EXHIBIT 4.1
INDENTURE
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21ST CENTURY INSURANCE GROUP,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
5.90% Senior Notes due 2013
______________________________
INDENTURE
Dated as of December 9, 2003
______________________________
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CROSS-REFERENCE TABLE
Certain Sections of this Indenture relating to Sections 310 through
318, inclusive, of the Trust Indenture Act of 1939:
Trust Indenture Act Indenture
Section Section
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310(a)(1) . . . . . . . . . . 7.9; 7.10
(a)(2) . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . N.A.
(b) . . . . . . . . . . 7.8; 7.10
(c) . . . . . . . . . . N.A.
311(a) . . . . . . . . . . 7.11
(b) . . . . . . . . . . 7.11
(c) . . . . . . . . . . N.A.
312(a) . . . . . . . . . . 2.5
(b) . . . . . . . . . . 10.3
(c) . . . . . . . . . . 10.3
313(a) . . . . . . . . . . 7.6
(b)(1) . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . 7.6
(c) . . . . . . . . . . 7.6
(d) . . . . . . . . . . 7.6
314(a) . . . . . . . . . . 4.7
. . . . . . . . . . 4.4; 10.2
(b) . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . 10.4
(c)(2) . . . . . . . . . . 10.4
(c)(3) . . . . . . . . . . N.A.
(d) . . . . . . . . . . N.A.
(e) . . . . . . . . . . 10.5
(f) . . . . . . . . . . 4.4
315(a) . . . . . . . . . . 7.1
(b) . . . . . . . . . . 7.5
(c) . . . . . . . . . . 7.1
(d) . . . . . . . . . . 7.1
(e) . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . 10.6
(a)(1)(A) . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . 6.4
(a)(2) . . . . . . . . . . . N.A.
(b) . . . . . . . . . . 6.7
317(a)(1) . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . 6.9
(b) . . . . . . . . . . 2.4
318(a) . . . . . . . . . . 10.1
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions and Incorporation by Reference 1
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Other Definitions. . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.3. Incorporation by Reference of Trust Indenture Act . . . . . 5
SECTION 1.4. Rules of Construction. . . . . . . . . . . . . . . . . . . . 5
ARTICLE II The Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.1. Form and Dating. . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Execution and Authentication . . . . . . . . . . . . . . . .10
SECTION 2.3. Registrar and Paying Agent . . . . . . . . . . . . . . . . .11
SECTION 2.4. Paying Agent To Hold Money in Trust. . . . . . . . . . . . .11
SECTION 2.5. Securityholder Lists . . . . . . . . . . . . . . . . . . . .12
SECTION 2.6. Transfer and Exchange. . . . . . . . . . . . . . . . . . . .12
SECTION 2.7. Form of Certificates to be Delivered in Connection
With Transfers Pursuant to Rule 144A . . . . . . . . . . . .14
SECTION 2.8. Business Days. . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 2.9. Replacement Securities . . . . . . . . . . . . . . . . . . .14
SECTION 2.10. Outstanding Securities . . . . . . . . . . . . . . . . . .15
SECTION 2.11. Temporary Securities. . . . . . . . . . . . . . . . . . . .15
SECTION 2.12. Cancellation. . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 2.13. Defaulted Interest. . . . . . . . . . . . . . . . . . . . .16
SECTION 2.14. CUSIP Numbers, etc. . . . . . . . . . . . . . . . . . . . .16
SECTION 2.15. Issuance of Additional Securities . . . . . . . . . . . . .16
SECTION 2.16. One Class of Securities . . . . . . . . . . . . . . . . . .17
ARTICLE III Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 3.1. Notices to Trustee . . . . . . . . . . . . . . . . . . . . .17
SECTION 3.2. Selection of Securities to be Redeemed . . . . . . . . . . .17
SECTION 3.3. Notice of Redemption . . . . . . . . . . . . . . . . . . . .18
SECTION 3.4. Effect of Notice of Redemption . . . . . . . . . . . . . . .18
SECTION 3.5. Deposit of Redemption Price. . . . . . . . . . . . . . . . .19
SECTION 3.6. Securities Redeemed in Part. . . . . . . . . . . . . . . . .19
ARTICLE IV Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 4.1. Payment of Securities. . . . . . . . . . . . . . . . . . . .19
SECTION 4.2. Limitations on Liens . . . . . . . . . . . . . . . . . . . .19
SECTION 4.3. Limitations on Sales of Our Significant Subsidiaries . . . .20
SECTION 4.4. Compliance Certificate . . . . . . . . . . . . . . . . . . .20
SECTION 4.5. Maintenance of Office or Agency. . . . . . . . . . . . . . .20
SECTION 4.6. Existence. . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 4.7. SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . .21
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SECTION 4.8. Further Instruments and Acts . . . . . . . . . . . . . . . .21
ARTICLE V Consolidation, Merger and Sale of Assets . . . . . . . . . . . . . .21
SECTION 5.1. Company May Merge or Transfer Assets Only on Certain Terms .21
SECTION 5.2. Successor Corporation Substituted . . . . . . . . . . . . .21
ARTICLE VI Defaults and Remedies . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 6.1. Events of Default. . . . . . . . . . . . . . . . . . . . . .22
SECTION 6.2. Acceleration . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 6.3. Other Remedies . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 6.4. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . .24
SECTION 6.5. Control by Majority. . . . . . . . . . . . . . . . . . . . .24
SECTION 6.6. Limitation on Suits. . . . . . . . . . . . . . . . . . . . .24
SECTION 6.7. Rights of Holders To Receive Payment . . . . . . . . . . . .25
SECTION 6.8. Collection Suit by Trustee . . . . . . . . . . . . . . . . .25
SECTION 6.9. Trustee May File Proofs of Claim . . . . . . . . . . . . . .25
SECTION 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . .26
SECTION 6.12. Waiver of Stay or Extension Laws . . . . . . . . . . . . .26
ARTICLE VII Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 7.1. Duties of Trustee. . . . . . . . . . . . . . . . . . . . . .26
SECTION 7.2. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . .28
SECTION 7.3. Individual Rights of Trustee . . . . . . . . . . . . . . . .29
SECTION 7.4. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . .29
SECTION 7.5. Notice of Defaults . . . . . . . . . . . . . . . . . . . . .29
SECTION 7.6. Reports by Trustee to Holders. . . . . . . . . . . . . . . .29
SECTION 7.7. Compensation and Indemnity . . . . . . . . . . . . . . . . .29
SECTION 7.8. Replacement of Trustee . . . . . . . . . . . . . . . . . . .30
SECTION 7.9. Successor Trustee by Merger. . . . . . . . . . . . . . . . .31
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . .31
SECTION 7.11. Preferential Collection of Claims Against the Company . . .32
ARTICLE VIII Discharge of Indenture; Defeasance. . . . . . . . . . . . . . . .32
SECTION 8.1. Discharge of Liability on Securities; Defeasance . . . . . .32
SECTION 8.2. Conditions to Defeasance . . . . . . . . . . . . . . . . . .33
SECTION 8.3. Application of Trust Money . . . . . . . . . . . . . . . . .34
SECTION 8.4. Repayment to the Company . . . . . . . . . . . . . . . . . .34
SECTION 8.5. Indemnity for Government Obligations . . . . . . . . . . . .34
SECTION 8.6. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . .35
ARTICLE IX Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 9.1. Without Consent of Holders . . . . . . . . . . . . . . . . .35
SECTION 9.2. With Consent of Holders. . . . . . . . . . . . . . . . . . .36
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SECTION 9.3. Compliance with Trust Indenture Act. . . . . . . . . . . . .37
SECTION 9.4. Revocation and Effect of Consents and Waivers. . . . . . . .37
SECTION 9.5. Notation on or Exchange of Securities. . . . . . . . . . . .37
SECTION 9.6. Trustee To Sign Amendments . . . . . . . . . . . . . . . . .37
ARTICLE X Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . .38
SECTION 10.1. Trust Indenture Act Controls. . . . . . . . . . . . . . . .38
SECTION 10.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . .38
SECTION 10.3. Communication by Holders with other Holders . . . . . . . .39
SECTION 10.4. Certificate and Opinion as to Conditions Precedent. . . . .39
SECTION 10.5. Statements Required in Certificate or Opinion . . . . . . .39
SECTION 10.6. When Securities Disregarded . . . . . . . . . . . . . . . .39
SECTION 10.7. Rules by Trustee, Paying Agent and Registrar. . . . . . . .40
SECTION 10.8. Governing Law . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 10.9. No Recourse Against Others. . . . . . . . . . . . . . . . .40
SECTION 10.10. Successors . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 10.11. Multiple Originals . . . . . . . . . . . . . . . . . . . .40
SECTION 10.12. Variable Provisions. . . . . . . . . . . . . . . . . . . .40
SECTION 10.13. Qualification of Indenture . . . . . . . . . . . . . . . .40
SECTION 10.14. Table of Contents; Headings. . . . . . . . . . . . . . . .40
Exhibit A - Form of Initial Security
Exhibit B - Form of Exchange Security
Exhibit C - Form of Certificate (transfers pursuant to Rule 144A)
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INDENTURE, dated as of December 9, 2003, between 21st Century
Insurance Group, a Delaware corporation (the "Company"), and The Bank of New
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York, a New York banking corporation, as trustee (the "Trustee").
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Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of Holders of the Company's 5.90% Senior Notes
due 2013 (the "Initial Securities") and, if and when issued in exchange for
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Initial Securities as provided in the Registration Rights Agreement, the
Company's 5.90% Senior Notes due 2013 (the "Exchange Securities" and, together
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with the Initial Securities and any Additional Securities, the "Securities"):
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ARTICLE I
Definitions and Incorporation by Reference
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SECTION 1.1. Definitions.
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"Additional Interest" shall have the meaning assigned to such term in
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the Registration Rights Agreement.
"Additional Securities" means 5.90% Senior Notes due 2013 issued from
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time to time after the Issue Date under the terms of this Indenture (other than
pursuant to Sections 2.6, 2.9, 2.11, 3.6 and 9.5 of this Indenture, in the case
of Securities that are not already Additional Securities, and other than
Exchange Securities issued pursuant to an exchange offer for the other
Securities outstanding under this Indenture).
"Board of Directors" or "Board" means, with respect to any Person, the
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Board of Directors of such Person or any committee thereof duly authorized to
act on behalf of such Board of Directors.
"Business Day" means a day which is not, in New York City or any other
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place of payment, a Saturday, Sunday or other day on which banking institutions
or trust companies are authorized or required by law, resolution or executive
order to close.
"Code" means the U.S. Internal Revenue Code of 1986, as amended.
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"Company" means the Person named as the "Company" in the first
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paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter,
"Company" shall mean such successor corporation.
"Corporate Trust Office" means the office of the Trustee at which, at
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any particular time, its corporate trust business shall be principally
administered; which office at the date of the execution of this Indenture is
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Administration or at any other time at such other address as the
Trustee may designate from time to time by notice to the Holders.
2
"Default" means any event which is, or after notice or passage of time
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or both would be, an Event of Default.
"DTC" means The Depository Trust Company, its nominees and their
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respective successors and assigns.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"GAAP" means generally accepted accounting principles in the United
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States as in effect from time to time.
"Holder" or "Securityholder" means the Person in whose name a Security
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is registered on the Registrar's books.
"Incur" means create, issue, assume, incur or guarantee.
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"Indenture" means this Indenture, as amended or supplemented from time
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to time.
"Indebtedness" means, with respect to any Person, every obligation of
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such Person for money borrowed or evidenced by bonds, debentures, notes or other
similar instruments, whether or not for money borrowed or given in connection
with the acquisition of any business, properties or assets, including
securities.
