EXHIBIT 4.2
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AMERICAN INTERNATIONAL GROUP, INC.
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FIRST SUPPLEMENTAL INDENTURE
Dated as of March 13, 2007
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(Supplemental to the Junior Subordinated Debt Indenture Dated as of
March 13, 2007)
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THE BANK OF NEW YORK,
as Trustee
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FIRST SUPPLEMENTAL INDENTURE, dated as of March 13, 2007, between American
International Group, Inc., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), and The Bank of New
York, a New York banking corporation, as Trustee (herein called "Trustee");
R E C I T A L S:
WHEREAS, the Company has heretofore executed and delivered to the Trustee
a Junior Subordinated Debt Indenture, dated as of March 13, 2007 (the
"Indenture"), providing for the issuance from time to time of the Company's
unsecured debentures, notes or other evidences of indebtedness (herein and
therein called the "Securities"), to be issued in one or more series as provided
in the Indenture;
WHEREAS, Section 901 of the Indenture permits the Company and the Trustee
to enter into an indenture supplemental to the Indenture to establish the form
and terms of a series of Securities;
WHEREAS, Section 201 of the Indenture permits the form of Securities of a
series to be established in an indenture supplemental to the Indenture;
WHEREAS, Section 301 of the Indenture permits certain terms of a series of
Securities to be established pursuant to an indenture supplemental to the
Indenture;
WHEREAS, pursuant to Sections 201 and 301 of the Indenture, the Company
desires to provide for the establishment of a new series of Securities under the
Indenture, the form and substance of such Securities and the terms, provisions
and conditions thereof to be set forth as provided in the Indenture and this
First Supplemental Indenture;
WHEREAS, all things necessary to make this First Supplemental Indenture a
valid agreement of the Company, in accordance with its terms, have been done;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities of the series established by this First Supplemental Indenture by the
Holders thereof, it is mutually agreed, for the equal and proportionate benefit
of all such Holders, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 RELATION TO INDENTURE
This First Supplemental Indenture constitutes a part of the Indenture (the
provisions of which, as modified by this First Supplemental Indenture, shall
apply to the Debentures) in respect of the Debentures but shall not modify,
amend or otherwise affect the Indenture insofar as it relates to any other
series of Securities or modify, amend or otherwise affect in any manner the
terms and conditions of the Securities of any other series.
SECTION 1.2 DEFINITIONS
For all purposes of this First Supplemental Indenture, the capitalized
terms used herein (i) which are defined in this Section 1.2 have the respective
meanings assigned hereto in this Section 1.2 and (ii) which are defined in the
Indenture (and which are not defined in this Section 1.2) have the respective
meanings assigned thereto in the Indenture. For all purposes of this First
Supplemental Indenture:
1.2.1 Unless the context otherwise requires, any reference to an Article
or Section refers to an Article or Section, as the case may be, of this First
Supplemental Indenture;
1.2.2 The words "herein", "hereof" and "hereunder" and words of similar
import refer to this First Supplemental Indenture as a whole and not to any
particular Article, Section or other subdivision; and
1.2.3 (a) The terms defined in this Section 1.2.3 have the meanings
assigned to them in this Section and include the plural as well as the singular:
"Adjusted Treasury Rate" means, with respect to any Redemption Date, the
rate per annum equal to the semi-annual equivalent yield to maturity 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.
"APM Commencement Date" means, with respect to any Deferral Period, the
earlier of (i) the first Interest Payment Date following the commencement of
such Deferral Period on which the Company pays any current interest on the
Debentures and (ii) the fifth anniversary of the commencement of such Deferral
Period.
"APM Common Stock" means an aggregate number of shares of Common Stock,
including any shares of Common Stock held in treasury, and any shares of Common
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Stock sold pursuant to the Company's dividend reinvestment or similar plan or
sold pursuant to any Employee Benefit Plan, up to the Maximum Share Number.
"APM Qualifying Securities" means APM Common Stock, Qualifying Warrants
and Qualifying Non-Cumulative Preferred Stock.
"Assurance Agreement" means the agreement of the Company, dated as of June
27, 2005, in favor of eligible employees and relating to specified obligations
of Starr International Company, Inc. (as such agreement may be amended,
supplemented, extended, modified or replaced from time to time).
"Bankruptcy Event" means an Event of Default set forth in Sections 501(5)
or (6) of the Indenture.
"Business Combination" means a merger, consolidation, amalgamation,
binding share exchange or conveyance, transfer or lease of assets substantially
as an entirety to any other Person or a similar transaction.
"Business Day" is any day, other than (i) a Saturday, Sunday or other day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed or (ii) on or after the Scheduled
Maturity Date, a day that is not a London Banking Day.
"Calculation Agent" means AIG Financial Products Corp., or any other
Person appointed by the Company, acting as calculation agent for the Debentures.
Any successor or substitute Calculation Agent may be an Affiliate of the
Company.
"Capital Stock" for any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) shares issued by that Person.
"Commercially Reasonable Efforts" means, for purposes of selling
Qualifying Capital Securities, commercially reasonable efforts to complete the
offer and sale of Qualifying Capital Securities to third parties that are not
Subsidiaries of the Company in public offerings or private placements. The
Company shall not be considered to have made Commercially Reasonable Efforts to
effect a sale of Qualifying Capital Securities if it determines not to pursue or
complete such sale due to pricing, coupon, dividend rate or dilution
considerations.
"Common Stock" means the common stock, par value $2.50 per share, of the
Company.
"Comparable Treasury Issue" means the U.S. Treasury security selected by
an independent investment bank selected by the Calculation Agent as having a
maturity comparable to the term remaining from the Redemption Date to the
Scheduled Maturity Date that would be utilized, at the time of selection and in
accordance with customary
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financial practice, in pricing new issues of corporate debt securities of
comparable maturity.
"Comparable Treasury Price" means, with respect to any Redemption Date,
the average of the Reference Treasury Dealer Quotations for such Redemption
Date.
"Continuing Director" means a director who was a director of the Company
at the time of the initial approval of the definitive agreement relating to a
Business Combination transaction by the Company's Board of Directors.
"Current Stock Market Price" of the APM Common Stock on any date shall
mean (i) the closing sale price per share (or if no closing sale price is
reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and the average ask prices) on that date as
reported in composite transactions by the New York Stock Exchange or, if the
Common Stock is not then listed on the New York Stock Exchange, as reported by
the principal U.S. securities exchange on which the Common Stock is traded, or
(ii) if the Common Stock is not listed on any U.S. securities exchange on the
relevant date, the average of the mid-point of the last bid and ask prices for
the Common Stock on the relevant date from each of at least three nationally
recognized independent investment banking firms selected by the Company for this
purpose.
"Debentures" has the meaning set forth in Section 2.1(a).
"Deferral Period" means each period beginning on an Interest Payment Date
with respect to which the Company either (A) elects pursuant to Section 2.1(g)
to defer all or part of any interest payment due on an Interest Payment Date or
(B) fails to pay all or any part of any interest payment due on an Interest
Payment Date within five Business Days after the Interest Payment Date and
ending on the earlier of (i) the tenth anniversary of such Interest Payment Date
and (ii) the next Interest Payment Date on which the Company has paid all
accrued and previously unpaid interest on the Debentures.
"Eligible APM Proceeds" means, with respect to any Interest Payment Date,
the net proceeds (after underwriters' or placement agents' fees, commissions or
discounts and other expenses relating to the issuance or sale) that the Company
has received during the 180-days prior to the related Interest Payment Date from
the issuance or sale of APM Qualifying Securities to Persons that are not
Subsidiaries. This includes, without limitation, sales pursuant to any dividend
reinvestment or similar plan and sales made pursuant to any Employee Benefit
Plan.
"Eligible Repayment Proceeds" means, with respect to any Repayment Date,
the Applicable Percentage of the net proceeds the Company has received from the
issuance of Qualifying Capital Securities that the Company has sold during a
180-day period ending on a notice date not more than 30 or less than 10 Business
Days prior to such Repayment Date.
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"Employee Benefit Plan" means any written or oral purchase, savings,
option, bonus, appreciation, profit sharing, thrift, incentive, pension or
similar plan or arrangement or any written or oral compensatory contract or
arrangement.
