EXHIBIT 4.1
[FORM OF INDENTURE]
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COASTAL BANCORP, INC.
DEBT SECURITIES
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INDENTURE
DATED AS OF [ ], 1999
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THE BANK OF NEW YORK, AS TRUSTEE
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PARTIAL CROSS-REFERENCE TABLE
INDENTURE SECTION TIA SECTION
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2.05 ................................................. 317(b)
2.06 ................................................. 312(a), 313(c)
2.11 ................................................. 316(a) (last sentence)
4.04 ................................................. 314(a)(4)
4.05 ................................................. 314(a)(1)
6.03 ................................................. 317(a)(1)
6.04 ................................................. 316(a)(1)(B)
6.05 ................................................. 316(a)(1)(A)
6.07 ................................................. 317(a)(1)
7.01 ................................................. 315(a), 315(d)
7.04 ................................................. 315(b)
7.05 ................................................. 313(a), 313(d)
7.07 ................................................. 310(a), 310(b)
7.09 ................................................. 310(a)(2)
8.02 ................................................. 310(a), 310(b)
10.04 ................................................. 316(c)
11.01 ................................................. 318(a)
11.02 ................................................. 313(c)
11.03 ................................................. 314(c)(1),
314(c)(2)
11.04 ................................................. 314(e)
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TABLE OF CONTENTS
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ARTICLE 1--DEFINITIONS
SECTION 1.01. Definitions.................................................... 1
SECTION 1.02. Other Definitions.............................................. 4
SECTION 1.03. Rules of Construction.......................................... 4
ARTICLE 2--THE SECURITIES
SECTION 2.01. Issuable in Series............................................. 5
SECTION 2.02. Execution and Authentication................................... 7
SECTION 2.03. Registrar and Transfer, Paying and Conversion Agents and
Other Agents.............................................. 8
SECTION 2.04. Bearer Securities.............................................. 9
SECTION 2.05. Paying Agent to Hold Money in Trust ........................... 9
SECTION 2.06. Securityholder Lists........................................... 10
SECTION 2.07. Transfer and Exchange.......................................... 10
SECTION 2.08. Replacement Securities......................................... 11
SECTION 2.09. Outstanding Securities......................................... 11
SECTION 2.10. Discounted Debt Securities..................................... 12
SECTION 2.11. Treasury Securities............................................ 12
SECTION 2.12. Global Securities.............................................. 12
SECTION 2.13. Temporary Securities........................................... 12
SECTION 2.14. Cancellation................................................... 13
SECTION 2.15. Defaulted Interest............................................. 13
SECTION 2.16 CUSIP Numbers.................................................. 13
ARTICLE 3--REDEMPTION
SECTION 3.01. Notices to Trustee............................................. 13
SECTION 3.02. Selection of Securities to Be Redeemed......................... 14
SECTION 3.03. Notice of Redemption........................................... 14
SECTION 3.04. Effect of Notice of Redemption................................. 15
SECTION 3.05. Payment of Redemption Price.................................... 15
SECTION 3.06. Securities Redeemed in Part.................................... 16
ARTICLE 4--COVENANTS
SECTION 4.01. Payment of Securities.......................................... 16
SECTION 4.02. Overdue Interest............................................... 16
SECTION 4.03. No Lien Created, etc........................................... 16
SECTION 4.04. Compliance Certificate......................................... 16
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TABLE OF CONTENTS
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SECTION 4.05. SEC Reports.................................................... 17
SECTION 4.06. Costs and Expenses of COASTAL Trusts........................... 17
SECTION 4.07 Statement by Officers as to Default............................ 17
ARTICLE 5--SUCCESSORS
SECTION 5.01. When Company May Merge, etc.................................... 18
ARTICLE 6--DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.............................................. 18
SECTION 6.02. Acceleration................................................... 20
SECTION 6.03. Other Remedies................................................. 20
SECTION 6.04. Waiver of Past Defaults........................................ 21
SECTION 6.05. Control by Majority............................................ 21
SECTION 6.06. Limitation on Suits............................................ 21
SECTION 6.07. Collection Suit by Trustee..................................... 22
SECTION 6.08. Priorities..................................................... 22
ARTICLE 7--TRUSTEE
SECTION 7.01. Rights of Trustee.............................................. 22
SECTION 7.02. Individual Rights of Trustee................................... 24
SECTION 7.03. Trustee's Disclaimer........................................... 24
SECTION 7.04. Notice of Defaults............................................. 24
SECTION 7.05. Reports by Trustee to Holders.................................. 24
SECTION 7.06. Compensation and Indemnity..................................... 24
SECTION 7.07. Replacement of Trustee......................................... 25
SECTION 7.08. Successor Trustee by Merger, etc............................... 26
SECTION 7.09. Trustee's Capital and Surplus.................................. 26
ARTICLE 8--DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance..................................................... 26
SECTION 8.02. Conditions to Defeasance....................................... 27
SECTION 8.03. Application of Trust Money..................................... 28
SECTION 8.04. Repayment to Company........................................... 28
SECTION 8.05 Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions.............. 28
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ARTICLE 9--CONVERSION
SECTION 9.01. Conversion Privilege............................................ 29
SECTION 9.02. Conversion Procedure............................................ 29
SECTION 9.03. Taxes on Conversion............................................. 30
SECTION 9.04. Company Determination Final..................................... 30
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer..................... 30
SECTION 9.06. Company to Provide Conversion Securities........................ 31
SECTION 9.07. Cash Settlement Option.......................................... 31
SECTION 9.08. Adjustment in Conversion Rate for Change in Capital Stock....... 32
SECTION 9.09. Adjustment in Conversion Rate for Common Stock Issued
Below Market Price.......................................... 33
SECTION 9.10. Adjustment for Other Distributions.............................. 35
SECTION 9.11. Voluntary Adjustment............................................ 36
SECTION 9.12. When Adjustment May Be Deferred................................. 36
SECTION 9.13. When No Adjustment Required..................................... 36
SECTION 9.14. Notice of Adjustment............................................ 37
SECTION 9.15. Notice of Certain Transactions.................................. 37
SECTION 9.16. Reorganization of the Company................................... 37
ARTICLE 10--AMENDMENTS
SECTION 10.01. Without Consent of Holders...................................... 38
SECTION 10.02. With Consent of Holders......................................... 38
SECTION 10.03. Compliance with Trust Indenture Act............................. 39
SECTION 10.04. Effect of Consents.............................................. 39
SECTION 10.05. Notation on or Exchange of Securities........................... 40
SECTION 10.06. Trustee Protected............................................... 40
ARTICLE 11--MISCELLANEOUS
SECTION 11.01. Trust Indenture Act............................................. 40
SECTION 11.02. Notices......................................................... 40
SECTION 11.03. Certificate and Opinion as to Conditions
Precedent....................................................... 42
SECTION 11.04. Statements Required in Certificate or
Opinion.................................................... 42
SECTION 11.05. Rules by Company and Agents..................................... 42
SECTION 11.06. Legal Holidays.................................................. 42
SECTION 11.07. No Recourse Against Others...................................... 43
SECTION 11.08. Duplicate Originals............................................. 43
SECTION 11.09. Governing Law................................................... 43
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SIGNATURES......................................................................... S-1
EXHIBIT A: A Form of Registered Security................................... A-1
EXHIBIT B: A Form of Bearer Security....................................... B-1
Notes to Exhibits A and B
EXHIBIT C: Assignment Form................................................. C-1
EXHIBIT D: Conversion Notice............................................... D-1
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INDENTURE dated as of [ ], 1999 between COASTAL BANCORP INC., a Texas
corporation (hereinafter called the "COMPANY"), and THE BANK OF NEW YORK (the
"TRUSTEE").
Each party agrees as follows for the benefit of the Holders (as defined
below) of the Company's debt securities issued under this Indenture:
ARTICLE 1--DEFINITIONS
SECTION 1.01. Definitions.
"AFFILIATE" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
"AGENT" means any Registrar, Transfer Agent, Paying Agent, Conversion
Agent or other Agent appointed by the Company.
"AUTHORIZED NEWSPAPER" means a newspaper that is:
(1) printed in the English language or in an official language of
the country of publication;
(2) customarily published on each business day in the place of
publication; and
(3) of general circulation in the relevant place or in the financial
community of such place.
Whenever successive publications in an Authorized Newspaper are
required, they may be made on the same or different business days and in the
same or different Authorized Newspapers.
"BEARER SECURITY" means a Security payable to bearer.
"BOARD" means the Board of Directors of the Company or an authorized
committee of the Board.
"BUSINESS DAY" means any day other than a legal holiday.
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of any person and all
warrants or options to acquire such capital stock.
"COASTAL TRUST" means a statutory business trust created under Delaware
law pursuant to a trust agreement executed by the Company, as depositor of such
COASTAL Trust, and the trustees of such COASTAL Trust named therein and pursuant
to a certificate of trust filed with the Delaware Secretary of State, which
COASTAL Trust exists for the purposes of (i) issuing and selling
its trust securities, (ii) using the proceeds from the sale of such trust
securities to acquire a series of Securities issued by the Company under this
Indenture and (iii) engaging in only those other activities necessary,
convenient or incidental thereto.
"COMMON STOCK" means the Common Stock, par value $0.00667 per share, of
the Company.
"COMPANY" means the party named as such above until a successor
replaces it and thereafter means the successor.
"CONVERSION RATE" means such number or amount of shares of Common Stock
or other equity or debt securities for which $1,000 aggregate principal amount
of Securities of any series is convertible, initially as stated in the
Securities Resolution authorizing the series and as adjusted pursuant to the
terms of this Indenture and the Securities Resolution.
"COUPON" means an interest coupon for a Bearer Security.
"DEFAULT" means any event which is, or after notice or passage of time,
or both, would be, an Event of Default (as defined below).
"DISCOUNTED DEBT SECURITY" means a Security where the amount of
principal due upon acceleration is less than the stated principal amount.
"HOLDER" or "SECURITYHOLDER" means the person in whose name a
Registered Security is registered and the bearer of a Bearer Security or coupon.
"INDENTURE" means this Indenture and any Securities Resolution as
amended from time to time.
"LIEN" means any mortgage, pledge, security interest or other lien.
"OFFICER" means the Chairman, any Vice-Chairman, the President, the
Chief Financial Officer, any Executive or Senior Vice President, any
Vice-President, the Treasurer or any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
the Company, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee, and delivered to the Trustee. Unless otherwise
provided herein, the counsel may be an employee of or counsel to the Company.
"PRINCIPAL" of a debt security means the principal of the security plus
the premium, if and when applicable, on the security.
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"REGISTERED SECURITY" means a Security registered as to principal and
interest by the Registrar.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the debt securities issued under this Indenture.
