1
==========================================================================
THE PROGRESSIVE CORPORATION
AND
RHODE ISLAND HOSPITAL TRUST
NATIONAL BANK,
Trustee
______________
INDENTURE
______________
Dated as of November 15, 1988
==========================================================================
2
CROSS REFERENCE SHEET*
-------
Between
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of November 15, 1988 between THE PROGRESSIVE CORPORATION and RHODE ISLAND
HOSPITAL TRUST NATIONAL BANK, Trustee:
Section of the Act Section of Indenture
- - - ------------------- --------------------
310(a)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
310(a)(3) and (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8 and 6.10(a), (b)
and (d)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13(a) and (c)(1)
and (2)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(a) and (b)(i)
and (ii)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(a)(i), (ii), (iii),
(iv), (v) and (vi)
313(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12
316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9
316(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not required
316(a) (last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4(a) and (b)
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7
<FN>
* This Cross Reference Sheet is not part of the Indenture.
3
TABLE OF CONTENTS
-----------------
PAGE
----
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS:
Authorization of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Compliance with Legal Requirements 1
Purpose of and Consideration for Indenture . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS
SECTION 1.1. Certain Terms Defined . . . . . . . . . . . . . . . . . . . . . . . . 1
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . 2
Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
European Communities . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Holder, holder of Securities, Securityholder . . . . . . . . . . . . 3
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 4
Original issue date . . . . . . . . . . . . . . . . . . . . . . . . . 4
Original Issue Discount Security . . . . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Registered Security . . . . . . . . . . . . . . . . . . . . . . . . . 5
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . 5
Security or Securities . . . . . . . . . . . . . . . . . . . . . . . 6
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 6
Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . 6
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . . . . 6
Unregistered Security . . . . . . . . . . . . . . . . . . . . . . . . 6
4
ii
PAGE
----
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . 6
vice president . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE TWO
SECURITIES
SECTION 2.1. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.2. Form of Trustee's Certificate of Authentication . . . . . . . . . . . 7
SECTION 2.3. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . 8
SECTION 2.4. Authentication and Delivery of Securities . . . . . . . . . . . . . . 10
SECTION 2.5. Execution of Securities . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.6. Certificate of Authentication . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.7. Denomination and Date of Securities; Payments of
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.8. Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . 14
SECTION 2.9. Mutilated, Defaced, Destroyed Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.10. Cancellation of Securities; Destruction Thereof . . . . . . . . . . . 18
SECTION 2.11. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1. Payment of Principal and Interest . . . . . . . . . . . . . . . . . . 19
SECTION 3.2. Offices for Payments, etc . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.3. Appointment to Fill a vacancy in Office of Trustee . . . . . . . . . 21
SECTION 3.4. Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.5. Written Statement to Trustee . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.6. Luxembourg Publications . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1. Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders . . . . . . . . . . . . . . . . . . . 23
SECTION 4.2. Preservation and Disclosure of Securityholders'
Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.3. Reports by the Issuer . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.4. Reports by the Trustee . . . . . . . . . . . . . . . . . . . . . . . 26
5
iii
PAGE
----
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1. Event of Default Defined; Acceleration of Maturity;
Waiver of Default . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.2. Collection of Indebtedness by Trustee; Trustee May
Prove Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.3. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.4. Suits for Enforcement . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.5. Restoration of Rights on Abandonment of
Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.6. Limitations on Suits by Securityholders . . . . . . . . . . . . . . . 36
SECTION 5.7. Unconditional Right of Securityholders to Institute
Certain Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.8. Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.9. Control by Securityholders . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.10. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.11. Trustee to Give Notice of Default, But May Withhold
in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.12. Right of Court to Require Filing of Undertaking to Pay
Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1. Duties and Responsibilities of the Trustee; During
Default; Prior to Default . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.2. Certain Rights of the Trustee . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.3. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof . . . . . . . . . . . 43
SECTION 6.4. Trustee and Agents May Hold Securities or Coupons;
Collections, etc . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.5. Moneys Held by Trustee . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.6. Compensation and Indemnification of Trustee and Its
Prior Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.7. Right of Trustee to Rely on Officers' Certificate, etc. . . . . . . . 44
SECTION 6.8. Qualification of Trustee; Conflicting Interests . . . . . . . . . . . 45
SECTION 6.9. Persons Eligible for Appointment as Trustee . . . . . . . . . . . . . 51
6
iv
PAGE
----
SECTION 6.10. Resignation and Removal; Appointment of Successor
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.11. Acceptance of Appointment by Successor Trustee . . . . . . . . . . . 53
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business of Trustee . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.13. Preferential Collection of Claims Against the
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1. Evidence of Action Taken by Securityholders . . . . . . . . . . . . . 60
SECTION 7.2. Proof of Execution of Instruments and of Holding of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.3. Holders to be Treated as Owners . . . . . . . . . . . . . . . . . . . 61
SECTION 7.4. Securities Owned by Issuer Deemed Not Outstanding . . . . . . . . . . 62
SECTION 7.5. Right of Revocation of Action Taken . . . . . . . . . . . . . . . . . 63
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without Consent of Security-
holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.2. Supplemental Indentures With Consent of
Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.3. Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . 66
SECTION 8.4. Documents to Be Given to Trustee . . . . . . . . . . . . . . . . . . 67
SECTION 8.5. Notation on Securities in Respect of Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1. Issuer May Consolidate, etc., on Certain Terms . . . . . . . . . . . 67
SECTION 9.2. Successor Corporation Substituted . . . . . . . . . . . . . . . . . . 68
SECTION 9.3. Opinion of Counsel to Trustee . . . . . . . . . . . . . . . . . . . . 69
7
v
PAGE
----
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . 69
SECTION 10.2. Application by Trustee of Funds Deposited for Payment of Securities . 72
SECTION 10.3. Repayment of Moneys Held by Paying Agent . . . . . . . . . . . . . . 72
SECTION 10.4. Return of Moneys Held by Trustee and Paying Agent Unclaimed
for Two Years . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.5. Indemnity for U.S. Government Obligations . . . . . . . . . . . . . . 73
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1. Incorporators, Shareholders, Officers and Directors of
Issuer Exempt from Individual Liability . . . . . . . . . . . . . . 73
SECTION 11.2. Provisions of Indenture for the Sole Benefit of Parties
and Securityholders . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 11.3. Successors and Assigns of Issuer Bound by Indenture . . . . . . . . . 74
SECTION 11.4. Notices and Demands on Issuer, Trustee and Securityholders . . . . . 74
SECTION 11.5. Officers' Certificates and Opinions of Counsel; Statements to Be
Contained Therein . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 11.6. Payments Due on Saturdays, Sundays and Holidays . . . . . . . . . . 76
SECTION 11.7. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939 . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 11.8. New York Law to Govern . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.10. Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.11. Securities in Foreign Currencies or in ECU . . . . . . . . . . . . . 77
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 12.2. Notice of Redemption; Partial Redemptions . . . . . . . . . . . . . . 78
SECTION 12.3. Payment of Securities Called for Redemption . . . . . . . . . . . . . 79
SECTION 12.4. Exclusion of Certain Securities from Eligibility for
Selection for Redemption . . . . . . . . . . . . . . . . . . . . . 80
SECTION 12.5. Mandatory and Optional Sinking Funds . . . . . . . . . . . . . . . . 81
8
vi
PAGE
----
ARTICLE THIRTEEN
SUBORDINATION; SENIORITY
SECTION 13.1. Securities Subordinated to Senior Indebtedness . . . . . . . . . . . 84
SECTION 13.2. Issuer Not to Make Payments with Respect to Securities
in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . 84
SECTION 13.3. Subrogation of Securities . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 13.4. Authorization by Holders of Securities . . . . . . . . . . . . . . . 88
SECTION 13.5. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 13.6. Trustee's Relation to Senior Indebtedness . . . . . . . . . . . . . . 89
SECTION 13.7. No Impairment of Subordination . . . . . . . . . . . . . . . . . . . 89
SECTION 13.8. Article 13 Not to Prevent Events of Default . . . . . . . . . . . . . 90
SECTION 13.9. Paying Agents other than the Trustee . . . . . . . . . . . . . . . . 90
SECTION 13.10. Securities Senior to Subordinated Indebtedness . . . . . . . . . . . 90
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9
THIS INDENTURE, dated as of November 15, 1988, between THE PROGRESSIVE
CORPORATION, an Ohio corporation (the "Issuer"), and RHODE ISLAND HOSPITAL
TRUST NATIONAL BANK, a national banking association (the "Trustee"),
WITNESSETH:
WHEREAS, the Issuer has duly authorized the issue from time to time of
its unsecured debentures, notes or other evidences of indebtedness to be issued
in one or more series (the "Securities") up to such principal amount or amounts
as may from time to time be authorized in accordance with the terms of this
Indenture and to provide, among other things, for the authentication, delivery
and administration thereof, the Issuer has duly authorized the execution and
delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done;
Now, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the holders thereof, the Issuer and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective holders from time to
time of the Securities and of the Coupons, if any, appertaining thereto as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act of 1933 are referred to in the
Trust Indenture Act of 1939, including terms defined therein by reference to
the Securities Act of 1933 (except as herein otherwise expressly provided or
unless the context otherwise clearly requires), shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act
as in force at the date of this Indenture. 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
10
2
are generally accepted at the time of any computation. The words "herein",
"hereto" 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. The terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular.
"Authorized Newspaper" means a newspaper (which, in the case of the
United Kingdom, will, if practicable, be the Financial Times (London Edition)
and, in the case of Luxembourg, will, if practicable, be the Luxemburger Wort)
published in English or an official language of the country of publication
customarily published at least once a day for at least five days in each
calendar week and of general circulation in the United Kingdom or in
Luxembourg, as applicable. If it shall be impractical in the opinion of the
Trustee to make any publication of any notice required hereby in an Authorized
Newspaper, any publication or other notice in lieu thereof which is made or
given with the approval of the Trustee shall constitute a sufficient
publication of such notice.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act hereunder.
"Business Day" means, with respect to any Security, a day that in the
city (or in any of the cities, if more than one) in which amounts are payable,
as specified in the form of such Security, is not a day on which banking
institutions are authorized by law or regulation to close or a day on which
transactions in the currency in which the Securities are payable are not
conducted.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties on such date.
Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 15 Westminster Street, Room 737W, Providence,
Rhode Island 02903, Attn: Corporate Trust Administration.
"Coupon" means any interest coupon appertaining to a Security.
11
3
"ECU" means the European Currency Unit as defined and revised from
time to time by the council of European Communities.
"European Communities" means the European Economic Community (the
"EEC"), the European Coal and Steel Community and Euratom.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Foreign Currency" means a currency issued by the government of a
country other than the United States.
"Holder," "Holder of Securities," "Securityholder" or other similar
terms mean (a) in the case of any Registered Security, the Person in whose name
such Security is registered in the security register kept by the Issuer for
that purpose in accordance with the terms hereof, and (b) in the case of any
Unregistered Security, the bearer of such Security, or any Coupon appertaining
thereto, as the case may be.
"Indebtedness" with respect to any Person means:
(1) any debt (i) for borrowed money, or (ii) evidenced by a
bond, note, debenture, or similar instrument (including purchase money
obligations) given in connection with the acquisition of any business,
property or assets, whether by purchase, merger, consolidation or
otherwise, but shall not include any account payable or other
obligation created or assumed by a Person in the ordinary course of
business in connection with the obtaining of materials or services, or
(iii) which is a direct or indirect obligation which arises as a
result of banker's acceptances or drawings under bank letters of
credit issued to secure obligations of such person, whether contingent
or otherwise;
(2) any debt of others described in the preceding clause (1)
which such Person has guaranteed or for which it is otherwise liable;
(3) the obligation of such Person as lessee under any lease of
property which is reflected on such Person's balance sheet as a
capitalized lease; and
(4) any deferral, amendment, renewal, extension, supplement or
refunding of any liability of the kind described in any of the
preceding clauses (1), (2) and (3) provided, however, that, in
computing the "Indebtedness" of any Person, there shall be excluded
any particular
12
4
indebtedness if, upon or prior to the maturity thereof, there shall
have been deposited with the depository in trust money (or evidences
of indebtedness if permitted by the instrument creating such
indebtedness) in the necessary amount to pay, redeem or satisfy such
indebtedness as it becomes due, and the amount so deposited shall not
be included in any computation of the assets of such Person.
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular
series of Securities established as contemplated hereunder.
"Interest" means, when used with respect to non-interest bearing
Securities, interest payable after maturity.
"lssuer" means (except as otherwise provided in Article Six) THE
PROGRESSIVE CORPORATION, an Ohio corporation, and, subject to Article Nine, its
successors and assigns.
"Officers' Certificate" means a certificate signed by the chairman of
the Board of Directors or the president or any vice president or by the
treasurer and by the secretary or any assistant secretary of the Issuer and
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer or other counsel who
shall be satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 11.5, if and to the extent required hereby.
"Original Issue Date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when used
with reference to Securities, shall, subject to the provisions of Section 7.4,
means, as of any particular time, all Securities authenticated and delivered by
the Trustee under this Indenture, except
13
5
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) 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 Issuer) or shall have been set aside, segregated and held in
trust by the Issuer for the holders of such Securities (if the Issuer
shall act as its own paying agent), provided that if such Securities,
or portions thereof, are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as herein provided, or
provision satisfactory to the Trustee shall have been made for giving
such notice; and
(c) Securities in substitution for which other Securities
shall have been authenticated and delivered, or which shall have been
paid, pursuant to the terms of Section 2.9 (except with respect to any
such Security as to which proof satisfactory to the Trustee is
presented that such Security is held by a person in whose hands such
Security is a legal, valid and binding obligation of the Issuer).
In determining whether the holders of the requisite principal amount
of Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of all Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"principal" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any."
"Registered Security" means any Security registered on the Security
Register of the Issuer.
"Responsible Officer" when used with respect to the Trustee means any
officer or assistant officer assigned by the Trustee to administer its
corporate trust matters.
14
6
"Security" or "Securities" (except as otherwise provided in Section
6.8) has the meaning stated in the first recital of this Indenture, or, as the
case may be, Securities that have been authenticated and delivered under this
Indenture.