"Enforcement Event" means any one of the following events:
(1) failure by the Company to observe, satisfy or perform any of the
covenants or agreements contained in this First Supplemental Indenture or the
Indenture (other than (i) any covenant or agreement in the Indenture expressly
declared inapplicable herein, (ii) a covenant or agreement in respect of the
Debentures a default in whose observance, satisfaction or performance is
elsewhere specifically dealt with in this First Supplemental Indenture or the
Indenture (including without limitation Article X of the Indenture), or (iii) an
event which is, or with the passage of time and/or giving of notice would result
in, an Event of Default) on the part of the Company in respect of the Debentures
that continues following a period of 60 days after the date on which written
notice of such failure, requiring the Company to remedy the same and stating
that it is a notice with respect to an Enforcement Event hereunder, shall have
been given to the Company by the Trustee by registered mail, or to the Company
and the Trustee by the Holders of at least a majority in the aggregate principal
amount of the Debentures at the time Outstanding; or
(2) unless otherwise provided for in Section 2.1(d), the Company's failure
to use Commercially Reasonable Efforts to raise sufficient Eligible Repayment
Proceeds as required by Section 2.1(d); or
(3) the Company's failure (a) to use commercially reasonable efforts to
raise Eligible APM Proceeds, or (b) to pay deferred interest on the Debentures,
in either case as required by Section 2.1(h) or (i).
"Event of Default" has the meaning set forth in Section 2.1(j).
"Final Maturity Date" has the meaning set forth in Section 2.1(d)(iii).
"Indebtedness" means all indebtedness and obligations (other than the
Debentures) of, or Guaranteed or assumed by, the Company that (i) are for
borrowed money or (ii) are evidenced by bonds, debentures, notes or other
similar instruments.
"Interest Payment Date" means a Semi-Annual Interest Payment Date or a
Quarterly Interest Payment Date, as the case may be.
"Interest Period" means the period from and including any Interest Payment
Date (or, in the case of the first Interest Payment Date, March 13, 2007) to but
excluding the next Interest Payment Date.
"LIBOR Determination Date" means the second London Banking Day immediately
preceding the first day of the relevant Quarterly Interest Period.
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"London Banking Day" means any day on which dealings in dollars are
transacted in the London interbank market.
"Make-Whole Redemption Price" means the sum, as determined by the
Calculation Agent, of the present values of the remaining scheduled payments of
principal discounted from the Scheduled Maturity Date and interest thereon that
would have been payable to and including the Scheduled Maturity Date (not
including any portion of such payments of interest accrued to the Redemption
Date) discounted from the relevant Interest Payment Date to the Redemption Date
on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate plus (a) 0.50% in the case of a redemption
in whole upon the occurrence of a Tax Event or Rating Agency Event or (b) 0.25%
in the case of any other redemption.
"Market Disruption Event" means, for purposes of sales of APM Qualifying
Securities pursuant to Section 2.1(h) or sales of Qualifying Capital Securities
pursuant to Section 2.1(d), as applicable (collectively, the "Permitted
Securities"), the occurrence or existence of any of the following events or sets
of circumstances:
(a) trading in securities generally (or in the Common Stock specifically)
on the New York Stock Exchange or any other national securities exchange, or in
the over-the-counter market, on which the Company's Capital Stock is then listed
or traded shall have been suspended or its settlement generally shall have been
materially disrupted or minimum prices shall have been established on any such
exchange or market by the relevant regulatory body or governmental agency having
jurisdiction that materially disrupts or otherwise has a material adverse effect
on trading in, or the issuance and sale of, Permitted Securities; or
(b) the Company would be required to obtain the consent or approval of its
stockholders or the consent or approval of, license from, or registration with,
a regulatory body (including, without limitation, any securities exchange) or
governmental authority to issue and sell Permitted Securities, and the Company
fails to obtain that consent or approval or to receive such license or effect
such registration notwithstanding its commercially reasonable efforts to obtain
that consent, approval, license or registration; or
(c) an event occurs and is continuing as a result of which the offering
document for the offer and sale of Permitted Securities would, in the Company's
reasonable judgment, contain an untrue statement of a material fact or omit to
state a material fact required to be stated in that offering document or
necessary to make the statements in that offering document not misleading,
provided that one or more events described under this clause (c) shall not
constitute a Market Disruption Event with respect to a period of more than 90
days in any 180-day period; or
(d) the Company reasonably believes that the offering document for the
offer and the sale of Permitted Securities would not be in compliance with a
rule or regulation
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of the Commission (for reasons other than those referred to in clause (c) of
this definition) and the Company is unable to comply with such rule or
regulation or such compliance is unduly burdensome, provided that one or more
events described under this clause (d) shall not constitute a Market Disruption
Event with respect to a period of more than 90 days in any 180-day period; or
(e) a banking moratorium shall have been declared by the federal or state
authorities of the United States that results in a disruption of any of the
markets on which the Company's securities, including any obligations of any
other Person Guaranteed by the Company, are trading; or
(f) a material disruption shall have occurred in commercial banking or
securities settlement or clearance services in the United States; or
(g) the United States shall have become engaged in hostilities, there
shall have been an escalation in hostilities involving the United States, there
shall have been a declaration of a national emergency or war by the United
States or there shall have occurred any other national or international calamity
or crisis, such that market trading in the Company's Capital Stock has been
materially disrupted; or
(h) there shall have occurred such a material adverse change in general
domestic or international economic, political or financial conditions, including
without limitation as a result of terrorist activities, or the effect of
international conditions on the financial markets in the United States, that
materially disrupts the capital markets such as to make it, in the Company's
judgment, impracticable or inadvisable to proceed with the offer and sale of
Permitted Securities.
"Maximum Share Number" has the meaning set forth in Section 2.1(h).
"Maximum Warrant Number" has the meaning set forth in Section 2.1(h).
"Outstanding" has the meaning set forth in Section 2.1(d).
"pari passu", as applied to the ranking of any obligation of a Person in
relation to any other obligation of such Person, means in any bankruptcy,
insolvency or receivership proceeding that each such obligation either (i) is
not subordinated or junior in right of payment to any other obligation or (ii)
is subordinate or junior in right of payment to the same obligations as is the
other, and is so subordinate or junior to the same extent, and is not
subordinate or junior in right of payment to each other or to any obligation as
to which the other is not so subordinate or junior.
"Preferred Stock Issuance Cap" has the meaning set forth in Section
2.1(i)(1).
"Prospectus Supplement" means the prospectus supplement dated March 6,
2007 relating to the Debentures.
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"Qualifying Non-Cumulative Preferred Stock" means the Company's
non-cumulative perpetual preferred stock that (i) contains no remedies other
than Permitted Remedies and (ii)(a) is redeemable, but is subject to
Intent-Based Replacement Disclosure, and has a provision that prohibits the
Company from making any distributions thereon upon its failure to satisfy one or
more financial tests set forth therein or (b) is subject to a replacement
capital covenant substantially similar to the Replacement Capital Covenant.
"Qualifying Warrants" means net share settled warrants to purchase Common
Stock that (i) have an exercise price per share greater than the Current Stock
Market Price as of the date of pricing thereof, (ii) the Company is not entitled
to redeem for cash and the holders of which are not entitled to require the
Company to repurchase for cash in any circumstances and (iii) do not entitle the
holders thereof to purchase a number of shares of Common Stock in excess of the
applicable Maximum Warrant Number.
"Quarterly Interest Payment Date" has the meaning set forth in Section
2.1(e).
"Quarterly Interest Period" means the Interest Period relating to any
Quarterly Interest Payment Date.
"Rating Agency Event" means a change by any nationally recognized
statistical rating organization within the meaning of Rule 15c3-1 under the
Exchange Act (or any successor provision or, upon adoption, any rule for the
registration of nationally recognized statistical rating organizations adopted
by the Commission), that, as of March 6, 2007, publishes a rating for the
Company (a "Rating Agency") to its equity credit criteria for securities similar
to the Debentures, as such criteria is in effect on March 6, 2007 (the "Current
Criteria"), which change results in a lower equity credit being given to the
Debentures as of the date of such change than the equity credit that would have
been assigned to the Debentures as of the date of such change by such Rating
Agency pursuant to its Current Criteria.
"Redemption Price" has the meaning set forth in Section 2.1(q).
"Reference Treasury Dealer" means each of Citigroup Global Markets Inc.,
Deutsche Bank Securities Inc. or ▇.▇. ▇▇▇▇▇▇ Securities Inc. or their respective
successors; 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 shall substitute therefor another Primary Treasury Dealer;
and any other Primary Treasury Dealer selected by the Calculation Agent after
consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Calculation Agent, of the bid and ask prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Calculation Agent
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by that Reference Treasury Dealer at 5:00 p.m. on the third Business Day
preceding such Redemption Date.
"Regular Record Date" for the payment of any current interest payable on
any Interest Payment Date, the date specified in Section 2.1(f) and for the
payment of deferred interest, the date specified in Section 2.1(g)(ii).
"Repayment Date" means the Scheduled Maturity Date and each Interest
Payment Date thereafter until the Company shall have repaid, redeemed, defeased
or otherwise acquired all of the Debentures.
