HEALTHSOUTH CORPORATION
and
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, as Trustee
--------------------
SUBORDINATED INDENTURE
Dated as of March 20, 1998
--------------------
<PAGE>
CROSS REFERENCE SHEET*
Between
Provisions of Trust Indenture Act (as defined herein) and Indenture dated
as of March 20, 1998 between HEALTHSOUTH Corporation and The Bank of Nova Scotia
Trust Company of New York, Trustee:
SECTION OF THE ACT SECTION OF INDENTURE
310(a)(1) and (2)......................................................6.9
310(a)(3) and (4).............................................Inapplicable
310(b)........................................6.8 and 6.10(a), (b) and (d)
310(c)........................................................Inapplicable
311(a)................................................................6.14
311(b)................................................................6.14
311(c)........................................................Inapplicable
312(a).........................................................4.1 and 4.2
312(b).................................................................4.2
312(c).................................................................4.2
313(a).................................................................4.3
313(b)(1).....................................................Inapplicable
313(b)(2)..............................................................4.3
313(c).................................4.3, 5.11, 6.10, 6.11, 8.2 and 12.2
313(d).................................................................4.3
314(a).........................................................3.5 and 4.2
314(b)........................................................Inapplicable
314(c)(1) and (2).....................................................11.5
314(c)(3).....................................................Inapplicable
314(d)........................................................Inapplicable
314(e)................................................................11.5
314(f)........................................................Inapplicable
315(a), (c) and (d)....................................................6.1
315(b)................................................................5.11
315(e)................................................................5.12
316(a)(1).....................................................5.9 and 5.10
316(a)(2).....................................................Not required
316(a) (last sentence).................................................7.4
316(b).................................................................5.7
317(a).................................................................5.2
317(b)......................................................3.4(a) and (b)
318(a)................................................................11.7
*This Cross Reference Sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.........................................................1
SECTION 1.1 Certain Terms Defined..........................................1
"Affiliate"..................................................................2
"Authenticating Agent".......................................................2
"Authorized Newspaper".......................................................2
"Board of Directors".........................................................2
"Board Resolution"...........................................................2
"Business Day"...............................................................3
"Capital Stock"..............................................................3
"Commission".................................................................3
"Common Equity"..............................................................3
"Company"....................................................................3
"Company Order"..............................................................3
"Consolidated Tangible Assets"...............................................3
"Corporate Trust Office".....................................................4
"Coupon" ....................................................................4
"Covenant Defeasance"........................................................4
"Depositary".................................................................4
"Dollar" or "$"..............................................................4
"ECU" ....................................................................4
"Event of Default"...........................................................4
"Exchange Act"...............................................................4
"Fair Value".................................................................4
"Foreign Currency"...........................................................4
"Holder," "Holder of Subordinated Securities," "Securityholder"..............4
"IRS" ....................................................................5
"Judgment Currency"..........................................................5
"Maturity"...................................................................5
"Non-U.S. Person"............................................................5
"Officer's Certificate"......................................................5
"144A Global Subordinated Security"..........................................5
"Opinion of Counsel".........................................................5
"Original Issue Date"........................................................5
"Original Issue Discount Subordinated Security"..............................5
"Outstanding"................................................................6
"Paying Agent"...............................................................6
"Periodic Offering"..........................................................6
"Person" ....................................................................7
"PORTAL Market"..............................................................7
"Predecessor Subordinated Security"..........................................7
"principal"..................................................................7
"QIB" or "Qualified Institutional Buyer".....................................7
<PAGE>
"Regular Record Date"........................................................7
"Registered Global Subordinated Security"....................................7
"Registered Subordinated Security"...........................................7
"Regulation S"...............................................................7
"Regulation S Global Subordinated Security"..................................8
"Required Currency"..........................................................8
"Responsible Officer"........................................................8
"Restricted Subordinated Security"...........................................8
"Rule 144"...................................................................8
"Rule 144A"..................................................................8
"Rule 144K"..................................................................8
"Securities Act".............................................................8
"Significant Subsidiary".....................................................8
"Special Record Date"........................................................8
"Stated Maturity"............................................................8
"Subsidiary".................................................................9
"Subordinated Indenture".....................................................9
"Transfer Restriction Termination Date"......................................9
"Trustee"....................................................................9
"Unregistered Subordinated Security".........................................9
"U.S. Government Obligations"................................................9
"Voting Stock"...............................................................9
"Yield to Maturity"........................................................ 10
ARTICLE 2 SUBORDINATED SECURITIES...................................10
SECTION 2.1 Forms Generally...........................................10