"Senior Indebtedness" means the principal and unpaid interest on
Indebtedness of the Company outstanding at any time, other than (1) the
Securities, (2) Indebtedness of the Issuer to a Subsidiary for money borrowed
or advanced from any Subsidiary, except for such Indebtedness which the
Subsidiary has borrowed from a third party other than a Subsidiary and advanced
to the Company, (3) the Company's Floating Rate Convertible Subordinated
Debentures due 2008 issued in the aggregate principal amount of $75,000,000
("Floating Rate Convertible Subordinated Debentures"), and (4) any other
Indebtedness which by its terms expressly provides that it is not superior in
right of payment to the Securities.
"Subordinated Indebtedness" means the principal and interest on any
Indebtedness of the Company which by its terms is expressly subordinated in
right of payment to the Securities (including without limitation the Floating
Rate Convertible Subordinated Debentures).
"Subsidiary" means a corporation the majority of whose voting stock is
owned by the Company or a Subsidiary. Voting stock is capital stock having
voting power under the ordinary circumstances to elect directors.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939 as in force at the
date as of which this Indenture was originally executed.
"Unregistered Security" means any Security other than a Registered
Security.
"U.S. Government Obligations" means direct obligations of the United
States of America, backed by its full faith and credit.
"vice president" when used with respect to the Issuer, means any vice
president, whether or not designated by a number or a word or words added
before or after the title of "vice president".
15
7
"Yield to Maturity" means the yield to maturity on a series of
securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series and the
Coupons, if any, to be attached thereto shall be substantially in such form
(not inconsistent with this Indenture) as shall be established by or pursuant
to a resolution of the Board of Directors or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends, not inconsistent with the provisions of this Indenture, as may be
required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to general
usage, all as may be determined by the officers executing such Securities and
Coupons, as evidenced by their execution of the Securities and Coupons.
The definitive Securities and Coupons shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities and Coupons, as
evidenced by their execution of such Securities and Coupons.
SECTION 2.2 Form of Trustees Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
This is one of the Securities, of the series designated herein,
referred to in the within-mentioned Indenture.
TRUSTEE,
as Trustee
By ____________________________________________________
Authorized Signatory
16
8
SECTION 2.3 Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a resolution of the Board of Directors and set
forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11 or 12.3);
(3) the date or dates on which the principal of the Securities
of the series is payable or the method by which such date or dates
shall be determined;
(4) the rate or rates at which the Securities of the series
shall bear interest, if any, or the method by which such rate shall be
determined, the date or dates from which such interest shall accrue,
the interest payment dates on which such interest shall be payable and
the record dates for the determination of Holders to whom interest is
payable;
(5) the place or places where the principal and any interest
on Securities of the series shall be payable;
(6) the price or prices at which, the period or periods within
which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Issuer,
pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem, purchase
or repay Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
price or prices at which and the period or periods within which and
the terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
17
9
(8) if other than denominations of U.S. $1,000 and any
integral multiple thereof, in the case of Registered Securities, or
U.S. $1,000 in the case of Unregistered Securities, the denominations
in which Securities of the series shall be issuable;
(9) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof
pursuant to Section 5.1 or provable in bankruptcy pursuant to Section
5.2;
(10) any authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the Securities of such
series;
(11) if other than such coin or currency of the United States
of America as at the time of payment is legal tender for payment of
public or private debts, the coin or currency or units based on or
relating to currencies (including ECU) in which payment of the
principal of and interest, if any, on the Securities of that series
shall be payable;
(12) if the principal of or interest, if any, on the
Securities of that series are to be payable, at the election of the
Issuer or a holder thereof, in a coin or currency or units based on or
relating to currencies (including ECU) other than that in which the
Securities are stated to be payable, the period or periods within
which, and the terms and conditions upon which, such election may be
made;
(13) if the amount of payments of principal of or interest, if
any, on the Securities of the series may be determined with reference
to an index, formula or other method based on a coin or currency or
units based on or relating to currencies (including ECU) other than
that in which the Securities are stated to be payable, the manner in
which such amounts shall be determined;
(14) whether the Securities of the series will be issuable as
Registered Securities or Unregistered Securities (with or without
Coupons), or both, any restrictions applicable to the offer, sale or
delivery of Unregistered Securities and, if other than as provided in
Section 2.8, the terms upon which Unregistered Securities of any
series may be exchanged for Registered Securities of such series and
vice versa;
18
10
(15) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a Person
who is not a U.S. person in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the
Issuer will have the option to redeem such Securities rather than pay
such additional amounts;
(16) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions
not otherwise set forth herein, then the form and terms of such
certificates, documents or conditions;
(17) the degree to which such Securities shall be subordinated
to any other securities of the Issuer; and
(18) any other terms of the series, including provisions for
payment by wire transfers, if any, or modifications of the definition
of Business Day (which terms shall not adversely affect the interests
of the Holders of the Securities).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to such resolution of the Board of Directors or in any such indenture
supplemental hereto.
SECTION 2.4 Authentication and Delivery of Securities. At any time
and from time to time after the execution and delivery of this Indenture, the
Issuer may deliver Securities of any series (having attached thereto
appropriate Coupons, if any), executed by the Issuer to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver such
Securities and Coupons, if any, to or upon the written order of the Issuer,
signed by both (a) the chairman of its Board of Directors, or any vice chairman
of its Board of Directors, or its president or any vice president or its
treasurer or any assistant treasurer and (b) by its secretary or any assistant
secretary, without any further action by the Issuer. In authenticating such
Securities and Coupons, if any, and accepting the additional responsibilities
under this Indenture in relation to such Securities and Coupons, if any, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon:
19
11
(1) a copy of any resolution or resolutions of the Board of
Directors by or pursuant to which the form and term of such series
were established in each case certified by the Secretary or an
Assistant Secretary of the Issuer;
(2) an executed supplemental indenture, if any;
(3) an Officers' Certificate setting forth the form and terms
of the Securities and Coupons, if any, as required pursuant to Section
2.3, and prepared in accordance with Section 11.5;
(4) an Opinion of Counsel, prepared in accordance with
Section 11.5, which shall state
(a) that the form or forms and terms of such
Securities and Coupons, if any, have been established by or
pursuant to a resolution of the Board of Directors or by a
supplemental indenture as permitted by Section 2.1 and 2.3 in
conformity with the provisions of this Indenture;
(b) that such Securities and Coupons, if any, when
authenticated and delivered by the Trustee and issued by the
issuer in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and binding
obligations of the Issuer;
(c) that all laws and requirements in respect of the
execution and delivery by the Issuer of the Securities and
Coupons, if any, have been complied with; and
(d) such other matters as the Trustee may reasonably
request.
The Trustee shall have the right to decline to authenticate and
deliver any Securities and Coupons, if any, under this Section if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken
by the Issuer or if the Trustee in good faith by its board of directors or
board of trustees, executive committee, or a trust committee of directors,
trustees or Responsible Officers shall determine that such action would expose
the Trustee to personal liability to existing Holders.
SECTION 2.5 Execution of Securities. The Securities and, if
applicable, each Coupon appertaining thereto, shall be signed on behalf of the
Issuer by both (a) the chairman of its Board of Directors or any vice chairman
of its Board of Directors or its president or any vice president or its
treasurer or any assistant treasurer and (b) by its secretary or any
20
12
assistant secretary, under its corporate seal which may, but need not, be
attested. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. The seal of the Issuer may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects
in any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security or Coupon that has been duly
authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities or Coupons shall cease to be such officer before the Security or
Coupon so signed (or the Security to which the Coupon so signed appertains)
shall be authenticated and delivered by the Trustee or disposed of by the
Issuer, such Security or Coupon nevertheless may be authenticated and delivered
or disposed of as though the person who signed such Security or Coupon had not
ceased to be such officer of the Issuer; and any Security or Coupon may be
signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the
Issuer, although at the date of the execution and delivery of this Indenture
any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized signatories, shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate by the Trustee
upon any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the holder is entitled to the benefits of this Indenture. No Coupon
shall be entitled to the benefits of this Indenture or shall be valid or
obligatory for any purpose until such certificate by the Trustee shall have
become duly executed on the Security to which such Coupon appertains.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities shall be issuable as Registered Securities or
Unregistered Securities in such denominations as shall be specified as
contemplated by Section 2.3. In the absence of any such specification with
respect to the Registered Securities of any series, the Registered Securities
of such series shall be issuable in denominations of U.S. $1,000 and any
integral multiple thereof. In the absence of any such specification
21
13
with respect to the Unregistered Securities, Unregistered Securities shall be
issued in the denomination of U.S. $1,000. The Securities shall be numbered,
lettered, or otherwise distinguished in such manner or in accordance with such
plan as the officers of the Issuer executing the same may determine with the
approval of the Trustee as evidenced by the execution and authentication
thereof.
Each Registered Security shall be dated the date of its
authentication. Each Unregistered Security shall be dated as provided in the
resolution or resolutions of the Board of Directors of the Issuer or the
supplemental indenture referred to in Section 2.3. The Securities of each
series shall bear interest, if any, from the date, and such interest shall be
payable on the dates, established as contemplated by Section 2.3.
The person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the persons in whose names Outstanding
Registered Securities for such series are registered at the close of business
on a subsequent record date (which shall be not less than five Business Days
prior to the date of payment of such defaulted interest) established by notice
given by mail by or on behalf of the Issuer to the holders of Registered
Securities not less than 15 days preceding such subsequent record date. The
term "record date" as used with respect to any interest payment date (except a
date for payment of defaulted interest) shall mean the date specified as such
in the terms of the Registered Securities of any particular series, or, if no
such date is so specified, if such interest payment date is the first day of a
calendar month, the fifteenth day of the next preceding calendar month or, if
such interest payment date is the fifteenth day of a calendar month, the first
day of such calendar month, whether or not such record date is a Business Day.
Any defaulted interest payable in respect of any Unregistered Security
shall be payable pursuant to such procedures as are satisfactory to the Trustee
and in such manner so that there is no discrimination as between the holders of
Registered Securities and Unregistered Securities
22
14
of the same series and notice of the payment date therefore shall be given by
the Trustee in the name and at the expense of the Company by publication at
least once in an Authorized Newspaper. In case an Unregistered Security is
surrendered in exchange for a Registered Security after the close of business
on any record date for the payment of defaulted interest and before the opening
of business on the proposed date of payment of such defaulted interest, the
Coupon appertaining to such surrendered Unregistered Security and due for
payment on such proposed date of payment will not be surrendered with such
surrendered Unregistered Security and interest payable on such proposed date of
payment will be made only to the holder of such Coupon on such proposed date.
SECTION 2.8. Registration, Transfer and Exchange. The Issuer will
keep or cause to be kept at each office or agency to be maintained for the
purpose as provided in Section 3.2 a register or registers for each series of
Registered Securities issued hereunder (collectively, the "Security Register")
in which, subject to such reasonable regulations as it may prescribe, it will
register, and will register the transfer of, or cause the registration of
transfer of, Registered Securities as in this Article provided. Such register
shall be in written form in the English language or in any other form capable
of being converted into such form within a reasonable time. At all reasonable
times such register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Registered Security or Registered Securities of the same series in
authorized denominations for a like aggregate principal amount.
Unregistered Securities (except for any temporary Unregistered
Securities) and Coupons (except for Coupons attached to any temporary
Unregistered Securities) shall be transferable by delivery.
Any Registered Security or Registered Securities of any series may be
exchanged for a Registered Security or Registered Securities of the same series
in other authorized denominations, in an equal aggregate principal amount.
Registered Securities of any series to be exchanged shall be surrendered at any
office or agency to be maintained by the Issuer
23
15
for the purpose as provided in Section 3.2, and the Issuer shall execute and
the Trustee shall authenticate and deliver in exchange therefore the Registered
Security or Registered Securities of the same series which the Securityholder
making the exchange shall be entitled to receive, bearing numbers not
contemporaneously outstanding. If the Securities of any series are issued in
both registered and unregistered form, except as otherwise specified pursuant
to Section 2.3, at the option of the Holder thereof, Unregistered Securities of
any series may be exchanged for Registered Securities of such series, maturity
date, and interest rate of any authorized denominations and of a like aggregate
principal amount, upon surrender of such Unregistered Securities to be
exchanged at the agency of the Issuer that shall be maintained for such purpose
in accordance with Section 3.2, with, in the case of Unregistered Securities
that have Coupons attached, all unmatured Coupons and all matured Coupons in
default thereto appertaining, and upon payment, if the Issuer shall so require,
of the charges hereinafter provided. At the option of the Holder thereof, if
Unregistered Securities of any series, maturity date, interest rate and
original issue date are issued in more than one authorized denomination, except
as otherwise specified pursuant to Section 2.3, such Unregistered Securities
may be exchanged for Unregistered Securities of such series, maturity date,
interest rate and original issue date of other authorized denominations and of
a like aggregate principal amount, upon surrender of such Unregistered
Securities to be exchanged at the agency of the Issuer that shall be maintained
for such purpose in accordance with Section 3.2 or as specified pursuant to
Section 2.3, with, in the case of Unregistered Securities that have Coupons
attached, all unmatured Coupons and all matured Coupons in default thereto
appertaining, and upon payment, if the Issuer shall so require, of the charges
hereinafter provided. Unless otherwise specified pursuant to Section 2.3,
Registered Securities of any series may not be exchanged for Unregistered
Securities of such series. Whenever any Securities, and the Coupons
appertaining thereto, if any, are so surrendered for exchange, the Issuer shall
execute, and the Trustee shall authenticate and deliver, the Securities, and
the Coupons appertaining thereto, if any, which the Holder making the exchange
is entitled to receive. Notwithstanding the foregoing, if an Unregistered
Security of any series is surrendered at any such office or agency in exchange
for a Registered Security of the same series after the close of business at
such office or agency on any record date and before the opening of business at
such office or agency on the applicable interest payment date, such Unregis-
24
16
tered Security shall be surrendered without the Coupon, if any, relating to
such interest payment date. All Securities and Coupons surrendered upon any
exchange or transfer provided for in this Indenture shall be promptly cancelled
and disposed of by the Trustee and the Trustee will deliver a certificate of
disposition thereof to the Issuer.