"SECURITIES RESOLUTION" means a resolution adopted by the Board or by a
committee of Officers or an Officer pursuant to Board delegation authorizing a
series or a supplemental indenture authorizing a series executed by an
authorized Officer.
"SERIES" means a series of Securities or the Securities of the series.
"SUBSIDIARY" means a corporation a majority of whose Voting Stock is
owned by the Company or a Subsidiary.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code 77aaa-
77bbbb), as amended.
"TRADING DAY" means each day on which the securities exchange or
quotation system which is used to determine the Market Price is open for trading
or quotation.
"TRUSTEE" means the party named as such above until a successor
replaces it and thereafter means the successor.
"TRUST OFFICER" shall mean, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"TRUST SECURITIES" means securities issued by a COASTAL Trust.
"UNITED STATES" means the United States of America, its territories and
possessions and other areas subject to its jurisdiction.
"VOTING STOCK" means capital stock having voting power under ordinary
circumstances to elect directors.
"YIELD TO MATURITY" means the yield to maturity on a Security at the
time of its issuance or at the most recent determination of interest on the
Security.
3
SECTION 1.02. Other Definitions.
TERM DEFINED IN SECTION
"ACTUAL KNOWLEDGE" 7.01
"BANKRUPTCY LAW" 6.01
"CONDITIONAL REDEMPTION" 3.04
"CONVERSION AGENT" 2.03
"CONVERSION DATE" 9.02
"CONVERSION NOTICE" 9.02
"CONVERSION RIGHT" 9.01
"CUSTODIAN" 6.01
"EVENT OF DEFAULT" 6.01
"LEGAL HOLIDAY" 11.06
"MARKET PRICE" 9.07
"PAYING AGENT" 2.03
"PRICE PER SHARE" 9.09
"REGISTRAR" 2.03
"TRANSFER AGENT" 2.03
"TREASURY REGULATIONS" 2.04
"U.S. GOVERNMENT OBLIGATIONS" 8.02
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in the United States;
(3) generally accepted accounting principles are those applicable
from time to time;
(4) all terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC
rule under the TIA have the meanings assigned to them by such
definitions;
(5) "or" is not exclusive; and
(6) words in the singular include the plural, and in the plural
include the singular.
4
ARTICLE 2--THE SECURITIES
SECTION 2.01. Issuable in Series.
The aggregate principal amount of Securities that may be issued under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more series. Each series shall be created by a Securities Resolution that
establishes the terms of the series, which may include the following:
(1) the title of the series;
(2) the aggregate principal amount of the series;
(3) the interest rate or rates, if any, or method of calculating
the interest rate or rates;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Registered Securities;
(6) the dates when principal and interest are payable;
(7) the manner of paying principal and interest;
(8) the places where principal and interest are payable;
(9) the Registrar, Transfer Agent and Paying Agent;
(10) the terms of any mandatory or optional redemption by the
Company including any sinking fund;
(11) the terms of any redemption at the option of Holders;
(12) the denominations in which Securities are issuable;
(13) whether Securities will be issuable as Registered Securities,
Bearer Securities or uncertificated Securities;
(14) whether and upon what terms Registered Securities, Bearer
Securities and uncertificated Securities may be exchanged;
(15) whether any Securities will be represented by a Security in
global form;
(16) the terms of any global Security;
5
(17) the terms of any tax indemnity;
(18) if amounts of principal or interest may be determined by
reference to an index, formula or other method, the manner for
determining such amounts;
(19) provisions for electronic issuance of Securities or for
Securities in uncertificated form;
(20) the portion of principal payable upon acceleration of a
Discounted Debt Security;
(21) whether any Events of Default or covenants in addition to or in
lieu of those set forth in this Indenture apply;
(22) whether and upon what terms Securities may be defeased;
(23) the forms of the Securities or any coupon, which may be in the
form of Exhibit A or B;
(24) any terms that may be required by or advisable under U.S. or
other applicable laws or regulations;
(25) whether and upon what terms the Securities will be convertible
into or exchangeable for Common Stock of the Company or other
equity or debt securities, which may include the terms provided
in Article 9;
(26) the ranking of the Securities, including the relative degree,
if any, to which the Securities of such series shall be
subordinated to one or more other series of Securities in right
of payment, whether outstanding or not;
(27) any provisions relating to extending or shortening the date on
which the principal and premium, if any, of the Securities of
such series is payable;
(28) any provisions relating to the deferral of payment of any
interest;
(29) if such Securities are to be issued to a COASTAL Trust, the
forms of the related trust agreement and guarantee agreement
relating thereto;
(30) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary
to permit or facilitate the issuance of such Securities to a
COASTAL Trust; and
(31) any other terms not inconsistent with this Indenture.
6
All Securities of one series need not be issued at the same time and,
unless otherwise provided, a series may be reopened for issuances of additional
Securities of such series.
Unless otherwise stated herein or in the applicable Securities
Resolutions, the creation and issuance of a series and the authentication and
delivery thereof are not subject to any conditions precedent.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities. An Officer
shall sign any coupons by facsimile signature.
If an Officer whose signature is on a Security or its coupons no longer
holds that office at the time the Security is authenticated or delivered, the
Security and coupons shall nevertheless be valid.
A Security and its coupons shall not be valid until the Security is
authenticated by the manual signature of the Trustee. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security shall be dated the date of its original issuance or as
provided in the Securities Resolution.
Securities may have notations, legends or endorsements required by law,
stock exchange rule, agreement or usage.
In the event Securities are issued in electronic or other
uncertificated form, such Securities may be validly issued without the
signatures or seal contemplated by this Section 2.02.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication. Except as otherwise provided in this
Article Two, the Trustee shall thereupon authenticate and make available for
delivery said Securities to or upon the written order of the Company. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon:
(a) a copy of the Securities Resolution pursuant to which the terms
and form of the Securities were established;
(b) an executed supplemental indenture, if any;
(c) an Officers' Certificate delivered in accordance with Section
11.03; and
7
(d) an Opinion of Counsel from outside counsel knowledgeable in such
matters which shall state:
(1) that the form of such Securities has been established by a
supplemental indenture or by or pursuant to a Securities
Resolution in accordance with Sections 2.01 and 2.02 and in
conformity with the provisions of this Indenture;
(2) that the terms of such Securities have been established in
accordance with Section 2.01 and in conformity with the
other provisions of this Indenture;
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and
subject to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with
their terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting the enforcement of creditors'
rights and to general equity principles; and
(4) that all laws and requirements in respect of the execution
and delivery by the Company of such Securities have been
complied with.
The Trustee shall have the right to decline to authenticate and deliver
any Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in good
faith shall determine that such action would expose the Trustee to personal
liability to existing Holders.
SECTION 2.03. Registrar and Transfer, Paying and Conversion Agents and
Other Agents.
The Company shall maintain an office or agency where Securities may be
authenticated, where Securities may be presented for registration of transfer or
for exchange ("TRANSFER AGENT"), where Securities may be presented for payment
("PAYING AGENT") and where Securities may be presented for conversion
("CONVERSION AGENT"). Whenever the Company must issue or deliver Securities
pursuant to this Indenture, the Trustee shall authenticate the Securities at the
Company's written request. The Transfer Agent shall keep a register of the
Securities and of their transfer and exchange.
The Company may appoint more than one Transfer Agent, Paying Agent or
Conversion Agent or other Agent for a series. The Company shall notify the
Trustee of the name and address of any Agent not a party to this Indenture. If
the Company does not appoint or maintain a Transfer Agent, Paying Agent or
Conversion Agent for a series, the Trustee shall act as such.
8
SECTION 2.04. Bearer Securities.
U.S.laws and Treasury Regulations restrict sales or exchanges of and
payments on Bearer Securities. Therefore, except as provided below:
(1) Bearer Securities will be offered, sold or delivered only
outside the United States and will be delivered in connection
with their original issuance only upon presentation of a
certificate in a form prescribed by the Company to comply with
U.S. laws and regulations.
(2) Bearer Securities will not be issued in exchange for Registered
Securities.
(3) All payments of principal and interest (including original issue
discount) on Bearer Securities will be made outside the United
States by a Paying Agent located outside the United States
unless the Company determines that:
(A) such payments may not be made by such Paying Agent because
the payments are illegal or prevented by exchange controls
as described in Treasury Regulation 1.163-5(c)(2)(v); and
(B) making the payments in the United States would not have an
adverse tax effect on the Company.
If there is a change in the relevant provisions of U.S. laws or
Treasury Regulations or the judicial or administrative interpretation thereof, a
restriction set forth in paragraph (1), (2) or (3) above will not apply to a
series if the Company determines that the relevant provisions no longer apply to
the series or that failure to comply with the relevant provisions would not have
an adverse tax effect on the Company or on Securityholders or cause the series
to be treated as "registration- required" obligations under U.S. law.
The Company shall notify the Trustee of any determinations by the
Company under this Section.
"TREASURY REGULATIONS" means regulations of the U.S. Treasury
Department under the Internal Revenue Code of 1986, as amended.
SECTION 2.05. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent for a series other than
the Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of the persons entitled thereto all money held by the Paying Agent for
the payment of principal of or interest on the series, and will notify the
Trustee of any default by the Company in making any such payment.
9
While any such default continues, the Trustee may require a Paying
Agent to pay all money so held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent shall have no further liability for the
money.
If the Company or an Affiliate acts as Paying Agent for a series, it
shall segregate and hold as a separate trust fund all money held by it as Paying
Agent for the series.
The Company may elect not to exchange or register the transfer of any
Security for a period of 15 days before a selection of Securities to be
redeemed.
SECTION 2.06. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Transfer Agent, the Company shall
furnish to the Trustee semiannually and at such other times as the Trustee may
request a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders of Registered Securities and
Holders of Bearer Securities whose names are on the list referred to below.
The Transfer Agent shall keep a list of the names and addresses of
Holders of Bearer Securities who file a request to be included on such list. A
request will remain in effect for two years but successive requests may be made.
Whenever the Company or the Trustee is required to mail a notice to all
Holders of Registered Securities of a series, it also shall mail the notice to
Holders of Bearer Securities of the series whose names are on the list.
Whenever the Company is required to publish a notice to all Holders of
Bearer Securities of a series, it also shall mail the notice to such of them
whose names are on the list.
SECTION 2.07. Transfer and Exchange.
Where Registered Securities of a series are presented to the Transfer
Agent with a request to register a transfer or to exchange them for an equal
principal amount of Registered Securities of other denominations of the same
series, the Transfer Agent shall register the transfer or make the exchange if
its requirements for such transactions are met. Where Bearer Securities of a
series are presented to the Transfer Agent with a request to exchange them for
an equal principal amount of Bearer Securities of other denominations of the
same series, the Transfer Agent shall make the exchange if its requirements for
such transactions are met.