SECTION 2.2 Form of Trustee's Certificate
of Authentication.....................................10
SECTION 2.3 Amount Unlimited; Issuable in Series......................11
SECTION 2.4 Authentication and Delivery
of Subordinated Securities............................14
SECTION 2.5 Execution of Subordinated Securities......................18
SECTION 2.6 Certificate of Authentication.............................18
SECTION 2.7 Denomination and Date of Subordinated Securities;
Payments of Interest..................................... 19
SECTION 2.8 Registration, Transfer and Exchange.......................21
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and
Stolen Subordinated Securities..........................28
SECTION 2.10 Cancellation of Subordinated Securities;
Destruction Thereof.....................................30
SECTION 2.11 Temporary Subordinated Securities.........................30
ARTICLE 3 COVENANTS OF THE COMPANY ..........................................31
SECTION 3.1 Payment of Principal and Interest.........................31
SECTION 3.2 Offices for Payments, Etc.................................32
SECTION 3.3 Appointment to Fill a Vacancy in
Office of Trustee.......................................33
SECTION 3.4 Paying Agents.............................................33
SECTION 3.5 Compliance Certificates...................................35
SECTION 3.6 Corporate Existence.......................................35
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SECTION 3.7 Maintenance of Properties................................35
SECTION 3.8 Payment of Taxes and Other Claims........................36
SECTION 3.9 Luxembourg Publications..................................36
SECTION 3.10 Usury Laws...............................................36
ARTICLE 4 SECURITYHOLDER LISTS AND REPORTS BY THE COMPANY AND THE
TRUSTEE...........................................................37
SECTION 4.1 Company to Furnish Trustee Information as
to Names and Addresses of Securityholders...............37
SECTION 4.2 Preservation of Information;
Communications to Holders...............................37
SECTION 4.3 Reports by Trustee........................................38
SECTION 4.4 Reports by Company........................................38
ARTICLE 5 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
DEFAULT...........................................................38
SECTION 5.1 Event of Default Defined, Acceleration of Maturity;
Waiver of Default.......................................38
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment........40
SECTION 5.3 Collection of Indebtedness by Trustee;
Trustee May Prove Debt..................................43
SECTION 5.5 Trustee May Enforce Claims Without
Possession of Subordinated Securities...................45
SECTION 5.6 Application of Proceeds...................................45
SECTION 5.7 Suits for Enforcement.....................................46
SECTION 5.8 Limitations on Suits by Subordinated
Security Holders........................................47
SECTION 5.9 Unconditional Right of Securityholders
to Institute Certain Suits..............................48
SECTION 5.10 Restoration of Rights on Abandonment
of Proceedings..........................................48
SECTION 5.11 Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default..........................48
SECTION 5.12 Delay or Omission Not Waiver..............................48
SECTION 5.13 Control by Holders of Subordinated Securities.............49
SECTION 5.14 Waiver of Past Defaults...................................49
SECTION 5.15 Trustee to Give Notice of Default, But
May Withhold in Certain Circumstances...................50
SECTION 5.16 Right of Court to Require Filing of
Undertaking to Pay Costs................................50
SECTION 5.17 Waiver of Stay or Extension Laws..........................51
ARTICLE 6 CONCERNING THE TRUSTEE............................................51
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default........................51
SECTION 6.2 Certain Rights of the Trustee.............................53
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Subordinated Securities or
Application of Proceeds Thereof.........................54
SECTION 6.4 Trustee and Agents May Hold Subordinated
Securities or Coupons;Collections, Etc..................55
SECTION 6.5 Moneys Held by Trustee....................................55
SECTION 6.6 Compensation and Indemnification of
Trustee and Its Prior Claim.............................55
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SECTION 6.7 Right of Trustee to Rely on
Officer's Certificate, Etc..............................56
SECTION 6.8 Subordinated Indentures Not Creating
Potential Conflicting Interests for
the Trustee.............................................56
SECTION 6.9 Qualification of Trustee:
Conflicting Interests...................................56
SECTION 6.10 Persons Eligible for Appointment as Trustee...............56
SECTION 6.11 Resignation and Removal;
Appointment of Successor Trustee........................57
SECTION 6.12 Acceptance of Appointment by Successor Trustee............59
SECTION 6.13 Merger, Conversion, Consolidation or
Succession to Business of Trustee...................... 60
SECTION 6.14 Preferential Collection of Claims
Against the Company.....................................61
SECTION 6.15 Appointment of Authenticating Agent.......................61
ARTICLE 7 CONCERNING THE SECURITYHOLDERS....................................63
SECTION 7.1 Evidence of Action Taken by Securityholders...............63
SECTION 7.2 Proof of Execution of Instruments and
of Holding of Subordinated Securities.....................63
SECTION 7.3 Holders to be Treated as Owners...........................64
SECTION 7.4 Subordinated Securities Owned by
Company Deemed NotOutstanding...........................64
SECTION 7.5 Right of Revocation of Action Taken.......................65
ARTICLE 8 SUPPLEMENTAL SUBORDINATED INDENTURES......................66
SECTION 8.1 Supplemental Subordinated Indentures
Without Consent of Securityholders......................66
SECTION 8.2 Supplemental Subordinated Indentures
with Consent of Securityholders.........................68
SECTION 8.4 Documents to be Given to Trustee..........................70
SECTION 8.5 Notation on Subordinated Securities in
Respect of Supplemental Subordinated
Indentures..............................................70
ARTICLE 9 CONSOLIDATION, MERGER, SALE OR CONVEYANCE.........................71
SECTION 9.1 Company May Consolidate, Etc..............................71
SECTION 9.2 Successor Corporation Substituted.........................72
ARTICLE 10 SATISFACTION AND DISCHARGE........................................72
SECTION 10.1 Satisfaction and Discharge of
Subordinated Indenture................................. 72
SECTION 10.2 Application by Trustee of Funds Deposited
for Payment of Subordinated Securities..................77
SECTION 10.3 Repayment of Moneys Held by Paying Agent..................77
SECTION 10.4 Return of Moneys Held by Trustee and
Paying Agent Unclaimed for Two Years....................78
SECTION 10.5 Indemnity for U.S. Government of Obligations..............78
ARTICLE 11 MISCELLANEOUS PROVISIONS..........................................78
SECTION 11.1 Incorporators, Stockholders, Officers and
Directors of Company Exempt from Individual
Liability............................................... 78
<PAGE>
SECTION 11.2 Provisions of Subordinated Indenture for
the Sole Benefit of Parties and Holders
of Subordinated Securities and Coupons.....................79
SECTION 11.3 Successors and Assigns of Company Bound by
Subordinated Indenture..................................79
SECTION 11.4 Notices and Demands on Company, Trustee and
Holders of Subordinated Securities and Coupons..........79
SECTION 11.5 Officer's Certificates and Opinions of Counsel;
Statements to be Contained Therein......................80
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays...........81