"Initial Purchasers" means Banc of America Securities LLC and ▇▇▇▇▇▇
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Brothers Inc.
"Insurance Business" means the sale and underwriting of personal
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automobile insurance policies and any services related to the foregoing.
"Issue Date" means December 9, 2003.
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"Lien" means, with respect to any property or assets, any mortgage,
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pledge, security interest, lien, conditional sale or other title retention
agreement or other similar encumbrance.
"Officer" means the Chairman of the Board, the Chief Executive
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Officer, the President, the Vice Chairman, any Vice President, the Treasurer,
the Assistant Treasurer, the Chief Financial Officer, the Secretary or the
Assistant Secretary of the Company, as applicable.
"Officers' Certificate" means a certificate signed by any two Officers
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of the Company.
"Opinion of Counsel" means a written opinion from legal counsel to the
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Company who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company.
3
"Person" means any individual, corporation, partnership, limited
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liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Principal" means the principal of the Security plus the premium, if
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any, payable on the Security which is due or overdue or is to become due at the
relevant time; provided, however, that for purposes of calculating any such
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premium, the term "principal" shall not include the premium with respect to
which such calculation is being made.
"Purchase Agreement" means the Purchase Agreement dated December 4,
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2003 between the Company and the Initial Purchasers.
"Registered Exchange Offer" means the offer by the Company, pursuant
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to the Registration Rights Agreement, to certain Holders of Initial Securities,
to issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means the Registration Rights
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Agreement, dated as of December 9, 2003, between the Company and the Initial
Purchasers, and with respect to any Additional Securities, one or more
substantially similar registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, from time to time.
"Responsible Officer" shall mean, when used with respect to the
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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.
"Restrictive Securities Legend" means the Restrictive Legend set forth
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in Section 2.1(c).
"SEC" means the U.S. Securities and Exchange Commission, or any
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successor agency.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
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"Securities Custodian" means the custodian with respect to a Global
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Security (as appointed by DTC), or any successor person thereto and shall
initially be the Trustee.
"Significant Subsidiary" means a Subsidiary, including its
----------------------
Subsidiaries, that meets any of the conditions set forth under Rule 405 under
the Securities Act.
"Stated Maturity" means, with respect to any security, the date
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specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision
4
providing for the repurchase of such security at the option of the holder
thereof upon the happening of any contingency beyond the control of the Company
unless such contingency has occurred).
"Subsidiary" means a corporation, company (including any limited
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liability company), association, partnership, joint venture, trust or other
business entity in which the Company and/or one or more of its other
Subsidiaries owns at least 50% of the Voting Stock.
"Trust Indenture Act" means the U.S. Trust Indenture Act of 1939, as
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amended (15 U.S.C. Sec.Sec. 77aaa-77bbbb) as in effect on the date of this
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Indenture; provided, however, that in the event the Trust Indenture Act of 1939
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is amended after such date, "Trust Indenture Act" means, to the extent required
by any such amendments, the U.S. Trust Indenture Act of 1939, as so amended.
"Trustee" means the party named as such in this Indenture until a
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successor replaces it and, thereafter, means such successor.
"Uniform Commercial Code" means the New York Uniform Commercial Code
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as in effect from time to time.
"U.S. Government Obligations" means direct obligations (or
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certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the Company's option.
"Voting Stock" means all classes of stock or other interests
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(including partnership interests) outstanding of a Significant Subsidiary that
are normally entitled to vote in elections of directors, managers or trustees
thereof or any securities convertible into or exercisable or exchangeable for
such stock or interests of any Significant Subsidiary or warrants, rights or
options to subscribe for or purchase shares of such stock or interests of any
Significant Subsidiary.
SECTION 1.2. Other Definitions.
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Defined in
Term Section
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"Affiliate" . . . . . . . . . . . . . . . . . . . . 10.6
"Agent Members" . . . . . . . . . . . . . . . . . . 2.1(d)
"Applicable Procedures" . . . . . . . . . . . . . . 2.6(a)
"Authenticating Agent". . . . . . . . . . . . . . . 2.2
"Bankruptcy Law". . . . . . . . . . . . . . . . . . 6.1
"Company Order" . . . . . . . . . . . . . . . . . . 2.2
"covenant defeasance option". . . . . . . . . . . . 8.1(b)
"Custodian" . . . . . . . . . . . . . . . . . . . . 6.1
"Definitive Securities" . . . . . . . . . . . . . . 2.1(e)
5
"Event of Default". . . . . . . . . . . . . . . . . 6.1
"Exchange Global Security". . . . . . . . . . . . . 2.1
"Exchange Securities" . . . . . . . . . . . . . . . Preamble
"Global Securities" . . . . . . . . . . . . . . . . 2.1(a)
"Initial Securities". . . . . . . . . . . . . . . . Preamble
"legal defeasance option" . . . . . . . . . . . . . 8.1(b)
"Paying Agent". . . . . . . . . . . . . . . . . . . 2.3
"QIBs". . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
"Registrar" . . . . . . . . . . . . . . . . . . . . 2.3
"Resale Restriction Termination Date" . . . . . . . 2.6
"Restrictive Legend". . . . . . . . . . . . . . . . 2.1(c)
"Rule 144A" . . . . . . . . . . . . . . . . . . . . 2.1(a)
"Rule 144A Certificate" . . . . . . . . . . . . . . 2.6(b)
"Rule 144A Global Security" . . . . . . . . . . . . 2.1
"Rule 144A Security". . . . . . . . . . . . . . . . 2.1
"Securities". . . . . . . . . . . . . . . . . . . . Preamble
"Successor" . . . . . . . . . . . . . . . . . . . . 5.1
SECTION 1.3. Incorporation by Reference of Trust Indenture Act.
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This Indenture is subject to the mandatory provisions of the Trust Indenture Act
which are incorporated by reference in and made a part of this Indenture. The
following terms in the Trust Indenture Act have the following meanings:
"Commission" means the SEC.
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"indenturesecurities" means the Securities.
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"indenture security holder" means a Holder.
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"indenture to be qualified" means this Indenture.
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"indenture trustee" or "institutional trustee" means the Trustee.
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"obligor" on the indenture securities means the Company and any other
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obligor on the indenture securities.
All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context otherwise
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requires:
(1) a term has the meaning assigned to it;
6
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) all references to (a) Initial Securities shall refer also to
any Additional Securities issued in the form of Initial Securities and (b)
Exchange Securities shall refer also to any Additional Securities issued in
the form of Exchange Securities, in each case, pursuant to Section 2.15;
and
(7) all references to the date the Securities were originally
issued shall refer to the Issue Date or the date any Additional Securities
were originally issued, as the case may be.
ARTICLE II
The Securities
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SECTION 2.1.Form and Dating. The Initial Securities are being offered
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and sold by the Company to the Initial Purchasers pursuant to the Purchase
Agreement. The Initial Securities will be resold initially by the Initial
Purchasers only to qualified institutional buyers (as defined in Rule 144A under
the Securities Act ("Rule 144A")) in reliance on Rule 144A ("QIBs"). The
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Initial Securities may thereafter be transferred only to QIBs for the period
specified herein or in accordance with the procedure described herein.
The Initial Securities will be offered and sold to qualified
institutional buyers in reliance on Rule 144A (each, a "Rule 144A Security" and
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collectively, the "Rule 144A Securities") in the form of a permanent global
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Security, without interest coupons, substantially in the form of Exhibit A,
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which is incorporated by reference and made a part of this Indenture, including
appropriate legends as set forth in Section 2.1(c) (the "Rule 144A Global
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Security"), deposited with the Trustee, as custodian for DTC, duly executed by
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the Company and authenticated by the Trustee as hereinafter provided. The Rule
144A Global Security may be represented by more than one certificate, if so
required by DTC's rules regarding the maximum principal amount to be represented
by a single certificate. The aggregate principal amount of the Rule 144A Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for DTC or its nominee, as hereinafter
provided.
Exchange Securities exchanged for interests in the Rule 144A Security
will be issued in the form of a permanent global Security substantially in the
form of Exhibit B hereto, which is hereby incorporated by reference and made a
---------
part of this Indenture, deposited with the Trustee as hereinafter provided,
including the appropriate legend set forth in Section 2.1(c) (the "Exchange
--------
Global Security"). The Exchange Global Security may be represented by more than
---------------
7
one certificate, if so required by DTC's rules regarding the maximum principal
amount to be represented by a single certificate.
The Rule 144A Global Security and the Exchange Global Security are
sometimes collectively herein referred to as the "Global Securities."
-----------------
The Principal of and interest on the Securities shall be payable at
the office or agency of the Company maintained for such purpose in The City of
New York, or at such other office or agency of the Company as may be maintained
for such purpose pursuant to Section 2.3; provided, however, that at the option
-------- -------
of the Company, each installment of interest may be paid by (i) check mailed to
addresses of the Persons entitled thereto as such addresses shall appear on the
Note Register or (ii) wire transfer to an account located in the United States
maintained by the payee. Payments in respect of Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by DTC.
(b) Denominations. The Securities shall be issuable only in fully
-------------
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof.
(c) Restrictive Legends. Unless and until (i) an Initial Security
-------------------
is sold under an effective registration statement pursuant to the Registration
Rights Agreement or a similar agreement, (ii) an Initial Security is exchanged
for an Exchange Security in connection with an effective registration statement
pursuant to the Registration Rights Agreement or a similar agreement or (iii)
the Resale Restriction Termination Date (as defined below), the Rule 144A Global
Security shall bear the following legend (the "Restrictive Legend") on the face
------------------
thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") THAT IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY OR
A SUBSIDIARY OF THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
8
THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE."
(B) The Global Securities, whether or not an Initial Security, shall
bear the following legend on the face thereof:
"THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY
BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN."
(d) Book-Entry Provisions. This Section 2.1(d) shall apply only to
---------------------
Global Securities deposited with the Trustee, as custodian for DTC.
(ii) Each Global Security initially shall (x) be registered in the
name of DTC for such Global Security or the nominee of DTC, (y) be delivered to
the Trustee as custodian for DTC and (z) bear legends as set forth in Section
2.1(c).
9
(iii) Members of, or participants in, DTC ("Agent Members") shall
-------------
have no rights under this Indenture with respect to any Global Security held on
their behalf by DTC or by the Trustee as the custodian of DTC or under such
Global Security, and DTC may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by DTC or impair, as between DTC and its Agent Members,
the operation of customary practices of DTC governing the exercise of the rights
of a holder of a beneficial interest in any Global Security.
(iv) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (e) of this Section 2.1 to
beneficial owners who are required to hold Definitive Securities, the Securities
Custodian shall reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Definitive Securities of like tenor and amount.
(v) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to subsection (e) of this Section 2.1, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by DTC in exchange for its beneficial interest
in such Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations.
(vi) The registered holder of a Global Security may grant proxies
and otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(e) Definitive Securities. Except as provided below, owners of
---------------------
beneficial interests in Global Securities will not be entitled to receive
certificated Securities ("Definitive Securities"). If required to do so
---------------------
pursuant to any applicable law or regulation, beneficial owners may obtain
Definitive Securities in exchange for their beneficial interests in a Global
Security upon written request in accordance with DTC's and the Registrar's
procedures. In addition, Definitive Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (a) DTC notifies the Company that it is unwilling or unable to
continue as depositary for such Global Security or DTC ceases to be a clearing
agency registered under applicable law and a successor depositary is not
appointed by the Company within 90 days of such notice, (b) the Company executes
and delivers to the Trustee an Officers' Certificate stating that such Global
Security shall be so exchangeable or (c) an Event of Default has occurred and is
continuing and the Registrar has received a request from DTC.