The Transfer Agent may require a Holder to pay a sum sufficient to
cover any taxes imposed on a transfer or exchange.
10
If a series provides for Registered and Bearer Securities and for their
exchange, Bearer Securities may be exchanged for Registered Securities and
Registered Securities may be exchanged for Bearer Securities as provided in the
Securities or the Securities Resolution if the requirements of the Transfer
Agent for such transactions are met and in the case of the exchange of
registered securities for bearer securities if Section 2.04 permits the
exchange.
SECTION 2.08. Replacement Securities.
If the Holder of a Security or coupon claims that it has been lost,
destroyed or wrongfully taken, then, in the absence of notice to the Company or
the Trustee that the Security or coupon has been acquired by a bona fide
purchaser, the Company shall issue a replacement Security or coupon if the
Company and the Trustee receive:
(1) evidence satisfactory to them of the loss, destruction or
taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their expenses and any
taxes for replacing the Security or coupon.
A replacement Security shall have coupons attached corresponding to those, if
any, on the replaced Security.
Every replacement Security or coupon is an additional obligation of the
Company.
SECTION 2.09. Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01, they cease to be
outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
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SECTION 2.10. Discounted Debt Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, the principal
amount of a Discounted Debt Security shall be the amount of principal that would
be due as of the date of such determination if payment of the Security were
accelerated on that date.
SECTION 2.11. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or an Affiliate shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities which a Trust Officer of the
Trustee actually knows are so owned shall be so disregarded.
SECTION 2.12. Global Securities.
If the Securities Resolution so provides, the Company may issue some or
all of the Securities of a series in temporary or permanent global form. A
global Security may be in registered form, in bearer form with or without
coupons or in uncertificated form. A global Security shall represent that amount
of Securities of a series as specified in the global Security or as endorsed
thereon from time to time. At the Company's request, the Transfer Agent shall
endorse a global Security to reflect the amount of any increase or decrease in
the Securities represented thereby.
The Company may issue a global Security only to a depository designated
by the Company. A depository may transfer a global Security only as a whole to
its nominee or to a successor depository.
The Securities Resolution may establish, among other things, the manner
of paying principal and interest on a global Security and whether and upon what
terms a beneficial owner of an interest in a global Security may exchange such
interest for definitive Securities.
The Company, an Affiliate, the Trustee and any Agent shall not be
responsible for any acts or omissions of a depository, for any depository
records of beneficial ownership interests or for any transactions between the
depository and beneficial owners.
SECTION 2.13. Temporary Securities.
Until definitive Securities of a series are ready for delivery, the
Company may use temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Temporary Securities
may be in global form. Temporary Bearer Securities may have one or more coupons
or no coupons. Without unreasonable delay, the Company shall deliver definitive
Securities in exchange for temporary Securities.
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SECTION 2.14. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Transfer Agent and the Paying Agent shall forward to the
Trustee any Securities and coupons surrendered to them for payment, exchange or
registration of transfer. The Trustee shall cancel all Securities or coupons
surrendered for payment, registration of transfer, exchange or cancellation. The
Trustee also will cancel all Bearer Securities and unmatured coupons unless the
Company requests the Trustee to hold the same for redelivery. Any Bearer
Securities so held shall be considered delivered for cancellation under Section
2.09.
Unless the Securities Resolution otherwise provides, the Company may
not issue new Securities to replace Securities that the Company has paid or that
the Company has delivered to the Trustee for cancellation.
SECTION 2.15. Defaulted Interest.
If the Company defaults in a payment of interest on Registered
Securities, it need not pay the defaulted interest to Holders on the regular
record date. The Company may fix a special record date for determining Holders
entitled to receive defaulted interest, or the Company may pay defaulted
interest in any other lawful manner.
SECTION 2.16. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" numbers.
ARTICLE 3--REDEMPTION
SECTION 3.01. Notices to Trustee.
Securities of a series that are redeemable before maturity shall be
redeemable in accordance with their terms and, unless the Securities Resolution
otherwise provides, in accordance with this Article.
In the case of a redemption by the Company, the Company shall notify
the Trustee of the redemption date and the principal amount of Securities to be
redeemed. The Company shall notify the Trustee at least 45 days before the
redemption date unless a shorter notice is satisfactory to the Trustee.
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If the Company is required to redeem Securities, it may reduce the
principal amount of Securities required to be redeemed to the extent that it is
permitted a credit against such redemption requirement by the terms of the
Securities Resolution and notifies the Trustee of the amount of such credit and
the basis for it. If the reduction is based on a credit for acquired or redeemed
Securities that the Company has not previously delivered to the Trustee for
cancellation, the Company shall deliver the Securities at the same time as the
notice.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities of the series outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities having
denominations larger than the minimum denomination for the series. Securities
and portions thereof selected for redemption shall be in amounts equal to the
minimum denomination for the series or an integral multiple thereof. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption by first-class mail to each Holder of
Registered Securities whose Securities are to be redeemed.
If Bearer Securities are to be redeemed, the Company shall publish a
notice of redemption in an Authorized Newspaper as provided in the Securities.
A notice shall identify the Securities of the series (including CUSIP
number) to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption, together with all
coupons, if any, maturing after the redemption date, must be
surrendered to the Paying Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date;
(6) whether the redemption by the Company is mandatory or optional;
and
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(7) whether the redemption is conditional as provided in Section
3.04, and if so, the terms of the conditions, and that, if the
conditions are not satisfied or are not waived by the Company,
the Securities will not be redeemed and such a failure to redeem
will not constitute an Event of Default.
A redemption notice given by publication need not identify Registered
Securities to be redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption.
Except as provided below, once notice of redemption is given,
Securities called for redemption become due and payable on the redemption date
at the redemption price stated in the notice.
A notice of redemption may provide that it is subject to the occurrence
of any event before the date fixed for such redemption as described in such
notice ("CONDITIONAL REDEMPTION"), and such notice of Conditional Redemption
shall be of no effect unless all such conditions to the redemption have occurred
on or before such date or have been waived by the Company in its sole
discretion.
SECTION 3.05. Payment of Redemption Price.
Prior to 10:00 a.m., New York City time, on the redemption date, the
Company shall deposit with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Securities to be redeemed on
that date.
When the Holder of a Security surrenders it for redemption in
accordance with the redemption notice, the Company shall pay to the Holder on
the redemption date the redemption price and accrued interest to such date,
except that:
(1) the Company will pay any such interest (except defaulted
interest) to Holders on the record date of Registered Securities
if the redemption date occurs on an interest payment date; and
(2) the Company will pay any such interest to Holders of coupons
that mature on or before the redemption date upon surrender of
such coupons to the Paying Agent.
Coupons maturing after the redemption date on a called Security are
void absent a payment default on that date. Nevertheless, if a Holder surrenders
for redemption a Bearer Security missing any such coupons, the Company may
deduct the face amount of such coupons from the redemption price. If thereafter
the Holder surrenders to the Paying Agent the missing coupons, the Company will
15
return the amount so deducted. The Company may waive surrender of the missing
coupons if it receives an indemnity bond satisfactory to the Company.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall deliver to the Holder a new Security of the same series equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE 4--COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a series in
accordance with the terms of the Securities for the series, any related coupons,
and this Indenture. Principal and interest on a series shall be considered paid
on the date due if the Paying Agent for the series holds, prior to 10:00 a.m.,
New York City time, on that date money sufficient to pay all principal and
interest then due on the series.
SECTION 4.02. Overdue Interest.
Unless the Securities Resolution otherwise provides, the Company shall
pay interest on overdue principal of a Security of a series at the rate (or
Yield to Maturity in the case of a Discounted Debt Security) borne by the
series; the Company shall pay interest on overdue installments of interest at
the same rate or Yield to Maturity to the extent lawful.
SECTION 4.03. No Lien Created, etc.
This Indenture and the Securities do not create a Lien, charge or
encumbrance on any property of the Company or any Subsidiary.
SECTION 4.04. Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, a brief certificate signed by the
principal executive officer, principal financial officer or principal accounting
officer of the Company, as to the signer's knowledge of the Company's compliance
with all conditions and covenants under this Indenture (determined without
regard to any period of grace or requirement of notice provided herein) and if
the Company shall not be in compliance, specifying such non-compliance and the
nature and status thereof.
Any other obligor on the Securities shall also deliver to the Trustee
such a certificate as to its compliance with this Indenture within 120 days
after the end of each of its fiscal years.
The certificates need not comply with Section 11.04.
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SECTION 4.05. SEC Reports.
The Company shall file with the Trustee, within 15 days after the
Company is required to file the same with the SEC, copies of the annual reports
and of the information, documents, and other reports (or such portions of the
foregoing as the SEC may prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Any other obligor on the Securities shall do likewise as to the above
items which it is required to file with the SEC pursuant to those sections.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.06. Costs and Expenses of COASTAL Trusts.
The Company shall pay all debts and obligations (other than with
respect to the Trust Securities) and all costs and expenses of any COASTAL Trust
(including, but not limited to, all costs and expenses relating to the
organization of the applicable COASTAL Trust, the fees and expenses of any
trustee or trustees for the COASTAL Trust and all costs and expenses relating to
the operation of the applicable COASTAL Trust (other than with respect to the
Trust Securities)) and to pay any and all taxes, duties, assessments or other
governmental charges of whatever nature (other than United States withholding
taxes) imposed by the United States or any other taxing authority, so that the
net amounts received and retained by the applicable COASTAL Trust after paying
such fees, expenses, debts and obligations will be equal to the amounts the
applicable COASTAL Trust would have received and retained had no such fees,
expenses, debts and obligations been incurred by or imposed on the applicable
COASTAL Trust.
SECTION 4.07. Statement by Officers as to Default or Event of Default.
The Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default or Default, an Officers' Certificate setting forth the
details of such Event of Default or Default and the action which the Company has
taken or proposes to take with respect thereto.
17
ARTICLE 5--SUCCESSORS
SECTION 5.01. When Company May Merge, etc.
Unless the Securities Resolution establishing a Series otherwise
provides, the Company shall not consolidate with or merge into any person in any
transaction in which the Company is not the survivor, or transfer all or
substantially all of its assets to any person, unless:
(1) the person is organized under the laws of the United States or a
State thereof or is organized under the laws of a foreign
jurisdiction and consents to the jurisdiction of the courts of
the United States or a State thereof;
(2) the person assumes by supplemental indenture all the obligations
of the Company under this Indenture, the Securities and any
coupons;
(3) all required approvals of any regulatory body having
jurisdiction over the transaction shall have been obtained;
(4) immediately after the transaction no Default exists; and
(5) the Company provides an Officers' Certificate and an Opinion of
Counsel from outside counsel knowledgeable in such matters to
the effect that all the provisions in this Section 5.01 have
been complied with.