"Replacement Capital Covenant" means the replacement capital covenant,
dated as of March 13, 2007, of the Company, as the same may be amended or
supplemented from time to time in accordance with the provisions thereof.
"Reuters Screen LIBOR01" means the display designated on Reuters Screen
LIBOR01 (or such other page or service as may replace the Reuters Screen LIBOR01
as selected by the Calculation Agent or such other page and service as may be
selected by the Calculation Agent from time to time).
"Scheduled Maturity Date" has the meaning set forth in Section 2.1(d).
"Semi-Annual Interest Payment Date" has the meaning set forth in Section
2.1(e).
"Stock and Warrant Issuance Cap" has the meaning set forth in Section
2.1(i)(1).
"Tax Event" means that the Company has requested and received an Opinion
of Counsel (which counsel need not be satisfactory to the Trustee) experienced
in such matters to the effect that, as a result of any:
(a) amendment to or change in the laws or regulations of the United States
or any political subdivision or taxing authority of or in the United States that
is enacted or becomes effective after March 6, 2007;
(b) proposed change in those laws or regulations that is announced after
March 6, 2007;
(c) official administrative decision or judicial decision or
administrative action or other official pronouncement interpreting or applying
those laws or regulations that is announced after March 6, 2007; or
(d) threatened challenge asserted in connection with an audit of the
Company, or a threatened challenge asserted in writing against any other
taxpayer that has raised capital through the issuance of securities that are
substantially similar to the Debentures;
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there is more than an insubstantial risk that interest payable by the Company on
the Debentures is not, or will not be, deductible by the Company, in whole or in
part, for United States federal income tax purposes.
"Three-month LIBOR" means, with respect to any Quarterly Interest Period,
the rate (expressed as a percentage per annum and determined by the Calculation
Agent) for deposits in U.S. dollars for a three-month period commencing on the
first day of that Interest Period that appears on Reuters Screen LIBOR01 as of
11:00 a.m. (London time) on the LIBOR Determination Date for that Interest
Period. If such rate does not appear on Reuters Screen LIBOR01, Three-month
LIBOR will be determined on the basis of the rates at which deposits in U.S.
dollars for a three-month period commencing on the first day of that Interest
Period are offered to prime banks in the London interbank market by four major
banks in the London interbank market selected by the Calculation Agent (after
consultation with the Company), at approximately 11:00 a.m., London time, on the
LIBOR Determination Date for that Interest Period, in an amount that, in the
Calculation Agent's judgment, is representative of a single transaction in that
market at that time. The Calculation Agent will request the principal London
office of each of such banks to provide a quotation of its rate. If at least two
such quotations are provided, Three-month LIBOR with respect to that Interest
Period will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, Three-month LIBOR with respect to that Interest Period
will be the arithmetic mean of the rates quoted by three major banks in New York
City selected by the Calculation Agent, at approximately 11:00 a.m., New York
City time, on the first day of that Interest Period for loans in U.S. dollars to
leading European banks for a three-month period commencing on the first day of
that Interest Period and in an amount that, in the Calculation Agent's judgment,
is representative of a single transaction in that market at that time. However,
if fewer than three banks selected by the Calculation Agent to provide
quotations are quoting as described above, Three-month LIBOR for that Interest
Period will be the same as Three-month LIBOR as determined for the previous
Quarterly Interest Period or, in the case of the Quarterly Interest Period
beginning on the Scheduled Maturity Date, 5.34%.
"Voting Stock" means equity securities which ordinarily have voting power
for the election of directors, whether at all times or only so long as no senior
class of equity securities has such voting power by reason of any contingency.
(b) "Applicable Percentage", "Intent-Based Replacement Disclosure",
"Permitted Remedies" and "Qualifying Capital Securities" shall have the
respective meanings set forth in the Replacement Capital Covenant as in effect
on the date hereof and as it may be amended pursuant to its terms consistent
with Section 2.1(r).
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ARTICLE TWO
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1 TERMS OF DEBENTURES
Pursuant to Sections 201 and 301 of the Indenture, there is hereby
established a series of Securities, the terms of which shall be as follows:
(a) Designation. The Securities of this series shall be known and
designated as the "6.25% Series A-1 Junior Subordinated Debentures" of the
Company (the "Debentures"). The CUSIP number of the Debentures is ▇▇▇▇▇▇▇▇▇. The
Bank of New York will act as the paying agent for the Debentures.
(b) Aggregate Principal Amount. The maximum aggregate principal amount of
the Debentures that may be authenticated and delivered under the Indenture and
this First Supplemental Indenture is $1,000,000,000 (except for Debentures
authenticated and delivered upon registration of transfer of, or exchange for,
or in lieu of, other Debentures pursuant to ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇
of the Indenture or Section 3.5 of this First Supplemental Indenture); provided,
however, that the Company may from time to time authenticate and deliver under
the Indenture and this First Supplemental Indenture up to $1,000,000,000
additional amount of Debentures, which Debentures may accrue interest from a
different date than the Debentures, as may be specified pursuant to Section 301
of the Indenture, so long as the Company reasonably determines that the
additional Debentures so authenticated and delivered will be fungible for United
States federal income tax purposes. From time to time the Company may execute
and deliver, and upon Company Order the Trustee shall authenticate and deliver,
additional Debentures.
(c) Form and Denominations. The Debentures will be issued only in fully
registered form, and the authorized denominations of the Debentures shall be
$100,000 principal amount and integral multiples of $1,000 in excess thereof.
The Debentures will initially be issued in the form of one or more Global
Securities substantially in the form of Annex A attached hereto, with such
modifications thereto as may be approved by the authorized officer executing the
same. The Debentures will be denominated in U.S. dollars and payments of
principal and interest will be made in U.S. dollars.
(d) Scheduled Maturity Date.
(i) The principal amount of, and all accrued and unpaid interest on,
the Outstanding Debentures shall be payable in full on March 15, 2037, or
if such day is not a Business Day, the next Business Day (the "Scheduled
Maturity Date"); provided that in the event the Company has delivered an
Officers' Certificate to the Trustee pursuant to clause (vi) of this
Section 2.1(d) in connection with the
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Scheduled Maturity Date, (A) the principal amount of Debentures payable on
the Scheduled Maturity Date, if any, shall be the principal amount set
forth in the notice of repayment accompanying such Officers' Certificate,
(B) such specified principal amount of Debentures shall be repaid on the
Scheduled Maturity Date pursuant to Article III, and (C) subject to clause
(ii) of this Section 2.1(d), the remaining Debentures shall remain
Outstanding and shall be payable on the immediately succeeding Quarterly
Interest Payment Date or such earlier date on which they are redeemed
pursuant to Section 2.1(o) or shall become due and payable pursuant to
Section 502 of the Indenture or clause (iii) of this Section 2.1(d). The
Outstanding Debentures shall be due and payable on the Scheduled Maturity
Date except to the extent so specified in an Officers' Certificate
delivered to the Trustee not more than 30 and not less than 10 Business
Days immediately preceding the Scheduled Maturity Date.
(ii) In the event the Company has delivered an Officers' Certificate
to the Trustee pursuant to clause (vi) of this Section 2.1(d) in
connection with any Quarterly Interest Payment Date, the principal amount
of Debentures payable on such Quarterly Interest Payment Date shall be the
principal amount set forth in the notice of repayment, if any,
accompanying such Officers' Certificate, such principal amount of
Debentures shall be repaid on such Quarterly Interest Payment Date
pursuant to Article III, and the remaining Debentures shall remain
Outstanding and shall be payable on the immediately succeeding Quarterly
Interest Payment Date or such earlier date on which they are redeemed
pursuant to Section 2.1(o) or shall become due and payable pursuant to
Section 502 of the Indenture or clause (iii) of this Section 2.1(d). The
Outstanding Debentures shall be due and payable on any Quarterly Interest
Payment Date except to the extent so specified in an Officers' Certificate
delivered to the Trustee not more than 30 and no less than 10 Business
Days immediately preceding such Quarterly Interest Payment Date.
(iii) Notwithstanding anything to the contrary set forth in this
First Supplemental Indenture, the principal of, and all accrued and unpaid
interest on, all Outstanding Debentures shall be due and payable on March
15, 2087, or if such day is not a Business Day, the following Business Day
(the "Final Maturity Date").
(iv) Any repayment of principal and current interest on the
Debentures pursuant to this Section 2.1(d) on any date prior to the Final
Maturity Date shall not affect the Company's obligations under Section
2.1(h) with respect to the payment of deferred interest on the Debentures.
For the purpose of clarity, it is possible that the Company may repay the
principal and current interest on a Debenture pursuant to this Section
2.1(d) but still be obligated to pay deferred interest on the Debenture.