All Registered Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange
or registration of transfer of Securities and shall not be required to exchange
or register a transfer of any Securities until such payment is made. No
service charge shall be made for any such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing of notice of redemption of Securities of such series to be
redeemed, or (b) any Securities selected, called or being called for redemption
except, in the case of any Security where public notice has been given that
such Security is to be redeemed in part, the portion thereof not so to be
redeemed and except that an Unregistered Security may be exchanged for a
Registered Security of the same series being called for redemption.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, neither the Issuer nor the Trustee (which shall
rely on an Officers' Certificate and an Opinion of Counsel) shall be required
to exchange any Unregistered Security for a Registered Security if such
exchange would result in adverse Federal income tax consequences to the Issuer
(including, without limitation the inability of the Issuer to deduct from its
income, as computed for Federal income tax purposes, the interest payable on
the Unregistered Securities) under then applicable United States Federal income
tax laws.
25
17
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security or any Coupon
appertaining to any Security shall become mutilated, defaced or be destroyed,
lost or stolen, the Issuer in its discretion may execute, and upon the written
request of any officer of the Issuer, the Trustee shall authenticate and
deliver, a new Security of the same series, bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
or defaced Security, or in lieu of and substitution for the Security so
destroyed, lost or stolen with Coupons corresponding to the Coupons
appertaining to the Security so mutilated, defaced, destroyed, lost or stolen,
or in exchange or substitution for the Security to which such mutilated,
defaced, destroyed, lost or stolen Coupons appertained, with Coupons
appertaining thereto corresponding to the Coupons so mutilated, defaced,
destroyed, lost or stolen. In every case the applicant for a substitute
Security or Coupon shall furnish to the Issuer and to the Trustee and any agent
of the Issuer or the Trustee such security or indemnity as may be required by
them to indemnify and defend and to save each of them harmless and, in every
case of destruction, loss or theft, evidence to their satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof.
Upon the issuance of any substitute Security or Coupon, the Issuer 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
(including the fees and expenses of the Trustee) connected therewith. In case
any Security or Coupon which has matured or is about to mature or has been
called for redemption in full shall become mutilated or defaced or be
destroyed, lost or stolen, the Issuer may, at its sole discretion, instead of
issuing a substitute Security or Coupon, pay or authorize the payment of the
same (without surrender thereof except in the case of a mutilated or defaced
Security or Coupon), if the applicant for such payment shall furnish to the
Issuer and to the Trustee and any agent of the issuer or the Trustee such
security or indemnity as any of them may require to save each of them harmless,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Issuer and the Trustee and any agent of the Issuer or the
Trustee evidence to their satisfaction of the destruction, loss or theft of
such Security or Coupon and of the ownership thereof.
Every substitute Security or Coupon of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such
26
18
Security or Coupon is destroyed, lost or stolen shall constitute an additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Security or Coupon shall be at any time enforceable by anyone and shall
be entitled to all the benefits of (but shall be subject to all the limitations
of rights set forth in) this Indenture equally and proportionately with any and
all other Securities or Coupons of such series duly authenticated and delivered
hereunder. All Securities or Coupons shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced or
destroyed, lost or stolen Securities or Coupons 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 2.10 Cancellation of Securities; Destruction Thereof. All
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee, shall be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be cancelled by it; and no Securities or
Coupons shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture. The Trustee shall destroy cancelled
Securities and Coupons held by it and deliver a certificate of destruction to
the Issuer. If the Issuer shall acquire any of the Securities or Coupons, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities or Coupons unless and until the
same are delivered to the Trustee for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as Registered Securities without Coupons, or as Unregistered
Securities with or without Coupons attached thereto, of any authorized
denomination, and substantially in the form of the definitive Securities of
such series but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be
27
19
determined by the Issuer with the concurrence of the Trustee. Temporary
Securities may contain such reference to any provisions of this Indenture as
may be appropriate. Every temporary Security shall be executed by the Issuer
and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities. Without unreasonable delay the Issuer shall execute and shall
furnish definitive Securities of such series and thereupon temporary Securities
of such series may be surrendered in exchange therefore without charge at each
office or agency to be maintained by the Issuer for that purpose pursuant to
Section 3.2, and in the case of Unregistered Securities, together with any
unmatured Coupons and any matured Coupons in default appertaining thereto, at
any agency maintained by the Issuer for such purpose as specified pursuant to
Section 2.3, and the Trustee shall authenticate and deliver in exchange for
such temporary Securities of such series a like aggregate principal amount of
definitive Securities of the same series of authorized denominations. Until so
exchanged, the temporary Securities and any unmatured Coupons appertaining
thereto of any series shall be entitled to the same benefits under this
Indenture as definitive Securities and any unmatured Coupons appertaining
thereto of such series. The provisions of this Section are subject to any
restrictions or limitations on the issue and delivery of temporary Unregistered
Securities of any series that may be established pursuant to Section 2.3
(including any provision that Unregistered Securities of such series initially
be issued in the form of a single global Unregistered Security to be delivered
to a depositary or agency of the Issuer located outside the United States and
the procedures pursuant to which definitive Unregistered Securities of such
series would be issued in exchange for such temporary global Unregistered
Security).
ARTICLE THREE
COVENANTS OR THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer covenants
and agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such series at the place or places, at the respective times
and in the manner provided in such Securities. Except as specified in Section
2.3, the interest on Securities with Coupons attached (together with any
additional amounts payable pursuant to the terms of such Securities) shall be
payable only upon presentation and
28
20
surrender of the several Coupons for such interest installments as are
evidenced thereby as they severally mature. Except as specified in Section 2.3,
the interest on any temporary Unregistered Securities (together with any
additional amounts payable pursuant to the terms of such Securities) shall be
paid, as to the installments of interest evidenced by Coupons attached thereto,
if any, only upon presentation and surrender thereof, and, as to the other
installments of interest, if any, only upon presentation of such Securities for
notation thereon of the payment of such interest. Each installment of interest
on the Registered Securities of any series may be paid by mailing checks for
such interest payable to or upon the written order of the holders of Registered
Securities entitled thereto as they shall appear on the registry books of the
Issuer.
SECTION 3.2 Offices for Payments, etc. So long as any of the
Securities remain outstanding, the Issuer will maintain the following for each
series: an office or agency (a) where the Registered Securities may be
presented for payment, (b) where the Registered Securities may be presented for
registration of transfer and for exchange as in this Indenture provided and (c)
where notices and demands to or upon the Issuer in respect of the Registered
Securities or of this Indenture may be served.
The Issuer will maintain one or more agencies in a city or cities
located outside the United States (including any city in which such an agency
is required to be maintained under the rules of any stock exchange on which the
Securities of such series are listed) where the Unregistered Securities, if
any, of each series and Coupons, if any, appertaining thereto may be presented
for payment. No payment on any Unregistered Security or Coupon will be made
upon presentation of such Unregistered Security or Coupon at an agency of the
Issuer within the United States nor will any payment be made by transfer to an
account in, or by mail to an address in, the United States unless pursuant to
applicable United States laws and regulations then in effect such payment can
be made without adverse tax consequences to the Issuer. Notwithstanding the
foregoing, payments in U.S. dollars on Unregistered Securities of any series
and Coupons appertaining thereto which are denominated in U.S. dollars may be
made at an agency of the Issuer maintained in the Borough of Manhattan, The
City of New York if such payment in U.S. dollars at each agency maintained by
the Issuer outside the United States for payment on such Unregistered
Securities is illegal or effectively precluded by exchange controls or other
similar restrictions.
29
21
The Issuer will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. With respect
to each series of Securities and Coupons whose terms are established pursuant
to Section 2.3, the Issuer hereby designates the Corporate Trust Office as the
initial office to be maintained by it for each such purpose. In case the
Issuer shall fail to so designate or maintain any such office or agency 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
Corporate Trust Office.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each series of Securities
hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to the Securities of any
series, 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
provisions of this Section,
(a) that it will hold all sums received by it as such agent
for the payment of the principal of or interest on the Securities of
such series (whether such sums have been paid to it by the Issuer or
by any other obligor on the Securities of such series) in trust for
the benefit of the holders of the Securities of such series or the
Coupons appertaining thereto or of the Trustee, and
(b) that it will give the Trustee notice of any failure by
the Issuer (or by any other obligor on the Securities of such series)
to make any payment of the principal of or interest on the Securities
of such series when the same shall be due and payable.
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a sum
sufficient to pay such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of any
failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities or the Coupons appertaining thereto of any series, it will, on
30
22
or before each due date of the principal of or interest on the Securities or
the Coupons appertaining thereto of such series, set aside, segregate and hold
in trust for the benefit of the holders of the Securities or the Coupons
appertaining thereto of such series a sum sufficient to pay such principal or
interest so becoming due. The Issuer will promptly notify the Trustee of any
failure to take such action.
Anything in this Section to the contrary notwithstanding, the Issuer
may at any time, for the purpose of obtaining a satisfaction and discharge with
respect to one or more or all series of Securities hereunder, or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust for any
such series by the Issuer or any paying agent hereunder, as required by this
Section, such sums to be held by the Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.5 Written Statement to Trustee. The Issuer will deliver to
the Trustee on or before April 30 in each year (beginning with April 30, 1989)
a written statement, signed by two of its officers (which need not comply with
Section 11.5), stating that in the course of the performance of their duties as
officers of the Issuer they would normally have knowledge of any default by the
Issuer in the performance or fulfillment of any covenant, agreement or
condition contained in this Indenture, 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 3.6 Luxembourg Publications. In the event of the publication
of any notice pursuant to Section 5.11, 6.10(a), 6.11, 8.2, 10.4 or 12.2, the
party making such publication in London shall also, to the extent that notice
is required to be given to Holders of Securities of any series by applicable
Luxembourg law or stock exchange regulation, as evidenced by an Officers'
Certificate delivered to such party, make a similar publication in Luxembourg.
31
23
ARTICLE FOUR
SECURITYHOLDERS' LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the holders of the
Securities of each series:
(a) semiannually and not more that 15 days after each record
date for the payment of interest on such Securities, as hereinabove
specified, as of such record date and on dates to be determined
pursuant to Section 2.3 for not-interest bearing securities in each
year, and
(b) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Issuer of any such
request as of a date not more than 15 days prior to the time such
information is furnished,
provided that if and so long as the Trustee shall be the Security registrar for
such series and all of the Securities of such series are Registered Securities,
such list shall not be required to be furnished. The Trustee shall, at the
request of the Issuer, provide such list to the Issuer for so long as the
Trustee shall be the Security registrar.
SECTION 4.2 Preservation and Disclosure of Securityholders' 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
each series of Securities (i) contained in the most recent list furnished to it
as provided in Section 4.1, (ii) received by it in the capacity of Security
registrar for such series, if so acting and (iii) filed with it within the
preceding two years pursuant to Section 4.4(c)(ii). The Trustee may destroy
any list furnished to it as provided in Section 4.1 upon receipt of a new list
so furnished.
(b) In case three or more holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has
owned a Security for a period of at least six months preceding the
date of such application, and such application states that the
applicants desire to communicate with other holders of Securities of a
particular series (in which case the applicants must all hold
Securities of such series) or with Holders of all
32
24
Securities with respect to their rights under this Indenture or under
such Securities and such application is accompanied by a copy of the
form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the
receipt of such application, at its election, either
(i) afford to such applicants access to the
information preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this Section, or
(ii) inform such applicants as to the approximate
number of holders of Securities of such series or all
Securities, as the case may be, 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, 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 to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Securities, as
the case may be, whose name and address appears in the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a) of
this Section a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Commission together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of Securities of such series
or all Securities, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any of
such objections or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met, and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the Trustee shall
33
25
be relieved of any obligation or duty to such applicants respecting their
application.
(c) Each and every holder of Securities and Coupons, by
receiving and holding the same, agrees with the Issuer and the Trustee
that neither the Issuer nor the Trustee nor any agent of the Issuer or
the Trustee shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the holders of
Securities in accordance with the provisions of subsection (b) of this
Section, 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 such
subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents, any other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) which the Issuer
may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, if the Issuer is
not required to file information, documents, or reports pursuant to
either of such Sections, then to file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents, and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934, or in respect of a
security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents, and reports
with respect to compliance by the Issuer with the conditions and
covenants provided for in this Indenture as may be required from time
to time by such rules and regulations; and
(c) to transmit by mail to the holders of Securities. within
30 days after the filing thereof with the Trustee, such summaries of
any information, documents and reports required to be filed by the
Issuer pursuant to subsections (a) and (b) of this Section as may be
required
34
26
to be transmitted to such Holders by rules and regulations prescribed
from time to time by the Commission.
SECTION 4.4 Reports by the Trustee. (a) On or before July 15 in each
year following the date hereof, so long as any Securities are Outstanding
hereunder, the Trustee shall transmit by mail as provided below to the
Securityholders of each series, as hereinafter in this Section provided, a
brief report dated as of the preceding May 15 with respect to:
(i) its eligibility under Section 6.9 and its
qualification under Section 6.8, or in lieu thereof, if to the
best of its knowledge it has continued to be eligible and
qualified under such Sections, a written statement to such
effect;
(ii) the character and amount of any advances (and if
the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee (as such) which remain
unpaid on the date of such report and for the reimbursement of
which it claims or may claim a lien or charge, prior to that
of the Securities of any series, on any property or funds held
or collected by it as Trustee, except that the Trustee shall
not be required (but may elect) to report such advances if
such advances so remaining unpaid aggregate not more than 1/2
of 1% of the principal amount of the securities of any series
Outstanding on the date of such report;
(iii) the amount, interest rate, and maturity date of
all other indebtedness owing by the Issuer (or by any other
obligor on the Securities) to the Trustee in its individual
capacity on the date of such report, with a brief description
of any property held as collateral security therefore, except
any indebtedness based upon a creditor relationship arising in
any manner described in Section 6.13(b)(2), (3), (4) or (6);
(iv) the property and funds, if any, physically in
the possession of the Trustee (as such) on the date of such
report;
(v) any additional issue of Securities which the
Trustee has not previously reported; and
(vi) any action taken by the Trustee in the
performance of its duties under this Indenture which it has
not previously reported and which in its opinion materially
affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by it in
accordance with the provisions of Section 5.11.