The successor shall be substituted for the Company, and thereafter all
obligations of the Company under this Indenture, the Securities and any coupons
shall terminate.
ARTICLE 6--DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
Unless the Securities Resolution otherwise provides, an "EVENT OF
DEFAULT" on a series occurs if:
(1) the Company defaults in any payment of interest on any
Securities of the series when the same becomes due and payable
and the Default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal and
premium, if any, of any Securities of the series when the same
becomes due and payable at maturity or upon redemption,
acceleration or otherwise;
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(3) the Company defaults in the payment or satisfaction of any
sinking fund obligation with respect to any Securities of the
series as required by the Securities Resolution establishing
such series and the Default continues for a period of 30 days;
(4) the Company defaults in the performance of any of its other
agreements applicable to the series and the Default continues
for 60 days after the notice specified below;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian for it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian for the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company;
and the order or decree remains unstayed and in effect for 60
days; or
(7) there occurs any other Event of Default provided for in the
series.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "CUSTODIAN" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the Trustee
or the Holders of at least 25% in principal amount of the series notify the
Company of the Default and the Company does not cure the Default within the time
specified after receipt of the notice. The notice must specify the Default,
demand that it be remedied and state that the notice is a "Notice of Default."
If Holders notify the Company of a Default, they shall notify the Trustee at the
same time.
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The failure to redeem any Security subject to a Conditional Redemption
is not an Event of Default if any event on which such redemption is so
conditioned does not occur and is not waived before the scheduled redemption
date.
SECTION 6.02. Acceleration.
If an Event of Default occurs and is continuing on a series, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the series (or, in the case of a series issued to a COASTAL Trust, so
long as any of the related preferred securities of such COASTAL Trust remain
outstanding, if, upon such Event of Default, the Trustee or the Holders of not
less than 25% in aggregate principal amount of such series fail to declare the
principal of all the Securities of such series to be so immediately due and
payable, the holders of 25% in aggregate liquidation amount of such preferred
securities then outstanding shall have such right) by notice to the Company and
the Trustee, may declare the principal of and accrued interest on all the
Securities of the series to be due and payable immediately. Discounted Debt
Securities may provide that the amount of principal due upon acceleration is
less than the stated principal amount.
The Holders of a majority in principal amount of the series by notice
to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default on the series have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration;
provided, that in the case of a series issued to a COASTAL Trust, so long as any
of the related preferred securities of such COASTAL Trust remain outstanding,
the holders of a majority in aggregate liquidation amount of such preferred
securities then outstanding shall instead have such right to rescind the of
acceleration and its consequences with respect to such series, subject to the
same conditions set forth above.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing on a series, the
Trustee may pursue any available remedy to collect principal or interest then
due on the series, to enforce the performance of any provision applicable to the
series, or otherwise to protect the rights of the Trustee and Holders of the
series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or coupons or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
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SECTION 6.04. Waiver of Past Defaults.
Unless the Securities Resolution otherwise provides, the Holders of a
majority in principal amount of a series (or, in the case of a series issued to
a COASTAL Trust, so long as any of the related preferred securities of such
COASTAL Trust remain outstanding, the holders of a majority in aggregate
liquidation amount of such preferred securities then outstanding) by notice to
the Trustee may waive an existing Default on the series and its consequences
except:
(1) a Default in the payment of the principal of or interest on the
series, or
(2) a Default in respect of a provision that under Section 10.02
cannot be amended without the consent of each Securityholder
affected.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of a series may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or of exercising any trust or power conferred on the Trustee,
with respect to such series. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or if the Trustee in good
faith shall determine that the action or direction might involve the Trustee in
personal liability.
SECTION 6.06. Limitation on Suits.
A Securityholder of a series may pursue a remedy with respect to the
series only if:
(1) the Holder gives to the Trustee notice of a continuing Event of
Default on the series;
(2) the Holders of at least 25% in principal amount of the series
make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the series do not give the Trustee a direction
inconsistent with such request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
21
In the case of a series issued to a COASTAL Trust, any holder of the
related preferred securities of such COASTAL Trust shall have the right, upon
the occurrence and continuance of an Event of Default described in Sections
6.01(1) and (2) hereof with respect to such series, to institute a suit directly
against the Company to enforce payment to such holder of the principal of, and
premium, if any, and interest on, the Securities having a principal amount equal
to the aggregate liquidation amount of such preferred securities held by such
holder.
SECTION 6.07. Collection Suit by Trustee.
If an Event of Default in payment of interest, principal or sinking
fund specified in Section 6.01(1), (2) or (3) occurs and is continuing on a
series, the Trustee may recover judgment in its own name and as trustee of an
express trust against the Company for the whole amount of principal and interest
remaining unpaid on the series.
SECTION 6.08. Priorities.
If the Trustee collects any money for a series pursuant to this
Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.06;
Second: to Securityholders of the series for amounts due and unpaid for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable for principal and interest,
respectively; and
Third: to the Company.
The Trustee may fix a payment date for any payment to Securityholders.
ARTICLE 7--TRUSTEE
SECTION 7.01. Rights of Trustee.
(1) The Trustee may conclusively rely on any document believed by it
to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter
stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in
good faith in reliance on the Certificate or Opinion of Counsel.
22
(3) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any agent
appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith in accordance with a direction received by
it pursuant to Section 6.05.
(5) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with
the Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by
law.
(6) The Trustee shall have no duty with respect to a Default unless
a Trust Officer has actual knowledge of the Default. As used
herein, the term "actual knowledge" means the actual fact or
statement of knowing, without any duty to make any investigation
with regard thereto.
(7) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized and
within its powers.
(8) Any Agent shall have the same rights and be protected to the
same extent as if it were Trustee.
(9) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(10) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not
reasonably assured to it.
(11) The Trustee may consult with counsel of its selection and shall
not be held liable in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance on the
advice of such counsel or any Opinion of Counsel from such
counsel.
(12) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture
that it reasonably believes may expose it to any loss, liability
or expense, unless such Holders shall have offered to the
Trustee security or indemnity satisfactory to the Trustee
against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
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SECTION 7.02. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities or coupons and may otherwise deal with the
Company or an Affiliate with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 7.03. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities or any coupons; it shall not be accountable for
the Company's use of the proceeds from the Securities; it shall not be
responsible for any statement in the Securities or any coupons; it shall not be
responsible for any overissue; it shall not be responsible for determining
whether the form and terms of any Securities or coupons were established in
conformity with this Indenture; it shall not be responsible for determining
whether any Securities were issued in accordance with this Indenture; and it
shall not be responsible for the acts or omissions of any other Trustees
appointed hereunder.
SECTION 7.04. Notice of Defaults.
If a Default occurs and is continuing on a series and if the Trustee
has actual knowledge of such Default, the Trustee shall mail a notice of the
Default within 90 days after it occurs to Holders of Registered Securities of
the series. Except in the case of a Default in payment on a series, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interest of Holders
of the series. The Trustee shall withhold notice of a Default described in
Section 6.01(4) until at least 60 days after it occurs.
SECTION 7.05. Reports by Trustee to Holders.
Any report required by TIA Section 313(a) to be mailed to
Securityholders shall be mailed by the Trustee on or before May 15th of each
year.
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which any Securities are
listed. The Company shall notify the Trustee when any Securities are listed on a
stock exchange.
SECTION 7.06. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services as the Trustee and the Company shall from time to
time agree in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all expenses incurred by it. Such
expenses shall include the reasonable compensation and expenses of the Trustee's
agents and counsel.
The Company shall indemnify each of the Trustee or any predecessor
Trustee and their agents for, and to hold them harmless against, any and all
loss, damage, claims, liability or expense, including
24
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee), arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim (whether asserted by the Company,
or any Holder or any other Person) or liability in connection with the exercise
or performance of any of its powers or duties hereunder, except to the extent
that such loss, damage, claim, liability or expense is due to its own negligence
or bad faith. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or willful
misconduct.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities and any coupons on all money
or property held or collected by the Trustee, except that held in trust to pay
principal or interest on particular securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive any termination or
discharge of this Indenture (including without limitation any termination under
any Bankruptcy Law) and the resignation or removal of the Trustee.
SECTION 7.07. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee with the Company's
consent.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA Section 310(a) or
Section 310(b) or with Section 7.09;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a Custodian or other public officer takes charge of the Trustee
or its property;
(4) the Trustee becomes incapable of acting; or
25
(5) an event of the kind described in Section 6.01(5) or (6) occurs
with respect to the Trustee.
The Company also may remove the Trustee with or without cause if the
Company so notifies the Trustee three months in advance and if no Default occurs
during the three-month period.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in principal amount of the Securities may petition, at the
expense of the Company, any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with TIA Section 310(a) or Section
310(b) or with Section 7.09, any Securityholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Registered Securities. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.06.
SECTION 7.08. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.09. Trustee's Capital and Surplus.
The Trustee at all times shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published report of
financial condition.
ARTICLE 8--DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance.
Securities of a series may be defeased in accordance with their terms
and, unless the Securities Resolution otherwise provides, in accordance with
this Article.
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The Company at any time may terminate as to a series all of its
obligations under this Indenture, the Securities of the series ("legal
defeasance option"). The Company at any time may terminate as to a series its
obligations, if any, under any restrictive covenants which may be applicable to
a particular series ("covenant defeasance option"). However, in the case of the
legal defeasance option, the Company's obligations in Sections 2.03, 2.04, 2.05,
2.06, 2.07, 2.08, 7.06, 7.07 and 8.04 shall survive until the Securities of the
series are no longer outstanding; thereafter the Company's obligations in
Section 7.06 shall survive.
The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option. If the Company exercises
its legal defeasance option, a series may not be accelerated because of an Event
of Default. If the Company exercises its covenant defeasance option, a series
may not be accelerated by reference to any restrictive covenants as to which the
covenant defeasance option applicable to such series has been so exercised.
The Trustee upon request shall acknowledge in writing the discharge of
those obligations or restrictions that the Company terminates by defeasance.
SECTION 8.02. Conditions to Defeasance.