SECTION 11.7 Conflict of Any Provision of Subordinated
Indenture with Trust Indenture Act......................82
SECTION 11.8 New York Law to Govern....................................82
SECTION 11.9 Counterparts..............................................82
SECTION 11.10 Effect of Headings....................................... 82
SECTION 11.11 Subordinated Securities in a Foreign
Currency or in ECU......................................82
SECTION 11.12 Judgment Currency.........................................83
ARTICLE 12 REDEMPTION OF SUBORDINATED SECURITIES AND SINKING FUNDS..........84
SECTION 12.1 Applicability of Article..................................84
SECTION 12.2 Notice of Redemption; Partial Redemptions.................84
SECTION 12.3 Payment of Subordinated Securities Called
for Redemption........................... 86
SECTION 12.4 Exclusion of Certain Subordinated Securities
from Eligibility forSelection for Redemption.............87
SECTION 12.5 Mandatory and Optional Sinking Funds......................87
<PAGE>
THIS SUBORDINATED INDENTURE, dated as of March 20, 1998, by and between
HEALTHSOUTH Corporation, a Delaware corporation (the "Company"), and The Bank of
Nova Scotia Trust Company of New York, a New York trust company, as trustee (the
"Trustee"),
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issuance, sale, execution and
delivery, from time to time, of its unsecured evidences of subordinated
indebtedness (hereinafter referred to as the "Subordinated Securities"), without
limit as to principal amount, issuable in one or more series, the amount and
terms of each such series to be determined as hereinafter provided; and, to
provide the terms and conditions upon which the Subordinated Securities are to
be issued, authenticated and delivered, the Company has duly authorized the
execution of this Subordinated Indenture; and
WHEREAS, all acts and things necessary to make the Subordinated Securities,
when executed by the Company and authenticated and delivered by the Trustee as
in this Subordinated Indenture provided, the valid, binding and legal
subordinated obligations of the Company, and to constitute this Subordinated
Indenture a valid indenture and agreement according to its terms, have been done
and performed, and the execution of this Subordinated Indenture and the issuance
hereunder of the Subordinated Securities have in all respects been duly
authorized; and
WHEREAS, all things necessary to make this Subordinated Indenture a
valid indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Subordinated
Securities by the holders thereof, the Company and the Trustee mutually covenant
and agree for the equal and proportionate benefit of the respective holders from
time to time of the Subordinated Securities and of the coupons, if any,
appertaining thereto as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Certain Terms Defined.
The following terms (except as otherwise expressly provided or unless the
context otherwise clearly requires) for all purposes of this Subordinated
Indenture and of any indenture supplemental hereto shall have the respective
meanings specified in this Section. All other terms used in this Subordinated
Indenture that are defined in the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), or the definitions of which in the Securities Act of
1933, as amended (the "Securities Act"), are referred to in the Trust Indenture
Act, including terms defined therein by reference to the Securities Act (except
as herein otherwise expressly provided
<PAGE>
or unless the context otherwise requires), shall have the meaning assigned to
such terms in the Trust Indenture Act and in the Securities Act as in effect
from time to time. All accounting terms used herein and not expressly defined
shall have the meanings assigned to such terms in accordance with generally
accepted accounting principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted at the
time of any computation unless a different time shall be specified with respect
to such series of Subordinated Securities as provided for in Section 2.3. The
words "herein," "hereof" and "hereunder" and other words of similar import refer
to this Subordinated Indenture as a whole and not to any particular Article,
Section or other subdivision. The terms defined in this Article have the
meanings assigned to them in this Article and include the plural as well as the
singular.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor provision.
"Authenticating Agent" shall have the meaning set forth in Section 6.15.
"Authorized Newspaper" means a newspaper (which, in the case of The City of
New York, will, if practicable, be The Wall Street Journal (Eastern Edition), in
the case of the United Kingdom of Great Britain and Northern Ireland (the
"United Kingdom"), will, if practicable, be The Financial Times (London Edition)
and, in the case of the Grand Duchy of Luxembourg ("Luxembourg"), will, if
practicable, be the Luxemburger Wort) published in an official or common
language of the county of publication customarily published at least once a day
for at least five days in each calendar week and of general circulation in The
City of New York, the United Kingdom or Luxembourg, as applicable. If it shall
be impractical in the opinion of the Trustee to make any publication of any
notice required hereby in an Authorized Newspaper, any publication or other
notice in lieu thereof which is made or given with the approval of the Trustee
shall constitute a sufficient publication of such notice.
"Board of Directors" means either the Board of Directors of the Company or
any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions, certified by
the secretary or an assistant secretary of the Company to have been duly adopted
or consented to by the Board of Directors and to be in full force and effect,
and delivered to the Trustee.
"Business Day" means, with respect to any Subordinated Security, a day
other than any day on which banking institutions in the city (or in any of the
cities, if more than one) in which amounts are payable, as specified in the form
of such Subordinated Security, are authorized or required by any applicable law
or regulation to be closed.
"Capital Stock" of any Person means any and all shares, rights to purchase,
warrants or options (whether or not currently exercisable); participation or
other equivalents of or interest in (however designated) the equity (including
without limitation common stock, preferred stock and partnership and joint
venture interests) of such Person (excluding any debt securities that are
convertible into, or exchangeable for, such equity).
<PAGE>
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution and delivery of this Subordinated Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Common Equity" of any Person means all Capital Stock of such Person that
is generally entitled to (a) vote in the election of directors of such Person or
(b) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management and policies of such Person.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Subordinated Indenture, and thereafter "Company"
shall mean such successor Person.
"Company Order" means a written statement, request or order of the Company
signed in its name by the chairman of the Board of Directors, the president, any
vice president or the treasurer of the Company.
"Consolidated Tangible Assets" of any Person as of any date means the total
assets of such Person and its Subsidiaries (excluding any assets that would be
classified as "intangible assets" under generally accepted accounting principles
("GAAP")) on a consolidated basis at such date, as determined in accordance with
GAAP, less all write-ups subsequent to the date of initial issuance of the
Securities in the book value of any asset owned by such Person or any of its
Subsidiaries.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, as of the date of this Subordinated
Indenture, located at One Liberty Plaza, 23rd Floor, New York, New York 10006,
Attention: Corporate Trust Administration.
"Coupon" means any interest coupon appertaining to an Unregistered
Subordinated Security.
