PRINCIPAL AMOUNT 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 FOR ANY PURPOSE, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY.
Form of Junior Subordinated Debt Securities due 2035
of
Hallmark Financial Services, Inc.
Hallmark Financial Services, Inc., a company incorporated in
Nevada (the "Company"), for value received promises to pay to JPMorgan Chase
Bank, National Association, not in its individual capacity but solely as
Institutional Trustee for Hallmark Statutory Trust I, a Delaware statutory
trust (the "Holder"), or registered assigns, the principal sum of Thirty
Million Nine Hundred Twenty-Eight Thousand on June 15, 2035 (or earlier upon
any Redemption Date or the Special Redemption Date, or any earlier date of
acceleration of maturity of this Debt Security and to pay interest on the
outstanding principal amount of this debt security from June 21, 2005, or
from the most recent Interest Payment Date to which interest has been paid
or duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on March 15, June 15, September 15 and December 15 of each year
commencing September 15, 2005 (each such date, an "Interest Payment Date"),
at the rate of 7.725% (the "Fixed Rate") per annum until June 15, 2015 (the
"Fixed Rate Period") and thereafter at a variable per annum rate equal to
LIBOR (as defined in the Indenture) plus 3.25% (the "Variable Rate")
(provided, however, that the Interest Rate, defined to include the Fixed
Rate and Variable Rate, as applicable, 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 applicability) until the principal
hereof shall have become due and payable, 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 Interest Rate in effect for each such Extension
Period compounded quarterly. During the Fixed Rate Period, interest shall
be computed on the basis of a 360-day year of twelve 30-day months and the
amount payable for any partial period shall be computed on the basis of the
number of days elapsed in a 360-day year of twelve 30-day months. Upon
expiration of the Fixed Rate Period, 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 the relevant Interest Period.
The interest 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 said Indenture) is registered at the close of
business on the "regular record date" for such interest, except that
interest and any Deferred Interest payable on the Maturity Date shall be
paid to the Person to whom principal is paid. Any such interest not
punctually paid or duly provided for shall forthwith cease to be payable to
the registered holders on such regular record date and may be paid to the
Person in whose name this Debt Security (or one or more Predecessor Debt
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 registered holders of the Debt
Securities not less than 10 days prior to such special record date, all as
more fully provided in the Indenture.
The principal of and premium, if any, and interest on this Debt
Security shall be payable at the office or agency of the Trustee (or other
Paying Agent appointed by the Company) maintained for that purpose in any
coin or currency of the United States of America that at the time of payment
is legal tender for payment of public and private debts; provided, however,
that payment of interest may be made at the option of the Company by check
mailed to the registered holder 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 the Institutional
Trustee, the payment of the principal of and premium, if any, and interest
on this Debt Security will be made, when due, in immediately available funds
at such place and to such account as may be designated by the Institutional
Trustee. 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 debt.
Notwithstanding anything to the contrary contained herein, if any
Interest Payment Date, other than the Maturity Date, any Redemption Date or
the Special 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, Redemption Date or the Special 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), except that, if such Business Day
falls in the next succeeding calendar year, then such payment shall be made
on the immediately preceding Business Day with the same force and effect as
if such payment had been made on such Maturity Date, Redemption Date or
Special Redemption Date.
Upon submission of Notice (as defined in the Indenture) and so
long as no Event of Default has occurred and is continuing, the Company
shall have the right, from time to time and without causing an Event of
Default, to defer payments of interest on the Debt Securities by extending
the Interest Period on the Debt Securities at any time and from time to time
during the term of the Debt Securities, for up to 20 consecutive quarterly
periods (each such extended Interest Period, together with all previous and
further consecutive extensions thereof, is referred to herein as an
"Extension Period"), during which Extension Period no interest shall be due
and payable (except any Additional Interest that may be due and payable).
During any Extension Period, interest will continue to accrue on the Debt
Securities, and interest on such accrued interest (such accrued interest and
interest thereon referred to herein as "Deferred Interest") will accrue at
an annual rate equal to the Interest Rate in effect for each such Extension
Period, compounded quarterly from the date such Deferred Interest would have
been payable were it not for the Extension Period, to the extent permitted
by law. No Extension Period may end on a date other than an Interest Payment
Date. At the end of any such Extension Period the Company shall pay all
Deferred Interest then accrued and unpaid on the Debt Securities; provided,
however, that no Extension Period may extend beyond the Maturity Date, any
Redemption Date or the Special Redemption Date and provided, further,
however, during any such Extension Period, the Company may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or
make a liquidation payment with respect to, any of the Company's capital
stock, (ii) make any payment on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu in all respects with or
junior in interest to the Debt Securities or (iii) make any payment under
any guarantees of the Company that rank in all respects pari passu with or
junior in interest to the Capital Securities Guarantee (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Company (A) in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of one or more employees,
officers, directors or consultants, (B) in connection with a dividend
reinvestment or stockholder stock purchase plan or (C) in connection with
the issuance of capital stock of the Company (or securities convertible into
or exercisable for such capital stock), as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of any exchange, reclassification, combination or conversion of any
class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class
or series of the Company's capital stock, (c) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder's rights plan, or the issuance of rights,
stock or other property under any stockholder's rights plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in
the form of stock, warrants, options or other rights where the dividend
stock or the stock issuable upon exercise of such warrants, options or other
rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock). Prior to the termination of
any Extension Period, the Company may further extend such Extension Period,
provided, that such period together with all such previous and further
consecutive extensions that are part of such Extension Period shall not
exceed 20 consecutive quarterly periods. Upon the termination of any
Extension Period and upon the payment of all Deferred Interest, the Company
may commence a new Extension Period, subject to the foregoing requirements.