The Company may exercise as to a series its legal defeasance option or
its covenant defeasance option if:
(1) the Company irrevocably deposits in trust with the Trustee or
another trustee money or U.S. Government Obligations;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing
their opinion that the payments of principal and interest when
due on the deposited U.S. Government Obligations without
reinvestment plus any deposited money without investment will
provide cash at such times and in such amounts as will be
sufficient to pay principal and interest when due on all the
Securities of the series to maturity or redemption, as the case
may be;
(3) immediately after the deposit no Default exists;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the deposit does not cause the Trustee to have a conflicting
interest under TIA Section 310(a) or Section 310(b) as to
another series;
(6) the Company delivers to the Trustee an Opinion of Counsel from
outside counsel knowledgeable in such matters to the effect that
Holders of the series will not
27
recognize income, gain or loss for Federal income tax purposes
as a result of the defeasance;
(7) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 6.01(5) or (6) occurs
that is continuing at the end of the period; and
(8) the Company provides an Officers' Certificate and an Opinion of
Counsel from outside counsel knowledgeable in such matters to
the effect that all conditions precedent pursuant to this
Section 8.02 have been satisfied.
Before or after a deposit the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of (i) the
United States or (ii) an agency or instrumentality of the United States, the
payment of which is unconditionally guaranteed by the United States, which, in
either case, have the full faith and credit of the United States pledged for
payment and which are not callable at the issuer's option, or certificates
representing an ownership interest in such obligations.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.02. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal and interest on
Securities of the defeased series.
SECTION 8.04. Repayment to Company.
The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years. After payment to the Company, Securityholders
entitled to the money must look to the Company for payment as unsecured general
creditors unless an abandoned property law designates another person.
SECTION 8.05. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S.Government Obligations
deposited pursuant to Section 8.02 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of outstanding Securities.
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ARTICLE 9--CONVERSION
SECTION 9.01. Conversion Privilege.
If the Securities Resolution establishing the terms of a series of
securities so provides, Securities of any series may be convertible at the
option of the holders into or for Common Stock or other equity or debt
securities (a "CONVERSION RIGHT"). The Securities Resolution may establish,
among other things, the Conversion Rate, provisions for adjustments to the
Conversion Rate and limitations upon exercise of the Conversion Right.
Unless the Securities Resolution otherwise provides, a Holder may
convert a portion of a Security if the portion is $1,000 or an integral
multiples thereof. Provisions of this Indenture that apply to the conversion of
the aggregate principal amount of a Security also apply to conversion of a
portion of it.
The Securities Resolution providing for Securities with a Conversion
Right may establish any terms in addition to, or other than (including terms
inconsistent with), those set forth in this Article 9 with respect to the
conversion of the Securities established thereby (other than those of Section
9.16).
SECTION 9.02. Conversion Procedure.
To convert a Security a Holder must satisfy all requirements in the
Securities or the Securities Resolution and (i) complete and manually sign the
conversion notice (the "CONVERSION NOTICE") provided for in the Securities
Resolution or the Security (or complete and manually sign a facsimile thereof)
and deliver such notice to the Conversion Agent or any other office or agency
maintained for such purpose, (ii) surrender the Security to the Conversion Agent
or at such other office or agency by physical delivery, (iii) if required,
furnish appropriate endorsements and transfer documents, and (iv) if required,
pay all transfer or similar taxes. The date on which such notice shall have been
received by and the Security shall have been so surrendered to the Conversion
Agent is the "CONVERSION DATE." Such Conversion Notice shall be irrevocable and
may not be withdrawn by a Holder for any reason.
The Company will complete settlement of any conversion of Securities
not later than the fifth Business Day following the Conversion Date in respect
of the cash portion elected to be delivered in lieu of the securities into which
the Security is convertible and not later than the seventh business day
following the Conversion Date in respect of the portion to be settled in such
securities.
If any Security is converted between the record date for the payment of
interest and the next succeeding interest payment date, such Security must be
accompanied by funds equal to the interest payable on such succeeding interest
payment date on the principal amount so converted (unless such Security shall
have been called for redemption during such period, in which case no such
payment shall be required). A Security converted on an interest payment date
need not be accompanied by any payment, and the interest on the principal amount
of the Security being converted will be paid
29
on such interest payment date to the registered holder of such Security on the
immediately preceding record date. Subject to the aforesaid right of the
registered holder to receive interest, no payment or adjustment will be made on
conversion for interest accrued on the converted Security or for interest,
dividends or other distributions payable on any security issued on conversion.
If a Holder converts more than one Security at the same time, the
securities into which the Security is convertible issuable or cash payable upon
the conversion shall be based on the total principal amount of the Securities
converted.
Upon surrender of a Security that is converted in part the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unconverted portion of the Security surrendered; except that if a global
Security is so surrendered the Trustee shall authenticate and, if applicable,
deliver to the depository a new global Security in a denomination equal to and
in exchange for the unconverted portion of the principal of the global Security
so surrendered.
If the last day on which a Security may be converted is a Legal Holiday
in a place where a Conversion Agent is located, the Security may be surrendered
to that Conversion Agent on the next succeeding day that is not a Legal Holiday.
SECTION 9.03. Taxes on Conversion.
If a Holder of a Security exercises a Conversion Right, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on the
issue of the securities into which the Security is convertible upon the
conversion. However, the Holder shall pay any such tax which is due because
securities or other property are issued in a name other than the Holder's name.
Nothing herein shall preclude any income tax or other withholding required by
law or regulations.
SECTION 9.04. Company Determination Final.
Any determination that the Board of Directors makes pursuant to this
Article 9 or consistent with terms provided for in any Securities Resolution is
conclusive, absent manifest error.
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer.
The Trustee (and each Conversion Agent other than the Company) has no
duty to determine when or if an adjustment under this Article 9 or any
Securities Resolution should be made, how it should be made or calculated or
what it should be. The Trustee (and each Conversion Agent other than the
Company) makes no representation as to the validity or value of any securities
issued upon conversion of Securities. The Trustee (and each Conversion Agent
other than the Company) shall not be responsible for the Company's failure to
comply with this Article 9 or any provision of a Securities Resolution relating
to a Conversion Right.
30
SECTION 9.06. Company to Provide Conversion Securities.
The Company shall reserve out of its authorized but unissued Common
Stock or its Common Stock held in treasury sufficient shares to permit the
conversion of all of the Securities convertible into Common Stock. The Company
shall arrange and make available for issuance upon conversion the full amount of
any other securities into which the Securities are convertible to permit such
conversion of the Securities.
All shares of Common Stock or other equity securities of any person
which may be issued upon conversion of the Securities shall be validly issued,
fully paid and non-assessable.
The Company will comply with all securities laws regulating the offer
and delivery of securities upon conversion of Securities.
SECTION 9.07. Cash Settlement Option.
If the Securities Resolution so provides, the Company may elect to
satisfy, in whole or in part, a Conversion Right of Securities convertible into
Common Stock or other securities of any person by the delivery of cash. The
amount of cash to be delivered shall be equal to the Market Price on the last
Trading Day preceding the applicable Conversion Date of a share of Common Stock
or other securities of any person into which the Securities are convertible
multiplied by the number of shares of Common Stock or the number of shares or
principal amount of other securities into which the Securities are convertible,
respectively, in respect of which the Company elects to deliver cash. If the
Company elects to satisfy, in whole or in part, a Conversion Right by the
delivery of shares of Common Stock or other securities, no fractional shares or
portion of other securities will be delivered. Instead, the Company will pay
cash based on the Market Price for such fractional share of Common Stock or
portion of other securities.
The "MARKET PRICE" of the Common Stock into which Securities or other
equity securities into which the Securities are convertible may be converted
pursuant to a Securities Resolution or this Article 9 on any Trading Day means
the weighted average per share sale price for all sales of the Common Stock or
other equity securities on such Trading Day (or, if the information necessary to
calculate such weighted average per share sale price is not reported, the
average of the high and low sale prices, or if no sales are reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices), as reported in the composite
transactions for the New York Stock Exchange, or if the Common Stock or other
equity securities into which the Securities are convertible are not listed or
admitted to trading on such exchange, as reported in the composite transactions
for the principal national or regional United States securities exchange on
which the Common Stock or other equity securities into which the Securities are
convertible are listed or admitted to trading or, if the Common Stock or other
equity securities into which the Securities are convertible are not listed or
admitted to trading on a United States national or regional securities exchange,
as reported by Nasdaq or by the National Quotation
31
Bureau Incorporated, or if not so reported, as determined in the manner set
forth in the appropriate Securities Resolution. In the absence of such
quotations, the Company shall be entitled to determine the Market Price on the
basis of such quotations as it considers appropriate.
The "MARKET PRICE" of any debt security into which Securities are
convertible shall be determined as set forth in the applicable Securities
Resolution.
SECTION 9.08. Adjustment in Conversion Rate for Change in Capital Stock.
If the Securities are convertible into Common Stock and the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any shares of its
Capital Stock,
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares of Capital Stock of the
Company (or, at the Company's option, an equivalent amount in cash) which he
would have owned immediately following such action if he had converted the
Security immediately prior to such action.
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
If the security into which the Securities are convertible is other than
Common Stock of the Company, the conversion rate shall be subject to adjustment
as set forth in the applicable Securities Resolution.
If after an adjustment a Holder of a Security may, upon conversion,
receive shares of two or more classes of Capital Stock of the Company or other
securities, the Board of Directors of the Company shall determine the allocation
of the adjusted Conversion Rate between or among the classes of Capital Stock or
other securities. After such allocation, the conversion privilege and the
Conversion Rate of each class of Capital Stock or other securities shall
thereafter be subject to
32
adjustment on terms comparable to those applicable to Common Stock in this
Article or in such Securities Resolution.
SECTION 9.09. Adjustment in Conversion Rate for Common Stock Issued Below
Market Price.
If the Securities are convertible into Common Stock, and the Company
issues to all holders of Common Stock rights, options or warrants to subscribe
for or purchase shares of Common Stock, or any securities convertible into or
exchangeable for shares of Common Stock, or rights, options or warrants to
subscribe for or purchase such convertible or exchangeable securities at a Price
Per Share (as defined and determined according to the formula given below) lower
than the current Market Price on the date of such issuance, the Conversion Rate
shall be adjusted in accordance with the following formula:
AC = CC . (O + N)
-------
O.R - M
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding
immediately prior to such issuance (which number shall
include shares owned or held by or for the account of the
Company).
N = the "Number of Shares," which (i) in the case of rights,
options or warrants to subscribe for or purchase shares of
Common Stock or of securities convertible into or
exchangeable for shares of Common Stock, is the maximum
number of shares of Common Stock initially issuable upon
exercise, conversion or exchange thereof; and (ii) in the
case of rights, options or warrants to subscribe for or
purchase convertible or exchangeable securities, is the
maximum number of shares of Common Stock initially
issuable upon the conversion or exchange of the
convertible or exchangeable securities issuable upon the
exercise of such rights, options or warrants.