"Covenant Defeasance" shall have the meaning set forth in Section 10.1(C).
"Defaulted Interest" has the meaning specified in Section 2.7.
"Depositary" means, with respect to the Subordinated Securities of any
series issuable or issued in the form of one or more Registered Global
Subordinated Securities, the Person designated as Depositary by the Company
pursuant to Section 2.3 until a successor Depositary shall have become such
pursuant to the applicable provisions of this Subordinated Indenture, and
thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such Person,
"Depositary" as used with respect to the Subordinated Securities of any such
series shall mean the Depositary with respect to the Registered Global
Subordinated Securities of that series.
<PAGE>
"Dollar" or "$" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
"ECU" means the European Currency Unit as defined and revised from time to
time by the European Monetary System of the European Community.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Value" when used with respect to any Voting Stock means the fair
value as determined in good faith by the Board of Directors of the Company.
"Foreign Currency" means a currency issued by the government of a country
other than the United States of America.
"Holder," "Holder of Subordinated Securities," "Securityholder" or other
similar terms mean (a) in the case of any Registered Subordinated Security, the
person in whose name such Subordinated Security is registered in the Security
Register kept by the Company for that purpose in accordance with the terms
hereof, and (b) in the case of any Unregistered Subordinated Security, the
bearer of such Subordinated Security, or any Coupon appertaining thereto, as the
case may be.
"Interest Payment Date," means the Stated Maturity of an installment of
interest on such Subordinated Security.
"IRS" means the Internal Revenue Service of the United States Department of
the Treasury, or any successor entity.
"Judgment Currency" has the meaning set forth in Section 11.12.
"Maturity", when used with respect to any Subordinated Security, means the
date on which the principal of such Subordinated Security becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Non-U.S. Person" means any person that is not a "U.S. person" as such term
is defined in Rule 902 of the Securities Act.
"Officer's Certificate" means a certificate signed by the chairman of the
Board of Directors, the president or any vice president or the treasurer of the
Company and delivered to the Trustee. Each such certificate shall comply with
Section 314 of the Trust Indenture Act and include the statements provided for
in Section 11.5.
"144A Global Subordinated Security" has the meaning set forth in Section
2.8(b)(i).
<PAGE>
"Opinion of Counsel" means an opinion in writing signed by legal counsel
who may be an employee of the Company or other counsel satisfactory to the
Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture
Act and include the statements provided for in Section 11.5.
"Original Issue Date" of any Subordinated Security (or portion thereof)
means the earlier of (a) the date of such Subordinated Security or (b) the date
of any Subordinated Security (or portion thereof) for which such Subordinated
Security was issued (directly or indirectly) on registration of transfer,
exchange or substitution.
"Original Issue Discount Subordinated Security" means any Subordinated
Security that provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2.
"Outstanding" (except as otherwise provided in Section 7.4), when used with
reference to Subordinated Securities, means, subject to the provisions of
Section 7.4, as of any particular time, all Subordinated Securities
authenticated and delivered by the Trustee under this Subordinated Indenture,
except
(a) Subordinated Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Subordinated Securities, or portions thereof, for the payment or
redemption of which moneys or U.S. Government Obligations (as provided for in
Section 10.1) in the necessary amount shall have been deposited in trust with
the Trustee or with any Paying Agent (other than the Company) or shall have been
set aside, segregated and held in trust by the Company for the Holders of such
Subordinated Securities (if the Company shall act as its own Paying Agent),
provided, that if such Subordinated Securities, or portions thereof, are to be
redeemed prior to the Maturity thereof, notice of such redemption shall have
been given as herein provided, or provisions satisfactory to the Trustee shall
have been made for giving such notice; and
(c) Subordinated Securities which shall have been paid or in substitution
for which other Subordinated Securities shall have been authenticated and
delivered pursuant to the terms of Section 2.9 (except with respect to any such
Subordinated Security as to which proof satisfactory to the Trustee is presented
that such Subordinated Security is held by a person in whose hands such
Subordinated Security is a legal, valid and binding obligation of the Company).
In determining whether the Holders of the requisite principal amount of
Outstanding Subordinated Securities of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Subordinated Security that shall
be deemed to be Outstanding for such purposes shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2.
<PAGE>
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Periodic Offering" means an offering of Subordinated Securities of a
series from time to time, the specific terms of which Subordinated Securities,
including, without limitation, the rate or rates of interest, if any, thereon,
the Stated Maturity or Maturities thereof and the redemption provisions, if any,
with respect thereto, are to be determined by the Company or its agents upon the
issuance of such Subordinated Securities.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"PORTAL Market" means Private Offerings, Resales and Trading through
Automatic Linkages Market.
"Predecessor Subordinated Security" of any particular Subordinated Security
means every previous Subordinated Security evidencing all or a portion of the
same debt as that evidenced by such particular Subordinated Security; and, for
the purposes of this definition, any Subordinated Security authenticated and
delivered under Section 2.4 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Subordinated Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Subordinated Security.
"principal" whenever used with reference to the Subordinated Securities or
any Subordinated Security or any portion thereof, shall be deemed to include
"and premium, if any," provided, however, that such inclusion of premium, if
any, shall under no circumstances result in the double counting of such premium
for the purpose of any calculation required hereunder.
"QIB" or "Qualified Institutional Buyer" means "Qualified Institutional
Buyer" as such term is defined in Rule 144A under the Securities Act.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the securities of any series means the date specified for that purpose as
contemplated in Section 2.3.
"Registered Global Subordinated Security" means a Subordinated Security
evidencing all or a part of a series of Registered Subordinated Securities,
issued to the Depositary for such series in accordance with Section 2.4, and
bearing the legend prescribed in Section 2.4 and any other legend required by
the Depositary for such series.
"Registered Subordinated Security" means any Subordinated Security
registered on the Subordinated Security Register of the Company.
"Regulation S" means Regulation S under the Securities Act, or any
successor provision.
<PAGE>
"Regulation S Global Subordinated Security" has the meaning set forth in
Section 2.8(b).