35
27
(b) The Trustee shall transmit to the Securityholders of each
series, as provided in subsection (c) of this Section, a brief report
with respect to the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee, as such, since the date of the last
report transmitted pursuant to the provisions of subsection (a) of
this Section (or if no such report has yet been so transmitted, since
the date of this Indenture) for the reimbursement of which it claims
or may claim a lien or charge prior to that of the Securities of such
series on property or funds held or collected by it as Trustee and
which it has not previously reported pursuant to this subsection (b),
except that the Trustee shall not be required (but may elect) to
report such advances if such advances remaining unpaid at any time
aggregate 10% or less of the principal amount of Securities of such
series outstanding at such time, such report to be transmitted within
90 days after such time.
(c) Reports pursuant to this Section shall be transmitted by
mail:
(i) to all registered Holders of Securities, as the
names and addresses of such Holders appear upon the registry
books of the Issuer;
(ii) to such other Holders of Securities as have,
within two years preceding such transmission, filed their
names and addresses with the Trustee for that purpose; and
(iii) except in the case of reports pursuant to
subsection (b), to each Holder of a Security whose name and
address are preserved at the time by the Trustee as provided
in Section 4.2(a).
(d) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be
filed by the Trustee with each stock exchange upon which the
Securities of any applicable series are listed and also with the
Commission. The Issuer agrees to notify the Trustee with respect to
any series when and as the Securities of such series become admitted
to trading on any national securities exchange.
36
28
ARTICLE FIVE
REMEDIES OR THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default with respect to Securities of any series
wherever used herein, means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest
upon any of the Securities of such series as and when the same shall
become due and payable, and continuance of such default for a period
of 30 days; or
(b) default in the payment of all or any part of the
principal on any of the Securities of such series as and when the same
shall become due and payable either at maturity, upon redemption, by
declaration or otherwise; or
(c) default in the payment of any sinking fund installment as
and when the same shall become due and payable by the terms of the
Securities of such series; or
(d) default in the performance, or breach, of any covenant or
warranty of the Issuer in respect of the Securities of such series
(other than a covenant or warranty in respect of the Securities of
such series 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 Issuer by the Trustee
or to the Issuer and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of all series affected
thereby, 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
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in all involuntary
case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official) of
the
37
29
Issuer or for any substantial part of its property or ordering 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
(f) the Issuer shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
of or taking possession by a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the Issuer
or for any substantial part of its property, or make any general
assignment for the benefit of creditors; or
(g) any other Event of Default provided in the supplemental
indenture or resolution of the Board of Directors under which such
series of Securities is issued or in the form of Security for such
series.
If an Event of Default described in clauses (a), (b), (c) or (d) above (if the
Event of Default under clause (d) is with respect to less than all series of
Securities then Outstanding) occurs and is continuing, then, and in each and
every such case, unless the principal of all of the Securities of such series
shall have already become due and payable, either the Trustee or the holders of
not less than 25% in aggregate principal amount of the Securities of such
series then Outstanding hereunder (each such series voting as a separate class)
by notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if the Securities of
such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all
Securities of such series and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default described in clause (d)
(if the Event of Default under clause (d) is with respect to all series of
Securities then Outstanding), (e) or (f) occurs and is continuing, then and in
each and every such case, unless the principal of all the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in
38
30
aggregate principal amount of all the Securities then Outstanding hereunder
(treated as one class), by notice in writing to the Issuer (and to the Trustee
if given by Securityholders), may declare the entire principal (or, if any
Securities are Original Issue Discount Securities, such portion of the
principal as may be specified in the terms thereof) of all the Securities then
Outstanding and interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately
due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any series (or of all the Securities, as
the case may be) shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained
or entered as hereinafter provided, the Issuer shall pay or shall deposit with
the Trustee a sum sufficient to pay all matured installments of interest upon
all the Securities of such series (or of all the Securities, as the case may
be) and the principal of any and all Securities of such series (or of all the
Securities, as the case may be) which shall have become due otherwise than by
acceleration (with interest upon such principal and, to the extent that payment
of such interest is enforceable under applicable law, on overdue installments
of interest, at the same rate as the rate of interest or Yield to Maturity (in
the case of Original Issue Discount Securities) specified in the Securities of
such series (or at the respective rates of interest or Yields to Maturity of
all the Securities, as the case may be, to the date of such payment or deposit)
and such amount as shall be sufficient to cover reasonable compensation to the
Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result
of negligence or bad faith, and all other amounts due to the Trustee or any
predecessor Trustee pursuant to Section 6.6, and if any and all Events of
Default under the Indenture, other than the non-payment of the principal of
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 all the Securities
of such series, each series voting as a separate class (or of all the
Securities, as the case may be, voting as a single class) then outstanding, by
written notice to the Issuer and to the Trustee, may waive all defaults with
respect to such series (or with respect to all the
39
31
Securities, as the case may be) and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the provisions hereof, then, from and
after such declaration, unless such declaration has been rescinded and
annulled, the principal amount of such Original Issue Discount Securities shall
be deemed, for all purposes hereunder, to be such portion of the principal
thereof as shall be due and payable as a result of such acceleration, and
payment of such portion of the principal thereof as shall be due and payable as
a result of such acceleration, together with interest, if any, thereon and all
other amounts owing thereunder, shall constitute payment in full of such
Original Issue Discount Securities.
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Issuer covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities of any series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity
of the Securities of such series or upon any redemption or by declaration or
otherwise--then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole
amount that then shall have become due and payable on all Securities of such
series, and Coupons appertaining thereto, for principal or interest, as the
case may be (with interest to the date of such payment upon the overdue
principal and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest at the same rate as the
rate of interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of such series); and in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation to the Trustee and
each predecessor Trustee, their respective agents, attorneys and counsel, and
any expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee except as a result of its negligence or bad faith,
and all other amounts due to the Trustee or any predecessor Trustee pursuant to
Section 6.6.
40
32
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the holders,
whether or not the principal of and interest on the Securities of such series
be overdue.
In case the Issuer 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 action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Issuer or other obligor upon such
Securities and collect in the manner provided by law out of the property of the
Issuer or other obligor upon such Securities, wherever situated, the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor, or in case of any other comparable judicial proceedings relative to
the Issuer or other obligor upon the Securities of any series, or Coupons
appertaining thereto, or to the creditors or property of the Issuer or such
other obligor, the Trustee, irrespective of whether the principal of any
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount
of principal and interest (or, if the Securities of any series are
Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) owing and
unpaid in respect of the Securities of any series, and to file such
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
expenses and liabilities incurred, and all advances made, by the
Trustee and
41
33
each predecessor Trustee, except as a result of negligence or bad
faith, and all other amounts due to the Trustee or any predecessor
Trustee pursuant to Section 6.6) and of the Securityholders allowed in
any judicial proceedings relative to the Issuer or other obligor upon
the Securities of any series, or to the creditors or property of the
Issuer or such other obligor,
(b) unless prohibited by applicable law and regulations, to
vote on behalf of the holders of the Securities of any series 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
(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Securityholders and
of the Trustee on their behalf; and any trustee, receiver, or
liquidator, custodian or other similar official is hereby authorized
by each of the Securityholders to make payments to the Trustee, and,
in the event that the Trustee shall consent to the making of payments
directly to the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith and all other amounts due to the
Trustee or any predecessor Trustee pursuant to Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan or reorganization, arrangement, adjustment or
composition affecting the Securities or Coupons appertaining thereto of any
series 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 except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, or Coupons appertaining thereto may be enforced by
the Trustee without the possession of any of the Securities, or Coupons
appertaining thereto, or the production thereof on any trial or other
proceedings relative thereto, and any such action or proceedings
42
34
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements, compensation and all other amounts due pursuant to
Section 6.6 to the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the holders of the
Securities, or Coupons appertaining thereto, in respect of which such action
was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Securities in respect to which such action was taken, and it
shall not be necessary to make any holders of such Securities parties to any
such proceedings.
SECTION 5.3 Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of any series shall be applied in
the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal or interest, upon
presentation of the several Securities, and Coupons appertaining thereto, in
respect of which monies have been collected and stamping (or otherwise noting)
thereon the payment, or issuing Securities of such series in reduced principal
amounts in exchange for the presented Securities of like series if only
partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to
such series in respect of which monies have been collected, including
reasonable compensation to the Trustee and each predecessor Trustee
and their respective agents and attorneys and of all expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith, and
all other amounts due to the Trustee or any predecessor Trustee
pursuant to Section 6.6;
SECOND: To the Holders of Senior Indebtedness to the extent
required by Article 13;
THIRD: In case the principal of the Securities of such series
in respect of which moneys have been collected shall not have become
and be then due and payable, to the payment of interest on the
Securities of such series in default in the order of the maturity of
the installments of such interest, with interest (to the extent that
such
43
35
interest has been collected by the Trustee) upon the overdue
installments of interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made ratably to the
persons entitled thereto, without discrimination or preference;
FOURTH: In case the principal of the Securities of such
series in respect of which moneys have been collected shall have
become and shall be then due and payable, to the payment of the whole
amount then owing and unpaid upon all the Securities of such series
for principal and interest, with interest upon the overdue principal,
and (to the extent that such interest has been collected by the
Trustee) upon overdue installments of interest at the same rate as the
rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such series; and
in case such moneys shall be insufficient to pay in full the whole
amount so due and unpaid upon the Securities of such series, then to
the payment of such principal and interest or yield to maturity,
without preference or priority of principal over interest or yield to
maturity, or of interest or yield to maturity over principal, or of
any installment of interest over any other installment of interest, or
of any Security of such series over any other Security of such series,
ratably to the aggregate of such principal and accrued and unpaid
interest or yield to maturity; and
FIFTH: To the payment of the remainder, if any, to the Issuer
or any other person lawfully entitled thereto.
SECTION 5.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or 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 5.5 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued
44
36
or abandoned for any reason, or shall have been determined adversely to the
Trustee, then and in every such case the Issuer and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Issuer, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.
SECTION 5.6 Limitations on Suits by Securityholders. No holder of
any Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to institute
any action or proceeding at law or in equity or in bankruptcy or otherwise upon
or under or with respect to this Indenture, or for the appointment of a
trustee, receiver, liquidator, custodian or other similar official or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than 25% in
aggregate principal amount of the Securities of such series then outstanding
shall have made written request upon the Trustee to institute such action or
proceedings in its own name as trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or 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 or proceeding and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to
Section 5.9; it being understood and intended, and being expressly covenanted
by the taker and Holder of every Security or Coupon with every other taker and
Holder and the Trustee, that no one or more Holders of Securities of any series
or of any Coupon appertaining thereto shall have any right in any manner
whatever by virtue or by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other such Holder of Securities or
Coupons, or to obtain or seek to obtain priority over or preference to any
other such Holder or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Securities of the applicable series or of any Coupon appertaining
thereto. 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.
45
37
SECTION 5.7 Unconditional Rights of Securityholders to Institute
Certain Suits. Notwithstanding any other provision in this Indenture and any
provision of any Security, the right of any holder of any Security or Coupon to
receive payment of the principal of an interest on such Security or Coupon on
or after the respective due dates expressed in such Security or Coupon, or in
any Coupon appertaining thereto, or to institute suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 2.9, no right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Securityholder 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 Event of Default or an acquiescence
therein; and, subject to Section 5.6, every power and remedy given by this
Indenture 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 5.9 Control by Securityholders. The Holders of a majority in
aggregate principal amount of the Securities of each series affected (with each
series voting as a separate class) at the time outstanding shall have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series by this Indenture;
provided that such direction shall not be otherwise than in accordance with law
and the provisions of this Indenture and provided further that (subject to the
provisions of Section 6.1) the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by counsel shall
determine that the action or proceeding so directed may not lawfully be
46
38
taken or if the Trustee in good faith by its board of directors, the executive
committee, or a trust committee of directors or Responsible Officers of the
Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forebearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities of all series so affected not joining in the giving of said
direction, it being understood that (subject to Section 6.1) the Trustee shall
have no duty to ascertain whether or not such actions or forebearances are
unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
SECTION 5.10 Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Securities of any series as provided in
Section 5.1, the Holders of a majority in aggregate principal amount of the
Securities of such series at the time Outstanding may on behalf of the Holders
of all the Securities of such series waive any past default or Event of Default
described in clause (d) of Section 5.1 (or, in the case of an event specified
in clause (d) of Section 5.1 which relates to less than all series of
Securities then Outstanding, the Holders of a majority in aggregate principal
amount of the Securities then Outstanding affected thereby (each series voting
as a separate class)) may waive any such default or Event of Default, or, in
the case of an event specified in clause (d) (if the Event of Default under
clause (d) relates to all series of Securities then Outstanding), (e) or (f) of
Section 5.1 the Holders of Securities of a majority in principal amount of all
the Securities then Outstanding (voting as one class) may waive any such
default or Event of Default), and its consequences except a default in respect
of a covenant or provision hereof which cannot be modified or amended without
the consent of the Holder of each Security affected. In the case of any such
waiver, the Issuer, the Trustee and the Holders of the Securities of such
series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of
47
39
Default arising therefrom shall be deemed to have been cured, and not to have
occurred for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall, within 90 days after the occurrence
of a default with respect to the Securities of any series known to a
Responsible Officer of the Trustee, provide notice to the Holders of Securities
of such series and Coupons appertaining thereto, if any, (i) if any
Unregistered Securities of that series are then Outstanding, to the Holders
thereof, by publication at least once in an Authorized Newspaper in London
(and, if required by Section 3.6, at least once in an Authorized Newspaper in
Luxembourg), (ii) if any Unregistered Securities of that series are then
Outstanding, to all Holders thereof who have filed their names and addresses
with the Trustee pursuant to Section 4.4(c)(ii), by mailing such notice to such
Holders at such addresses and (iii) to all Holders of then Outstanding
Registered Securities of that series, by mailing such notice to such Holders at
their addresses as they shall appear in the registry books, unless such
defaults shall have been cured before the giving of such notice (the term
"default" or "defaults" for the purposes of this Section being hereby defined
to mean any event or condition which is, or with notice or lapse of time or
both would become, an Event of Default); provided that, except in the case of
default in the payment of the principal of or interest on any of the Securities
of such series, the Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee, or a trust
committee of directors or trustees and/or Responsible Officers of the Trustee
in good faith determines that the withholding of such notice is in the
interests of the Securityholders of such series.
SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Security or
Coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken, suffered 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, against any
48
40
party litigant in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Securityholder or group of Securityholders of any series
holding in the aggregate more than 10% in aggregate principal amount of the
Securities of such series, or, in the case of any suit relating to or arising
under clause (d) of Section 5.1 (if the suit relates to Securities of more than
one but less than all series), 10% in aggregate principal amount of Securities
Outstanding affected thereby, or in the case of any suit relating to or arising
under clause (d) (if the suit under clause (d) relates to all the Securities
then Outstanding), (e) or (f) of Section 5.1, 10% in aggregate principal amount
of all Securities Outstanding, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of or interest on any
Security or Coupon on or after the due date expressed in such Security or
Coupon.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, 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 Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or
waiving of all such Events of Default with respect to such series
which may have occurred:
(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be determined
solely by the
49
41
express provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the holders pursuant to Section 5.9 relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon, security or
50
42
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate or order of the Issuer (unless other evidence in respect
thereof be herein specifically prescribed); and any resolution of the
Board of Directors may be evidenced to the Trustee by a copy thereof
certified by the secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken 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 trusts, 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 might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, 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, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the holders of not less than a
majority in aggregate principal amount of the Securities of all series
affected then outstanding; provided 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 expenses or
liabilities as a
51
43
condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Issuer or, if paid by the Trustee
or any predecessor Trustee, shall be repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys not regularly in its employ and the
Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be deemed to have knowledge or
notice of any default or Event of Default unless a Responsible Officer
has actual knowledge thereof or unless the holders of not less than
25% of the aggregate principal amount of the then outstanding
Securities of any affected series have notified the Trustee thereof.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities or Coupons. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities or Coupons;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities or Coupons with the same rights it would have if it were not the
Trustee or such agent and, subject to Sections 6.8 and 6.13, if operative, may
otherwise deal with the Issuer and receive, collect, hold and retain
collections from the Issuer with the same rights it would have if it were not
the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except
52
44
to the extent required by mandatory provisions of law. Neither the Trustee nor
any agent of the Issuer or the Trustee shall be under any liability for
interest on any moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior
Claim. The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Issuer also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the costs
and expenses of defending itself against or investigating any claim of
liability in the premises. The obligations of the Issuer under this Section to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture. Such additional
indebtedness shall be a senior claim to that of the Securities and Coupons upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the holders of particular Securities or
Coupons, and the Securities and Coupons are hereby subordinated to such senior
claim, but such senior claim shall not be subordinate to any Senior
Indebtedness.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may in the absence of negligence or bad faith
on the part of the Trustee, be deemed
53
45
to be conclusively proved and established by an Officers' Certificate delivered
to the Trustee, and such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted by it under the provisions of this Indenture upon
the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. (a) If
the Trustee has or shall acquire any conflicting interest, as defined in this
Section, it shall, within 90 days after ascertaining that it has such
conflicting interest, either eliminate such conflicting interest or resign in
the manner and with the effect specified in this Indenture.
(b) In the event that the Trustee shall fail to comply with
the provisions of subsection (a) of this Section, the Trustee shall,
within 10 days after the expiration of such 90 day period, provide
notice of such failure to the Securityholders in the manner and to the
extent required by Section 4.4(c).
(c) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest with respect to Securities of
any series if
(i) the Trustee is trustee under this Indenture with
respect to the Outstanding Securities of any other series or
is a trustee under another indenture under which any other
securities, or certificates of interest or participation in
any other securities, of the Issuer are outstanding, unless
such other indenture is a collateral trust indenture under
which the only collateral consists of Securities issued under
this Indenture and this Indenture with respect to the
Securities of any other series and there shall also be so
excluded any other indenture or indentures under which other
securities, or certificates of interest or participation in
other securities, of the Issuer are outstanding if (i) this
Indenture is and, if applicable, this Indenture and any series
issued pursuant to this Indenture and such other indenture or
indentures are wholly unsecured, and such other indenture or
indentures are hereafter qualified under the Trust Indenture
Act of 1939, unless the Commission shall have found and
declared by order pursuant to Section 305(b) or Section 307(c)
of such Trust Indenture Act of 1939 that differences exist
between the provisions of this Indenture with respect to
Securities of such series and one or more other series, or the
provisions of this Indenture and the provisions of such other
indenture or indentures which are so likely to involve a
material conflict of interest as to make it necessary
54
46
in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this
Indenture with respect to Securities of such series and such
other series, or under this Indenture or such other indenture
or indentures, or (ii) the Issuer shall have sustained the
burden of proving, on application to the Commission and after
opportunity for hearing thereon, that trusteeship under this
Indenture with respect to Securities of such series and such
other series, or under this Indenture and such other indenture
or indentures is not so likely to involve a material conflict
of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from
acting as such under this Indenture with respect to Securities
of such series and such other series, or under this Indenture
and such other indentures;
(ii) the Trustee or any of its directors or executive
officers is an obligor upon the Securities of any series
issued under this Indenture or an underwriter for the Issuer;
(iii) the Trustee directly or indirectly controls or
is directly or indirectly controlled by or is under direct or
indirect common control with the Issuer or an underwriter for
the Issuer;
(iv) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee,
or representative of the Issuer, or of an underwriter (other
than the Trustee itself) for the Issuer who is currently
engaged in the business of underwriting, except that (x) one
individual may be a director or an executive officer, or both,
of the Trustee and a director or an executive officer, or
both, of the Issuer, but may not be at the same time an
executive officer of both the Trustee and the Issuer; (y) if
and so long as the number of directors of the Trustee in
office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and
a director of the Issuer; and (z) the Trustee may be
designated by the Issuer or by any underwriter for the Issuer
to act in the capacity of transfer agent, registrar,
custodian, paying agent, fiscal agent, escrow agent, or
depositary, or in any other similar capacity, or, subject to
the provisions of subsection (c)(i) of this Section, to act as
trustee, whether under an indenture or otherwise;
(v) 10% or more of the voting securities of the
Trustee is beneficially owned either by the Issuer or by any
director, partner or executive officer thereof, or 20% or more
of such voting securities
55
47
is beneficially owned, collectively, by any two or more of
such persons; or 10% or more of the voting securities of the
Trustee is beneficially owned either by an underwriter for the
Issuer or by any director, partner, or executive officer
thereof, or is beneficially owned, collectively, by any two or
more such persons;
(vi) the Trustee is the beneficial owner of, or holds
as collateral security for an obligation which is in default,
(x) 5% or more of the voting securities or 10% or more of any
other class of security of the Issuer, not including the
Securities issued under this Indenture and securities issued
under any other indenture under which the Trustee is also
trustee, or (y) 10% or more of any class of security of an
underwriter for the Issuer;
(vii) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is in
default, 5% or more of the voting securities of any person
who, to the knowledge of the Trustee, owns 10% or more of the
voting securities of, or controls directly or indirectly or is
under direct or indirect common control with, the Issuer;
(viii) the Trustee is the beneficial owner of, or
holds as collateral security for an obligation which is in
default, 10% or more of any class of security of any person
who, to the knowledge of the Trustee, owns 50% or more of the
voting securities of the Issuer; or
(ix) the Trustee owns on May 15 in any calendar year,
in the capacity of executor, administrator, testamentary or
inter vivos trustee, guardian, committee or conservator, or in
any other similar capacity, an aggregate of 25% or more of the
voting securities, or of any class of security, of any person
the beneficial ownership of a specified percentage of which
would have constituted a conflicting interest under Section
6.8(c)(vi), (vii) or (viii). As to any such securities of
which the Trustee acquired ownership through becoming
executor, administrator, or testamentary trustee of an estate
which included them, the provisions of the preceding sentence
shall not apply, for a period of two years from the date of
such acquisition, to the extent that such securities included
in such estate do not exceed 25% of such voting securities or
25% of any such class of security. Promptly after May 15 in
each calendar year the Trustee shall make a check of its
holdings of such securities in any of the above-mentioned
capacities as of such May 15. If the Issuer
56
48
fails to make payment in full of principal of or interest on
any of the Securities when and as the same becomes due and
payable, and such failure continues for 30 days thereafter,
the Trustee shall make a prompt check of its holdings of such
securities in any of the above-mentioned capacities as of the
date of the expiration of such 30-day period, and after such
date, notwithstanding the foregoing provisions of this
paragraph, all such securities so held by the Trustee, with
sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be
considered as though beneficially owned by the Trustee for the
purposes of subsections (c)(vi), (vii) and (viii) of this
Section.
The specification of percentages in subsections (c)(v) to (ix)
inclusive of this Section shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of subsections (c)(iii) or (vii) of this Section.
For the purposes of subsections (c)(vi), (vii), (viii) and (ix), of
this Section, only,
(i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but
shall not include any note or other evidence of indebtedness issued to
evidence an obligation to repay moneys lent to a person by one or more
banks, trust companies, or banking firms, or any certificate of
interest or participation in any such note or evidence of
indebtedness;
(ii) an obligation shall be deemed to be in default when a
default in payment of principal shall have continued for 30 days or
more and shall not have been cured; and
(iii) the Trustee shall not be deemed to be the owner or
holder of (x) any security which it holds as collateral security, as
trustee or otherwise, for an obligation which is not in default as
defined in clause (ii) above, or (y) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (z) any security which it holds as agent for collection,
or as custodian, escrow agent, or depositary, or in any similar
representative capacity.
Except as provided above, the word "security" or "securities" as used
in this Section shall mean any note, stock, treasury stock, bond,
57
49
debenture, evidence of indebtedness, certificate of interest or participation
in any profit-sharing agreement, collateral trust certificate, preorganization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas or other mineral rights, or, in general, any interest or
instrument commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.
(d) For purposes of this Section:
(i) the term "underwriter" when used with reference to the
issuer shall mean every person who, within three years prior to the
time as of which the determination is made, has purchased from the
Issuer with a view to, or has offered or sold for the Issuer in
connection with, the distribution of any security of the Issuer
outstanding at such time, or has participated or has had a direct or
indirect participation in any such undertaking, or has participated or
has had a participation in the direct or indirect underwriting of any
such undertaking, but such term shall not include a person whose
interest was limited to a commission from an underwriter or dealer not
in excess of the usual and customary distributors' or sellers'
commission;
(ii) the term "director" shall mean any director of a
corporation or any individual performing similar functions with
respect to any organization whether incorporated or unincorporated;
(iii) the term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock company, a
trust, an unincorporated organization, or a government or political
subdivision thereof; as used in this paragraph, the term "trust" shall
include only a trust where the interest or interests of the
beneficiary or beneficiaries are evidenced by a security;
(iv) the term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement or arrangement
whereby a trustee or trustees or agent or agents for the owner or
holder of such security are presently entitled to vote in the
direction or management of the affairs of a person;
58
50
(v) the term "Issuer" shall mean any obligor upon the
Securities; and
(vi) the term "executive officer" shall mean the president,
every vice president, every trust officer, the cashier, the secretary,
and the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization whether
incorporated or unincorporated, but shall not include the chairman of
the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(i) a specified percentage of the voting securities of the
Trustee, the Issuer or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means
such amount of the outstanding voting securities of such person as
entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person;
(ii) a specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding;
(iii) the term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares, and the number of
units if relating to any other kind of security;
(iv) the term "outstanding" means issued and not held by or
for the account of the issuer; the following securities shall not be
deemed outstanding within the meaning of this definition:
(A) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(B) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not
in default as to principal or interest or otherwise;
59
51
(C) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(D) securities held in escrow if placed in escrow by
the issuer thereof;
provided, that any voting securities of an issuer shall be deemed outstanding
if any person other than the issuer is entitled to exercise the voting rights
thereof; and
(v) a security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges; provided, that,
in the case of secured evidences of indebtedness, all of which are
issued under a single indenture, differences in the interest rates or
maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes and provided,
further, that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall not
be deemed sufficient to constitute them securities of different
classes, whether or not they are issued under a single indenture.
SECTION 6.9 Persons Eligible for Appointment as Trustee. The Trustee
for each series of Securities hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $50,000,000, and which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by Federal,
State or District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 6.10.
60
52
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer. Upon receiving such notice
of resignation, the Issuer shall promptly appoint a successor trustee or
trustees with respect to the applicable series by written instrument in
duplicate, executed by authority of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee or trustees. If no successor trustee shall have been so
appointed with respect to any series and have accepted appointment within 30
days after the mailing of such notice of resignation, the resigning trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona fide Holder of a Security or
Securities of the applicable series for at least six months may, subject to the
provisions of Section 5.12, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 6.8 with respect to any series of Securities after written
request therefor by the Issuer or by any Securityholder who has been a
bona fide Holder of a Security or Securities of such series for at
least six months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.9 and shall fail to resign after written
request therefor by the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator 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 of affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of
Directors of the Issuer, one copy of which instrument shall be
61
53
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 5.12, any Securityholder who has been a
bona fide Holder of a Security or Securities of such series for at least six
months may on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series at the time Outstanding may at any time remove the
Trustee with respect to securities of such series and appoint a successor
trustee with respect to the Securities of such series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 7.1 of the action in that regard taken by the
Securityholders.