R = the proceeds received or receivable by the Company,
which (i) in the case of rights, options or warrants to
subscribe for or purchase shares of Common Stock or of
securities convertible into or exchangeable for shares of
Common Stock, is the aggregate amount received or
receivable by the Company in consideration for the sale
and issuance of such rights, options, warrants or
convertible or
33
exchangeable securities, plus the minimum aggregate amount
of additional consideration, other than the convertible or
exchangeable securities, payable to the Company upon
exercise, conversion or exchange thereof; and (ii) in the
case of rights, options or warrants to subscribe for or
purchase convertible or exchangeable securities, is the
aggregate amount received or receivable by the Company in
consideration for the sale and issuance of such rights,
options or warrants, plus the minimum aggregate
consideration payable to the Company upon the exercise
thereof, plus the minimum aggregate amount of additional
consideration, other than the convertible or exchangeable
securities, payable upon the conversion or exchange of the
convertible or exchangeable securities; PROVIDED, that in
each case the proceeds received or receivable by the
Company shall be deemed to be the amount of gross cash
proceeds without deducting therefrom any compensation paid
or discount allowed in the sale, underwriting or purchase
thereof by underwriters or dealers or others performing
similar services or any expenses incurred in connection
therewith.
M = the current Market Price per share of Common Stock on
the date of issue of the rights, options or warrants to
subscribe for or purchase shares of Common Stock or the
securities convertible into or exchangeable for shares of
Common Stock or the rights, options or warrants to
subscribe for or purchase convertible or exchangeable
securities.
"PRICE PER SHARE" shall be defined and determined
according to the following formula:
P = R
-
N
where:
P = Price Per Share
and R and N have the meanings assigned above.
If the Company shall issue rights, options, warrants or convertible or
exchangeable securities with respect to its Common Stock for a consideration
consisting, in whole or in part, of property other than cash the amount of such
consideration shall be determined in good faith by the Board of Directors whose
determination shall be conclusive and evidenced by a resolution of the Board of
Directors filed with the Trustee.
The adjustment shall be made successively whenever any such additional
rights, options, warrants or convertible or exchangeable securities with respect
to its Common Stock are issued, and shall become effective immediately after the
date of issue of such shares, rights, options, warrants or convertible or
exchangeable securities.
34
To the extent that such rights, options or warrants to acquire Common
Stock expire unexercised or to the extent any convertible or exchangeable
securities with respect to its Common Stock are redeemed by the Company or
otherwise cease to be convertible or exchangeable into shares of Common Stock,
the Conversion Rate shall be readjusted to the Conversion Rate which would then
be in effect had the adjustment made upon the date of issuance of such rights,
options, warrants or convertible or exchangeable securities been made upon the
basis of the issuance of rights, options or warrants to subscribe for or
purchase only the number of shares of Common Stock as to which such rights,
options or warrants were actually exercised and the number of shares of Common
Stock that were actually issued upon the conversion or exchange of the
convertible or exchangeable securities.
If the Securities are convertible into securities other than the Common
Stock, any adjustment in the Conversion Rate required for the issuance or sale
of the securities into which the Securities are convertible shall be made as set
forth in the Securities Resolution.
SECTION 9.10. Adjustment for Other Distributions.
If the Securities are initially convertible into Common Stock and the
Company distributes to all holders of its Common Stock any of its assets or debt
securities or any rights or warrants to purchase assets or debt securities of
the Company, the Conversion Rate shall be adjusted in accordance with the
following formula:
AC = CC . (O . M)
------------------
( (O . M) - F)
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding on the
record date mentioned below (which number shall include
shares owned or held by or for the account of the
Company).
M = the current Market Price per share of Common Stock on
the record date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants distributed. The Board of
Directors of the Company shall determine the fair market
value.
The adjustment shall become effective immediately after the record date
for the determination of stockholders entitled to receive the distribution.
35
If the securities into which the Securities are convertible are other
than Common Stock, any adjustments for such other distribution shall be made as
set forth in the Securities Resolution.
This Section does not apply to cash dividends or distributions or to
reclassifications or distributions referred to in Section 9.08. Also, this
Section does not apply to shares issued below Market Price referred to in
Section 9.09.
SECTION 9.11. Voluntary Adjustment.
The Company at any time may increase the Conversion Rate, temporarily
or otherwise, by any amount but in no event shall such Conversion Rate result in
the issuance of Capital Stock at a price less than the par value of such Capital
Stock at the time such increase is made.
SECTION 9.12. When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made unless the adjustment
would require a change of at least 1% in the Conversion Rate. Any adjustments
that are not made due to the immediately preceding sentence shall be carried
forward and taken into account in any subsequent adjustment; PROVIDED, that any
adjustment carried forward shall be deferred not in excess of three years,
whereupon any adjustment to the Conversion Rate will be effected.
All calculations under this Article 9 shall be made to the nearest cent
or to the nearest 1/100th of a share, as the case may be.
SECTION 9.13. When No Adjustment Required.
Except as set forth in Section 9.09, no adjustment in the Conversion
Rate shall be made because the Company issues, in exchange for cash, property or
services, shares of Common Stock, or any securities convertible into shares of
Common Stock, or securities carrying the right to purchase shares of Common
Stock or such convertible securities.
No adjustment in the Conversion Rate need be made for rights to
purchase or the sale of Common Stock pursuant to a Company plan providing for
reinvestment of dividends or interest.
No adjustment in the Conversion Rate need be made for a change in the
par value of the Common Stock or other securities having a par value.
No adjustment need be made for a transaction referred to in Section
9.08, 9.09 or 9.10 if Securityholders are to participate in the transaction on a
basis and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock or
other securities into which the Securities are convertible participate in the
transaction.
36
SECTION 9.14. Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company shall promptly
mail to Holders of Securities affected a notice of the adjustment. The Company
shall file with the Trustee an Officers' Certificate or a certificate from the
Company's independent public accountants stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence that the adjustment is correct, absent manifest error.
SECTION 9.15. Notice of Certain Transactions.
If:
(1) the Company proposes to take any action that would require an
adjustment in the Conversion Rate,
(2) the Company proposes to take any action that would require a
supplemental indenture pursuant to Section 9.16, or
(3) there is a proposed liquidation or dissolution of the Company or
of the issuer of any other security into which the Securities
are convertible,
the Company shall mail to registered Holders of Securities of any affected
series a notice stating the proposed record date for a dividend or distribution
or the proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or dissolution. The Company
shall mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the transaction.
SECTION 9.16. Reorganization of the Company.
If the Company is a party to a transaction subject to Section 5.01, the
successor corporation (if other than the Company) shall enter into a
supplemental indenture which shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or other assets which he
would have owned immediately after the consolidation, merger or transfer if he
had converted the Security immediately before the effective date of the
transaction. The supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Article. The successor company shall mail to Holders of Securities
of any affected series a notice briefly describing the supplemental indenture.
If this Section applies, Sections 9.08, 9.09 and 9.10 do not apply.
37
ARTICLE 10--AMENDMENTS
SECTION 10.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture or the Securities
without the consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5 or Section 9.16;
(3) to provide that specific provisions of this Indenture shall not
apply to a series not previously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate Trustee for one or more series; or
(6) to make any change that does not materially adversely affect the
rights of any Securityholder.
SECTION 10.02. With Consent of Holders.
Unless the Securities Resolution otherwise provides, the Company and
the Trustee may amend this Indenture, the Securities and any coupons with the
written consent of the Holders of a majority in principal amount of the
Securities of all series affected by the amendment voting as one class; provided
that, in the case of a series issued to a COASTAL Trust, so long as any of the
related preferred securities of such COASTAL Trust remains outstanding, no such
amendment shall be made that adversely affects the holders of such preferred
securities in any material respect, and no termination of this Indenture shall
occur, without the prior consent of the holders of not less than a majority in
aggregate liquidation amount of such preferred securities then outstanding
unless and until the principal (and premium, if any) of the Securities of such
series and all accrued and unpaid interest thereon have been paid in full; and
provided further that, in the case a series issued to a COASTAL Trust, so long
as any of the related preferred securities of such COASTAL Trust remain
outstanding, no amendment shall be made to the third paragraph of Section 6.06
of this Indenture without the prior written consent of the holders of each such
preferred security then outstanding unless and until the principal (and premium,
if any) of the Securities of such series and all accrued and unpaid interest
thereon have been paid in full. However, without the consent of each
Securityholder affected, an amendment under this Section may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
38
(2) reduce the interest on or change the time for payment of
interest on any Security (except an election to defer interest
in accordance with the applicable Securities Resolutions and
Section 2.01(30) hereof);
(3) change the fixed maturity of any Security;
(4) reduce the principal of any non-Discounted Debt Security or
reduce the amount of principal of any Discounted Debt Security
that would be due upon an acceleration thereof;
(5) change the currency in which principal or interest on a Security
is payable;
(6) make any change that materially adversely affects the right to
convert or exchange any Security; or
(7) make any change in Section 6.04 or 10.02, except to increase the
amount of Securities whose Holders must consent to an amendment
or waiver or to provide that other provisions of this Indenture
cannot be amended or waived without the consent of each
Securityholder affected thereby.
An amendment of a provision included solely for the benefit of one or
more series does not affect Securityholders of any other series.
Securityholders need not consent to the exact text of a proposed
amendment or waiver; it is sufficient if they consent to the substance thereof.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment pursuant to Section 10.01 or 10.02 shall be set forth
in a supplemental indenture (except any amendment pursuant to Section 10.01(4),
which may be set forth in a Securities Resolution) that complies with the TIA.
If a provision of the TIA requires or permits a provision of this
Indenture and the TIA provision is amended, then the Indenture provision shall
be automatically amended to like effect.
SECTION 10.04. Effect of Consents.
An amendment or waiver becomes effective in accordance with its terms
and thereafter binds every Securityholder entitled to consent to it.
A consent to an amendment or waiver by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder of a Security that
evidences the same debt as the consenting Holder's Security. Any Holder or
subsequent Holder may revoke the consent as to his Security if the Trustee
receives notice of the revocation before the amendment or waiver becomes
effective.
39
The Company may fix a record date for the determination of Holders of
Registered Securities entitled to give a consent. The record date shall not be
less than 10 nor more than 60 days prior to the first written solicitation of
Securityholders.
SECTION 10.05. Notation on or Exchange of Securities.
The Company or the Trustee may place an appropriate notation about an
amendment or waiver on any Security thereafter authenticated. The Company may
issue in exchange for affected Securities new Securities that reflect the
amendment or waiver.
SECTION 10.06. Trustee Protected.
The Trustee need not sign any supplemental indenture that adversely
affects its rights. The Trustee shall be provided with, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment or supplement or waiver is
authorized or permitted by this Indenture, and that such amendment or supplement
or waiver constitutes the legal, valid and binding obligation of the Company.
ARTICLE 11--MISCELLANEOUS
SECTION 11.01. Trust Indenture Act.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not expressly set forth herein.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control. If any provision of this Indenture
modifies or excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.