"Required Currency" shall have the meaning set forth in Section 11.12 .
"Responsible Officer" when used with respect to the Trustee means the
chairman of the board of directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president
(whether or not designated by numbers or words added before or after the title
"Vice President"), the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.
"Restricted Subordinated Security" has the meaning set forth in Section
2.8(b).
"Rule 144" means Rule 144 under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144K" means Rule 144(k) under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 2.9.
"Significant Subsidiary" means a Subsidiary of the Company which at the
time of determination either (i) had tangible assets which, as of the Company's
most recent quarterly consolidated balance sheet, constituted at least 5% of
Consolidated Tangible Assets as of such date, or (ii) had revenues for the
12-month period ending on the date of the Company's most recent quarterly
consolidated statement of income which constituted at least 5% of the Company's
total consolidated revenues for such period.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.7.
"Stated Maturity", when used with respect to any Subordinated Security or
any installment of interest thereon, means the date specified in such
Subordinated Security as the fixed date on which the principal of such
Subordinated Security or such installment of interest is due and payable.
"Subsidiary" of any Person means (a) any corporation of which Common Equity
having ordinary voting power to elect a majority of the directors of such
corporation is owned by such
<PAGE>
Person directly or through one or more other subsidiaries of such Person and (b)
any entity other than a corporation in which such Person, directly or
indirectly, owns at least 50% of the Common Equity of such entity and has the
authority to manage such entity on a day-to-day basis.
"Subordinated Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular series
of Subordinated Securities established as contemplated hereunder.
"Subordinated Security" or "Subordinated Securities" (except as otherwise
provided in Section 7.4) has the meaning stated in the first recital of this
Subordinated Indenture, or, as the case may be, Subordinated Securities that
have been authenticated and delivered under this Subordinated Indenture.
"Transfer Restriction Termination Date" means the earlier of the first date
on which (i) the Subordinated Securities of a series (other than such
Subordinated Securities acquired by the Company or any Affiliate thereof since
the issue date of such Subordinated Securities) may be sold pursuant to Rule
144K (or any successor provision) and (ii) all such Subordinated Securities have
been exchanged or sold pursuant to an effective registration statement.
"Trustee" means the Person identified as "Trustee" in the first paragraph
hereof and, subject to the provisions of Article 6, shall also include any
successor trustee. "Trustee" shall also mean or include each Person who is then
a trustee hereunder and if at any time there is more than one such Person,
"Trustee" as used with respect to the Subordinated Securities of any series
shall mean the trustee with respect to the Subordinated Securities of such
series.
"Unregistered Subordinated Security" means any Subordinated Security other
than a Registered Subordinated Security.
"U.S. Government Obligations" shall have the meaning set forth in Section
10.1(A).
"Voting Stock" means stock of any class or classes having general voting
power under ordinary circumstances to elect a majority of the board of
directors, managers or trustees of the corporation in question, provided, that,
for the purposes hereof, stock which carries only the right to vote
conditionally on the happening of an event shall not be considered voting stock
whether or not such event shall have happened.
"Yield to Maturity" means the yield to maturity on a series of securities,
calculated at the time of issuance of such series, or, if applicable, at the
most recent redetermination of interest on such series, and calculated in
accordance with accepted financial practice.
<PAGE>
ARTICLE 2
SUBORDINATED SECURITIES
SECTION 2.1 Forms Generally.
The Subordinated Securities of each series and the Coupons, if any, to be
attached thereto shall be substantially in such form (not inconsistent with this
Subordinated Indenture) as shall be established by or pursuant to one or more
Board Resolutions (as set forth in a Board Resolution or, to the extent
established pursuant to but not set forth in a Board Resolution, an Officer's
Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Subordinated Indenture and may have imprinted or otherwise reproduced thereon
such legend or legends or endorsements, not inconsistent with the provisions of
this Subordinated Indenture, as may be required to comply with any law or with
any rules or regulations pursuant thereto, or with any rules of any securities
exchange or to conform to general usage, all as may be determined by the
officers executing such Subordinated Securities and Coupons, if any, as
evidenced by their execution of such Subordinated Securities and Coupons.
The definitive Subordinated Securities and Coupons, if any, shall be
printed, lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the officers executing such
Subordinated Securities and Coupons, if any, as evidenced by their execution of
such Subordinated Securities and Coupons, if any.
SECTION 2.2 Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication on all Subordinated Securities
shall be in substantially the following form:
"This is one of the Subordinated Securities referred to in the
within-mentioned Subordinated Indenture.
[__________________________________]
as Trustee
By_________________________________
Authorized Signatory"
<PAGE>
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Subordinated Securities, then the Trustee's Certificate
of Authentication to be borne by the Subordinated Securities of each such series
shall be substantially as follows:
"This is one of the Subordinated Securities referred to in the
within-mentioned Subordinated Indenture.
[__________________________________]
as Authenticating Agent
By__________________________________
Authorized Signatory"
SECTION 2.3 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Subordinated Securities which may be
authenticated and delivered under this Subordinated Indenture is unlimited.