For the purposes of the definition of "Outstanding" in the Indenture, a
Debenture, as to which principal and current interest has been repaid,
redeemed or otherwise satisfied by the Company, shall for all purposes of
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the Indenture and this First Supplemental Indenture, other than for
purposes of Article XI of the Indenture and Section 2.1(d) and Article III
of this First Supplemental Indenture, be deemed Outstanding so long as any
deferred interest on such Debenture remains unpaid.
(v) Until principal and current interest on all Outstanding
Debentures are paid in full, the principal of all Outstanding Debentures
is automatically accelerated as provided in Section 2.1(k) or a
declaration of acceleration pursuant to Section 502 of the Indenture
occurs, the Company shall use Commercially Reasonable Efforts, subject to
a Market Disruption Event:
(A) to raise sufficient Eligible Repayment Proceeds during a
180-day period ending on a date not more than 30 and not less than
10 Business Days prior to the Scheduled Maturity Date to permit
repayment of the principal and current interest on all Outstanding
Debentures in full on the Scheduled Maturity Date; and
(B) if the Company is unable for any reason to raise
sufficient Eligible Repayment Proceeds to permit repayment in full
of the principal amount of and current interest on all the
Outstanding Debentures on the Scheduled Maturity Date or any
subsequent Quarterly Interest Payment Date, to raise sufficient
Eligible Repayment Proceeds to permit repayment of the principal and
current interest on all Outstanding Debentures in full on the next
Quarterly Interest Payment Date pursuant to clause (ii) of this
Section 2.1(d).
(vi) The Company shall, if it has not raised sufficient Eligible
Repayment Proceeds in connection with any Repayment Date, deliver an
Officers' Certificate to the Trustee no more than 30 and no less than 10
Business Days in advance of such Repayment Date stating the amount of
Eligible Repayment Proceeds, if any, raised pursuant to clause (v) above
in connection with such Repayment Date. Each Officers' Certificate
delivered pursuant to this clause (vi), unless no principal amount of
Debentures is to be repaid on the applicable Repayment Date, shall be
accompanied by a notice of repayment pursuant to Section 3.1 setting forth
the principal amount of the Debentures to be repaid on such Repayment
Date, which amount shall be determined after giving effect to clause
(viii) of this Section 2.1(d).
(vii) The Company shall be excused from its obligation to use
Commercially Reasonable Efforts to sell Qualifying Capital Securities
pursuant to clause (v) above if such Officers' Certificate further
certifies that: (A) a Market Disruption Event was existing at any time
during the period commencing 180 days prior to the date of such Officers'
Certificate or, in the case of any Repayment Date after the Scheduled
Maturity Date, the period commencing on the immediately preceding
Quarterly Interest Payment Date and ending on the
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Business Day immediately preceding the date of such Officers' Certificate;
and (B) either (1) the Market Disruption Event continued for the entire
180-day period or, in the case of any Repayment Date after the Scheduled
Maturity Date, the period since the most recent Quarterly Interest Payment
Date, as the case may be, or (2) the Market Disruption Event continued for
only part of the relevant period, but the Company was unable after
Commercially Reasonable Efforts to raise sufficient Eligible Repayment
Proceeds during the rest of that period to permit repayment of the
Debentures in full.
(viii) Payments on the Debentures on any Repayment Date shall be
applied, first, to the extent permitted by Section 2.1(i), to deferred
interest to the extent of Eligible APM Proceeds raised pursuant to Section
2.1(i), second, to current interest and, third, to the repayment of the
principal of Debentures; provided that if the Company is obligated to sell
Qualifying Capital Securities and repay any outstanding pari passu
securities in addition to the Debentures, then on any date and for any
period such payments shall be applied to the Debentures and those other
pari passu securities having the same scheduled maturity date as the
Debentures pro rata in accordance with their respective outstanding
principal amounts and none of such payments shall be applied to any other
pari passu securities having a later scheduled maturity date until the
principal of and all accrued and unpaid interest on the Debentures has
been paid in full, except to the extent permitted by clause (vii) of
Section 2.1(g) and the first sentence of Section 2.1(h). If the Company
has raised less than $5,000,000 of Eligible Repayment Proceeds during the
relevant 180-day or three-month period, the Company will not be required
to repay any Debentures on the relevant Repayment Date, but it will repay
the applicable principal amount of the Debentures on the next Quarterly
Interest Payment Date as of which the Company has raised at least
$5,000,000 of Eligible Repayment Proceeds.
(e) Rate of Interest. The Debentures shall bear interest (i) from and
including March 13, 2007 to but excluding the Scheduled Maturity Date at the
rate of 6.25% per annum, computed on the basis of a 360-day year comprised of
twelve 30-day months, and (ii) thereafter, as to the principal amount of any
Outstanding Debentures, at an annual rate equal to Three-month LIBOR plus
2.056%, computed on the basis of a 360-day year and the actual number of days
elapsed. All percentages resulting from any calculation of Three-month LIBOR
will be rounded upward or downward, as appropriate, to the next higher or lower
one hundred-thousandth of a percentage point. Subject to Sections 2.1(g) and
(h): (x) prior to and including March 15, 2037, interest on the Debentures shall
be payable semi-annually in arrears on March 15 and September 15 of each year,
beginning on September 15, 2007 (each such date, a "Semi-annual Interest Payment
Date"), and (y) after March 15, 2037, interest on the Debentures shall be
payable quarterly in arrears on March 15, June 15, September 15 and December 15
of each year, beginning on June 15, 2037, or if any such day is not a Business
Day, the following Business Day, unless such postponement would cause the day to
fall in the next calendar month, in which case it shall be brought forward to
the preceding Business Day (each such date, a "Quarterly
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Interest Payment Date"). In the event any Semi-annual Interest Payment Date
falls on a day that is not a Business Day, the interest payment due on that date
will be postponed to the next day that is a Business Day and no interest shall
accrue as a result of such postponement. Any installment of interest (or portion
thereof) deferred in accordance with Section 2.1(g) or otherwise unpaid shall
bear additional interest, to the extent permitted by law, at the rate of
interest then in effect from time to time on the Debentures, from the relevant
Interest Payment Date, compounded on each subsequent Interest Payment Date,
until paid in accordance with Section 2.1(h).
(f) To Whom Interest is Payable. Interest (other than deferred interest
which shall be payable to the Persons specified pursuant to Section 2.1(g)(ii))
shall be payable to the Person in whose name the Debentures are registered at
the close of business on the Business Day next preceding the Interest Payment
Date, or in the event the Debentures cease to be held in the form of one or more
Global Securities, at the close of business on the date 15 days prior to that
Interest Payment Date, whether or not a Business Day.
(g) Option to Defer Interest Payments.
(i) The Company shall have the right, at any time and from time to
time prior to the Final Maturity Date, to defer the payment of interest on
the Debentures for one or more consecutive Interest Periods that do not
exceed 10 years; provided that no Deferral Period shall extend beyond the
Final Maturity Date or the earlier redemption of the Debentures. If an
Event of Default has occurred and is continuing or the Company has given
notice of its election to defer interest payments but the Deferral Period
has not yet commenced or a Deferral Period is continuing, the Company
shall not, and shall not permit any Subsidiary, subject to the exceptions
specified in clause (vii) of this Section 2.1(g), to: (a) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any Capital Stock of the Company, (b)
make any payment of principal of, or interest or premium, if any, on, or
repay, purchase or redeem any debt securities of the Company that rank
pari passu with or junior to the Debentures or (c) make any payments with
respect to any Guarantee by the Company of the junior subordinated debt
securities of any Subsidiary if such Guarantee ranks pari passu with, or
junior in interest to, the Debentures.
(ii) At the end of any Deferral Period, the Company shall pay all
deferred interest on the Debentures (together with compounded interest
thereon, if any, to the extent permitted by applicable law), to the Person
in whose name the Debentures are registered at the close of business on
the Business Day next preceding the Interest Payment Date at the end of
such Deferral Period or, in the event the Debentures cease to be held in
the form of one or more Global Securities, at the close of business on the
date 15 days prior to the end of the Deferral Period, whether or not a
Business Day.
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(iii) Upon termination of any Deferral Period and upon the payment
of all deferred interest and any compounded interest then due on any
Interest Payment Date, the Company may elect to begin a new Deferral
Period pursuant to clause (i) of this Section 2.1(g).
(iv) The Company may elect to pay deferred interest on any Interest
Payment Date during any Deferral Period to the extent permitted by Section
2.1(h).