(ii) Any Definitive Security delivered in exchange for an interest
in a Global Security pursuant to Section 2.1(d)(iv) or (v) shall bear the legend
regarding transfer restrictions applicable to the Definitive Security set forth
in Section 2.1(c).
10
SECTION 2.2.Execution and Authentication. An Officer of the Company
----------------------------
shall sign the Securities for the Company by manual or facsimile signature and
may be imprinted or otherwise reproduced.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee authenticates the Security by manual or facsimile signature. The
signature of the Trustee on a Security shall be conclusive evidence that such
Security has been duly and validly authenticated and issued under this
Indenture. A Security shall be dated the date of its authentication.
At any time and from time to time after the execution and delivery of
this Indenture, the Trustee shall authenticate and make available for delivery:
(1) Initial Securities for original issue on the Issue Date in an aggregate
principal amount of $100.0 million, (the "Original Securities"), (2) any
-------------------
Additional Securities for original issue from time to time after the Issue Date
as set forth in Section 2.15 and (3) any Exchange Securities for issue only in
exchange for a like principal amount of Initial Securities, in each case upon a
written order of the Company signed by two Officers of the Company (a "Company
-------
Order"). Such Company Order shall specify the amount of the Securities to be
-----
authenticated and the date on which the original issue of Securities is to be
authenticated and whether the Securities are to be Initial Securities,
Additional Securities or Exchange Securities. The aggregate principal amount of
Initial Securities which may be authenticated and delivered under this Indenture
is limited to $100.0 million. Additionally, the Company may from time to time,
without notice to or consent of the Holders, issue such additional principal
amounts of Additional Securities as may be issued and authenticated pursuant to
clause (2) of this paragraph, and Securities authenticated and delivered upon
registration or transfer of, or in exchange for, or in lieu of, other Securities
of the same class pursuant to Section 2.6, Section 2.9, Section 2.10, Section
3.6, Section 9.5 and except for transactions similar to the Registered Exchange
Offer.
The Trustee may appoint an agent (the "Authenticating Agent")
--------------------
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent.
In case the Company, pursuant to Article V, shall be consolidated or
merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
(if not otherwise a party to the Indenture) with the Trustee pursuant to Article
V, any of the Securities authenticated or delivered prior to such consolidation,
merger, conveyance, transfer, lease or other disposition may, from time to time,
at the request of the successor Person, be exchanged for other Securities
executed in the name of the successor Person with such changes in phraseology
and form as may be appropriate, but otherwise in substance of like tenor as the
Securities surrendered for such
11
exchange and of like principal amount; and the Trustee, upon Company Order of
the successor Person, shall authenticate and deliver Securities as specified in
such order for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person (if other than
the Company) pursuant to this Section 2.2 in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person (if other
than the Company), at the option of the Holders but without expense to them,
shall provide for the exchange of all Securities at the time outstanding for
Securities authenticated and delivered in such new name.
SECTION 2.3.Registrar and Paying Agent. The Company shall maintain an
--------------------------
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more additional paying agents. The term "Paying Agent" includes any
such additional paying agent.
In the event the Company shall retain any Person not a party to this
Indenture as an agent hereunder, the Company shall enter into an appropriate
agency agreement with any Registrar or Paying Agent not a party to this
Indenture, which shall incorporate the terms of the Trust Indenture Act. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of each
such agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.7. The Company shall be responsible for the fees
and compensations of all agents appointed or approved by it. Either the Company
or any of its domestically incorporated wholly owned Subsidiaries may act as
Paying Agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION 2.4.Paying Agent To Hold Money in Trust. By no later than
-----------------------------------
11:00 a.m. (New York City time) on the date on which any Principal or interest
(including any Additional Interest) on any Security is due and payable, the
Company shall deposit with the Paying Agent a sum sufficient to pay such
Principal or interest (including any Additional Interest) when due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that such Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by such Paying Agent for the payment of Principal of
or interest (including any Additional Interest) on the Securities and shall
notify the Trustee in writing of any default by the Company in making any such
payment. If either of the Company or any of its Subsidiaries acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent (other
than the Trustee) to pay all money held by it to the Trustee and to account for
any funds disbursed by such Paying Agent. Upon complying with this Section 2.4,
the Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money delivered to the Trustee. Upon any bankruptcy,
reorganization or similar proceeding with respect to the Company, the Trustee
shall serve as Paying Agent for the Securities.
12
SECTION 2.5.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
Registrar, the Company shall cause the Registrar to furnish to the Trustee, in
writing at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of Securityholders.
SECTION 2.6. Transfer and Exchange.
---------------------
With respect to any proposed registration of transfer of a Global
Security prior to the date which is two years after the later of the date of its
original issue and the last date on which the Company or any Affiliate of the
Company was the owner of such Security (or any predecessor thereto) (the "Resale
------
Restriction Termination Date"), a registration of transfer shall be made upon
----------------------------
the representation of the transferee in the form as set forth on the reverse of
the Security that it is purchasing for its own account or an account with
respect to which it exercises sole investment discretion and that it and any
such account is a "qualified institutional buyer" within the meaning of Rule
144A, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(a) Restrictive Securities Legend. Upon the transfer, exchange or
-----------------------------
replacement of Securities not bearing a Restrictive Securities Legend, the
Registrar shall deliver Securities that do not bear a Restrictive Securities
Legend. Upon the transfer, exchange or replacement of Securities bearing a
Restrictive Securities Legend, the Registrar shall deliver only Securities that
bear a Restrictive Securities Legend unless there is delivered to the Registrar
an Opinion of Counsel to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(b) The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.1 or this Section
2.6. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
(c) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Securities.
----------
(i) To permit registrations of transfers and exchanges, the
Company shall, subject to the other terms and conditions of this Article
II, execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental charges payable upon
exchange or transfer pursuant to Sections 3.6 or 9.5).
13
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period beginning
(1) 15 days before the mailing of a notice of an offer to repurchase or
redeem Securities and ending at the close of business on the day of such
mailing or (2) 15 days before an interest payment date and ending on such
interest payment date.
(iv) Prior to the due presentation for registration of transfer
of any Security, the Company, the Trustee, the Paying Agent, the Registrar
or any co-registrar may deem and treat the person in whose name a Security
is registered as the absolute owner of such Security for the purpose of
receiving payment of Principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d) shall bear the
legend regarding transfer restrictions applicable to the Definitive
Security set forth in Section 2.1(c).
(vi) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall be the valid and legally
binding obligation of the Company, shall evidence the same debt and shall
be entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(vii) All certificates, certifications and opinions of counsel
required to be submitted to the Registrar or any co-registrar pursuant to
this Section 2.6 to effect any transfer or exchange may be submitted by
facsimile transmission, with the original to follow by first class mail or
hand delivery.
(d) No Obligation of the Trustee. The Trustee shall have no
----------------------------
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, DTC or other Person in respect of any aspect of
the records, or for maintaining, supervising or reviewing any records, relating
to beneficial ownership interests of a Global Security, with respect to the
accuracy of the records of DTC or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Securities or with
respect to the delivery to any participant, member, beneficial owner or other
Person (other than DTC) of any notice (including any notice of redemption) or
the payment of any amount or delivery of any Securities (or other security or
property) under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders
in respect of the Securities shall be given or made only to or upon the order of
the registered Holders (which shall be DTC or its nominee in the case of a
Global Security). The rights of beneficial owners in any Global Security shall
be exercised only through DTC subject to the applicable rules and procedures of
DTC. The Trustee and the Company may conclusively rely and shall be fully
protected in relying upon information furnished by DTC with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under
14
applicable law with respect to any transfer of any interest in any Security
(including any transfers between or among Agent Members or beneficial owners of
interests in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by, the terms of this Indenture, and
to examine the same to determine substantial compliance as to form with the
express requirements hereof.
(e) Transfer and Exchange of Global Securities. A Global Security
------------------------------------------
may not be transferred as a whole except by DTC to a nominee of DTC, by a
nominee of DTC to DTC or to another nominee of DTC, or by the DTC or any such
nominee to a successor depositary or to a nominee of such successor depositary.
(f) Accrual of Interest on the Exchange Security; Exchange of
---------------------------------------------------------
Exchange Securities.
-------------------
(i) Interest on any Exchange Security shall accrue from the
dates provided in Exhibit B.
(ii) Subject to Section 2.1(e), upon the occurrence of the
exchange offer in accordance with the Registration Rights Agreement, the
Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.2, the Trustee shall authenticate one or more
Exchange Global Securities in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Initial Securities or
Additional Securities tendered for acceptance by Persons that certify in
the applicable letters of transmittal that (x) they are not broker-dealers,
(y) they are not participating in a distribution of the Exchange Securities
and (z) they are not affiliates (as defined in Rule 144 under the
Securities Act) of the Company, and accepted for exchange in the exchange
offer. Concurrently with the issuance of such Securities, the Trustee shall
cause the aggregate principal amount of the applicable Initial Securities
in the form of Global Securities and/or Additional Securities in the form
of Global Securities to be reduced accordingly.
SECTION 2.7. Form of Certificates to be Delivered in Connection with
-------------------------------------------------------
Transfers Pursuant to Rule 144A.
-------------------------------
Attached hereto as Exhibit C is the certificate to be delivered in
---------
connection with transfers pursuant to Rule 144A.
SECTION 2.8. Business Days. If a payment date is on a date that is
-------------
not a Business Day, payment shall be made on the next succeeding day that is a
Business Day, and no interest shall accrue on such payment for the intervening
period. If a regular record date is on a day that is not a Business Day, the
record date shall not be affected.
SECTION 2.9. Replacement Securities. If a mutilated Security is
----------------------
surrendered to the Registrar or if the Holder of a Security shall provide the
Company and the Trustee with evidence to their satisfaction that the Security
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the
15
requirements of Section 8-405 of the Uniform Commercial Code are met and the
Holder satisfies any other reasonable requirements of the Trustee. In addition,
such Holder shall furnish an indemnity or surety bond sufficient in the judgment
of the Company and the Trustee to protect the Company, the Trustee, the Paying
Agent and the Registrar from any loss which any of them may suffer if a Security
is replaced. The Company and the Trustee may charge the Holder for their
expenses in replacing a Security, including reasonable fees and expenses of
counsel. Every replacement Security is an additional obligation of the Company.
SECTION 2.10. Outstanding Securities. Securities outstanding at any
----------------------
time are all Securities authenticated by the Trustee except for those canceled,
those delivered for cancellation and those described in this Section 2.10 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.9, 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 the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all Principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.11. Temporary Securities. Until definitive Securities are
--------------------
ready for delivery, the Company may prepare and the Trustee shall authenticate
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. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities. After
the preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and deliver in exchange therefor, one or more
definitive Securities representing an equal principal amount of Securities.
Until so exchanged, the Holder of temporary Securities shall in all respects be
entitled to the same benefits under this Indenture as a Holder of definitive
Securities.
SECTION 2.12. Cancellation. The Company at any time may deliver
------------
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee for cancellation any Securities surrendered to them
for registration of transfer or exchange or payment. The Trustee and no one
else shall cancel (subject to the record retention requirements of the Exchange
Act) all Securities surrendered for registration of transfer or exchange,
payment or cancellation and, upon the request of the Company, deliver a
certificate of such cancellation to the Company. The Company may not issue new
Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancellation, which shall not prohibit the Company from issuing any
Additional Securities, or any Exchange Securities in exchange for Initial
Securities.