(d) any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as
if originally named as trustee for such series hereunder; but, nevertheless, on
the written request of the Issuer or of the successor trustee, upon payment of
its charges then unpaid, the trustee ceasing to act shall, subject to Section
10.4, pay over to the successor trustee all moneys at the time held by it
hereunder and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon
request of any such successor trustee, the Issuer shall execute any and all
instruments in writing for more fully and certainly vesting in and
62
54
confirming to such successor trustee all such rights and powers. Any trustee
ceasing to act shall, nevertheless, retain a prior claim upon all property or
funds held or collected by such trustee to secure any amounts then due it
pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the Securities of any applicable series 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 predecessor Trustee with respect to
the Securities of any series 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 trusts hereunder by more
than one trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such trustees or co-trustees of the
same trust and that each such trustee shall be trustee of a trust or trusts
under separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Issuer shall mail notice thereof (a) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof,
by publication of such notice at least once in an Authorized Newspaper in
London (and, if required by Section 3.6. at least once in an Authorized
Newspaper in Luxembourg), (b) if any Unregistered Securities of a series
affected are then Outstanding, to the Holders thereof who have filed their
names and addresses with the Trustee pursuant to Section 4.4(c)(ii), by mailing
such notice to such holders at such addresses as were so furnished to the
Trustee (and the Trustee shall make such information available to the Issuer
for such purpose) and (c) to the Holders of Registered Securities of each
series affected, by first-class mail to such Holders of Securities of any
series for which such successor trustee is acting as trustee at their last
addresses as they shall appear in the Security register. If the Issuer fails to
mail such notice within ten days after acceptance of appointment by the
successor trustee,
63
55
the successor trustee shall cause such notice to be mailed at the expense of
the Issuer.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided, that such
corporation shall be qualified under the provisions of Section 6.8 and eligible
under the provisions of Section 6.9 without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
Securities of such series or in this Indenture provided that the certificate of
the Trustee shall have; provided, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of any
series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Issuer.
(a) Subject to the provisions of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Issuer
within four months prior to a default, as defined in subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
Holders of other indenture securities (as defined in this Section):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or
64
56
interest, effected after the beginning of such four months period and
valid as against the Issuer and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in subsection (a)(2) of this Section, or from the exercise
of any right of set-off which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the Issuer upon
the date of such default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefore, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such four months' period or an amount equal to the proceeds of any
such property, if disposed of, subject, however, to the rights, if
any, of the Issuer and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on
account of any such claim by any person (other than the Issuer) who is
liable thereon, (ii) the proceeds of the bona fide sale of any such
claim by the Trustee to a third person, and (iii) distributions made
in cash, securities or other property in respect of claims filed
against the Issuer in bankruptcy or receivership or in proceedings for
reorganization pursuant to Title 11 of the United States Code or
applicable state law;
(B) to realize, for its own account, upon any property held
by it as security for any such claim, if such property was so held
prior to the beginning of such four months' period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such four months' period and such property was received
as security therefor simultaneously with the creation thereof, and if
the Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to
believe that a default as defined in subsection (c) of this Section
would occur within four months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property held as security for
such claim as provided in such paragraph (B) or (C) as the case may
be, to the extent of the fair value of such property.
65
57
For the purpose of paragraphs (B), (C) and (D), property substituted
after the beginning of such four months' period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released and to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of Trustee as such creditor, such claim shall have the
same status as such pre- existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, such Securityholders and the
holders of other indenture securities realize, as a result of payment from such
special account and payments of dividends on claims filed against the Issuer in
bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable State law, the same percentage
of their respective claims, figured before crediting to the claim of the
Trustee anything on account of the receipt by it from the Issuer of the funds
and property in such special account and before crediting to the respective
claims of the Trustee, such Securityholders and the holders of other indenture
securities dividends on claims filed against the Issuer in bankruptcy or
receivership or in proceedings for reorganization pursuant to Title 11 of the
United States Code or applicable State law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from the funds and property
so held in such special account. As used in this paragraph, with respect to
any claim, the term "dividends" shall include any distribution with respect to
such claim, in bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable State law, whether
such distribution is made in cash, securities or other property, but shall not
include and such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion between the
Trustee, such Securityholders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held
in such special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the
66
58
provisions of this paragraph, due consideration in determining the fairness of
the distributions to be made to the Trustee, such Securityholders and the
holders of other indenture securities with respect to their respective claims,
in which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to
apply the provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such four months' period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four months' period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had
continued as trustee, occurred after the beginning of such four
months' period; and
(ii) such receipt of property or reduction of claim occurred
within four months after such resignation or removal.
(b) There shall be excluded from the operation of this Section a
creditor relationship arising from
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction or by this Indenture for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
Securityholders at the time and in the manner provided in this
Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
67
59
(4) an indebtedness created as a result of services rendered
or premises rented or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c)(3)
below:
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Issuer, or
(6) the acquisition, ownership, acceptance or negotiation of
any draft, bills of exchange, acceptance or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c)(4) of this Section.
(c) As used in this Section:
(1) the term "default" shall mean any failure to make payment
in full of the principal of or interest upon any of the Securities or
upon the other indenture securities when and as such principal or
interest becomes due and payable;
(2) the term "other indenture securities" shall mean
securities upon which the Issuer is an obligor (as defined in the
Trust Indenture Act of 1939) outstanding under any other indenture (i)
under which the Trustee is also trustee, (ii) which contains
provisions substantially similar to the provisions of subsection (a)
of this Section, and (iii) under which a default exists at the time of
the apportionment of the funds and property held in said special
account;
(3) the term "cash transaction" shall mean any transaction in
which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in
checks or other orders drawn upon banks or bankers and payable upon
demand;
(4) the term "self-liquidating paper" shall mean any draft,
bill of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Issuer for the purpose of financing the
purchase, processing, manufacture, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing
title to, possession of, or a lien upon the goods, wares or
merchandise or the receivables or proceeds arising from the sale of
the goods, wares or merchandise previously constituting the secu-
68
60
rity, provided the security is received by the Trustee simultaneously
with the creation of the creditor relationship with the Issuer arising
from the making, drawing, negotiating or incurring of the draft, bill
of exchange, acceptance or obligation; and
(5) the term "Issuer" shall mean any obligor upon the
Securities.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose
of this Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of
the Trustee and the Issuer, if made in the manner provided in this Article.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following
manner:
The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments
of deeds or administer oaths that the person executing such
instruments acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution sworn to before any such
notary or other such officer. Where such execution is by or on behalf
of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of
the person executing the same. The fact of the holding by any Holder
69
61
of an Unregistered Security of any series, and the identifying number
of such Security and the date of his holding the same, may be proved
by the production of such Security or by a certificate executed by any
trust company, bank, banker or recognized securities dealer wherever
situated satisfactory to the Trustee, if such certificate shall be
deemed by the Trustee to be satisfactory. Each such certificate shall
be dated and shall state that on the date thereof a Security of such
series bearing a specified identifying number was deposited with or
exhibited to such trust company, bank, banker or recognized securities
dealer by the person named in such certificate. Any such certificate
may be issued in respect of one or more Unregistered Securities of one
or more series specified therein. The holding by the person named in
any such certificate of any Unregistered Securities of any series
specified therein shall be presumed to continue for a period of one
year from the date of such certificate unless at the time of any
determination of such holding (1) another certificate bearing a later
date issued in respect of the same Securities shall be produced, or
(2) the Security of such series specified in such certificate shall be
produced by some other person, or (3) the Security of such series
specified in such certificate shall have ceased to be Outstanding.
Subject to Sections 6.1 and 6.2, the fact and date of the execution of
any such instrument and the amount and numbers of Securities of any
series held by the person so executing such instrument and the amount
and numbers of any Security or Securities for such series may also be
proven in accordance with such reasonable rules and regulations as may
be prescribed by the Trustee for such series or in any other manner
which the Trustee for such series may deem sufficient.
SECTION 7.3 Holders to be Treated as Owners. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the person in
whose name any Security shall be registered upon the Security register for such
series as the absolute owner of such Security (whether or not such Security
shall be overdue and not withstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on account of the
principal of and, subject to the provisions of this Indenture, interest on such
Security and for all other purposes; and neither the Issuer nor the Trustee nor
any agent of the Issuer or the Trustee shall be affected by any notice to the
contrary. The
70
62
Issuer, the Trustee and any agent of the lssuer or the Trustee may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the
absolute owner of such Unregistered Security or Coupon (whether or not such
Unregistered Security or Coupon shall be overdue) for the purpose of receiving
payment thereof or on account thereof and for all other purposes and neither
the Issuer, the Trustee, nor any agent of the Issuer or the Trustee shall be
affected by any notice to the contrary. All such payments so made to any such
person, or upon his order, shall be valid, and, to the extent of the sum or
sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Security or Coupon.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture. Securities which are owned by the
Issuer or any other obligor on the Securities with respect to which such
determination is being made or by any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Issuer or
any other obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction,
consent or waiver only Securities which the Trustee knows are so owned shall be
so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Issuer or any other obligor upon the Securities or
any person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Issuer or any other obligor on the
Securities. In case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly a written statement by two of its officers (which need not
comply with Section 11.5) listing and identifying all Securities, if any, known
by the Issuer to be owned or held by or for the account of any of the
above-described persons; and, subject to Sections 6.1 and 6.2, the Trustee
shall be entitled to accept such Officers' Certificate as conclusive evidence
of the fact therein set
71
63
forth and of the fact that all Securities not listed therein are Outstanding
for the purpose of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial number of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far as
concerns such Security. Except as aforesaid any such action taken by the
Holder of any Security shall be conclusive and binding upon such Holder and
upon all future Holders and owners of such Security and of any Securities
issued in exchange or substitution therefore, irrespective of whether or not
any notation in regard thereto is made upon any such Security. Any action
taken by the Holders of the percentage in aggregate principal amount of the
Securities of any or all series, as the case may be, specified in this
Indenture in connection with such action shall be conclusively binding upon the
Issuer, the Trustee and the Holders of all the Securities affected by such
action.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of its Board of
Directors, 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 of 1939 as in force at the date of the
execution thereof) for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any
property or assets:
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article Nine;
72
64
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as its Board of
Directors and the Trustee shall consider to be for the protection of
the Holders of Securities or Coupons, and to make the occurrence, or
the occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, that in
respect of any such additional covenant, restriction, condition or
provision 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 an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may
limit the right of the Holders of a majority in aggregate principal
amount of the Outstanding Securities of such series to waive such an
Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture; or to make such other provisions in
regard to matters or questions arising under this Indenture or under
any supplemental indenture as the Board of Directors may deem
necessary or desirable and which shall not adversely affect the
interests of the Holders of the Securities;
(e) to provide for the issuance under this Indenture of
Securities in coupon form (including Securities registrable as to
principal only) and to provide for exchangeability of such Securities
with Securities issued hereunder in fully registered form, and to make
all appropriate changes for such purpose; and
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one
or more series, or of the Coupons appertaining to such 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 6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further
73
65
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Article Seven of the Holders not
less than 66 2/3% in aggregate principal amount of the Securities at the time
Outstanding of all series affected by such supplemental indenture (voting as
one class), the Issuer, when authorized by a resolution of its Board of
Directors, 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 of 1939 as in force at the date of
execution thereof) 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 Securities of each such series or the coupons appertaining to such
Securities; provided, that no such supplemental indenture shall (a) extend the
final maturity of any Security, or reduce the principal amount thereof or the
method in which amounts of payments of principal or interest thereon are
determined, or reduce the rate or extend the time of payment of interest
thereon, or change the coin or currency or units based on or related to
currencies (including ECU) of payment thereof, or reduce any amount payable on
redemption thereof or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof pursuant to Section 5.1 or the amount thereof provable in
bankruptcy pursuant to Section 5.2, or impair or affect the right of any
Securityholder to institute suit for the payment thereof or, if the Securities
provide therefore, any right of repayment at the option of the Securityholder
or make any change in Article Thirteen hereof that adversely affects the rights
of any Holder, in each case, without the consent of the Holder of each Security
so affected, or (b) reduce the aforesaid percentage of Securities of any
series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holder of each Security so
affected.
74
66
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors certified by the secretary or an assistant secretary
of the Issuer authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
as aforesaid and other documents, if any, required by Section 7.1, the Trustee
shall join with the Issuer 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.
It shall not be necessary for the consent of the Securityholders under
this section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Issuer
shall mail a notice thereof (i) by first class mail to the Holders of then
Outstanding Registered Securities of each series affected thereby at their
addresses as they shall appear on the registry books of the Issuer, (ii) if any
Unregistered Securities of a series affected thereby are then Outstanding, to
the Holders thereof who have filed their names and addresses with the Trustee
pursuant to Section 4.4(c)(ii), by mailing a notice thereof by first class mail
to such Holders at such addresses as were so furnished to the Trustee and (iii)
if any Unregistered Securities of a series affected thereby are then
Outstanding, to all holders thereof by publication of a notice thereof at least
once in an Authorized Newspaper in London (and, if required by Section 3.6, at
least once in an authorized Newspaper in Luxembourg), and in each case such
notice shall set forth in general terms the substance of such supplemental
indenture. Any failure of the Issuer to mail such notice, or any defect
therein, shall not however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, 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,
75
67
the Issuer and the Holders of Securities of each series affected thereby 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 of any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, may receive an Officers' Certificate
and an Opinion Of Counsel as conclusive evidence that any supplemental
indenture executed pursuant to this Article Eight complies with the applicable
provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken at any such meeting. If the Issuer or the Trustee shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms. The
issuer covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless (i) either the Issuer shall be the continuing corporation, or
the successor corporation or the Person which acquires by sale or conveyance
substantially all the assets of the Issuer (if other than the Issuer) shall be
a corporation organized under the laws of the United States of America or any
State thereof and shall expressly assume the due and punctual payment of the
principal of and interest on all the Securities and Coupons, according to their
tenor, and the due and
76
68
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed or observed by the Issuer by supplemental
indenture satisfactory to the Trustee, executed and delivered to the Trustee by
such corporation, and (ii) the Issuer or such successor corporation, as the
case may be, shall not, immediately after such merger or consolidation, or such
sale or conveyance, be in default in the performance of any such covenant or
condition.