(v) The Company shall give written notice to the Trustee and the
Holders of the Debentures of its election to begin any Deferral Period at
least one Business Day prior to the Regular Record Date for that Interest
Payment Date. Notwithstanding the previous sentence, the Company's failure
to pay any interest due within five Business Days after any Interest
Payment Date shall automatically and without any further action by any
Person be deemed to commence a Deferral Period.
(vi) If any Deferral Period lasts longer than one year, the Company
shall not, and shall cause its Subsidiaries not to purchase, redeem or
otherwise acquire any securities ranking junior to or pari passu with any
APM Qualifying Securities the proceeds of which were used to pay deferred
interest during such Deferral Period until the first anniversary of the
date on which all deferred interest has been paid, subject to the
exceptions set forth in clause (vii) below. If the Company is involved in
a Business Combination where immediately after the consummation of the
Business Combination more than 50% of the surviving or resulting entity's
Voting Stock is owned by the shareholders of the other party to the
Business Combination or Continuing Directors cease for any reason to
constitute a majority of the directors of the surviving or resulting
entity, then neither the restrictions set forth in this clause (vi) nor
the provisions of Section 2.1(h) shall apply to any Deferral Period that
is terminated on the next Interest Payment Date following the date of
consummation of the Business Combination.
(vii) The restrictions in clauses (i) and (vi) of this Section
2.1(g) do not apply to (a) purchases, redemptions or other acquisitions of
shares of the Company's Capital Stock in connection with (1) any Employee
Benefit Plan or the Assurance Agreement or (2) a dividend reinvestment,
stock purchase plan or other similar plan, (b) any exchange or conversion
of any class or series of the Company's Capital Stock (or the Capital
Stock of any Subsidiary) for any class or series of the Company's Capital
Stock or of any class or series of Indebtedness of the Company for any
class or series of the Company's Capital Stock, (c) the purchase of
fractional interests in shares of the Capital Stock of the Company in
accordance with the conversion or exchange provisions of the Company's
Capital Stock or the security or instrument being converted or exchanged,
(d) any declaration of a dividend in connection with any stockholders'
right plan, or the issuance of rights, equity securities or other property
under any stockholders'
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right plan, or the redemption or repurchase of rights in accordance with
any stockholders' rights plan, (e) any dividend in the form of equity
securities, warrants, options or other rights where the dividend stock or
the stock issuable upon exercise of the warrants, options or other rights
is the same stock as that on which the dividend is being paid or ranks
pari passu with or junior to such equity securities, (f) any payment
during a Deferral Period of current interest in respect of any debt
securities of the Company that rank pari passu with the Debentures that is
made pro rata to the amounts due on such pari passu securities and on the
Debentures and any payments of deferred interest on such pari passu
securities that, if not made, would cause the Company to breach the terms
of the instrument governing such pari passu securities (provided that such
payments are made in accordance with Section 2.1(h) to the extent it
applies), (g) any payment of principal in respect of pari passu securities
having an earlier scheduled maturity date than the Debentures, as required
under a provision of such pari passu securities that is substantially the
same as Section 2.1(d) or any such payment in respect of any such pari
passu securities having the same scheduled maturity date as the Debentures
that is made on a pro rata basis among one or more series of such
securities and the Debentures or (h) any repayment or redemption of a
security necessary to avoid a breach of the instrument governing that
security.
(h) Payment of Deferred Interest. The Company shall not pay deferred
interest (including compounded interest thereon) on the Debentures on any
Interest Payment Date during any Deferral Period from any source other than
Eligible APM Proceeds unless (x) required by an applicable regulatory authority,
(y) permitted under clause (vi) of Section 2.1(g) or (z) an Event of Default has
occurred and is continuing. Notwithstanding the foregoing, the Company may pay
current interest during a Deferral Period from any available funds. To the
extent that the Company is able to raise some, but not all, Eligible APM
Proceeds to pay accrued and unpaid interest on the applicable Interest Payment
Date, such Eligible APM Proceeds shall be allocated first to deferred payments
of accrued and unpaid interest in chronological order based on the date each
payment was first deferred. If any Indebtedness of the Company that ranks pari
passu with the Debentures is outstanding in addition to the Debentures under
which the Company is obligated to sell APM Qualifying Securities and apply the
net proceeds to the payment of deferred interest or distributions, then on any
date and for any period the amount of Eligible APM Proceeds received by the
Company from such sales and available for payment of the deferred interest and
distributions shall be applied to the Debentures and such pari passu securities
on a pro rata basis up to, in the case of Common Stock, the Stock and Warrant
Issuance Cap and the Maximum Share Number, in the case of Qualifying Warrants,
the Stock and Warrant Issuance Cap and the Maximum Warrant Number and, in the
case of Qualifying Non-Cumulative Preferred Stock, the Preferred Stock Issuance
Cap (or comparable provisions in the instruments governing such pari passu
securities) in proportion to the total amounts that are due on the Debentures
and such pari passu securities. The Company may make such pro rata payments on
such pari passu securities so long as it shall have paid or deposited with the
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paying agent for the Debentures or shall have segregated and holds in trust for
payment the pro rata proceeds applicable to the Debentures that have not been
paid. The "Maximum Share Number" will initially equal 100,000,000 and the
"Maximum Warrant Number" will initially equal 100,000,000; provided that, if the
number of issued and outstanding shares of Common Stock is changed into a
different number of shares or a different class by reason of any stock split,
reverse stock split, stock dividend, reclassification, recapitalization,
split-up, combination, exchange of shares or other similar transaction, then the
Maximum Share Number and the Maximum Warrant Number shall be correspondingly
adjusted in a manner reasonably determined by the Company. The Company may, at
its discretion and without the consent of the holders of the Debentures,
increase the Maximum Share Number or the Maximum Warrant Number or both
(including through the increase of the Company's authorized share capital, if
necessary) if the Company determines that such increase is necessary to allow
the Company to issue sufficient Common Stock and/or Qualifying Warrants to pay
deferred interest on the Debentures.
(i) Alternative Payment Mechanism. Immediately following any APM
Commencement Date and until the termination of the related Deferral Period, the
Company will be required to use commercially reasonable efforts to sell APM
Qualifying Securities until the Company has raised an amount of Eligible APM
Proceeds at least equal to the aggregate amount of accrued and unpaid deferred
interest on the Debentures (including compounded interest thereon) and applied
such Eligible APM Proceeds on the next Interest Payment Date to the payment of
deferred interest (including compounded interest thereon) in accordance with
Section 2.1(h); provided that:
(1) the foregoing obligations shall not apply (i) during the first
five years of any Deferral Period to the extent the number of shares of
Common Stock issued and the number of shares of Common Stock subject to
such Qualifying Warrants, together with the number of shares of Common
Stock previously issued and the number of shares of Common Stock subject
to Qualifying Warrants previously issued during such Deferral Period to
pay interest on the Debentures pursuant to this Section 2.1(i), would, in
the aggregate, exceed 2% of the total number of issued and outstanding
shares of Common Stock as of the date of the Company's most recent
publicly available consolidated financial statements on the date of
determination (the "Stock and Warrant Issuance Cap") or (ii) to the
issuance of Qualifying Non-Cumulative Preferred Stock at any time to the
extent the Eligible APM Proceeds raised from such issuance, together with
the Eligible APM Proceeds of all prior issuances of Qualifying
Non-Cumulative Preferred Stock pursuant to this Section 2.1(i) applied to
pay deferred interest on the Debentures, would exceed $250,000,000 plus
25% of the aggregate principal amount of any additional Debentures at the
time of their initial issuance pursuant to Section 2.1(b) (the "Preferred
Stock Issuance Cap");
(2) the foregoing obligations shall not apply in respect of any
Interest Payment Date if the Company shall have provided to the Trustee
(which the
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Trustee will promptly forward upon receipt to each Holder of the
Debentures whose name appears in the Security Register) no more than 30
and no less than 10 Business Days prior to such Interest Payment Date an
Officers' Certificate stating that (i) a Market Disruption Event occurred
after the immediately preceding Interest Payment Date and (ii) either (A)
the Market Disruption Event continued for the entire period from the
Business Day immediately following the preceding Interest Payment Date to
the Business Day immediately preceding the date on which such Officers'
Certificate is provided or (B) the Market Disruption Event continued for
only part of such period but the Company was unable after commercially
reasonable efforts to raise sufficient Eligible APM Proceeds during the
rest of that period to pay all accrued and unpaid interest due on the
Interest Payment Date with respect to which such Officers' Certificate is
being delivered; and
(3) to the extent that the Company has raised some but not all
Eligible APM Proceeds necessary to pay all deferred interest on any
Interest Payment Date, such Eligible APM Proceeds shall be applied in
accordance with Section 2.1(h).