16
All cancelled Securities held by the Trustee may be disposed of by the Trustee
in accordance with its then customary practices and procedures, unless the
Company directs otherwise.
SECTION 2.13. Defaulted Interest. If the Company defaults in a
------------------
payment of interest on the Securities, the Company shall pay defaulted interest
plus interest on such defaulted interest to the extent lawful at the rate
specified therefor in the Securities in any lawful manner. The Company may pay
the defaulted interest to the Persons who are Securityholders on a subsequent
special record date. The Company shall fix or cause to be fixed any such
special record date and payment date to the reasonable satisfaction of the
Trustee which specified record date shall not be less than 10 days prior to the
payment date for such defaulted interest and shall promptly mail or cause to be
mailed to each Securityholder a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Security and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such defaulted interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when so deposited to be held in
trust for the benefit of the Person entitled to such defaulted interest as
provided in this Section 2.13.
SECTION 2.14. CUSIP Numbers, etc. The Company in issuing the
------------------
Securities may use "CUSIP" or "ISIN" numbers and/or other similar numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" and/or "ISIN"
numbers in notices of redemption as a convenience to Holders; provided, however,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the 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 and/or other
similar numbers.
SECTION 2.15. Issuance of Additional Securities. The Company shall
---------------------------------
be entitled to issue, from time to time, Additional Securities under this
Indenture which shall have identical terms as the Initial Securities issued on
the Issue Date or the Exchange Securities exchanged therefor (in each case,
other than with respect to the date of issuance, issue price and amount of
interest payable on the first payment date applicable thereto), as the case may
be. The Initial Securities issued on the Issue Date, any Additional Securities
and all Exchange Securities issued in exchange therefor shall be treated as a
single class for all purposes under this Indenture.
With respect to any Additional Securities, the Company shall set forth
in a resolution of the Board of Directors and an Officers' Certificate, a copy
of each shall be delivered to the Trustee, the following information:
(i) the aggregate principal amount of such Additional Securities to
be authenticated and delivered pursuant to this Indenture;
17
(ii) the issue price, the issue date and the "CUSIP" and "ISIN"
number of any such Additional Securities and the amount of interest payable on
the first payment date applicable thereto;
(iii) whether such Additional Securities shall be transfer
restricted securities and issued in the form of Initial Securities as set forth
in Exhibit A to this Indenture or shall be issued in the form of Exchange
Securities as set forth in Exhibit B to this Indenture; and
(iv) if applicable, the Resale Restriction Termination for such
Additional Securities.
SECTION 2.16. One Class of Securities. The Initial Securities, any
-----------------------
Additional Securities and the Exchange Securities shall vote and consent
together on all matters as one class; and none of the Initial Securities, any
Additional Securities and the Exchange Securities shall have the right to vote
or consent as a separate class on any matter. The Initial Securities, any
Additional Securities and the Exchange Securities shall together be deemed to be
a single series under this Indenture.
ARTICLE III
Redemption
----------
SECTION 3.1. Notices to Trustee. If the Company elects to redeem
------------------
Securities pursuant to Section 5 of the Securities, it shall notify the Trustee
in writing of the redemption date and the principal amount of Securities to be
redeemed.
The Company shall give each notice to the Trustee provided for in this
Section 3.1 at least 60 days (45 days in the case of redemption of all the
Securities) before the redemption date unless the Trustee consents to a shorter
period. Such notice shall be accompanied by an Officers' Certificate from the
Company to the effect that such redemption will comply with the conditions
herein. The record date relating to such redemption shall be selected by the
Company and set forth in the related notice given to the Trustee, which record
date shall be not less than 15 days prior to the date selected for redemption by
the Company.
SECTION 3.2. Selection of Securities to be Redeemed. If fewer than
--------------------------------------
all the Securities then outstanding are to be redeemed, the Trustee shall select
the Securities to be redeemed by a method that complies with applicable legal
and securities exchange requirements, if any, and that the Trustee considers, in
its discretion, to be fair and appropriate in accordance with methods generally
used at the time of selection by fiduciaries in similar circumstances. The
Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
Principal of Securities that have denominations larger than $1,000. Securities
and portions of them that the Trustee selects shall be in amounts of $1,000 or a
whole multiple of $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company of the Securities or portions
of Securities to be redeemed.
18
SECTION 3.3. Notice of Redemption. At least 30 days but not more
--------------------
than 60 days before a date for redemption of Securities, notice of redemption
shall be mailed by first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price (or the method of calculating such
price) and the amount of accrued interest to be paid, if any;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price plus accrued and unpaid
interest, if any;
(5) if fewer than all the outstanding Securities are to be
redeemed, the Bond No. (if certificated) and principal amounts of the
particular Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;
(7) the CUSIP number, or any similar number, if any, printed on
the Securities being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, or any similar number, if any, listed in such
notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the name of the Company and at the Company's expense. In such
event, the Company shall provide the Trustee with the information required by
this Section 3.3.
SECTION 3.4. Effect of Notice of Redemption. Once notice of
------------------------------
redemption is mailed in accordance with Section 3.3, Securities called for
redemption shall become due and payable on the redemption date and at the
redemption price as stated in the notice. Upon surrender to the Paying Agent on
or after the redemption date, such Securities shall be paid at the redemption
price stated in the notice, plus accrued and unpaid interest to the redemption
date; provided, that the Company shall have deposited the redemption price with
the Paying Agent or the Trustee on or before 11:00 a.m. (New York City time) on
the date of redemption; provided further that if the redemption date is after a
regular record date and on or prior to the interest payment date, the accrued
and unpaid interest shall be payable to the Securityholder of the redeemed
Securities entitled to the redemption price. Failure to give notice or any
defect in the notice to any Holder shall not affect the validity of the notice
to any other Holder.
19
SECTION 3.5. Deposit of Redemption Price. By no later than 11:00
---------------------------
a.m. (New York City time) on the date of redemption, the Company shall deposit
with the Paying Agent (or, if the Company or any of its Subsidiaries is the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued and unpaid interest on all Securities to be
redeemed on that date other than Securities or portions of Securities called for
redemption which are owned by the Company or a Subsidiary and have been
delivered by the Company or such Subsidiary to the Trustee for cancellation.
Unless the Company defaults in the payment of such redemption price,
interest on the Securities to be redeemed will cease to accrue on and after the
applicable redemption date, whether or not such Securities are presented for
payment.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a
---------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder thereof (at the Company's expense) a new
Security, equal in a principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE IV
Covenants
---------
SECTION 4.1. Payment of Securities. The Company covenants and
---------------------
agrees that it will promptly pay the Principal of and interest (including
Additional Interest) on the Securities on the dates and in the manner provided
in the Securities and in this Indenture. Principal and interest (including
Additional Interest) shall be considered paid on the date due if, on or before
11:00 a.m. (New York City time) on such date, the Trustee or the Paying Agent
(or, if the Company or any of its Subsidiaries is the Paying Agent, the
segregated account or separate trust fund maintained by the Company or such
Subsidiary pursuant to Section 2.4) holds in accordance with this Indenture
money sufficient to pay all Principal and interest (including Additional
Interest) then due. If any Additional Interest is due, the Company shall
deliver an Officers' Certificate to the Trustee setting forth the Additional
Interest per $1,000 aggregate principal amount of Securities.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful as provided in
Section 2.13.
Notwithstanding anything to the contrary contained in this Indenture,
the Company or the Paying Agent may, to the extent it is required to do so by
law, deduct or withhold income or other similar taxes imposed by the United
States of America or other domestic or foreign taxing authorities from Principal
or interest payments hereunder.
SECTION 4.2. Limitations on Liens. The Company will not and will
--------------------
not permit any of its Significant Subsidiaries to Incur any Indebtedness secured
by a Lien on any Voting Stock of a Significant Subsidiary unless the Company
secures or causes such Significant Subsidiary to secure the Securities equally
and ratably with (or prior to) the Indebtedness so
20
secured for so long as such Indebtedness is so secured; provided, however, that
the foregoing restrictions shall not apply to:
(1) Liens on Voting Stock of a Significant Subsidiary existing
at the time such entity becomes a Significant Subsidiary; provided,
however, that such Liens are not created, incurred or assumed in connection
with, or in contemplation of, such entity becoming a Significant
Subsidiary;
(2) Liens on Voting Stock of a Significant Subsidiary to the
Company or another Significant Subsidiary; or
(3) Any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of Liens
referred to clauses (1) or (2) of this Section 4.2; provided that any such
--------
extension, renewal or replacement Lien shall be incurred within six months
of repaying the Indebtedness secured by the Lien referred to in clauses (1)
or (2) of this Section 4.2 and limited to the property covered by the Lien
extended, renewed or replaced, and the Indebtedness secured by such new
Lien shall not be greater in amount than the Indebtedness secured by the
Lien extended, renewed or replaced.
SECTION 4.3. Limitations on Sales of Our Significant Subsidiaries.
----------------------------------------------------
So long as any Securities remain outstanding, the Company will not and will not
permit of any of its Significant Subsidiaries to (x) issue, sell, transfer or
otherwise dispose of any Voting Stock of any Significant Subsidiary (other than
to the Company or any wholly-owned Subsidiary) or (y) sell, lease, assign or
transfer all or substantially all of the assets of any Significant Subsidiary
(other than to the Company or any wholly-owned Subsidiary), unless such
issuance, sale, transfer, lease, assignment or other disposition is for at least
fair value (as determined by our board of directors acting in good faith) and,
after giving effect to the use of proceeds therefrom, the Company and its
Subsidiaries, considered as a whole, would continue to be principally engaged in
the Insurance Business.
SECTION 4.4. Compliance Certificate. The Company shall deliver to
----------------------
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate signed by its principal executive officer, the principal
financial officer or the principal accounting officer stating that in the course
of the performance by the signers of their duties as Officers of the Company
they would normally have knowledge of any Default or Event of Default and
whether or not the signers know of any Default or Event of Default that occurred
during such period. If they do, the certificate shall describe the Default or
Event of Default, its status and what action the Company is taking or proposes
to take with respect thereto. The Company also shall comply with Section
314(a)(4) of the Trust Indenture Act.
SECTION 4.5. Maintenance of Office or Agency. The Company shall
-------------------------------
maintain the office or agency required under Section 2.3. The Company shall
give prior written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 10.2.
21
SECTION 4.6. Existence. Except as otherwise permitted by Article V,
---------
the Company shall do or cause to be done all things necessary to preserve and
keep in full force and effect its existence as a corporation or other Person.
SECTION 4.7. SEC Reports. The Company will comply with all the
-----------
applicable provisions of Section 314(a) of the Trust Indenture Act. Delivery of
such information, documents or reports to the Trustee pursuant to such
provisions is for informational purposes only, and the Trustee's receipt thereof
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on the Officers' Certificate).
SECTION 4.8. Further Instruments and Acts. Upon reasonable request
----------------------------
of the Trustee, the Company will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
ARTICLE V
Consolidation, Merger and Sale of Assets
----------------------------------------
SECTION 5.1. Company May Merge or Transfer Assets Only on Certain
----------------------------------------------------
Terms. The Company will not consolidate with or sell, lease, transfer or convey
-----
all or substantially all of its assets to, or merge with or into, in one
transaction or a series of related transactions, any other Person, unless:
(i) the Company shall be the continuing entity, or the
resulting, surviving or transferee Person (the "Successor") shall be a
---------
Person organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor
(if not the Company) shall expressly assume, by supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to the Trustee,
all the obligations of the Company under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) if requested, the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer and such supplemental indenture
(if any) comply with this Indenture and that all conditions precedent
herein provided for relating to such transaction have been complied with.