The Subordinated Securities may be issued in one or more series and each
such series shall be established in or pursuant to one or more Board Resolutions
(and to the extent established pursuant to but not set forth in a Board
Resolution, in an Officer's Certificate detailing such establishment) or
established in one or more indentures supplemental hereto, prior to the initial
issuance of Subordinated Securities of any series,
(1) the designation of the Subordinated Securities of the series, which
shall distinguish the Subordinated Securities of the series from the
Subordinated Securities of all other series, and which may be part of a series
of Subordinated Securities previously issued;
(2) any limit upon the aggregate principal amount of the Subordinated
Securities of the series that may be authenticated and delivered under this
Subordinated Indenture (except for Subordinated Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Subordinated Securities of the series pursuant to Section 2.8, 2.9, 2.11,
8.5 or 12.3);
(3) if other than Dollars, the coin or currency in which the Subordinated
Securities of the series are denominated (including, but not limited to, any
Foreign Currency or ECU);
(4) the date or dates on which the principal of the Subordinated Securities
of the series is payable;
(5) the rate or rates at which the Subordinated Securities of the series
shall bear interest, if any, the date or dates from which such interest shall
accrue, on which such interest shall be payable and (in the case of Registered
Subordinated Securities) on which a
<PAGE>
record shall be taken for the determination of Holders to whom interest is
payable and/or the method by which such rate or rates or date or dates shall be
determined;
(6) the place or places where the principal of and any interest on
Subordinated Securities of the series shall be payable, if other than as
provided in Section 3.2;
(7) the right, if any, of the Company to redeem Subordinated Securities, in
whole or in part, at its option and the period or periods within which, the
price or prices at which and any terms and conditions upon which Subordinated
Securities of the series may be so redeemed, pursuant to any sinking fund or
otherwise;
(8) the obligation, if any, of the Company to redeem, purchase or repay
Subordinated Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof and
the price or prices at which and the period or periods within which and any
terms and conditions upon which Subordinated Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple thereof
in the case of Registered Subordinated Securities, or $1,000 and $5,000 in the
case of Unregistered Subordinated Securities, the denominations in which
Subordinated Securities of the series shall be issuable;
(10) if other than the principal amount thereof, the portion of the
principal amount of Subordinated Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof;
(11) if other than the coin or currency in which the Subordinated
Securities of the series are denominated, the coin or currency in which payment
of the principal of or interest on the Subordinated Securities of such series
shall be payable;
(12) if the principal of or interest on the Subordinated Securities of the
series are to be payable, at the election of the Company or a Holder thereof, in
a coin or currency other than that in which the Subordinated Securities are
denominated, the period or periods within which, and the terms and conditions
upon which, such election may be made;
(13) if the amount of payments of principal of and interest on the
Subordinated Securities of the series may be determined with reference to an
index based on a coin or currency other than that in which the Subordinated
Securities of the series are denominated, the manner in which such amounts shall
be determined;
(14) whether the Subordinated Securities of the series will be issuable as
Registered Subordinated Securities (and if so, whether such Subordinated
Securities will be issuable as Registered Global Subordinated Securities) or
Unregistered Subordinated Securities (with or without Coupons), or any
combination of the foregoing, any restrictions applicable to the offer, sale or
delivery of Unregistered Subordinated Securities or the payment of interest
<PAGE>
thereon and, if other than as provided in Section 2.8, the terms upon which
Unregistered Subordinated Securities of any series may be exchanged for
Registered Subordinated Securities of such series and vice versa;
(15) whether and under what circumstances the Company will pay additional
amounts on the Subordinated Securities of the series held by a person who is not
a U.S. person in respect of any tax, assessment or governmental charge withheld
or deducted and, if so, whether the Company will have the option to redeem the
Subordinated Securities of the series rather than pay such additional amounts;
(16) if the Subordinated Securities of the series are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Subordinated Security of such series) only upon receipt of certain certificates
or other documents or satisfaction of other conditions, the form and terms of
such certificates, documents or conditions;
(17) any trustees, depositaries, authenticating or paying agents, transfer
agents or registrars of any other agents with respect to the Subordinated
Securities of such series;
(18) any other events of default or covenants with respect to the
Subordinated Securities of such series;
(19) the terms of subordination applicable to any series of the
Subordinated Securities;
(20) if the Subordinated Securities of the series are to be convertible
into or exchangeable for any other security; and
(21) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Subordinated Indenture).
All Subordinated Securities of any one series and Coupons, if any,
appertaining thereto shall be substantially identical, except in the case of
Registered Subordinated Securities as to denomination and except as may
otherwise be provided by or pursuant to the Board Resolution or Officer's
Certificate referred to above or as set forth in any indenture supplemental
hereto. All Subordinated Securities of any one series need not be issued at the
same time and may be issued from time to time, consistent with the terms of this
Subordinated Indenture, if so provided by or pursuant to such Board Resolution,
such Officer's Certificate or in any indenture supplemental hereto.
SECTION 2.4 Authentication and Delivery of Subordinated Securities.
The Company may deliver Subordinated Securities of any series having
attached thereto appropriate Coupons, if any, executed by the Company to the
Trustee for authentication together with the applicable documents referred to
below in this Section 2.4, and the Trustee shall thereupon authenticate and
deliver such Subordinated Securities and Coupons, if any, to or upon the order
of the Company (contained in the Company Order referred to below in this
Section)
<PAGE>
or pursuant to such procedures acceptable to the Trustee and to such recipients
as may be specified from time to time by a Company Order. The maturity date,
original issue date, interest rate and any other terms of the Subordinated
Securities of such series and Coupons, if any, appertaining thereto shall be
determined by or pursuant to such Company Order and procedures. If provided for
in such procedures, such Company Order may authorize authentication and delivery
pursuant to oral or electronic instructions from the Company or its duly
authorized agent or agents, which instructions, if oral, shall be promptly
confirmed in writing. In authenticating such Subordinated Securities and
accepting the additional responsibilities under this Subordinated Indenture in
relation to such Subordinated Securities, the Trustee shall be entitled to
receive (in the case of subparagraphs (2), (3) and (4) below only at or before
the time of the first request of the Company to the Trustee to authenticate
Subordinated Securities of such series) and (subject to Section 6.1) shall be
fully protected in relying upon, the following enumerated documents unless and
until such documents have been superseded or revoked:
(1) a Company Order requesting such authentication and setting forth