Once the Company reaches the Stock and Warrant Issuance Cap for a Deferral
Period, the Company will not be required to issue more shares of Common Stock or
Qualifying Warrants under this Section 2.1(i) during the first five years of
such Deferral Period even if the Stock and Warrant Issuance Cap subsequently
increases because of a subsequent increase in the number of outstanding shares
of Common Stock. The Stock and Warrant Issuance Cap will cease to apply after
the fifth anniversary of the commencement of any Deferral Period, at which point
the Company must pay any deferred interest, regardless of the time at which it
was deferred pursuant to Section 2.1(h), subject to the limitations in Section
2.1(g), the Preferred Stock Issuance Cap, the Maximum Share Number, the Maximum
Warrant Number and any Market Disruption Event. In addition, if the Stock and
Warrant Issuance Cap is reached during a Deferral Period and the Company
subsequently pays all deferred interest, the Stock and Warrant Issuance Cap will
cease to apply at the termination of such Deferral Period, reset to zero and
will not apply again unless and until the start of a new Deferral Period. The
Preferred Stock Issuance Cap shall not reset to zero even if the Company pays
all deferred interest for a Deferral Period, and the Eligible APM Proceeds from
sales of Qualifying Non-Cumulative Preferred Stock applied pursuant to Section
2.1(h) during such Deferral Period and all prior Deferral Periods cumulate as
Qualifying Non-Cumulative Preferred Stock is issued to pay deferred interest.
The Company will not be excused from its obligations under this Section 2.1(i)
if it determines not to pursue or complete the sale of APM Qualifying Securities
due to pricing, dividend rate or dilution considerations.
(j) Events of Default. The Debentures shall not be entitled to the
benefits of the Events of Default in clauses (1) through (4) of Section 501 of
the Indenture. The Debentures shall be entitled to the benefits of the Events of
Default in clauses (5) and (6)
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of Section 501 of the Indenture. The following events shall be Events of Default
with respect to the Debentures (whatever the reason for such Event of Default
and whether it shall be occasioned by the provisions of Article Fourteen of the
Indenture or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of interest, including compounded
interest, in full on any Debenture for a period of 30 days after the
conclusion of a 10-year period following the commencement of any Deferral
Period;
(2) default in the payment of the principal of the Debentures at the
Final Maturity Date or upon a call for redemption;
Except as provided in this paragraph (j), no breach or default by the Company of
any other covenant or obligation under the Indenture or the terms of the
Debentures shall constitute an Event of Default.
(k) Acceleration of Maturity; Rescission of Amendment. The remedies
provided to the Trustee and Holders by Section 502 of the Indenture will apply
only to an Event of Default under clause (1) of Section 2.1(j). If an Event of
Default specified in Section 501(5) or 501(6) of the Indenture occurs, then in
every such case the principal amount of all the Debentures shall automatically
become due and payable immediately, without any declaration or other action on
the part of the Trustee or any Holder. An Event of Default in clause (2) of
Section 2.1(j) shall not entitle the Holders to the benefits of Section 502 of
the Indenture.
(l) Collection of Indebtedness and Suits From Enforcement by Trustee. The
Debentures shall not have the benefits of the first paragraph of Section 503 of
the Indenture.
(m) Limitation on Suits. For purposes of the Debentures, Section 507 of
the Indenture is hereby amended (i) by adding "or Enforcement Event" after
"Event of Default" in clause (1) thereof, and (ii) by adding at the end of
clause (2) thereof: "or the Holders of no less than a majority in principal
amount of the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such Enforcement
Event in its own name as Trustee hereunder;"
(n) Unconditional Right of Holders to Receive Principal, Premium and
Interest. For purposes of the Debentures, Section 508 of the Indenture is hereby
amended and restated in its entirety:
"Notwithstanding any other provision in this Indenture or the First
Supplemental Indenture, the Holder of any Debenture shall have the right,
which is absolute and unconditional, to receive payment of the principal
of and any premium and
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(subject to Section 2.1(g)(ii) of the First Supplemental Indenture and
Section 307 of the Indenture) interest on such Debenture when due, it
being understood (i) that, in the case of a Deferral Period, interest
shall only become due and payable at the time and in the manner provided
for in Sections 2.1(g) and (h) of the First Supplemental Indenture, and
interest shall, in the case of Section 2.1(i) of the First Supplemental
Indenture, only become due and payable in the amount determined in
accordance with such Section, and (ii) that the extent to which Holders
have a right to receive payment of principal on any Repayment Date is
determined in accordance with Section 2.1(d) of the First Supplemental
Indenture. Any Holder's right to institute suit for the enforcement of any
such payment, and such rights referred to in this Section 508 shall not be
impaired without the consent of such Holder."
For the purposes of Section 316(b) of the Trust Indenture Act, it is understood
and agreed that no payment of principal or interest shall be deemed due and
payable under the provisions of Sections 2.1(d), 2.1(g)(ii) and 2.1(h) until
the Company has received Eligible Repayment Proceeds or Eligible APM Proceeds,
respectively, to pay such principal or interest.
(o) Waiver of Past Defaults. Notwithstanding anything to the contrary in
Section 513 of the Indenture, for the purposes of the Debentures, a past default
that is an Event of Default under Section 501(5) or 501(6) of the Indenture
cannot be waived, with respect to the Debentures and its consequences, without
the consent of each Holder of the Debentures.
(p) Notice of Defaults and Enforcement Events. For purposes of the
Debentures, Section 602 of the Indenture is hereby amended (i) by adding "and
Enforcement Events" after "Defaults" in the header thereof, and (ii) by adding
"or Enforcement Event" after "default" in the first and second line of such
Section.
(q) Redemption. The Debentures shall be redeemable in accordance with
Article Eleven of the Indenture, provided that the Debentures are redeemable at
any time (i) in whole or in part at the option of the Company or (ii) in whole
but not in part upon the occurrence of a Rating Agency Event or a Tax Event at a
"Redemption Price" equal to (1) 100% of their principal amount plus accrued and
unpaid interest to the Redemption Date or (2) in the case of any such redemption
prior to the Scheduled Maturity Date, if greater, the applicable Make-Whole
Redemption Price plus accrued and unpaid interest to the Redemption Date. In the
event of any redemption in part prior to the Scheduled Maturity Date, the
aggregate principal amount of the Debentures Outstanding after such redemption
must be not less than $50,000,000. For purposes of the Debentures, the first
sentence of Section 1104 of the Indenture is replaced in its entirety with the
following: "Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 10 nor more than 60 days prior to the Redemption
Date, to each Holders of Securities to be redeemed, at his address appearing in
the Security Register.
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(r) Replacement Capital Covenant. The Company shall not modify the
Replacement Capital Covenant to (A) amend the definitions incorporated into this
First Supplemental Indenture pursuant to Section 1.2.3(b) in a manner adverse to
the Holders or (B) impose additional restrictions on the type or amount of
Qualifying Capital Securities that the Company may include for purposes of
determining the extent to which repayment, redemption, defeasance or repurchase
of the Debentures is permitted, except with the consent of the holders of a
majority of the principal amount of Outstanding Debentures. Except as expressly
provided in the preceding sentence, the Company may modify the Replacement
Capital Covenant at any time and in any manner without the consent of the
Holders of the Debentures.
(s) Limitation on Claims in the Event of Bankruptcy, Insolvency or
Receivership. To the extent permitted by law, each Holder, by such Holder's
acceptance of the Debentures, agrees that if a Bankruptcy Event shall occur
prior to the redemption, repayment or defeasance of such Debentures, such Holder
shall only have a claim for deferred and unpaid interest (including compounded
interest thereon) to the extent such interest (including compounded interest
thereon) relates to the earliest two years of the portion of the Deferral Period
for which interest has not so been paid.
(t) Sinking Fund; Holder Repurchase Right. The Debentures shall not be
subject to any sinking fund or analogous provision or be redeemable at the
option of the Holders.
(u) Forms. The Debentures shall be substantially in the form of Annex A
attached hereto, with such modifications thereto as may be approved by the
authorized officer executing the same.
(v) Subordination. The Debentures shall be subject to Article XIV of the
Indenture, subject to the following modifications:
(i) For purposes of the Debentures, the "or" before clause (iii) of
the definition of Senior Debt in the Indenture is deleted, the following clauses
are added to the definition of Senior Debt in the Indenture after the word
"contracts," in clause (iii) for purposes of the Debentures:
", (iv) any subordinated or junior subordinated debt that by its terms is
not expressly pari passu or subordinated to the Debentures, (v) any
Guarantee of any indebtedness, obligation or security issued by any Person
that is an Affiliate of the Company and such Person is viewed by the
Company as a vehicle to finance its operations, and (vi) Indebtedness of
the Company to its Subsidiaries"; and
(ii) For purposes of the Debentures, the following provision is
added to the end of the definition of Senior Debt in the Indenture after the
word "Securities": "provided that (a) trade account payables and accrued
liabilities arising in the ordinary course of the Company's business, (b) the
Company's 5.75% Series ▇-▇ ▇▇▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and 4.875% Series A-3 Junior Subordinated Debentures and
(c) any other indebtedness, Guarantee or other obligation that is specifically
designated as being subordinate, or not superior, in right of payment to the
Debentures, shall not be considered Senior Debt".