SECTION 5.2. Successor Corporation Substituted. The Successor will
---------------------------------
succeed to, and be substituted for, and may exercise every right and power of,
the Company under the Indenture, but the predecessor Company in the case of a
lease of all or substantially all of the Company's assets will not be released
from the obligation to pay the Principal of and interest on the Securities.
22
ARTICLE VI
Defaults and Remedies
---------------------
SECTION 6.1. Events of Default. An "Event of Default" occurs with
----------------- ----------------
respect to the Securities if:
(1) the Company defaults in the payment of the Principal (or
premium, if any) of any Security when the same becomes due and payable at
its Stated Maturity, upon optional redemption, upon declaration or
otherwise;
(2) the Company defaults in any payment of interest (including
Additional Interest) on any Security when the same becomes due and payable,
and such default continues for a period of 30 days;
(3) the Company fails to comply with any of its covenants and
agreements in the Securities or this Indenture (other than those referred
to in (1) or (2) above) and such failure continues for 60 days after the
notice specified below;
(4) the Company fails to pay when due at maturity, or defaults
with respect to other Indebtedness of the Company or any Significant
Subsidiary (which default results in the acceleration of Indebtedness), in
an aggregate amount of $10,000,000 or more without such failure or
acceleration having ceased or been rescinded, stayed or annulled within 30
days after written notice specified below;
(5) the Company or any Significant Subsidiary, pursuant to or
within the meaning of the Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against
it in an involuntary case or proceeding in which it is the debtor;
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property;
(D) makes a general assignment for the benefit of its
creditors;
(E) files a petition in bankruptcy or answer or consent
seeking reorganization or relief;
(F) consents to the filing of such petition or the
appointment of or taking possession by a Custodian; or
(G) takes any comparable action under any foreign laws
relating to insolvency; or
23
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case, or adjudicates the Company or
a Significant Subsidiary insolvent or bankrupt;
(B) appoints a Custodian of the Company or a Significant
Subsidiary or for all or substantially all of the Company's or
any Significant Subsidiary's property; or
(C) orders the winding-up or liquidation of the Company or
a Significant Subsidiary (or any similar relief is granted under
any foreign laws)
and the order or decree remains unstayed and in effect for 60 days.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any
similar federal or state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
If any failure, default or acceleration referred to in clause (4)
above shall cease or be rescinded, stayed or annulled, then the Event of
Default hereunder by reason thereof shall be deemed likewise to have been
thereupon cured.
A Default with respect to Securities under clauses (3) or (4) of this
Section 6.1 is not an Event of Default until the Trustee (by notice to the
Company) or the Holders of at least 25% in aggregate principal amount of the
outstanding Securities (by notice to the Company and the Trustee) gives notice
of the Default and the Company does not cure such Default within the time
specified in said clause (3) or (4) after receipt of such notice. Such notice
must specify the Default, demand that it be remedied and state that such notice
is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice or the lapse of time would become an
Event of Default under clause (3) or (4) of this Section 6.1, its status and
what action the Company is taking or proposes to take with respect thereto.
SECTION 6.2. Acceleration. If an Event of Default with respect to
------------
the Securities (other than an Event of Default specified in Section 6.1(5) or
(6)) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the outstanding
Securities by notice to the Company and the Trustee, may
24
declare the Principal of and accrued but unpaid interest on all the Securities
to be due and payable. Upon such a declaration, such Principal and interest
shall be due and payable immediately. If an Event of Default specified in
Section 6.1(5) or (6) occurs and is continuing, the Principal of and accrued
interest on all the Securities shallipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holders. The Holders of a majority in aggregate principal amount of the
outstanding Securities by notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree (other than a judgment or decree for the payment of Principal or interest
or monies due on the Securities) and if all existing Events of Default have been
cured or waived except nonpayment of Principal or interest that has become due
solely because of such acceleration and the Trustee has been paid all amounts
due to it pursuant to Section 7.7. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default with respect to
--------------
the Securities occurs and is continuing, the Trustee may pursue any available
remedy to collect the payment of Principal of or interest on the Securities or
to enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities 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. No remedy is
exclusive of any other remedy. All available remedies are, to the extent
permitted by law, cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
-----------------------
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may waive any past or existing Default and its consequences except (i) a
Default in the payment of the Principal of, or premium, or interest on a
Security or (ii) a Default in respect of a provision that under Section 9.2
cannot be amended without the consent of each Securityholder affected. When a
Default is waived, it is deemed cured, and any Event of Default arising
therefrom shall be deemed to have been cured, but no such waiver shall extend to
any subsequent or other Default or impair any consequent right.
SECTION 6.5. Control by Majority. Upon provision of security or
-------------------
indemnity reasonably satisfactory to the Trustee, the Holders of a majority in
aggregate principal amount of the Securities then outstanding may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee with respect to the Securities or of exercising any trust or power
conferred on the Trustee. However, the Trustee, which may rely on opinions of
counsel, may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines is unduly prejudicial to the rights of
other Securityholders or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
-------- -------
the Trustee that is not inconsistent with such direction.
SECTION 6.6. Limitation on Suits. A Holder of Securities may not
-------------------
pursue any remedy with respect to this Indenture or the Securities unless:
25
(i) the Holder gives to the Trustee previous written notice
stating that an Event of Default has occurred and is continuing;
(ii) the Holders of at least 25% in aggregate principal amount
of the Securities then outstanding make a written request to the Trustee to
pursue the remedy;
(iii) such Holder or Holders offer to the Trustee reasonable
indemnity satisfactory to it against any costs, liabilities or expenses;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or indemnity;
and
(v) the Holders of a majority in aggregate principal amount of
the Securities then outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7. Rights of Holders To Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of Principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default
--------------------------
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
--------------------------------
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Securityholders allowed in any judicial
proceedings relative to an Company, its creditors or any other obligor upon the
Securities, or any of their creditors or the property of the Company or such
other obligor or their creditors and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.7.
SECTION 6.10. Priorities. Any money or other property collected by
----------
the Trustee pursuant to Article VI hereof, or any money or other property
otherwise distributable in
26
respect of the Company's obligations under this Indenture, shall be applied in
the following order:
FIRST: to the Trustee (including any predecessor Trustee) for amounts
due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for Principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for Principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
---------------------
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.7 or a suit by Holders of more than 10% in aggregate principal amount of the
outstanding Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
--------------------------------
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
Trustee
-------
SECTION 7.1. Duties of Trustee. If an Event of Default has occurred
-----------------
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and use the same degree of care and skill in their exercise as
a prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
27
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon Officers' Certificates and Opinions of Counsel
furnished to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such Officers' Certificates and Opinions of Counsel
which by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such Officers' Certificates and Opinions of
Counsel to determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this subsection does not limit the effect of subsections
(b) or (f) of this Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to subsections (a), (b), (c) and (f) of this Section 7.1.
(e) The Trustee shall not be liable for interest on any money or
other property received by it or for holding moneys or other property
uninvested, in either case, except as otherwise agreed between the Company and
the Trustee. Money and other property held in trust by the Trustee need not be
segregated from other money or property except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur 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 to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.1 and to the provisions of the Trust
Indenture Act, where applicable.
28
SECTION 7.2. Rights of Trustee. 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.
(b) 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
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may execute any of the trusts or powers or perform
any duties hereunder either directly through attorneys and agents, respectively,
and shall not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care by it hereunder.
(d) The Trustee shall not be liable for any action it takes, suffers
to exist or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Trustee's conduct does
-------- -------
not constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in reliance thereon.
(f) 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, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction.
(g) The Trustee shall not be charged with knowledge of any Default
or Event of Default with respect to the Securities unless either (1) a
Responsible Officer shall have actual knowledge of such Default or Event of
Default or (2) written notice of such Default or Event of Default shall have
been given to a Responsible Officer of the Trustee at the Corporate Trust Office
by the Company or any other obligor on the Securities or by any Holder of the
Securities. Any such notice shall reference this Indenture and the Securities.
(h) The rights, privileges, protections, immunities and benefits
given to the Trustee pursuant to this Indenture, including its rights to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities as Registrar and Paying Agent, as the case may be, hereunder.
(i) The Trustee may request that the Issuer deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
29
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company with the same rights it would have if it
were not Trustee. Any Paying Agent, Registrar or co-paying agent may do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
--------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities or any offering document, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
in any document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default or an Event of
------------------
Default occurs with respect to the Securities and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Securityholder notice of
the Default within 90 days after it is known to a Responsible Officer or written
notice of it is received by a Responsible Officer of the Trustee. Except in the
case of a Default in payment of Principal of or interest on any Security, the
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is not opposed to
the interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as
-----------------------------
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with Section 313(a) of the Trust Indenture Act. The Trustee also shall
comply with Section 313(b) of the Trust Indenture Act. The Trustee shall
promptly deliver to the Company a copy of any report it delivers to Holders
pursuant to this Section 7.6.
A copy of each report at the time of its mailing to Securityholders
shall be filed by the Trustee with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.7. Compensation and Indemnity. The Company covenants and
--------------------------
agrees to pay to the Trustee (and any predecessor Trustee) from time to time
such compensation for its services as the Company and the Trustee 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 reasonable out-of-pocket expenses
(including attorneys' fees and expenses), disbursements and advances incurred or
made by it in accordance with the provisions of this Indenture, including costs
of collection, in addition to such compensation for its services, except any
such expense, disbursement or advance as may arise from its negligence, willful
misconduct or bad faith. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents
and counsel. The Trustee shall provide the Company reasonable notice of any
expenditure not in the ordinary course of business; provided that prior approval
by the Company of any such expenditure shall not be a requirement for the making
of such expenditure nor for reimbursement by the Company thereof. The Company
shall indemnify each of the
30
Trustee, its officers, directors, employees and any predecessor Trustees against
any and all loss, damage, claim, liability or expense (including reasonable
attorneys' fees and expenses), including taxes (other than taxes applicable to
the Trustee's compensation hereunder) incurred by it in connection with the
acceptance or administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee so to notify the Company shall not
relieve the Company of its obligations hereunder, except to the extent that the
Company has been prejudiced by such failure. The Company shall defend the claim
and the Trustee shall cooperate, to the extent reasonable, in the defense of any
such claim, and, if (in the opinion of counsel to the Trustee) the facts and/or
issues surrounding the claim are reasonably likely to create a conflict with the
Company, the Company shall pay the reasonable fees and expenses of separate
counsel to the Trustee. The Company need not reimburse any expense or indemnify
against any loss, liability or expense incurred by the Trustee through the
Trustee's own willful misconduct, negligence or bad faith. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld or delayed.
To secure the Company's payment obligations in this Section 7.7, the
Trustee (including any predecessor trustee) shall have a lien prior to the
Securities on all money or property held or collected by the Trustee other than
money or property held in trust to pay Principal of and interest on particular
Securities.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the satisfaction, discharge and termination of this Indenture, the
resignation or removal of the Trustee and any discharge of this Indenture
including any discharge under any bankruptcy law. In addition to and without
prejudice to the rights provided to the Trustee under any of the provisions of
this Indenture, when the Trustee incurs expenses or renders services after the
occurrence of a Default specified in Section 6.1(6) or (7) with respect to the
Company, the expenses and the compensation for the services are intended to
constitute expenses of administration under the Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
----------------------
time with 30 days notice to the Company. The Holders of a majority in principal
amount of the Securities then outstanding, may remove the Trustee with 30 days
notice to the Trustee and may appoint a successor Trustee, which successor
Trustee shall be reasonably acceptable to the Company. The Company shall remove
the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a
31
successor Trustee, or if a vacancy exists in the office of Trustee for any
reason (the Trustee in such event being referred to herein as the retiring
Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company and the Company shall pay
all amounts due and owing to the Trustee under Section 7.7 of the Indenture.