SECTION 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale or conveyance and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the Issuer, with the same effect as if it had been named
herein. Such successor corporation may cause to be signed, and may issue
either in its own name or in the name of the Issuer prior to such succession
any or all of the Securities issuable hereunder, together with any Coupons
appertaining thereto, which theretofore shall not have been signed by the
Issuer and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Issuer and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee authenticate and shall
deliver any Securities, together with any Coupons appertaining thereto, which
previously shall have been signed and delivered by the officers of the Issuer
to the Trustee for authentication, and any Securities, together with any
Coupons appertaining thereto, which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All of the
Securities, together with any Coupons appertaining thereto, so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Securities, together with any Coupons appertaining thereto, theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities and Coupons had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, lease or conveyance
such changes in phraseology and form (but not in substance) may be made in the
Securities and Coupons thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Issuer or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.
77
69
SECTION 9.3 Opinion of Counsel to Trustee. The Trustee, subject to
the provisions of Sections 6.1 and 6.2, may receive an Opinion of Counsel,
prepared in accordance with Section 11.5, as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance and any such assumption, and
any such liquidation or dissolution, complies with the applicable provisions of
this Indenture.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE:
UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Securities of any series Outstanding hereunder and all
unmatured Coupons appertaining thereto (other than Securities or Coupons which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.9) as and when the same shall have become due and
payable, or (b) the Issuer shall have delivered to the Trustee for cancellation
all Securities of any series theretofore authenticated and all unmatured
Coupons appertaining thereto (other than any Securities or Coupons of such
series which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.9) or (c) (i) all the Securities
of such series not theretofore 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 (ii) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any paying agent to the Issuer in
accordance with Section 10.4) or U.S. Government Obligations, maturing as to
principal and interest in such amounts and at such times as will insure the
availability of cash (without consideration of any reinvestment of such
principal or interest), or a combination of U.S. Government Obligations and
cash sufficient to pay at maturity or upon redemption all Securities of such
series and all unmatured Coupons appertaining thereto (other than any
Securities or Coupons of such series which shall have been destroyed, lost or
stolen and which shall have been
78
70
replaced or paid as provided in Section 2.9) not theretofore delivered to the
Trustee for cancellation, including principal and interest due or to become due
to such date of maturity as the case may be, and if, in any such case, the
Issuer shall also pay or cause to be paid all other sums payable hereunder by
the Issuer with respect to Securities of such series and Coupons appertaining
thereto, then this Indenture shall cease to be of further effect with respect
to Securities of such series and Coupons appertaining thereto (except as to (i)
rights of registration of transfer and exchange, and the Issuer's right of
optional redemption, (ii) substitution of mutilated, defaced, destroyed, lost
or stolen Securities or Coupons, (iii) rights of holders of Securities and
Coupons appertaining thereto to receive payments of principal thereof and
interest thereon upon the original stated due dates therefore (but not upon
acceleration) and remaining rights of the holders to receive mandatory sinking
fund payments, if any, (iv) the rights, obligations, duties and immunities of
the Trustee hereunder, including those under Section 6.6. (v) the rights of the
Securityholders of such series as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them, and (vi)
the obligations of the Issuer under Section 3.2) and the Trustee, on demand of
the Issuer accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture with respect
to such series; provided, that the rights of Holders of the Securities and
Coupons to receive amounts in respect of principal of and interest on the
Securities and Coupons held by them shall not be delayed longer than required
by then-applicable mandatory rules or policies of any securities exchange upon
which the Securities are listed. The Issuer agrees to reimburse the Trustee
for any costs or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Securities and
Coupons of such series.
(B) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of a series and Coupons appertaining thereto
on the 121st day after the date of the
79
71
deposit referred to in subparagraph (a) below, and the provisions of this
Indenture with respect to the Securities of such series and Coupons
appertaining thereto shall no longer be in effect (except as to (i) rights of
registration of transfer and exchange of Securities of such series, and of
Coupons appertaining thereto, (ii) substitution of apparently mutilated,
defaced, destroyed, lost or stolen Securities or Coupons, (iii) rights of
holders of Securities and Coupons appertaining thereto to receive, from the
trust fund described in subparagraph (a) below, payments of principal thereof
and interest thereon, upon the original stated due dates therefore (but not
upon acceleration) and remaining rights of the holders to receive sinking fund
payments if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, including those under section 6.6, (v) the rights of the
holders of Securities of such series and Coupons appertaining thereto as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them and (vi) the obligations of the Issuer under
Section 3.2) and the Trustee, at the expense of the Issuer, shall at the
Issuer's request execute proper instruments acknowledging the same, if
(a) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the holders of the Securities
of such series and Coupons appertaining thereto (i) cash, or (ii) U.S.
Government Obligations, maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash or
(iii) a combination thereof, in an amount sufficient, in the opinion
of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay (A) the Principal and interest on all Securities of such series
and Coupons appertaining thereto on the date that such principal or
interest is due and payable and (B) any mandatory sinking fund
payments on the day on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such
series;
(b) such deposit will not result in a breach or violation of,
or constitute a default under, any agreement or instrument to which
the Issuer is a party or by which it is bound;
(c) the Issuer has delivered to the Trustee an opinion of
independent legal counsel satisfactory to the Trustee to the effect
80
72
that Holders of the Securities of such series and Coupons appertaining
thereto will not recognize income, gain or loss for Federal income
tax purposes as a result of such deposit, defeasance and discharge
and will be subject to Federal income tax on the same amount and in
the same manner and at the same times, as would have been the case if
such deposit, defeasance and discharge had not occurred; and
(d) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with, and the
Opinion of Counsel shall also state that such deposit does not
violate applicable law.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 10.4, all moneys deposited with the Trustee
pursuant to Section 10.1 shall be held in trust and applied by it to the
payment, either directly or through any paying agent (including the Issuer
acting as its own paying agent), to the Holders of the particular Securities of
such series and of Coupons appertaining thereto for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such money need not be
segregated from other funds except to the extent required by law. Money or
U.S. Government Obligations so held in trust are not subject to the provisions
of Article 13.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to
Securities of any series, all moneys then held by any paying agent under the
provisions of this Indenture with respect to such series of Securities shall,
upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon
such paying agent shall be released from all further liability with respect to
such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of or interest on any
Security of any series and not applied but remaining unclaimed for two years
after the date upon which such principal or interest shall have become due and
payable, shall, upon the written request of the Issuer and unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee for such series
or such paying agent, and the Holder of the Security of such series shall,
unless
81
73
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property laws, thereafter look only to the Issuer for any payment
which such Holder may be entitled to collect, and all liability of the Trustee
or any paying agent with respect to such moneys shall thereupon cease; provided
the Trustee or such paying agent, before being required to make any such
repayment with respect to moneys deposited with it for any payment (a) in
respect of Registered Securities of any series, may at the expense of the
Issuer, mail by first class mail to Holders of such Securities at their
addresses as they shall appear on the Security register, and (b) in respect of
Unregistered Securities of any series, may at the expense of the Issuer cause
to be published once, in an Authorized Newspaper in London (and if required by
Section 3.8, once in an Authorized Newspaper in Luxembourg), notice, that such
moneys remain and that, after a date specified therein, which shall not be less
than thirty days from the date of such mailing or publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer.
SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect of
such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Shareholders, Officers and Directors of
Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security or Coupon appertaining thereto, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, as such or against
any past, present or future shareholder, officer or director, as such, of the
Issuer or of any successor, either directly or through the Issuer or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities and any Coupons appertaining thereto by the
holders thereof and as part of the consideration for the issue of the
Securities and any Coupons appertaining thereto.
82
74
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholders. Nothing in this Indenture or in the Securities and any
Coupons appertaining thereto, expressed or implied, shall give or be construed
to give to any person, firm or corporation, other than the parties hereto and
their successors and the Holders of the Securities or Coupons, any legal or
equitable right, remedy or claim under this Indenture or under any covenant or
provision herein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and their successors and of the Holders of
the Securities.
SECTION 11.3 Successors and Assigns of lssuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders
of Securities or Coupons to or on the Issuer may be given or served by being
deposited postage prepaid, first-class mail (except as otherwise specifically
provided herein) addressed (until another address of the Issuer is filed by the
Issuer with the Trustee) to The Progressive Corporation, 6000 Parkland
Boulevard, Mayfield Heights, Ohio 44124, Attn: Treasurer. Any notice,
direction, request or demand by the Issuer or any Securityholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders, such notice shall
be sufficiently given (unless otherwise herein expressly provided) (i) in the
case of Holders of Registered Securities and Holders of Unregistered Securities
who have filed their names and addresses with the Trustee pursuant to Section
4.4(c)(ii), if in writing and mailed, first-class postage prepaid, to each
holder entitled thereto, at his last address as it appears in the registry
books; and (ii) in the case of holders of Unregistered Securities who have not
filed their names and addresses with the Trustee, by publication in accordance
with the requirements of the provision hereof requiring such notice. Any
notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given when mailed, whether or not the Holder
receives the notice. In any case
83
75
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular holder shall
affect the sufficiency of such notice with respect to other Holders. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent 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 in the case of any such application or demand
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or demand,
no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that the
person making such certificate or opinion has read such covenant or condition,
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with and (d) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
84
76
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of counsel may be based,
insofar as it relates to factual matters, information with respect to which is
in the possession of the Issuer, upon the certificate, statement or opinion of
or representations by an officer or officers of the Issuer, unless such counsel
knows that the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of interest on or principal of the Securities of any series or
any Coupons appertaining thereto or the date fixed for redemption or repayment
of any such Security or Coupon shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on the
date of maturity or the date fixed for redemption, and no interest shall accrue
for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
85
77
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, of the Trust Indenture Act of 1939, such required provision
shall control.
SECTION 11.8 New York Law to Govern. This Indenture and each
Security and Coupon shall be deemed to be a contract under the laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of such State, except as may otherwise be required by mandatory
provisions of law.
SECTION 11.9 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 11.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 11.11 Securities in Foreign Currencies or in ECU. Whenever
this Indenture provides for any action by, or the determination of any of the
rights of, or any distribution to, Holders of Securities denominated in United
States dollars and in any other currency or currency unit (including ECU), in
the absence of any provision to the contrary in the form of Security of any
particular series, any amount in respect of any Security denominated in a
currency or currency unit (including ECU) other than United States dollars
shall be treated for any such action or distribution as that amount of United
States dollars that could be obtained for such amount on such reasonable basis
of exchange and as of such date as the Issuer may specify in a written notice
to the Trustee or in the absence of such written notice, as the Trustee shall
so determine.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section
2.3 for Securities of such series.
86
78
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30
days and not more than 60 days prior to the date fixed for redemption to such
Holders of Securities of such series at their last addresses as they shall
appear upon the registry books. Notice of redemption to the Holders of
Unregistered Securities to be redeemed as a whole or in part, who have filed
their names and addresses with the Trustee pursuant to Section 4.4(c)(ii),
shall be given by mailing notice of such redemption, by first class mail,
postage prepaid, at least thirty and not more than sixty days prior to the date
fixed for redemption, to such Holders at such addresses as were so furnished to
the Trustee (and in the case of any such notice given by the Issuer, the
Trustee shall make such information available to the Issuer for such purpose).
Notice of redemption to all other holders of Unregistered Securities shall be
published in an Authorized Newspaper in London (and, if required by Section
3.6, in an Authorized Newspaper in Luxembourg), in each case, once in each of
two successive calendar weeks, the first publication to be not less than thirty
nor more than sixty days prior to the date fixed for redemption. Any notice
which is mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the Holder receives the notice. Failure
to give notice by mail, or any defect in the notice to the Holder of any
Security of a series designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Security
of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of payment, that payment will be made upon presentation and surrender of
such Securities, and, in the case of Securities with Coupons attached thereto,
of all Coupons appertaining thereto maturing after the date fixed for
redemption, that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest accrued to the date
fixed for redemption will be paid as specified in such notice and that on and
after said date interest thereon or on the portions thereof to be redeemed will
cease to accrue. In case any Security of a series is 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
87
79
such Security, a new Security or Securities of such series in principal amount
equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On the redemption date specified in the notice of redemption given as
provided in this Section, the Issuer will deposit with the Trustee or with one
or more paying agents (or, if the Issuer is acting as its own paying agent, set
aside, segregate and hold in trust as provided in Section 3.4) an amount of
money sufficient to redeem on the redemption date all the Securities of such
series so called for redemption at the appropriate redemption price, together
with accrued interest to the date fixed for redemption. If any or all of the
outstanding Securities of a series are to be redeemed, the Issuer will deliver
to the Trustee at least 70 days prior to the date fixed for redemption an
Officers' Certificate stating the date of redemption and the aggregate
principal amount of Securities to be redeemed.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such series to be redeemed in whole or in part. Securities may
be redeemed in part in multiples equal to the minimum authorized denomination
for Securities of such series or any integral multiple thereof. The Trustee
shall promptly notify the Issuer in writing of the Securities of such series
selected for redemption and, in the case of any Securities of such series
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities of any series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date
and at the place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption, and on and
after said date (unless the Issuer shall default in the payment of such
Securities at the redemption price, together with interest accrued to said
date) interest on the Securities or portions of Securities so called for
redemption shall cease to accrue and the
88
80
unmatured Coupons, if any, appertaining thereto shall be void and, except as
provided in Sections 6.5 and 10.4, such Securities shall cease from and after
the date fixed for redemption to be entitled to any benefit or security under
this Indenture, and the Holders thereof shall have no right in respect of such
Securities except the right to receive the redemption price thereof and unpaid
interest to the date fixed for redemption. On presentation and surrender of
such Securities, together with all Coupons appertaining thereto maturing after
the date fixed for redemption, at a place of payment specified in said notice,
said Securities and Coupons or the specified portions thereof shall be paid and
redeemed by the Issuer at the applicable redemption price, together with
interest accrued thereon to the date fixed for redemption; provided that any
semiannual payment of interest becoming due on the date fixed for redemption
shall be payable in the case of Securities with Coupons attached thereto, to
the bearers of the Coupons for such interest upon surrender thereof, and in the
case of Registered Securities, to the Holders of such Securities registered as
such on the relevant record date subject to the terms and provisions of Section
2.4 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by the Security.