SECTION 11.02. Notices.
Any notice by one party to another is duly given if in writing and
delivered in person, sent by facsimile transmission confirmed by mail or mailed
by first-class mail to the other's address shown below:
40
Company:
Coastal Bancorp, Inc.
Coastal Banc Plaza
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: [ ]
Trustee:
The Bank of New York
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Trustee Administration
A party by notice to the other parties may designate additional or
different addresses for subsequent notices.
Any notice mailed to a Securityholder shall be mailed to his address
shown on the register kept by the Transfer Agent or on the list referred to in
Section 2.06. Failure to mail a notice to a Securityholder or any defect in a
notice mailed to a Securityholder shall not affect the sufficiency of the notice
mailed to other Securityholders or the sufficiency of any published notice.
If a notice is mailed or sent in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives it,
provided however, that notices mailed or sent to the Trustee shall be duly given
upon the Trustee's receipt of such notice.
If the Company mails a notice to Securityholders, it shall mail a copy
to the Trustee and each Agent at the same time.
If in the Company's opinion it is impractical to mail a notice required
to be mailed or to publish a notice required to be published, the Company may
give such substitute notice as the Trustee approves. Failure to publish a notice
as required or any defect in it shall not affect the sufficiency of any mailed
notice.
All notices shall be in the English language, except that any published
notice may be in an official language of the country of publication.
A "notice" includes any communication required by this Indenture.
41
SECTION 11.03. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied
with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 11.04. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 11.05. Rules by Company and Agents.
The Company may make reasonable rules for action by or a meeting of
Securityholders. An Agent may make reasonable rules and set reasonable
requirements for its functions.
SECTION 11.06. Legal Holidays.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions in Houston, Texas or New York, New York are not permitted or not
required to be open or a day on which the Federal Reserve Bank of New York is
not open. If a payment date is a Legal Holiday at a place of payment, unless the
Securities Resolution establishing a series otherwise provides with respect to
Securities of the series, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
42
SECTION 11.07. No Recourse Against Others.
All liability described in the Securities of any director, officer,
employee or stockholder, as such, of the Company is waived and released.
SECTION 11.08. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One signed
copy is enough to prove this Indenture.
SECTION 11.09. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE,
THE SECURITIES AND ANY COUPONS, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
43
S-1
SIGNATURES
Dated: [ ], 1999 COASTAL BANCORP, INC.
By
------------------------------------------
Name:
Title:
Dated: [ ], 1999 THE BANK OF NEW YORK, as Trustee
By
------------------------------------------
Name:
Title:
44
EXHIBIT A
A Form of Registered Security
No. [$]
COASTAL BANCORP, INC.
[Title of Security]
COASTAL BANCORP, INC.
promises to pay to
-------------------------
or registered assigns
the principal sum of Dollars on ,
------- -------------- ----
Interest Payment Dates:
------------------------
Record Dates:
----------------------------------
THE BANK OF NEW YORK
Transfer Agent and Paying Agent
COASTAL BANCORP, INC.
By
-----------------------------------------
[Title of Authorized Officer]
By
-----------------------------------------
[Title of the Authorized Officer]
(SEAL)
Authenticated:
Dated:
THE BANK OF NEW YORK,
as Trustee
By
-------------------------------------
Authorized Signatory
A-1
COASTAL BANCORP, INC.
[Title of Security]
[Explanatory Notes follow Exhibit B]
1. INTEREST./1/
Coastal Bancorp, Inc. ("Company"), a Texas corporation, promises to pay
interest on the principal amount of this Security at the rate per annum
shown above. The Company will pay interest on and ________ of each year
commencing _________, ____. Interest on the Securities will accrue from
the most recent date to which interest has been paid or, if no interest
has been paid, from _________, ____. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities to the persons who are
registered Holders of Securities at the close of business on the record
date for the next interest payment date, except as otherwise provided in
the Indenture. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Company may pay
principal and interest by check payable in such money. It may mail an
interest check to a holder's registered address.
3. SECURITIES AGENTS.
Initially, The Bank of New York, Attention: Corporate Trust Trustee
Administration, will act as Paying Agent and Transfer Agent. The Company
may change any Paying Agent or Transfer Agent without notice or provide
for more than one such agent. The Company or any Affiliate may act in
any such capacity. Subject to certain conditions, the Company may change
the Trustee.
4. INDENTURE.
The Company issued the securities of this series ("Securities") under an
Indenture dated as of [ ], 1999 ("Indenture") between the Company and
The Bank of New York (the "Trustee"). The terms of the Securities
include those stated in the Indenture and in the Securities Resolution
creating the Securities and those made part of the Indenture by the
Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb).
Securityholders are referred to the Indenture, the Securities Resolution
and the Act for a statement of such terms.
A-2
5. OPTIONAL REDEMPTION./2/
On or after _______, the Company may redeem all the Securities at any
time or some of them from time to time at the following redemption
prices (expressed in percentages of principal amount), plus accrued
interest to the redemption date.
If redeemed during the 12-month period beginning,
YEAR PERCENTAGE YEAR PERCENTAGE
and thereafter at 100%.
6. MANDATORY REDEMPTION./3/
The Company will redeem $_____ principal amount of Securities on and on
each thereafter through ____ at a redemption price of 100% of principal
amount, plus accrued interest to the redemption date./4/ The Company may
reduce the principal amount of Securities to be redeemed pursuant to
this paragraph by subtracting 100% of the principal amount (excluding
premium) of any Securities (i) that the Company has acquired or that the
Company has redeemed other than pursuant to this paragraph and (ii) that
the Company has delivered to the Registrar for cancellation. The Company
may so subtract the same Security only once.
7. ADDITIONAL OPTIONAL REDEMPTION./5/
In addition to redemptions pursuant to the above paragraph(s), the
Company may redeem not more than $_____ principal amount of Securities
on _____ and on each ____ thereafter through _______ at a redemption
price of 100% of principal amount, plus accrued interest to the
redemption date.
8. NOTICE OF REDEMPTION./6/
Notice of redemption will be mailed at least 30 but not more than 60
days before the redemption date to each holder of Securities to be
redeemed at his registered address.
A notice of redemption may provide that it is subject to the occurrence
of any event before the date fixed for such redemption as described in
such notice ("Conditional Redemption") and such notice of Conditional
Redemption shall be of no effect unless all such conditions to the
redemption have occurred before such date or have been waived by the
Company.
A-3
9. CONVERSION./7/
A Holder of a Security may convert it into Common Stock of the Company
or cash, or a combination thereof, at the Company's option, at any time
before the close of business on ___________, or, if the Security is
called for redemption, the Holder may convert it at any time before the
close of business on the redemption date. The initial Conversion Rate is
____________ (or an equivalent amount in cash) per $1,000 principal
amount of the Securities, subject to adjustment as provided in Article 9
of the Indenture./8/ The Company will deliver a check in lieu of any
fractional share. On conversion no payment or adjustment for interest
accrued on the Securities will be made nor for dividends on the Common
Stock issued on conversion. If any Security is converted between the
record date for the payment of interest and the next succeeding interest
payment date, such Security must be accompanied by funds equal to the
interest payable on such succeeding interest payment date on the
principal amount so converted (unless such Security shall have been
called for redemption, in which case no such payment shall be required).
A Security converted on an interest payment date need not be accompanied
by any payment, and the interest on the principal amount of the Security
being converted will be paid on such interest payment date to the
registered holder of such Security on the immediately preceding record
date. To convert a Security a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Registrar or Conversion Agent and
(4) pay any transfer or similar tax if required. A Holder may convert a
portion of a Security if the portion is $1,000 or an integral multiple
of $1,000.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in registered form without coupons in denominations
of $1,000/9/ and whole multiples of $1,000. The transfer of Securities
may be registered and Securities may be exchanged as provided in the
Indenture. The Transfer Agent may require a holder, among other things,
to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or the Indenture. The Transfer Agent
need not exchange or register the transfer of any Security or portion
of a Security selected for redemption. Also, it need not exchange or
register the transfer of any Securities for a period of 15 days before
a selection of Securities to be redeemed.
11. PERSONS DEEMED OWNERS.
The registered holder of a Security may be treated as its owner for all
purposes.
A-4
12. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities may be
amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment./10/
Subject to certain exceptions, a default on a series may be waived with
the consent of the holders of a majority in principal amount of the
series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of Company
obligations to Securityholders; or to make any change that does not
materially adversely affect the rights of any Securityholder.
13. RESTRICTIVE COVENANTS./11/
The Securities are unsecured general obligations of the Company limited
to $____________ principal amount. The Indenture does not limit other
unsecured debt.
14. SUCCESSORS.
When a successor assumes all the obligations of the Company under the
Securities and the Indenture, the Company will be released from those
obligations.
15. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY./12/
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture if
the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities
to redemption or maturity. U.S. Government Obligations are securities
backed by the full faith and credit of the United States of America or
certificates representing an ownership interest in such Obligations.
16. DEFAULTS AND REMEDIES.
An Event of Default/13/ includes: default for 60 days in payment of
interest on the Securities; default in payment of principal on the
Securities; default in payment or satisfaction of any sinking fund
obligation; default by the Company for a specified period after notice
to it in the performance of any of its other agreements applicable to
the Securities; certain events of bankruptcy or insolvency; and any
other Event of Default provided for in the series. If an Event of
Default occurs and is continuing, the Trustee or the holders of at least
25% in principal amount of the Securities may declare the principal/14/
of all the Securities to be due and payable immediately.
A-5
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of
any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their
interests. The Company must furnish an annual compliance certificate to
the Trustee.
17. TRUSTEE DEALINGS WITH COMPANY.
The Bank of New York, the Trustee under the Indenture, in its individual
or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not Trustee.
18. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. Each Securityholder
by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the
Securities.
19. AUTHENTICATION.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants by
the entirety), JT TEN (=joint tenants with right of survivorship and not
as tenants in common), CUST (=custodian), U/G/M/A (=Uniform Gifts to
Minors Act) and U/T/M/A (=Uniform Transfers to Minors Act).
A-6
EXHIBIT B
A Form of Bearer Security
No. [$]
COASTAL BANCORP, INC.
---------------------
[Title of Security]
COASTAL BANCORP, INC.
---------------------
promises to pay to
-------------------------------------------------
bearer
the principal sum of Dollars on ,
--------- ----------- ----
Interest Payment Dates:
-------------------------
Record Dates:
-----------------------------------
THE BANK OF NEW YORK
-------------------------------
Transfer Agent and Paying Agent
COASTAL BANCORP, INC.