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 Securityholders affected by such resignation or
removal. 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
7.7.
If a successor Trustee does not take office with respect to the
Securities within 30 days after the retiring Trustee resigns or is removed, the
retiring Trustee or the Holders of 10% in principal amount of the Securities may
petition any court of competent jurisdiction at the expense of the Issuer for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee
---------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee; provided that such corporation shall
be eligible under this Article Seven and Section 310(a) of the Trust Indenture
Act.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
-----------------------------
all times satisfy the requirements of Section 310(a) of the Trust Indenture Act.
The Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. The Trustee
shall comply with Section 310(b) of the Trust Indenture Act; provided, however,
-------- -------
that there shall be excluded from the operation of Section 310(b)(1) of the
Trust Indenture Act and any indenture or indentures under which other securities
Or
32
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in Section
310(b)(1) of the Trust Indenture Act are met.
Nothing herein shall prevent the Trustee from filing with the
Commission the application referred to in the second to last paragraph of
Section 310(b) of the Trust Indenture Act.
SECTION 7.11. Preferential Collection of Claims Against the Company.
-----------------------------------------------------
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.1. Discharge of Liability on Securities; Defeasance. With
------------------------------------------------
respect to the Securities, when (i) the Company delivers to the Trustee all
outstanding Securities for cancellation or (ii) all outstanding Securities have
become due and payable, whether at maturity or as a result of the mailing of a
notice of redemption pursuant to Article 3 hereof or the Securities will become
due and payable at their Stated Maturity within one year, or the Securities are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company, and, in each case of this clause (ii), the
Company irrevocably deposits or causes to be deposited with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date, and if in either
case the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.1(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate from the Company and an
Opinion of Counsel from the Company that all conditions precedent provided
herein for relating to satisfaction and discharge of this Indenture have been
complied with and at the cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all of its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Section 4.2 and
----------------------
Section 4.3 and the operation of Section 6.1(4) ("covenant defeasance option").
--- --------------------------
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 with respect to
the Securities, payment of the Securities may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of Default
specified in Section 6.1(4).
33
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.3, 2.4, 2.5, 2.9, 4.1, 4.5, 4.8, 7.7, 7.8, 8.4, 8.5
and 8.6 shall survive until the Securities have been paid in full. Thereafter,
the Company's and the Trustee's obligations in Sections 7.7, 8.4 and 8.5 shall
survive.
SECTION 8.2. Conditions to Defeasance. The Company may exercise its
------------------------
legal defeasance option or its covenant defeasance option with respect to the
Securities only if:
(i) the Company irrevocably deposits or causes to be deposited
in trust with the Trustee money or U.S. Government Obligations which
through the scheduled payment of Principal and interest in respect thereof
in accordance with their terms will provide cash at such times and in such
amounts as will be sufficient to pay Principal and interest and any other
payments when due on all outstanding Securities (except Securities replaced
pursuant to Section 2.9) to maturity or redemption, as the case may be as
evidenced by a certificate from a nationally recognized firm of independent
accountants delivered to the Trustee expressing their opinion that the
payments of Principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations 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 outstanding
Securities (except Securities replaced pursuant to Section 2.9) to maturity
or redemption, as the case may be;
(ii) No Default or Event of Default with respect to such
Securities shall have occurred and be continuing on the date of such
deposit or, insofar as Sections 6.1(5) or 6.1(6) are concerned, at any time
during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until
the expiration of such period);
(iii) the deposit does not constitute a default under any other
material agreement binding on the Company;
(iv) the Company delivers to the Trustee an Opinion of Counsel
to the effect that either (i) as a result of the deposit, registration is
not required under the Investment Company Act of 1940, as amended, by the
Company, with respect to the trust funds representing such deposit or by
the Trustee for such trust funds or (ii) all necessary registrations under
said Act have been effected;
(v) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Securityholders will not recognize income, gain or loss for
federal
34
income tax purposes as a result of such deposit and defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such deposit and
defeasance had not occurred;
(vi) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred; and
(vii) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as contemplated
by this Article 8 have been complied with.
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.
SECTION 8.3. Application of Trust Money. The Trustee shall hold in
--------------------------
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations either directly or through the Paying Agent as the
Trustee may determine and in accordance with this Indenture to the payment of
Principal of and interest on the Securities.
SECTION 8.4. Repayment to the 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.
Subject to any applicable abandoned property law, 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 the date of payment of such Principal and interest, and, thereafter,
Securityholders entitled to the money must look to the Company for payment as
general creditors.
Anything in this Section 8.4 to the contrary notwithstanding, in the
absence of a written request from the Company to return unclaimed funds to the
Company, the Trustee shall from time to time deliver all unclaimed funds to or
as directed by applicable escheat authorities, as determined by the Trustee in
its sole discretion, in accordance with the customary practices and procedures
of the Trustee. Any unclaimed funds held by the Trustee pursuant to this
Section 8.4 shall be held uninvested and without any liability for interest.
SECTION 8.5. Indemnity for Government Obligations. The Company
------------------------------------
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations other than
any such tax, fee or other charge which by law is for the account of the Holders
of the defeased Securities; provided that the Trustee shall be entitled to
charge any such tax, fee or other charge to such Holder's account.
35
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is
-------------
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that (a) if
the Company has made any payment of interest on or Principal of any Securities
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent and (b)
unless otherwise required by any legal proceeding or any order or judgment of
any court or governmental authority, the Trustee or Paying Agent shall return
all such money and U.S. Government Obligations to the Company promptly after
receiving a written request therefor at any time, if such reinstatement of the
Company's obligations has occurred and continues to be in effect.
ARTICLE IX
Amendments
----------
SECTION 9.1. Without Consent of Holders. The Company and the
--------------------------
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to comply with Article 5;
(iii) to add any additional Events of Default;
(iv) to add to the covenants of the Company for the benefit of
the Holders of all the Securities or to surrender any right or power herein
conferred upon the Company;
(v) to add one or more guarantees for the benefit of holders of
the Securities;
(vi) to secure the Securities pursuant to the terms of this
Indenture;
(vii) to add or appoint a successor or separate Trustee or
other agent;
(viii) to comply with any requirements in connection with
qualifying this Indenture under the Trust Indenture Act;
(ix) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
-------- -------
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are as described in Section 163(f)(2)(B) of the Code;
36
(x) to provide for the issuance of the Exchange Securities,
which will have terms substantially identical in all material respects to
the Initial Securities (except that the transfer restrictions contained in
the Initial Securities will be modified or eliminated, as appropriate);
(xi) to provide for the issuance of any Additional Securities,
which will have terms substantially identical in all material respects to
the Initial Securities or the Exchange Securities (in each case, other than
with respect to the date of issuance, issue price and amount of interest
payable on the first payment date applicable thereto), as the case may be,
and which will be treated, together with any outstanding Initial Securities
and any Additional Securities, as a single issue of securities; and
(xii) to change any other provision if the change does not
adversely affect the interests of any Securityholder.
After an amendment under this Section 9.1 becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section 9.1.
SECTION 9.2. With Consent of Holders. The Company and the Trustee
-----------------------
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities then outstanding (including consents obtained in
connection with a tender offer or exchange for Securities). However, without
the consent of each Securityholder affected, an amendment may not:
(i) change the Stated Maturity of the Principal of, or
installment of interest on, any Security;
(ii) reduce the principal amount of, or premium, if any, or the
rate of interest on, or any other amounts due on any Securities (including
amounts due upon optional redemption or otherwise);
(iii) reduce the principal amount of any Security that would be
due and payable upon a declaration of acceleration of the Stated Maturity
thereof;
(iv) change the place of payment or the coin or currency in
which the Principal of or interest on any Security is payable;
(v) impair the right of any Holder to institute suit for the
enforcement of any payment on or after the Stated Maturity of any Security;
(vi) reduce the percentage in principal amount of the
outstanding Securities, the consent of whose Holders is required in order
to modify or amend the Indenture;
(vii) modify any of the provisions of this Indenture regarding
the waiver of past defaults and the waiver of certain covenants by Holders
except to increase any
37
percentage vote required or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the holder of
each security affected thereby; or
(viii) modify any of the above provisions of this Section 9.2.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.2 becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section 9.2.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment
-----------------------------------
to this Indenture or the Securities shall comply with the Trust Indenture Act as
then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A
---------------------------------------------
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. After an
amendment or waiver becomes effective with respect to the Securities, it shall
bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an amendment
-------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Company shall provide in writing to
the Trustee an appropriate notation to be placed on the Security regarding the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determine, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment.
SECTION 9.6. Trustee To Sign Amendments. The Trustee shall sign any
--------------------------
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1) shall be fully protected in relying
38
upon, in addition to the documents required by Section 10.4, an Officers'
Certificate of the Company and an Opinion of Counsel stating that such amendment
complies with the provisions of this Article 9 and that such supplemental
indenture constitutes the legal valid and binding obligation of the Company in
accordance with its terms subject to customary exceptions.
ARTICLE X
Miscellaneous
-------------
SECTION 10.1. Trust Indenture Act Controls. If any provision of
----------------------------
this Indenture limits, qualifies or conflicts with the duties imposed by, or
with another provision included or which is required to be included in this
Indenture by the Trust Indenture Act, the duty or provision required by the
Trust Indenture Act shall control.
SECTION 10.2. Notices. Any notice or communication shall be in
-------
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
21st Century Insurance Group
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
if to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Any notices between the Company and the Trustee may be by facsimile or
certified first class mail, receipt confirmed and the original to follow by
guaranteed overnight courier. The Company or the Trustee by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or
39
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 10.3. Communication by Holders with other Holders.
-------------------------------------------
Securityholders may communicate pursuant to Section 312(b) of the Trust
Indenture Act with other Securityholders with respect to their rights under this
Indenture or the Securities. The Company, the Trustee, the Registrar and anyone
else shall have the protection of Section 312(c) of the Trust Indenture Act.
SECTION 10.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(i) an Officers' Certificate of the Company in form reasonably
satisfactory to the Trustee 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
(ii) an Opinion of Counsel of the Company in form reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
Notwithstanding the foregoing no such Opinion of Counsel shall be
given with respect to the authentication and delivery of any Initial Securities.
SECTION 10.5. Statements Required in Certificate or Opinion. The
---------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(i) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such individual, 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
(iv) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 10.6. When Securities Disregarded. 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 by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company (an "Affiliate") shall be disregarded and deemed
not to be outstanding, except that, for the purpose of determining
40
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which a Responsible Officer of the Trustee knows are
so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION 10.7. Rules by Trustee, Paying Agent and Registrar. The
--------------------------------------------
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 10.8. Governing Law. This Indenture and the Securities
-------------
shall be governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 10.9. No Recourse Against Others. A director, officer,
--------------------------
employee or stockholder (other than the Company), as such, of the Company shall
not have any liability for any obligations of the Company under the Securities,
this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.
SECTION 10.10. Successors. All agreements of the Company in this
----------
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 10.11. Multiple Originals. The parties may sign any number
------------------
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 10.12. Variable Provisions. The Company initially appoints
-------------------
the Trustee as Paying Agent and Registrar and custodian with respect to any
Global Securities (as defined in the Appendix hereto).