delivery instructions if the Subordinated Securities and Coupons, if any, are
not to be delivered to the Company, provided that, with respect to Subordinated
Securities of a series subject to a Periodic Offering, (a) such Company Order
may be delivered by the Company to the Trustee prior to the delivery to the
Trustee of such Subordinated Securities for authentication and delivery, (b) the
Trustee shall authenticate and deliver Subordinated Securities of such series
for original issue from time to time, in an aggregate principal amount not
exceeding the aggregate principal amount established for such series, pursuant
to a Company Order or pursuant to procedures acceptable to the Trustee as may be
specified from time to time by a Company Order, (c) the maturity date or dates,
original issue date or dates, interest rate or rates and any other terms of
Subordinated Securities of such series shall be determined by a Company Order or
pursuant to such procedures and (d) if provided for in such procedures, such
Company Order may authorize authentication and delivery pursuant to oral or
electronic instructions from the Company or its duly authorized agent or agents,
which instructions, if oral, shall be promptly confirmed in writing;
(2) any Board Resolution, Officer's Certificate and/or executed
supplemental indenture referred to in Section 2.1 and 2.3 by or pursuant to
which the forms and terms of the Subordinated Securities and Coupons, if any,
were established;
(3) an Officer's Certificate setting forth the form or forms and terms of
the Subordinated Securities and Coupons, if any, stating that the form or forms
and terms of the Subordinated Securities and Coupons, if any, have been
established pursuant to Sections 2.1 and 2.3 and comply with this Subordinated
Indenture, and covering such other matters as the Trustee may reasonably
request; and
(4) At the option of the Company, either one or more Opinions of Counsel,
or a letter addressed to the Trustee permitting it to rely on one or more
Opinions of Counsel, substantially to the effect that:
<PAGE>
(a) the form or forms of the Subordinated Securities and Coupons, if
any, have been duly authorized and established in conformity with the
provisions of this Subordinated Indenture;
(b) in the case of an underwritten offering, the terms of the
Subordinated Securities have been duly authorized and established in
conformity with the provisions of this Subordinated Indenture, and, in the
case of an offering that is not underwritten, certain terms of the
Subordinated Securities have been established pursuant to a Board
Resolution, an Officer's Certificate or a supplemental indenture in
accordance with this Subordinated Indenture, and when such other terms as
are to be established pursuant to procedures set forth in a Company Order
shall have been established, all such terms will have been duly authorized
by the Company and will have been established in conformity with the
provisions of this Subordinated Indenture; and
(c) such Subordinated Securities and Coupons, if any, when executed by
the Company and authenticated by the Trustee in accordance with the
provisions of this Subordinated Indenture and delivered to and duly paid
for by the purchasers thereof, and subject to any conditions specified in
such Opinion of Counsel, will have been duly issued under this Subordinated
Indenture, will be entitled to the benefits of this Subordinated Indenture,
and will be valid and binding obligations of the Company, enforceable in
accordance with their respective terms except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency or similar laws affecting
creditors' rights generally, (ii) rights of acceleration, if any, and (iii)
the availability of equitable remedies may be limited by equitable
principles of general applicability and such counsel need express no
opinion with regard to the enforceability of Section 6.6 or of a judgment
denominated in a currency other than Dollars.
In rendering such opinions, any counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium, fraudulent transfer and
other similar laws affecting the rights and remedies of creditors and is subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely upon
opinions of other counsel (copies of which shall be delivered to the Trustee)
reasonably satisfactory to the Trustee, in which case the opinion shall state
that such counsel believes he and the Trustee are entitled so to rely. Such
counsel may also state that, insofar as such opinion involves factual matters,
he has relied, to the extent he deems proper, upon certificates of officers of
the Company and its subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to authenticate and deliver any
Subordinated Securities under this section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Company or
if the Trustee in good faith by its board of directors or board of trustees,
executive committee or a trust committee of directors or trustees shall
determine that such action would expose the Trustee to personal liability to
existing Holders or would affect the Trustee's own rights, duties or immunities
under the Subordinated Securities, this Subordinated Indenture or otherwise.
<PAGE>
If the Company shall establish pursuant to Section 2.3 that the
Subordinated Securities of a series are to be issued in the form of one or more
Registered Global Subordinated Securities, then the Company shall execute and
the Trustee shall, in accordance with this Section and the Company Order with
respect to such series, authenticate and deliver one or more Registered Global
Subordinated Securities that (i) shall represent and shall be denominated in an
amount equal to the aggregate principal amount of all of the Subordinated
Securities of such series issued and not yet canceled, (ii) shall be registered
in the name of the Depositary for such Registered Global Subordinated Security
or Subordinated Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or delivered or held pursuant to
such Depositary's instructions and (iv) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or in part for
Subordinated Securities in definitive registered form, this Subordinated
Security may not be transferred except as a whole by the Depositary to the
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time of its
designation and at all times while it serves as Depositary, be a clearing agency
registered under the Exchange Act and any other applicable statute or
regulation.
SECTION 2.5 Execution of Subordinated Securities.
The Subordinated Securities and each Coupon appertaining thereto, if any,
shall be signed on behalf of the Company by the chairman or vice chairman of its
Board of Directors or its president, or any executive (senior or other), a vice
president or its treasurer, under its corporate seal (except in the case of
Coupons) which may, but need not, be attested. Such signatures may be the manual
or facsimile signatures of the present or any future such officers. The seal of
the Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Subordinated Securities.
Typographical and other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or enforceability of
any Subordinated Security that has been duly authenticated and delivered by the
Trustee.
In case any officer of the Company who shall have signed any of the
Subordinated Securities or Coupons, if any, shall cease to be such officer
before the Subordinated Security or Coupon so signed (or the Subordinated
Security to which the Coupon so signed appertains) shall be authenticated and
delivered by the Trustee or disposed of by the Company, such Subordinated
Security or Coupon nevertheless may be authenticated and delivered or disposed
of as though the person who signed such Subordinated Security or Coupon had not
ceased to be such officer of the Company; and any Subordinated Security or
Coupon may be signed on behalf of the Company by such persons as, at the actual
date of the execution of such Subordinated Security or Coupon, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Subordinated Indenture any such person was not such an officer.
<PAGE>
SECTION 2.6 Certificate of Authentication.