By
---------------------------------------------------
[Title of Authorized Officer]
By
---------------------------------------------------
[Title of the Authorized Officer]
(SEAL)
Authenticated:
-------------------------
Dated:
---------------------------------
THE BANK OF NEW YORK
Trustee
By
---------------------------------------------------
Authorized Signatory
B-1
COASTAL BANCORP, INC.
[Title of Security]
[Explanatory Notes follow Exhibit B]
1. INTEREST./1/
COASTAL BANCORP, INC. ("Company"), a Wisconsin corporation, promises to
pay to bearer interest on the principal amount of this Security at the
rate per annum shown above. The Company will pay interest on ___ and of
each year commencing _________, ____. Interest on the Securities will
accrue from the most recent date to which interest has been paid or, if
no interest has been paid, from _________, ____. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT.
Holders must surrender Securities and any coupons to a Paying Agent to
collect principal and interest payments. The Company will pay principal
and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. The Company may
pay principal and interest by check payable in such money.
3. SECURITIES AGENTS.
Initially, The Bank of New York, Attention: Corporate Trust Trustee
Administration, will act as Transfer Agent, Paying Agent and Registrar.
The Company may change any Paying Agent or Transfer Agent without notice
or provide for more than one such agent. The Company or any Affiliate
may act in any such capacity. Subject to certain conditions, the Company
may change the Trustee.
4. INDENTURE.
The Company issued the securities of this series ("Securities") under an
Indenture dated as of [ ], 1999 ("Indenture") between the Company and
The Bank of New York (the "Trustee"). The terms of the Securities
include those stated in the Indenture and the Securities Resolution and
those made part of the Indenture by the Trust Indenture Act of 1939 (15
U.S. Code Sections 77aaa-77bbbb). Securityholders are referred to the
Indenture, the Securities Resolution and the Act for a statement of such
terms.
B-2
5. OPTIONAL REDEMPTION./2/
On or after ________, the Company may redeem all the Securities at any
time or some of them from time to time at the following redemption
prices (expressed in percentages of principal amount), plus accrued
interest to the redemption date. If redeemed during the 12-month period
beginning,
YEAR PERCENTAGE YEAR PERCENTAGE
---- ---------- ---- ----------
and thereafter 100%.
6. MANDATORY REDEMPTION./3/
The Company will redeem $______ principal amount of Securities on and on
each____thereafter through____at a redemption price of 100% of principal
amount, plus accrued interest to the redemption date./4/ The Company may
reduce the principal amount of Securities to be redeemed pursuant to
this paragraph by subtracting 100% of the principal amount (excluding
premium) of any Securities (i) that the Company has acquired or that the
Company has redeemed other than pursuant to this paragraph and (ii) that
the Company has delivered to the Registrar for cancellation. The Company
may so subtract the same Security only once.
7. ADDITIONAL OPTIONAL REDEMPTION./5/
In addition to redemptions pursuant to the above paragraph(s), the
Company may redeem not more than $____principal amount of Securities
on ____and on each____thereafter through_____at a redemption price
of 100% of principal amount, plus accrued interest to the redemption
date.
8. NOTICE OF REDEMPTION./6/
Notice of redemption will be published once in an Authorized Newspaper
in the City of New York and if the Securities are listed on any stock
exchange located outside the United States and such stock exchange so
requires, in any other required city outside the United States at least
30 but not more than 60 days before the redemption date. Notice of
redemption also will be mailed to holders who have filed their names and
addresses with the Transfer Agent within the two preceding years. A
holder of Securities may miss important notices if he fails to maintain
his name and address with the Transfer Agent.
A notice of redemption may provide that it is subject to the occurrence
of any event before the date fixed for such redemption as described in
such notice ("Conditional Redemption") and such notice of Conditional
Redemption shall be of no effect unless all such conditions to the
redemption have occurred before such date or have been waived by the
Company.
B-3
9. CONVERSION./7/
A Holder of a Security may convert it into Common Stock of the Company
or cash, or a combination thereof, at the Company's option, at any time
before the close of business on ___________, or, if the Security is
called for redemption, the Holder may convert it at any time before the
close of business on the redemption date. The initial Conversion Rate is
____________ (or an equivalent amount in cash) per $1,000 principal
amount of the Securities, subject to adjustment as provided in Article 9
of the Indenture./8/ The Company will deliver a check in lieu of any
fractional share. On conversion no payment or adjustment for interest
accrued on the Securities will be made nor for dividends on the Common
Stock issued on conversion. If any Security is converted between the
record date for the payment of interest and the next succeeding interest
payment date, such Security must be accompanied by funds equal to the
interest payable on such succeeding interest payment date on the
principal amount so converted (unless such Security shall have been
called for redemption, in which case no such payment shall be required).
A Security converted on an interest payment date need not be accompanied
by any payment, and the interest on the principal amount of the Security
being converted will be paid on such interest payment date to the
registered holder of such Security on the immediately preceding record
date.
To convert a Security a Holder must (1) complete and sign the conversion
notice on the back of the Security, (2) surrender the Security to a
Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Registrar or Conversion Agent and (4) pay
any transfer or similar tax if required. A Holder may convert a portion
of a Security if the portion is $1,000 or an integral multiple of
$1,000.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in bearer form with coupons in denominations of
$5,000/9/ and whole multiples of $5,000. The Securities may be
transferred by delivery and exchanged as provided in the Indenture. Upon
an exchange, the Transfer Agent may require a holder, among other
things, to furnish appropriate documents and to pay any taxes and fees
required by law or the Indenture. The Transfer Agent need not exchange
any Security or portion of a Security selected for redemption. Also, it
need not exchange any Securities for a period of 15 days before a
selection of Securities to be redeemed.
11. PERSONS DEEMED OWNERS.
The holder of a Security or coupon may be treated as its owner for all
purposes.
B-4
12. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities may be
amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment./10/
Subject to certain exceptions, a default on a series may be waived with
the consent of the holders of a majority in principal amount of the
series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of Company
obligations to Securityholders; or to make any change that does not
materially adversely affect the rights of any Securityholder.
13. RESTRICTIVE COVENANTS./11/
The Securities are unsecured general obligations of the Company limited
to $_____ principal amount. The Indenture does not limit other unsecured
debt.
14. SUCCESSORS.
When a successor assumes all the obligations of the Company under the
Securities, any coupons and the Indenture, the Company will be released
from those obligations.
15. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY./12/
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities, any coupons and the
Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity. U.S. Government Obligations are
securities backed by the full faith and credit of the United States of
America or certificates representing an ownership interest in such
Obligations.
16. DEFAULTS AND REMEDIES.
An Event of Default/13/ includes: default for 60 days in payment of
interest on the Securities; default in payment of principal on the
Securities; default in payment or satisfaction of any sinking fund
obligation; default by the Company for a specified period after notice
to it in the performance of any of its other agreements applicable to
the Securities; certain events of bankruptcy or insolvency; and any
other Event of Default provided for in the series. If an Event of
Default occurs and is continuing, the Trustee or the holders of at least
25% in principal amount of the Securities may declare the principal/14/
of all the Securities to be due and payable immediately. Securityholders
may not enforce the Indenture or the Securities except as provided in
the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any
B-5
trust or power. The Trustee may withhold from Securityholders notice of
any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their
interests. The Company must furnish annual compliance certificates to
the Trustee.
17. TRUSTEE DEALINGS WITH COMPANY.
The Bank of New York, the Trustee under the Indenture, in its individual
or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not Trustee.
18. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. Each Securityholder
by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the
Securities.
19. AUTHENTICATION.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants by
the entirety), JT TEN (=joint tenants with right of survivorship and not
as tenants in common), CUST (=custodian), U/G/M/A (=Uniform Gifts to
Minors Act) and U/T/M/A (=Uniform Transfers to Minors Act).
B-6
$
-------------
[$]
-----------
Due
----------
COASTAL BANCORP, INC.
[Title of Security]
Unless the Security attached to this coupon has been called for
redemption, Coastal Bancorp, Inc. ("Company") will pay to bearer, upon
surrender, the amount shown hereon when due. This coupon may be surrendered for
payment to any Paying Agent listed on the back of this coupon unless the Company
has replaced such Agent. Payment may be made by check. This coupon represents
months' interest.
COASTAL BANCORP, INC.
By
------------------------------------
[REVERSE OF COUPON]
PAYING AGENTS
B-7
NOTES TO EXHIBITS A AND B
1 If the Security is not to bear interest at a fixed rate per annum, insert a
description of the manner in which the rate of interest is to be determined.
If the Security is not to bear interest prior to maturity, so state.
2 If applicable. If the Security is to be subject to a nonrefunding
restriction, insert a brief summary thereof. If the redemption is to be
subject to a condition, insert a brief summary thereof.
3 Such provisions as are applicable, if any.
4 If the Security is a Discounted Debt Security, insert amount to be redeemed
or method of calculating such amount.
5 If applicable. Also insert, if applicable, provisions for repayment of
Securities at the option of the Securityholder.
6 If applicable.
7 If applicable. If convertible into securities other than Common Stock,
insert appropriate summary.
8 If additional or different adjustment provisions apply so specify.
9 If applicable. Insert additional or different denominations and terms as
appropriate.
10 If different terms apply, insert a brief summary thereof.
11 If applicable. If additional or different covenants apply, insert a brief
summary thereof.
12 If applicable. If different defeasance terms apply, insert a brief summary
thereof.
13 If additional or different Events of Default apply, insert a brief summary
thereof.
14 If the Security is a Discounted Debt Security, set forth the amount due and
payable upon an Event of Default.
Note: U.S. tax law may require certain legends on Discounted Debt and Bearer
Securities.
B-8
EXHIBIT C
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
-----------------------------------------------
: :
:-----------------------------------------:
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Date: Your Signature:
------------------- -------------------------------------
----------------------------------------------
(Sign exactly as your name(s) appear(s) on the
other side of this Security)
Signature(s) guaranteed by:
----------------------------------------------------
(All signatures must be guaranteed by an "eligible
guarantor institution" as defined by Rule 17Ad-15
of the Securities Exchange Act of 1934, as amended)
C-1
EXHIBIT D
CONVERSION NOTICE
To convert this Security, check the box:
/ /
To convert only part of this Security, state the amount (must be in integral
multiples of $1,000);
$
-----------------------------
If you want the securities delivered upon conversion made out in another
person's name, fill in the form below:
(Insert other person's Social Security or Tax I.D. Number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type other person's name, address and zip code)
Date: Signature(s):
------------------- -------------------------------------
----------------------------------------------
(Sign exactly as your name(s) appear(s) on the
other side of this Security)
Signature(s) guaranteed by:
----------------------------------------------------
(All signatures must be guaranteed by an "eligible
guarantor institution" as defined by Rule 17Ad-15
of the Securities Exchange Act of 1934, as amended)
D-1