If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all such Coupons maturing after the date
fixed for redemption, the surrender of such missing Coupon or Coupons may be
waived by the Issuer and the Trustee, if there be furnished to each of them
such security or indemnity as they may require to save each of them harmless.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, together with all Coupons, if any, appertaining
thereto, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registra-
89
81
tion and certificate number in a written statement signed by an authorized
officer of the Issuer and delivered to the Trustee at least 40 days prior to
the last date on which notice of redemption may be given as being owned of
record and beneficially by, and not pledged or hypothecated by either (a) the
Issuer or (b) an entity specifically identified in such written statement
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of Securities of
any series is herein referred to as a "mandatory sinking fund payment", and any
payment in excess of such minimum amount provided for by the terms of
Securities of any series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.7, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or
(c) receive credit for Securities of such series (not previously so credited)
redeemed by the Issuer through any optional redemption provision contained in
the terms of such series. Securities so delivered or credited shall be
received or credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the sixtieth day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee a written statement
(which need not contain the statements required by Section 11.5) signed by an
authorized officer of the Issuer (a) specifying the portion of the mandatory
sinking fund payment to be satisfied by payment of cash and the portion to be
satisfied by credit of Securities of such series, (b) stating that none of the
Securities of such series has theretofore been so credited, (c) stating that no
defaults in the payment of interest or Events of Default with respect to such
series have occurred
90
82
(which have not been waived or cured) and are continuing and (d) stating
whether or not the Issuer intends to exercise its right to make an optional
sinking fund payment with respect to such series and, if so, specifying the
amount of such optional sinking fund payment which the Issuer intends to pay on
or before the next succeeding sinking fund payment date. Any Securities of
such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefore as aforesaid which have not
theretofore been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such written statement (or
reasonably promptly thereafter if acceptable to the Trustee). Such written
statement shall be irrevocable and upon its receipt by the Trustee the Issuer
shall become unconditionally obligated to make all the cash payments or
payments therein referred to, if any, on or before the next succeeding sinking
fund payment date. Failure of the Issuer, on or before any such sixtieth day,
to deliver such written statement and Securities specified in this paragraph,
if any, shall not constitute a default but shall constitute, on and as of such
date, the irrevocable election of the Issuer (i) that the mandatory sinking
fund payment for such series due on the next succeeding sinking fund payment
date shall be paid entirely in cash without the option to deliver or credit
Securities of such series in respect thereof and (ii) that the Issuer will make
no optional sinking fund payment with respect to such series as provided in
this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 (or a lesser sum if the Issuer shall so request) with respect to
the Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the sinking fund redemption price together with accrued interest to
the date fixed for redemption. If such amount shall be $50,000 or less and the
Issuer makes no such request, then it shall be carried over until a sum in
excess of $50,000 is available. The Trustee shall select, in the manner
provided in Section 12.2, for redemption on such sinking fund payment date a
sufficient principal amount of Securities of such series to absorb said cash,
as nearly as may be, and shall (if requested in writing by the Issuer) inform
the Issuer of the serial numbers of the Securities of such series (or potions
thereof) so selected. Securities of any series which are (a) owned by the
Issuer
91
83
or an entity known by the Trustee to be directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer, as
shown by the Security register, and not know to the Trustee to have been
pledged or hypothecated by the Issuer or any such entity or (b) identified in
an Officers' Certificate at least 60 days prior to the sinking fund payment
date as being beneficially owned by, and not pledged or hypothecated by, the
Issuer or an entity directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer shall be excluded from
Securities of such series eligible for selection for redemption. The Trustee,
in the name and at the expense of the Issuer (or the Issuer, if it shall so
request the Trustee in writing) shall cause notice of redemption of the
Securities of such series to be given in substantially the manner provided in
Section 12.2 (and with the effect provided in Section 12.3) for the redemption
of Securities of such series in part at the option of the Issuer. The amount
of any sinking fund payments not so applied or allocated to the redemption of
Securities of such series shall be added to the next cash sinking fund payment
for such series and, together with such payment, shall be applied in accordance
with the provisions of this Section. Any and all sinking fund moneys held on
the stated maturity date of the Securities of any particular series (or
earlier, if such maturity is accelerated), which are not held for the payment
or redemption of particular Securities of such series shall be applied,
together with other moneys, if necessary, sufficient for the purpose, to the
payment of the principal of, and interest on, the Securities of such series at
maturity.
On each sinking fund payment date, the Issuer shall pay to the Trustee
in cash or shall otherwise provide for the payment of all interest accrued to
the date fixed for redemption on Securities to be redeemed on the next
following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or provide any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default except that, where the mailing or publication of notice of
redemption of any Securities shall theretofore have been made, the Trustee
shall redeem or cause to be redeemed such Securities, provided that it shall
have received from the Issuer a sum sufficient for such redemption. Except as
aforesaid, any moneys in the sinking fund for such series at the time when any
such default or Event of Default
92
84
shall occur, and any moneys thereafter paid into the sinking fund, shall,
during the continuance of such default or Event of Default, be deemed to have
been collected under Article Five and held for the payment of all such
Securities. In case such Event of Default shall have been waived as provided
in Section 5.10 or the default cured on or before the sixtieth day preceding
the sinking fund payment date in any year, such moneys shall thereafter be
applied on the next succeeding sinking fund payment date in accordance with
this Section to the redemption of such Securities.
ARTICLE THIRTEEN
SUBORDINATION; SENIORITY
SECTION 13.1 Securities Subordinated to Senior Indebtedness. The
Issuer agrees, and each Holder of the Securities by his acceptance thereof
likewise agrees, that the payment of the principal of and interest on
Securities of any series issued under this Indenture shall be subordinated and
junior in right of payment, to the extent and in the manner provided in this
Article 13 to the prior payment in full of all Senior Indebtedness whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed.
The Senior Indebtedness of the Issuer shall continue to be Senior
Indebtedness and entitled to the benefits of these subordination provisions
irrespective of any amendment, modification or waiver of any term of any
instrument relating to the Senior Indebtedness or the extension or renewal of
the Senior Indebtedness.
All the provisions of this Indenture and the Securities shall be
subject to the provisions of this Article 13 so far as they may be applicable
thereto, except that nothing in this Article 13 shall apply to claims for, or
payments to, the Trustee under or pursuant to Section 6.6.
SECTION 13.2 Issuer Not to Make Payments with Respect to Securities
in Certain Circumstances. No payment shall be made by the Issuer on account of
principal of or interest on Securities of any series or on account of the
purchase or other acquisition of Securities of any series, if there shall have
occurred and be continuing a default with respect to any Senior Indebtedness
permitting the acceleration thereof or with respect to the payment of any
Senior Indebtedness and (a) such default is the subject of a judicial
proceeding or (b) notice of such default
93
85
in writing or by telegram has been given to the Issuer by any holder or holders
of any Senior Indebtedness (provided, however, that in the case of Senior
Indebtedness issued pursuant to an indenture such notice may be validly given
only by the trustee under such indenture), unless and until such default or
event of default shall have been cured or waived or shall have ceased to exist.
Upon any acceleration of the principal of Securities of any series or
any payment by the Issuer, or distribution of assets of the Issuer of any kind
or character, whether in cash, property or securities, to creditors upon any
dissolution or winding up or liquidation or reorganization of the Issuer,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full in money or money's worth, or payment
thereof provided for, before any payment is made on account of the principal of
or interest on Securities of any series; and (subject to the power of a court
of competent jurisdiction to make other equitable provision, which shall have
been determined by such court to give effect to the rights conferred in this
Article upon the Senior Indebtedness and the holders thereof with respect to
Securities of any series or the Holders thereof or the Trustee, by a lawful
plan of reorganization or readjustment under applicable law) upon any such
dissolution or winding up or liquidation or reorganization, any payment by the
Issuer, or distribution of assets of the Issuer of any kind or character,
whether in cash, property or securities, to which the Holders of the Securities
of any series or the Trustee would be entitled except for the provisions of
this Article, shall be paid by the Issuer or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution directly to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all 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 Senior Indebtedness, before any payment or distribution is made to
the Holders of the Securities of any series or to the Trustee.
In the event that, notwithstanding the foregoing, any payment by or
distribution of assets of the Issuer of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be
94
86
received by the Trustee or the Holders of the Securities of any series before
all Senior Indebtedness is paid in full in money or money's worth, or provision
is made for such payment, and if such fact shall then have been or thereafter
be made known to the Trustee or, as the case may be, such Holder, then and in
such event such payment or distribution shall be paid over or delivered to the
holders of Senior Indebtedness or their representative or representatives, or
to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all 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, and, until so delivered, the same shall be held in trust by any
Holder of a Security as the property of the holders of Senior Indebtedness.
The consolidation of the Issuer with, or the merger of the Issuer
into, another corporation or the liquidation or dissolution of the Issuer
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Nine shall not be deemed a dissolution, winding
up, liquidation or reorganization for the purposes of this Section if such
other corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Nine. Nothing in this
Section shall apply to claims of, or payments to, the Trustee under or pursuant
to Section 6.6.
The holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Holders of the Securities of any
series, without incurring responsibility to the Holders of the Securities of
any series and without impairing or releasing the obligations of the Holders of
the Securities of any series to the holders of Senior Indebtedness: (i) change
the manner, place or terms of payment or change or extend the time of payment
of, or renew or alter, Senior Indebtedness, or otherwise amend in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of Senior Indebtedness; and (iv) exercise or refrain from exercising
any rights against the Issuer and any other Person.
95
87
SECTION 13.3 Subrogation of Securities. Subject to the payment in
full of all amounts then due (whether by acceleration of the maturity thereof
or otherwise) on account of the principal and interest on all Senior
Indebtedness at the time outstanding, the Holders of the Securities shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Issuer
applicable to the Senior Indebtedness until the principal and interest on the
Securities shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities of any series or
the Trustee would be entitled except for the provisions of this Article shall,
as between the Issuer, its creditors other than holders of Senior Indebtedness,
and the Holders of the Securities of any series, be deemed to be a payment by
the Issuer to or on account of the Senior Indebtedness. It is understood that
the provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Senior Indebtedness, on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities of any series is intended to or shall impair, as among the
Issuer, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Securities, the obligation of the Issuer, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
interest on the 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 Securities of any series and creditors of the
Issuer other than the holders of Senior Indebtedness, nor shall anything herein
or therein prevent the Trustee or the Holder of any Security from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness in respect of cash, property or securities of the Issuer
received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Issuer referred to
in this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such
96
88
dissolution, winding up, liquidation or reorganization proceedings are pending,
or certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Issuer, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article.
SECTION 13.4 Authorization by Holders of Securities. Each Holder of
a Security of any series by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate, as between the Holder of the Security and the holders of Senior
Indebtedness, the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes.
SECTION 13.5 Notices to Trustee. The Issuer shall give prompt
written notice to the Trustee of any fact known to the Issuer which would
prohibit the making of any payment of moneys to or by the Trustee in respect of
the Securities of any series pursuant to the provisions of this Article.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of moneys to or by the
Trustee in respect of the Securities of any series pursuant to the provisions
of this Article, unless and until the Trustee shall have received at its
Corporate Trust Office written notice thereof from the Issuer or a holder or
holders of Senior Indebtedness or from any trustee therefore; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 6.1, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received at least
three Business Days prior to the date upon which by the terms hereof any such
moneys may become payable for any purpose (including, without limitation, the
payment of the principal or interest on any Security of any series) with
respect to such moneys the notice provided for in this Section, then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such moneys and to apply the same to the purpose
for which they were received and shall
97
89
not be affected by any notice to the contrary which may be received by it
within three Business Days prior to such date.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a trustee on behalf
of any such holder. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
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, 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 13.6 Trustee's Relation to Senior Indebtedness. The Trustee
in its individual capacity shall be entitled to all the rights set forth in
this Article 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
Section 6.13 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe any such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not owe any
fiduciary duty to the holders of Senior Indebtedness but shall have only such
obligations to such holders as are expressly set forth in this Article.
SECTION 13.7 No Impairment of Subordination. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Issuer or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Issuer with the
terms, provisions and
98
90
covenants of this Indenture, regardless of any knowledge thereof which any such
holder may have or otherwise be charged with.
SECTION 13.8 Article 13 Not To Prevent Events of Default. The
failure to make a payment on account of principal or interest on the Securities
by reason of any provision in this Article 13 shall not be construed as
preventing the occurrence of an Event of Default under Section 5.1.
SECTION 13.9 Paying Agents other than the Trustee. In case at any
time any Paying Agent other than the Trustee shall have been appointed by the
Issuer and be then acting hereunder, the term "Trustee" as used in this Article
13 shall in such case (unless the context shall otherwise require) be construed
as extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were named in this Article 13
in addition to or in place of the Trustee; provided, however, that Sections
13.5 and 13.6 hereof shall not apply to the Issuer or any Subsidiary if it acts
as Paying Agent.
SECTION 13.10 Securities Senior to Subordinated Indebtedness. The
indebtedness represented by the Securities will be senior and prior in right of
payment to the principal and interest on all Subordinated Indebtedness, to the
extent and in the manner provided in such Subordinated Indebtedness.
99
91
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of November 15, 1988.
THE PROGRESSIVE CORPORATION
[CORPORATE SEAL]
By
-----------------------------------------
Treasurer
Attest:
By
--------------------------------------
RHODE ISLAND HOSPITAL TRUST
NATIONAL BANK
[CORPORATE SEAL]
By
-----------------------------------------
Attest:
By
--------------------------------------
100
92
STATE OF NEW YORK
COUNTY OF NEW YORK ss.:
On this ____ day of ______ before me personally came Howard M. Zelikow,
to me personally known, who, being by me duly sworn, did depose and say that he
resides at Cleveland, Ohio
; that he is an officer of THE PROGRESSIVE
CORPORATION, one of the corporations described in and which executed the above
instrument; that he knows the corporate seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
-----------------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK
COUNTY OF NEW YORK ss.:
On this day of , before me personally came , to me personally
known, who, being by me duly sworn, did depose and say that he resides at
New York, New York; that he is an of RHODE ISLAND HOSPITAL TRUST
NATIONAL BANK, one of the corporations described in and which executed the above
instrument; that he knows the corporate seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
-----------------------------------------
Notary Public
[NOTARIAL SEAL]