SECTION 10.13. Qualification of Indenture. The Company shall
--------------------------
qualify this Indenture under the Trust Indenture Act in accordance with the
terms and conditions of the Registration Rights Agreement and shall pay all
reasonable costs and expenses (including attorneys' fees for the Company, the
Trustee and the Holders) incurred in connection therewith, including, but not
limited to, costs and expenses of qualification of this Indenture and the
Securities and printing this Indenture and the Securities. The Trustee shall be
entitled to receive from the Company any such Officers' Certificates, Opinions
of Counsel or other documentation as it may reasonably request in connection
with any such qualification of this Indenture under the Trust Indenture Act.
SECTION 10.14. Table of Contents; Headings. The table of contents,
---------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
21ST CENTURY INSURANCE GROUP
By______________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By______________________________
Name:
Title:
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
21ST CENTURY INSURANCE GROUP
5.90% SENIOR NOTES DUE 2013
No. __ Principal Amount $______________,
(subject to adjustment as reflected in the
Schedule of Increases and Decreases in Global
Security attached hereto)
CUSIP NO. _________
ISIN NO. __________
21st Century Insurance Group, a Delaware corporation, for value
received, promises to pay to _____________, or registered assigns, the principal
sum of ____________ Dollars, subject to adjustment as reflected in the Schedule
of Increases and Decreases in Global Security attached hereto, on December 15,
2013.
Interest Payment Dates: June 15 and December 15 of each year, commencing
on June 15, 2004 [first interest payment date relating to any Additional
Securities].
Record Dates: June 1 and December 1 of each year.
Additional provisions of this Security are set forth on the other side of
this Security.
21ST CENTURY INSURANCE GROUP
By
-----------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture.
The Bank of New York,
as Trustee
By_____________________________
Authorized Signatory
Dated: _______ __, 20__
A-1
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
[Reverse of Security]
5.90% Senior Notes due 2013
1. Interest
--------
21st Century Insurance Group, a Delaware corporation (together with
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above; provided, however, that if a
-------- -------
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.25% per annum.
If a Registration Default occurs and is continuing for a period more than 90
days, then the amount of additional interest the Company is required to pay on
this Security will increase, effective from and after the 91st day in that
period, by an additional 0.25% per annum until all Registration Defaults have
been cured. However, in no event will the rate of additional interest exceed
0.50% per annum. Such additional interest is payable in addition to any other
interest payable from time to time with respect to this Security. The Trustee
will not be deemed to have notice of a Registration Default until a Responsible
Officer shall have received actual notice of such Registration Default.
The Company will pay interest semiannually on June 15 and December 15
of each year (each such date, an "Interest Payment Date"), commencing on [June
15, 2004] [first interest payment date relating to any Additional Securities].
Interest on the Securities will accrue from [December 9, 2003] [date of issuance
of any Additional Securities], or from the most recent date to which interest
has been paid on the Securities. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment
-----------------
By no later than 11:00 a.m. (New York City time) on the date on which
any Principal of or interest on any Security is due and payable, the Company
shall irrevocably deposit with the Trustee or the Paying Agent money sufficient
to pay such Principal and/or interest. The Company will pay interest (except
defaulted interest and interest on Securities redeemed after a record date and
on or prior to the corresponding interest payment date) to the Persons who are
registered Holders of Securities at the close of business on the June 1 or
December 1 next preceding the interest payment date. 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. Payments in
respect of Securities represented by a Global Security (including principal,
premium, if any, and interest) will be made by the transfer of immediately
available funds to the accounts specified by The Depository Trust Company. The
Company may make all payments in respect of a Definitive Security (including
principal, premium, if any, and interest) by mailing a check to the registered
address of each Holder thereof or by wire transfer to an account located in the
United States maintained by the payee.
A-2
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice to any Securityholder. The
Company or any of its domestically organized wholly owned Subsidiaries may act
as Paying Agent.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of
December 9, 2003 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sec.Sec. 77aaa-77bbbb) as in effect on the date of the Indenture (the
------
"Trust Indenture Act"). Capitalized terms used herein and not defined herein
-------------------
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the
Trust Indenture Act for a statement of those terms.
The Securities are senior obligations of the Company. The Security is
one of the Initial Securities referred to in the Indenture. The Securities
include the Initial Securities issued on the Issue Date, any Additional
Securities issued in accordance with Section 2.15 of the Indenture and the
Exchange Securities issued in exchange for the Initial Securities or Additional
Securities pursuant to the Indenture. The Initial Securities, any Additional
Securities and the Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on
the ability of the Company and its Significant Subsidiaries to create Liens,
sell Voting Stock of Significant Subsidiaries and enter into mergers and
consolidations.
5. Optional Redemption
-------------------
The Securities are redeemable, in whole or in part, at any time and
from time to time, at the option of the Company, at a redemption price equal to
the greater of (i) 100% of the principal amount of such Securities and (ii) the
sum of the present values of the remaining scheduled payments of principal and
interest thereon (exclusive of interest accrued to the date of redemption)
discounted to the redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points,
plus accrued interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date for the
-------------
Securities, the rate per annum equal to the semiannual equivalent yield to
maturity or interpolated (on a day count basis) of the Comparable Treasury
Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
-------------------------
or securities selected by an Independent Investment Banker as having an actual
or interpolated maturity comparable to the remaining term of the Securities to
be redeemed that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing
A-3
new issues of corporate debt securities of comparable maturity to the remaining
term of the Securities to be redeemed.
"Comparable Treasury Price" means, with respect to any redemption date
-------------------------
for the Securities, (a) the average of the Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest of such
Reference Treasury Dealer Quotations or (b) if the Trustee obtains fewer than
four such Reference Treasury Dealer Quotations, the average of all such
Quotations.
"Independent Investment Banker" means one of the Reference Treasury
-----------------------------
Dealers appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means (x) each of Banc of America
-------------------------
Securities LLC and ▇▇▇▇▇▇ Brothers Inc. or their respective affiliates;
provided, however, that if any of the foregoing shall cease to be a primary U.S.
government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company will substitute therefor another Primary Treasury Dealer and (y) two
other Primary Treasury Dealers selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
------------------------------------
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer as of 3:30 p.m., New
York City time, on the third Business Day preceding such redemption date.
Except as set forth above, the Securities will not be redeemable by
the Company prior to maturity.
The Securities will not be entitled to the benefit of any sinking
fund.
6. Notice of Redemption
--------------------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date by first-class mail to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations of principal amount larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued and unpaid interest on all Securities (or portions thereof)
to be redeemed on the redemption date is deposited with the Paying Agent on or
before 11:00 a.m. (New York City time) on the redemption date and certain other
conditions are satisfied, on and after such date interest ceases to accrue on
such Securities (or such portions thereof) called for redemption.
7. Registration Rights
-------------------
The Company is party to a Registration Rights Agreement, dated as of
December 9, 2003, between the Company and Banc of America Securities LLC and
▇▇▇▇▇▇ Brothers Inc., pursuant to which the Company is obligated to pay
Additional Interest (as defined therein) upon the occurrence of certain
Registration Defaults (as defined therein).
A-4
8. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
register, transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
for a period beginning 15 days before a selection of Securities to be redeemed
and ending on the date of such selection.
9. Persons Deemed Owners
---------------------
The registered holder of this Security may be treated as the owner of
it for all purposes.
10. Unclaimed Money
---------------
If money for the payment of Principal or interest remains unclaimed
for two years after the date of payment of Principal and interest, the Trustee
or Paying Agent shall pay the money back to the Company at its request unless an
abandoned property law designates another Person. After any such payment,
Holders entitled to the money must look only to the Company and not to the
Trustee for payment.
Anything in this Section 10 to the contrary notwithstanding, in the
absence of a written request from the Company to return unclaimed funds to the
Company, the Trustee shall from time to time deliver all unclaimed funds to or
as directed by applicable escheat authorities, as determined by the Trustee in
its sole discretion, in accordance with the customary practices and procedures
of the Trustee.
11. Defeasance
----------
Subject to certain conditions set forth in the Indenture, 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 of and interest on the
Securities to redemption or maturity, as the case may be.
12. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
and (ii) any default or noncompliance with any provision of the Indenture or the
Securities may be waived with the written consent of the Holders of a majority
in principal amount of the outstanding Securities. However, the Indenture
requires the consent of each Securityholder that would be affected for certain
specified amendments or modifications of the Indenture and the Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to, among other things, cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to add any
A-5
additional Events of Default, or to add additional covenants of or surrender
rights and powers conferred on the Company, or to add or appoint a successor or
separate trustee or other agent, or to comply with any requirements in
connection with qualifying the Indenture under the Trust Indenture Act, or to
provide for uncertificated Securities in addition to or in place of certificated
Securities, or to change any other provision if the change does not adversely
affect the interests of any Securityholder.
13. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default in payment
of Principal on the Securities at maturity, upon redemption pursuant to
paragraph 5 of the Securities, upon declaration or otherwise; (ii) default for
30 days in payment of interest on the Securities; (iii) failure by the Company
to comply with other agreements in the Indenture or the Securities for sixty
days after notice; (iv) failure to pay when due or certain accelerations of
other indebtedness of the Company or any Significant Subsidiary in an aggregate
amount of $10,000,000 or more, subject to notice and (v) certain events of
bankruptcy or insolvency involving the Company or any Significant Subsidiary.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Securities may
declare all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives indemnity or security reasonably
satisfactory to it. 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 or Event of Default (except a Default or Event of Default in
payment of Principal or interest) if it in good faith determines that
withholding notice is not opposed to their interest.
14. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company and may otherwise deal with the Company
with the same rights it would have if it were not Trustee.
15. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder (other than the Company),
as such, of the Company shall not have any liability for any obligations of the
Company under the Securities, the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation.
A-6
16. Authentication
--------------
This Security shall not be valid until an authorized officer of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
17. 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 rights of survivorship and not as tenants
in common), CUST (custodian) and U/G/M/A (Uniform Gift to Minors Act).
18. CUSIP and ISIN Numbers
----------------------
The Company has caused CUSIP and ISIN numbers and/or other similar
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP and ISIN numbers and/or other similar numbers in notices of redemption as
a convenience to Securityholders. No representation is made as to the accuracy
of such numbers either as printed on the Securities or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.
19. Governing Law
-------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
A-7
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
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: ___________________
Signature Guarantee: ______________________________
(Signature must be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program or other signature guarantor program reasonably
acceptable to the Trustee)
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer or exchange of any of the certificated
Securities evidenced by this certificate occurring prior to the date that is two
years after the later of the date of original issuance of such Securities and
the last date, if any, on which such Securities were owned by the Company or any
Affiliate of the Company, the undersigned confirms that such Securities are
being transferred:
CHECK ONE BOX BELOW:
(1)[ ] to the Company or any of its Subsidiaries; or
(2)[ ] for so long as the Securities are eligible for resale pursuant to
Rule 144A under the Securities Act, to a person it reasonably
believes is a "Qualified Institutional Buyer" as defined in Rule
144A under the Securities Act that purchases for its own account
or for the account of a Qualified Institutional Buyer to whom
notice is given that the transfer is being made in reliance on
Rule 144A; or
(3)[ ] pursuant to Rule 144 under the Securities Act or any other
available exemption from the registration requirements of the
Securities Act; or
(4)[ ] pursuant to a registration statement that has been declared
effective under the Securities Act.