No interest or Deferred Interest shall be due and payable during an
Extension Period, except at the end thereof, but Deferred Interest shall
accrue upon each installment of interest that would otherwise have been due
and payable during such Extension Period until such installment is paid. The
Company must give the Trustee notice of its election to begin or extend any
Extension Period not later than the related regular record date for the next
succeeding Interest Payment Date.
The indebtedness evidenced by this Debt Security is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debt Security is
issued subject to the provisions of the Indenture with respect thereto. Each
holder of this Debt Security, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Trustee on such
holder's behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee such holder's attorney-in-fact for any and all such purposes. Each
holder hereof, by such holder's acceptance hereof, hereby waives all notice
of the acceptance of the subordination provisions contained herein and in
the Indenture by each holder of Senior Indebtedness, whether now outstanding
or hereafter incurred, and waives reliance by each such holder upon said
provisions.
The Company waives diligence, demand, presentment for payment,
notice of nonpayment, notice of protest, and all other notices.
This Debt Security shall not be entitled to any benefit under the
Indenture hereinafter referred to 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.
IN WITNESS WHEREOF, the Company has duly executed this
certificate.
Hallmark Financial Services, Inc.
By _____________________________
Name:___________________________
Title:__________________________
Dated:__________________, 2005
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Debt Securities referred to in the within-
mentioned Indenture.
JPMorgan Chase Bank, National Association,
not in its individual capacity but solely
as the Trustee
By:
--------------------------------------
Authorized Officer
Dated:__________________, 2005
[FORM OF REVERSE OF SECURITY]
This Debt Security is one of a duly authorized series of Debt
Securities of the Company, all issued or to be issued pursuant to an
Indenture (the "Indenture"), dated as of June 21, 2005, duly executed and
delivered between the Company and JPMorgan Chase Bank, National Association
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 (referred
to herein as the "Debt Securities") of which this Debt Security is a part.
The summary of the terms of this Debt Security contained herein does not
purport to be complete and is qualified by reference to the Indenture.
Upon the occurrence and continuation of a Tax Event or an
Investment Company Event (each a "Special Event"), this Debt Security may
become due and payable, in whole but not in part, at any time, within 90
days following the occurrence of such Tax Event or an Investment Company
Event (the "Special Redemption Date"), as the case may be, at the Special
Redemption Price. In the event that the Special Redemption Date falls on a
day prior to the LIBOR Determination Date for any Interest Period, then the
Company shall be required to pay to Securityholders, on the Business Day
following such LIBOR Determination Date, any additional amount of interest
that would have been payable on the Special Redemption Date had the amount
of interest determined on such LIBOR Determination Date been known on the
first day of such Interest Period.
The Company shall also have the right to redeem this Debt Security
at its option, in whole or from time to time in part (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), on any Interest
Payment Date on or after June 15, 2010 (each, a Redemption Date"), at the
Redemption Price (as defined herein).
Any redemption pursuant to either of the preceding two paragraphs
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 lot or by any
other method utilized by the Trustee.
"Redemption Price" means 100% of the principal amount of the Debt
Securities being redeemed plus accrued and unpaid interest on such Debt
Securities to the Redemption Date.
"Special Redemption Price" means (1) if the Special Redemption
Date is before June 15, 2010, 107.5% of the principal amount to be redeemed
plus any accrued and unpaid interest thereon to the date of such redemption
and (2) if the Special Redemption Date is on or after June 15, 2010, the
Redemption Price.
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.
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 not less than 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 the Debt Securities, or reduce the principal amount thereof
or any redemption premium thereon, or reduce the rate or manner of
calculation of the rate or extend the time of payment of interest thereon,
or reduce any amounts payable upon redemption thereof or make payments due
on the Debt Securities payable in any coin or currency other than United
States Dollars, or impair or affect the right of any holder of Debt
Securities to institute suit for the 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 all of
the holders of 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, (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,
or (c) in respect of the covenants of the Company relating to its ownership
of Common Securities of the Trust. Any such consent or waiver by the
registered 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 pay all payments due on
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
registered holder hereof on the Debt Security Register of the Company, upon
surrender of this Debt Security for registration of transfer at the office
or agency of the Trustee in Houston, Texas accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or
the Trustee duly executed by the registered 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 may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this 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 registered 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 or on
account of the principal of and premium, if any, hereof and interest due
hereon and for all other purposes, and neither the Company nor the Trustee
nor any Authenticating Agent nor any Paying Agent nor any transfer agent nor
any Debt Security registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
the 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 or director, past, present or
future, as such, of the Company or of any predecessor or successor
corporation, 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.
The Debt Securities are issuable only in registered certificated
form without coupons. 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 a different
authorized denomination, as requested by the holder surrendering the same.
All terms used in this Debt Security that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND
THE DEBT SECURITIES, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.