(iii) For purposes of the Debentures, the provisions of Section 1404
of the Indenture shall only apply in the case where (A) there has been an event
of default with respect to Senior Debt within the meaning of clause (i) of the
definition of Senior Debt, (B) the principal amount of such Senior Debt has been
accelerated, (C) the outstanding principal amount of Senior Debt at the time of
acceleration is at least $100,000,000 and (D) the event of default or
acceleration has not been cured, waived, or otherwise ceased to exist. In no
other case and to no other Senior Debt shall Section 1404 apply.
(iv) The Debentures shall rank pari passu with the Company's 5.75%
Series A-2 Junior Subordinated Debentures and 4.875% Series A-3 Junior
Subordinated Debentures.
(w) Registrar, Paying Agent, Authenticating Agent and Place of Payment.
The Company hereby appoints the Bank of New York. as Security Registrar,
Authenticating Agent and Paying Agent with respect to the Debentures. The
Debentures may be surrendered for registration of transfer and for exchange at
the office or agency of the Company maintained for such purpose in the City of
New York, New York and at any other office or agency maintained by the Company
for such purpose. The Place of Payment for the Debentures shall be the Paying
Agent's office in New York, New York.
(x) Defeasance. Until the Scheduled Maturity Date, the Debentures will be
subject to Sections 1302 and 1303 of the Indenture.
ARTICLE THREE
REPAYMENT OF THE DEBENTURES
3.1. REPAYMENT. The Company shall, not more than 30 nor less than 10
Business Days prior to each Repayment Date (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of the principal amount of
Debentures to be repaid on such date pursuant to Section 2.1(d).
3.2. SELECTION OF SECURITIES TO BE REPAID. If less than all the Debentures
are to be repaid on any Repayment Date, the particular Debentures to be repaid
shall be selected not more than 30 days prior to such Repayment Date by the
Trustee, from the Outstanding Debentures not previously repaid or redeemed or as
to which notice of repayment or redemption has been given, by such other method
as the Trustee may deem fair and appropriate and which may provide for the
selection for repayment of a portion of the principal amount of any Debenture,
provided that the portion of the principal
-23-
amount of any Debenture not repaid shall be in an authorized denomination
(which shall not be less than the minimum authorized denomination).
The Trustee shall promptly notify the Company in writing of the Debentures
selected for partial repayment and the principal amount thereof to be repaid.
For all purposes hereof, unless the context otherwise requires, all provisions
relating to the repayment of Debentures shall relate, in the case of any
Debenture repaid or to be repaid only in part, to the portion of the principal
amount of such Debenture which has been or is to be repaid.
3.3. NOTICE OF REPAYMENT. Notice of repayment shall be given by
first-class mail, postage prepaid, mailed not later than the 15th calendar day,
and not earlier than the 10th calendar day, prior to the Repayment Date, to each
Holder of Debentures to be repaid, at the address of such Holder as it appears
in the Security Register.
Each notice of repayment shall identify the Debentures to be repaid
(including CUSIP number, if a CUSIP number has been assigned to the Debentures)
and shall state:
(a) the Repayment Date;
(b) if less than all Outstanding Debentures are to be repaid, the
identification (and, in the case of partial repayment, the respective principal
amounts) of the particular Debentures to be repaid;
(c) that on the Repayment Date, the principal amount of the Debentures or
portions thereof to be repaid will become due and payable, and that interest
thereon, if any, shall cease to accrue on and after said date;
(d) whether any deferred interest shall remain outstanding on any
Debentures to be repaid, and if so, the amount of such deferred interest and
that compound interest thereon shall continued to accrue on and after said date
until paid; and
(e) the place or places where such Debentures are to be surrendered for
payment of the principal amount thereof.
Notice of repayment shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company and shall
be irrevocable.
3.4. DEPOSIT OF REPAYMENT AMOUNT. Prior to [10:00 a.m.], New York City
time, on the Repayment Date specified in the notice of repayment given as
provided in Section 3.3, the Company will deposit with the Trustee or with one
or more Paying Agents (or if the Company is acting as its own Paying Agent, the
Company will segregate and hold in trust as provided in Section 1003 of the
Indenture) an amount of money sufficient to pay the principal amount of, and
(except to the extent the payment of such accrued interest shall be prohibited
pursuant to Section 2.1(h)) any accrued interest
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(including compounded interest) on, all the Debentures which are to be repaid on
that date.
3.5. PAYMENT OF DEBENTURES SUBJECT TO REPAYMENT. If any notice of
repayment has been given as provided in Section 3.3, the Debentures or portion
of the Debentures with respect to which such notice has been given shall become
due and payable on the Repayment Date. On presentation and surrender of such
Debentures as provided in the notice of repayment, such Debentures or the
specified portions thereof shall be paid by the Company at their principal
amount, together with accrued interest (including any compounded interest) to
the Repayment Date (except to the extent the payment of such accrued interest
shall be prohibited pursuant to Section 2.1(h)); provided that, except in the
case of a repayment in full of all Outstanding Debentures, installments of
interest whose Stated Maturity is on or prior to the Repayment Date will be
payable to the Holders of such Debentures, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Regular
Record Dates according to their terms and the provisions of Section 307 of the
Indenture and Section 2.1(g)(ii) of this First Supplemental Indenture.
Section 1107 of the Indenture shall apply to any Debenture repaid in part
pursuant to this Article III.
If any Debenture subject to repayment shall not be so repaid upon
surrender thereof, the principal of such Debenture shall, until paid, bear
interest from the applicable Repayment Date at the rate prescribed therefore in
the Debenture.
ARTICLE FOUR
MISCELLANEOUS
SECTION 4.1 RELATIONSHIP TO EXISTING INDENTURE
The First Supplemental Indenture is a supplemental indenture within the
meaning of the Indenture. The Indenture, as supplemented and amended by this
First Supplemental Indenture, is in all respects ratified, confirmed and
approved and, with respect to the Debentures, the Indenture, as supplemented and
amended by this First Supplemental Indenture, shall be read, taken and construed
as one and the same instrument.
SECTION 4.2 MODIFICATION OF THE EXISTING INDENTURE
Except as expressly modified by this First Supplemental Indenture, the
provisions of the Indenture shall govern the terms and conditions of the
Debentures.
-25-
SECTION 4.3 GOVERNING LAW
This instrument shall be governed by and construed in accordance with the
laws of the State of New York.
SECTION 4.4 COUNTERPARTS
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 4.5 TRUSTEE MAKES NO REPRESENTATION
The recitals contained herein are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture (except for its execution thereof and its
certificates of authentication of the Debentures).
-26-
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed and attested all as of the day and year first
above written.
AMERICAN INTERNATIONAL GROUP, INC.
By /s/ ▇▇▇▇▇▇ ▇. Gender
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. Gender
Title: Vice President and Treasurer
Attest:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
THE BANK OF NEW YORK,
as Trustee
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
Title: Vice President
ANNEX A
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 THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
AMERICAN INTERNATIONAL GROUP, INC.
No. CUSIP No.:
$
American International Group, Inc., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of five hundred million Dollars ($500,000,000) on March 15, 2087,
or if such day is not a Business Day, the following Business Day (the "Final
Maturity Date"); provided that the principal amount of, and all accrued and
unpaid interest on, this Security shall be payable in full on March 15, 2037, or
if such day is not a Business Day, the next Business Day (the "Scheduled
Maturity Date"), or any subsequent Interest Payment Date (as hereinafter
defined) to the extent set forth in the Indenture hereinafter referred to. As
provided in the Indenture, the principal of this Security is payable on the
Scheduled Maturity Date only to the extent the Company has raised sufficient
Eligible Repayment Proceeds. The Company's obligation to raise Eligible
Repayment Proceeds is subject to certain limitations and restrictions described
in the First Supplemental Indenture hereinafter referred to. In connection with
the issuances of this Security, the Company has entered into a Replacement
Capital Covenant that contains restrictions on the Company's ability to repay
the principal of this Security.