Unless one of the boxes is checked, the Trustee may refuse to register any of
the certificated Securities evidenced by this certificate in the name of any
Person other than the registered holder thereof; provided, however, that if box
-------- -------
(3) is checked, the Trustee may require, prior to registering any such transfer
of the Securities, such legal opinions, certifications and other information as
the Company has reasonably requested to confirm that such transfer is being
A-8
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
_____________________________________
Signature
Signature Guarantee:
_______________________________ _____________________________________
Signature
(Signature must be guaranteed by a
participant in a recognized Signature
Guarantee Medallion Program or other
signature guarantor program reasonably
acceptable to the Trustee)
_______________________________________________________________________
A-9
TO BE COMPLETED BY PURCHASER IF BOX (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
certificated Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:___________________ _____________________________________
NOTICE: To be executed by an executive
officer
Signature Guarantee:
_______________________________ _____________________________________
Signature
(Signature must be guaranteed by a
participant in a recognized Signature
Guarantee Medallion Program or other
signature guarantor program reasonably
acceptable to the Trustee)
__________________________________________________________________
A-10
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
Principal Amount of this Global
Date of Amount of decrease in Principal Amount of increase in Principal Security following such
Exchange Amount of this Global Security Amount of this Global Security decrease or increase
________ _______________________________ _______________________________ _______________________________
Signature of authorized officer
Date of of Trustee or Securities
Exchange Custodian
________ _______________________________
A-11
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
21ST CENTURY INSURANCE GROUP
5.90% SENIOR NOTES DUE 2013
No. __ Principal Amount $______________,
(subject to adjustment as reflected in the
Schedule of Increases and Decreases in Global
Security attached hereto)
CUSIP NO. _________
ISIN NO. __________
21st Century Insurance Group, a Delaware corporation, for value
received, promises to pay to _______________, or registered assigns, the
principal sum of _____________ Dollars on 15, 2013.
Interest Payment Dates: June 15 and December 15 of each year,
commencing on June 15, 2004 [first interest payment date relating to any
Additional Securities].
Record Dates: June 1 and December 1 of each year.
Additional provisions of this Security are set forth on the other side
of this Security.
21st CENTURY INSURANCE GROUP
By
-----------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture.
The Bank of New York,
By_____________________________
Authorized Officer
Dated:________ ___, 20___
B-1
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
5.90% Senior Notes due 2013
1. Interest
--------
21st Century Insurance Group, a Delaware corporation (together with
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above.
The Company will pay interest semiannually on June 15 and December 15
of each year (each such date, an "Interest Payment Date"), commencing on [June
15, 2004] [first interest payment date relating to any Additional Securities].
Interest on the Securities will accrue from December 9, 2003 [date of issuance
of any Additional Securities], or from the most recent date to which interest
has been paid on the Securities. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment
-----------------
By no later than 11:00 a.m. (New York City time) on the date on which
any Principal of or interest on any Security is due and payable, the Company
shall irrevocably deposit with the Trustee or the Paying Agent money sufficient
to pay such Principal and/or interest. The Company will pay interest (except
defaulted interest and interest on Securities redeemed after a record date and
or prior to the corresponding interest payment date) to the Persons who are
registered Holders of Securities at the close of business on the June 1 or
December 1 next preceding the Interest Payment Date. 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. Payments in
respect of Securities represented by a Global Security (including principal,
premium, if any, and interest) will be made by the transfer of immediately
available funds to the accounts specified by The Depository Trust Company. The
Company may make all payments in respect of a Definitive Security (including
principal, premium, if any, and interest) by mailing a check to the registered
address of each Holder thereof or by wire transfer to an account located in the
United States maintained by the payee.
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice to any Securityholder. The
Company or any of its domestically organized wholly owned Subsidiaries may act
as Paying Agent.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of
December 9, 2003 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), between the Company and the
Trustee. The terms of the Securities
B-2
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. Sec.Sec. 77aaa-77bbbb)
as in effect on the date of the Indenture (the "Trust Indenture Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Trust Indenture Act for a
statement of those terms.
The Securities are senior obligations of the Company. The Security is
one of the Exchange Securities referred to in the Indenture. The Securities
include the Initial Securities issued on the Issue Date, any Additional
Securities issued in accordance with Section 2.15 of the Indenture and any
Exchange Securities issued in exchange for the Initial Securities pursuant to
the Indenture and the Registration Rights Agreement. The Initial Securities,
any Additional Securities and the Exchange Securities are treated as a single
class of securities under the Indenture. The Indenture imposes certain
limitations on the ability of the Company and its Significant Subsidiaries to
create Liens, sell Voting Stock of Significant Subsidiaries and enter into
mergers and consolidations.
5. Optional Redemption
-------------------
The Securities are redeemable, in whole or in part, at any time and
from time to time, at the option of the Company, at a redemption price equal to
the greater of (i) 100% of the principal amount of such Securities and (ii) the
sum of the present values of the remaining scheduled payments of principal and
interest thereon (exclusive of interest accrued to the date of redemption)
discounted to the redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points,
plus accrued interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date for the
Securities, the rate per annum equal to the semiannual equivalent yield to
maturity or interpolated (on a day count basis) of the Comparable Treasury
Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
or securities selected by an Independent Investment Banker as having an actual
or interpolated maturity comparable to the remaining term of the Securities to
be redeemed that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the Securities to be
redeemed.
"Comparable Treasury Price" means, with respect to any redemption date
for the Securities, (a) the average of the Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest of such
Reference Treasury Dealer Quotations or (b) if the Trustee obtains fewer than
four such Reference Treasury Dealer Quotations, the average of all such
Quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Company.
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"Reference Treasury Dealer" means (x) each of Banc of America
Securities LLC and ▇▇▇▇▇▇ Brothers Inc. or their respective affiliates;
provided, however, that if any of the foregoing shall cease to be a primary U.S.
government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company will substitute therefor another Primary Treasury Dealer and (y) two
other Primary Treasury Dealers selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer as of 3:30 p.m., New
York City time, on the third Business Day preceding such redemption date.
Except as set forth above, the Securities will not be redeemable by
the Company prior to maturity.
The Securities will not be entitled to the benefit of any sinking
fund.
6. Notice of Redemption
--------------------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date by first-class mail to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations of principal amount larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued and unpaid interest on all Securities (or portions thereof)
to be redeemed on the redemption date is deposited with the Paying Agent on or
before 11:00 a.m. (New York City time) on the redemption date and certain other
conditions are satisfied, on and after such date interest ceases to accrue on
such Securities (or such portions thereof) called for redemption.
7. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
register transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
for a period beginning 15 days before a selection of Securities to be redeemed
and ending on the date of such selection.
8. Persons Deemed Owners
---------------------
The registered holder of this Security may be treated as the owner of
it for all purposes.
9. Unclaimed Money
---------------
If money for the payment of Principal or interest remains unclaimed
for two years after the date of payment of Principal and interest, the Trustee
or Paying Agent shall pay the money back to the Company at its request unless an
abandoned property law designates another
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Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
Anything in this Section 9 to the contrary notwithstanding, in the
absence of a written request from the Company to return unclaimed funds to the
Company, the Trustee shall from time to time deliver all unclaimed funds to or
as directed by applicable escheat authorities, as determined by the Trustee in
its sole discretion, in accordance with the customary practices and procedures
of the Trustee.
10. Defeasance
----------
Subject to certain conditions set forth in the Indenture, 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 of and interest on the
Securities to redemption or maturity, as the case may be.
11. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
and (ii) any default or noncompliance with any provision of the Indenture or the
Securities may be waived with the written consent of the Holders of a majority
in principal amount of the outstanding Securities. However, the Indenture
requires the consent of each Securityholder that would be affected for certain
specified amendments or modifications of the Indenture and the Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to, among other things, cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to add any
additional Events of Default, or to add additional covenants of or surrender
rights and powers conferred on the Company, or to add or appoint a successor or
separate trustee or other agent, or to comply with any requirements in
connection with qualifying the Indenture under the Trust Indenture Act, or to
provide for uncertificated Securities in addition to or in place of certificated
Securities, or to change any other provision if the change does not adversely
affect the interests of any Securityholder.
12. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default in payment
of principal on the Securities at maturity, upon redemption pursuant to
paragraph 5 of the Securities, upon declaration or otherwise; (ii) default for
30 days in payment of interest on the Securities; (iii) failure by the Company
to comply with other agreements in the Indenture or the Securities for sixty
days after notice; (iv) failure to pay when due or certain accelerations of
other indebtedness of the Company or any Significant Subsidiary in an aggregate
amount of $10,000,000 or more, subject to notice and (v) certain events of
bankruptcy or insolvency involving the Company or any Significant Subsidiary.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Securities may
declare all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default
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which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives indemnity or security reasonably
satisfactory to it. 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 or Event of Default (except a Default or Event of Default in
payment of Principal or interest) if it in good faith determines that
withholding notice is not opposed to their interest.
13. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company and may otherwise deal with the Company
with the same rights it would have if it were not Trustee.
14. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder (other than the Company),
as such, of the Company shall not have any liability for any obligations of the
Company or under the Securities, the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation.
15. Authentication
--------------
This Security shall not be valid until an authorized officer of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
16. 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 rights of survivorship and not as tenants
in common), CUST (custodian) and U/G/M/A (Uniform Gift to Minors Act).
17. CUSIP and ISIN Numbers
----------------------
The Company has caused CUSIP and ISIN numbers and/or other similar
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP and ISIN numbers and/or other similar numbers in notices of redemption as
a convenience to Securityholders. No representation is made as to the accuracy
of such numbers either as printed on the Securities or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.
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18. Governing Law
-------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
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: ______________________
Signature Guarantee: ______________________________
(Signature must be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program or other signature guarantor program reasonably
acceptable to the Trustee)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
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EXHIBIT C - Form of
Rule 144A Certificate
RULE 144A CERTIFICATE
(For transfers pursuant to Sections
2.6(b), (c), (d) and (e) of the Indenture)
To: The Bank of New York,
as Trustee
Re: 5.90% Senior Notes due 2013 of
21st Century Insurance Group (the "Securities")
------------------------------------------------
Reference is made to the Indenture, dated as of December 9, 2003, (the
"Indenture"), between 21st Century Insurance Group (the "Company") and The Bank
--------- -------
of New York, as Trustee. Terms used herein and defined in the Indenture or in
Rule 144 under the U.S. Securities Act of 1933, as amended (the "Securities
----------
Act") are used herein as so defined.
This certificate relates to U.S.$________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
---------
Securities"):
----------
CUSIP No(s). __________________________
CERTIFICATE No(s). ____________________
The person in whose name this certificate is executed below (the "undersigned")
-----------
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through DTC or an Agent Member in the name of the undersigned, as or on behalf
of the Owner. If the Specified Securities are not represented by a Global
Security, they are registered in the name of the Undersigned, as or on behalf of
the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a Rule 144A
----------
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A or Rule 144 under the Securities Act and with all applicable securities
laws of the states of the United States and other jurisdictions. Accordingly,
the Owner hereby further certifies as:
1. Rule 144A Transfers. If the transfer is being effected in
-------------------
accordance with Rule 144A:
(a) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A, acquiring for
its own account or for the account of a qualified institutional buyer; and
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(b) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner is
relying on Rule 144A in connection with the transfer; and
2. Rule 144 Transfers. If the transfer is being effected pursuant
------------------
to Rule 144:
(a) the transfer is occurring after December 9, 2004 and is being
effected in accordance with the applicable amount, manner of sale and notice
requirements of Rule 144; or
(b) the transfer is occurring after December 9, 2005 and the Owner
is not, and during the preceding three months has not been, an affiliate of the
Company.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated: ________________________________________________
(Print the name of the undersigned, as such term
is defined in the second paragraph of this
certificate)
By:_____________________________________________
Name:
Title:
(If the undersigned is a corporation, partnership
or fiduciary, the title of the person signing on
behalf of the undersigned must be stated)
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