This Security shall bear interest (i) from and including March 13, 2007
to, but excluding the Scheduled Maturity Date, payable (subject to deferral as
set forth herein
and in the Indenture) at the rate of 6.25% per annum semi-annually in arrears on
March 15 and September 15 in each year, commencing September 15, 2007 (computed
on the basis of a 360-day year comprised of twelve 30-day months), and (ii) from
and including the Scheduled Maturity Date, at an annual rate equal to
three-month LIBOR (as defined in the Indenture) plus 2.056% (computed on the
basis of a 360-day year and the actual number of days elapsed), payable (subject
to deferral as set forth herein and in the Indenture) quarterly in arrears on
March 15, June 15, September 15 and December 15 in each year, commencing June
15, 2037, until the principal hereof is paid or made available for payment (each
such date referred to in clause (i) or (ii), an "Interest Payment Date"). In the
event that any Interest Payment Date on or before the Scheduled Maturity Date
would otherwise fall on a day that is not a Business Day, the interest payment
due on that date shall be postponed to the next day that is a Business Day and
no interest shall accrue as a result of that postponement. In the event that any
Interest Payment Date after the Scheduled Maturity Date would otherwise fall on
a day that is not a Business Day, that Interest Payment Date shall be postponed
to the next day that is a Business Day; however, if the postponement would cause
the day to fall in the next calendar month, the Interest Payment Date will
instead be brought forward to the immediately preceding Business Day. Any
installment of interest (or portion thereof) deferred in accordance with the
Indenture or otherwise unpaid on the relevant Interest Payment Date shall bear
interest, to the extent permitted by law, at the rate of interest then in effect
on this Security, from the relevant Interest Payment Date, compounded on each
subsequent Interest Payment Date, until paid in accordance with the Indenture.
A "Business Day" shall mean any day other than (i) a Saturday, Sunday or
other day on which banking institutions in The City of New York are authorized
or required by law or executive order to remain closed and (ii) on or after the
Scheduled Maturity Date, a day which is not a London Banking Day.
The interest (other than deferred interest) so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered (i) at the close of business on the
Business Day next preceding the Interest Payment Date if this Security is issued
in the form of a Global Security, or (ii) the close of business on the fifteenth
day (whether or not a Business Day) next preceding such Interest Payment Date if
this Security is not issued in the form of a Global Security. Any such interest
not so punctually paid or duly provided for (other than deferred interest) will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture. Any deferred interest shall be payable to the holder of record
of this Security as provided below.
A-2
The Company shall have the right, at any time and from time to time, prior
to the Final Maturity Date to defer the payment of interest on this Security for
one or more consecutive Interest Periods that do not exceed 10 years; provided
that no Deferral Period shall extend beyond the Final Maturity Date or the
earlier redemption of the Securities of this series. As provided in the
Indenture, the payment of deferred interest is subject to the Company's ability
to raise Eligible APM Proceeds. The Company's obligation to raise Eligible APM
Proceeds is subject to certain limitations, restrictions and exceptions
described in the First Supplemental Indenture.
At the end of any Deferral Period, the Company shall pay all deferred
interest on this Security (together with compounded interest thereon, if any, to
the extent permitted by applicable law), to the Person in whose name this
Security is registered at the close of business on the Business Day next
preceding the Interest Payment Date at the end of such Deferral Period or, in
the event this Security ceases to be held in the form of a Global Security, at
the close of business on the date 15 days prior to the end of the Deferral
Period, whether or not a Business Day. Upon termination of any Deferral Period
and upon the payment of all deferred interest and any compounded interest then
due on any Interest Payment Date, the Company may elect to begin a new Deferral
Period, subject to the above requirements and those in the Indenture. The
Company may elect to pay deferred interest on any Interest Payment Date during
any Deferral Period to the extent permitted, and shall pay deferred interest
(including compounded interest thereon) to the extent required, by the
Indenture.
To the extent permitted by law, each Holder of this Security, by such
Holder's acceptance of this Security agrees that if a Bankruptcy Event shall
occur prior to the redemption or repayment of this Security, such Holder shall
only have a claim for deferred and unpaid interest (including compounded
interest thereon) to the extent such interest (including compounded interest
thereon) relates to the earliest two years of the portion of the Deferral Period
for which interest has not so been paid.
The Company shall give written notice to the Trustee and the Holders of
this Security of its election to begin any Deferral Period at least one Business
Day prior to the Regular Record Date for that Interest Payment Date, provided,
however, that the Company's failure to pay any interest due within five Business
Days after any Interest Payment Date shall automatically and without any further
action by any Person be deemed to commence a Deferral Period.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
A-3
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
A-4
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
AMERICAN INTERNATIONAL GROUP,
INC.
By:
--------------------------
Name:
Title:
Attest:
--------------------------------------
[Secretary or Assistant Secretary]
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------
Name:
Title:
(Signature Page for Series A-1 Security)
REVERSE OF SECURITY
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under a Junior Subordinated Debt Indenture, dated as of March 13, 2007
(herein called the "Base Indenture"), which term shall have the meaning assigned
to it in such instrument, as supplemented by a First Supplemental Indenture,
dated as of March 13, 2007 (herein called the "First Supplemental Indenture"
and, together with the Base Indenture, the "Indenture"), in each case, between
the Company and The Bank of New York, as Trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee, the holders of Senior Debt and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof limited in
aggregate principal amount to $1,000,000,000 (except for Securities
authenticated and delivered upon registration or transfer of, or exchange for,
or in lieu of, other Securities pursuant to Section 304, 305, 306, 906, or 1107
of the Base Indenture or Section 3.5 of the First Supplemental Indenture);
provided, however, that the Company may from time to time authenticate and
deliver under the Indenture up to $1,000,000,000 additional principal amount of
Securities which may accrue interest from a different date than this Security,
as may be specified pursuant to Section 301 of the Base Indenture, so long as
the company reasonably determines that the additional Securities so
authenticated and delivered will be fungible for United States federal income
tax purposes.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Securities of this series are subject to redemption upon not less than
10 days nor more than 60 days' prior notice by first class mail, postage
pre-paid, to each Holder of Securities to be redeemed, at any time (i) in whole
or in part, at the option of the Company or (ii) in whole but not in part upon
the occurrence of a Rating Agency Event or a Tax Event, subject to the terms and
conditions of the First Supplemental Indenture and Article XI of the Base
Indenture, at a Redemption Price of 100% of their principal amount or, in the
case of any such redemption prior to the Scheduled Maturity Date, if greater,
the applicable Make-Whole Redemption Price, in either case, plus accrued and
unpaid interest to the Redemption Date.
In the event of redemption of this Security in part only, a new Security
or Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof;
provided, however, that in the event of any redemption in part of the Securities
of this series prior to the Scheduled Maturity Date, the aggregate principal
amount of the Securities of this series Outstanding after such redemption must
be not less than $50,000,000.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all
A-6
Senior Debt, and this Security is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his or her behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee as his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter
created, incurred, assumed or Guaranteed, and waives reliance by each such
holder of Senior Debt upon said provisions.
The Indenture contains provisions for defeasance of the entire
indebtedness of this Security at any time prior to the Scheduled Maturity Date
upon compliance with certain conditions set forth in the Indenture.
The Securities of this series are entitled to the benefits of the Events
of Default described in Section 2.1(j) of the First Supplemental Indenture and
the Enforcement Events as defined in the First Supplemental Indenture. The
Holder of this Security and the Trustee shall be entitled to the remedies
provided by Section 502 of the Base Indenture only if an Event of Default
specified in clause (1) of Section 2.1(j) of the First Supplemental Indenture
shall occur with respect to the Securities of this series. If an Event of
Default specified in Section 501(5) or Section 501(6) of the Base Indenture
shall occur with respect to the Securities of this series, then in every such
case the principal amount of all the Securities of this series shall become
automatically due and payable immediately, without any declaration or other
action on the part of the Trustee or any Holder. An Event of Default specified
in clause (2) of Section 2.1(j) of the First Supplemental Indenture shall not
entitle the Holders to the benefits of Section 502 of the Base Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless
A-7
such Holder shall have previously given the Trustee written notice of a
continuing Event of Default or Enforcement Event with respect to the Securities
of this series, the Holders of not less than 25% (or, in the case of an
Enforcement Event, a majority) in principal amount of the Securities of this
series at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default or Enforcement Event,
as the case may be, as Trustee and offered the Trustee reasonable indemnity, and
the Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction
inconsistent with such request, and shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates to the extent
provided by Section 2.1(n) of the First Supplemental Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $100,000 and integral multiples of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires beneficial
interest in, this Security agree that, for United States federal, state and
local tax purposes, it is intended that this Security constitute indebtedness.
A-8
THE BASE INDENTURE, THE FIRST SUPPLEMENTAL INDENTURE AND THIS SECURITY
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
A-9