Only such Subordinated Securities as shall bear thereon a certificate of
authentication substantially in the form hereinbefore recited, executed by the
Trustee by the manual signature of one of its authorized officers, shall be
entitled to the benefits of this Subordinated Indenture or be valid or
obligatory for any purpose. No Coupon shall be entitled to the benefits of this
Subordinated Indenture or shall be valid and obligatory for any purpose until
the certificate of authentication on the Subordinated Security to which such
Coupon appertains shall have been duly executed by the Trustee. The execution of
such certificate by the Trustee upon any Subordinated Security executed by the
Company shall be conclusive evidence that the Subordinated Security so
authenticated has been duly authenticated and delivered hereunder and that the
Holder is entitled to the benefits of this Subordinated Indenture.
SECTION 2.7 Denomination and Date of Subordinated Securities; Payments of
Interest.
The Subordinated Securities of each series shall be issuable as Registered
Subordinated Securities or Unregistered Subordinated Securities in denominations
established as contemplated by Section 2.3 or, with respect to the Registered
Subordinated Securities of any series, if not so established, in denominations
of $1,000 and any integral multiple thereof. If denominations of Unregistered
Subordinated Securities of any series are not so established, such Subordinated
Securities shall be issuable in denominations of $1,000 and $5,000. The
Subordinated Securities of each series shall be numbered, lettered or otherwise
distinguished in such manner or in accordance with such plan as the officers of
the Company executing the same may determine with the approval of the Trustee,
as evidenced by the execution and authentication thereof.
Each Registered Subordinated Security shall be dated the date of its
authentication. Each Unregistered Subordinated Security shall be dated as
provided in the Board Resolution referred to in Section 2.3. The Subordinated
Securities of each series shall bear interest, if any, from the date, and such
interest shall be payable on the dates, established as contemplated by Section
2.3.
Interest on any Subordinated Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Subordinated Security (or one or more Predecessor
Subordinated Securities) is registered at the close of business on the Regular
Record Date for such interest. At the option of the Company, interest on any
Subordinated Security may be paid by mailing a check to the address of the
Holder thereof as such address appears in the Subordinated Securities Register.
Any interest on any Subordinated Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Subordinated Securities (or their respective
Predecessor
<PAGE>
Subordinated Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Subordinated Security
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as it appears
in the Subordinated Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Subordinated Securities
(or their respective Predecessor Subordinated Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Subordinated Securities may be listed, and upon such notice as may
be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Subordinated Security
delivered under this Subordinated Indenture upon registration of transfer of or
in exchange for or in lieu of any other Subordinated Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Subordinated Security.
In the case of any Subordinated Security which is converted during the period
after any Regular Record Date and on or prior to the next succeeding Interest
Payment Date (other than any Subordinated Security whose Maturity is prior to
such Interest Payment Date), interest whose Stated Maturity is on such Interest
Payment Date shall be payable on such Interest Payment Date notwithstanding such
conversion, and such interest (whether or not punctually paid or duly provided
for) shall be paid to the Person in whose name that Subordinated Security (or
one or more Predecessor Subordinated Securities) is registered at the close of
business on such Regular Record Date; provided, however, that Subordinated
Securities so registered for conversion shall (except in the case of
Subordinated Securities or portions thereof which have been called for
redemption on a Redemption Date within such period) be accompanied by payment in
New York Clearing House Funds or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount being surrendered for conversion. Except as otherwise expressly
provided in the immediately preceding sentence, in
<PAGE>
the case of any Subordinated Security which is converted, interest whose Stated
Maturity is after the date of conversion of such Subordinated Security shall not
be payable.
SECTION 2.8 Registration, Transfer and Exchange.
(a) The Company will keep at each office or agency to be maintained for the
purpose as provided in Section 3.2 for each series of Subordinated Securities a
register or registers (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 3.2 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as the Company may prescribe, it will provide for
the registration of Registered Subordinated Securities of such series and the
registration of transfer of Registered Subordinated Securities of such series.
Such Security Register shall be in written form in the English language or in
any other form capable of being converted into such form within a reasonable
time. At all reasonable times such Security Register or registers shall be open
for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Subordinated Security of any series at any such office or agency to be
maintained for the purpose as provided in Section 3.2, the Company shall execute
and the Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Registered Subordinated Security or Registered Subordinated
Securities of the same series, maturity date, interest rate and original issue
date in authorized denominations for a like aggregate principal amount.
Unregistered Subordinated Securities (except for any temporary global
Unregistered Subordinated Securities) and Coupons (except for Coupons attached
to any temporary global Unregistered Subordinated Securities) shall be
transferable by delivery.
At the option of the Holder thereof, Registered Subordinated Securities of
any series (other than a Registered Global Subordinated Security, except as set
forth below) may be exchanged for a Registered Subordinated Security or
Registered Subordinated Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Registered Subordinated Securities to be exchanged at the agency of the Company
that shall be maintained for such purpose in accordance with Section 3.2 and
upon payment, if the Company shall so require, of the charges hereinafter
provided. If the Subordinated Securities of any series are issued in both
registered and unregistered form, at the option of the Holder thereof, except as
otherwise specified pursuant to Section 2.3, Unregistered Subordinated
Securities of any series may be exchanged for Registered Subordinated Securities
of such series having authorized denominations and an equal aggregate principal
amount, upon surrender of such Unregistered Subordinated Securities to be
exchanged at the agency of the Company that shall be maintained for such purpose
in accordance with Section 3.2, with, in the case of Unregistered Subordinated
Securities that have Coupons attached, all unmatured Coupons and all matured
Coupons in default thereto appertaining, and upon payment, if the Company shall
so require, of the charges hereinafter provided. At the option of the Holder
thereof, if Unregistered Subordinated Securities of any series, maturity date,
interest rate and original issue date are issued in more than one authorized
denomination, except as otherwise specified pursuant to Section 2.3, such
Unregistered Subordinated Securities may be exchanged for Unregistered
<PAGE>
Subordinated Securities of such series having authorized denominations and an
equal aggregate principal amount, upon surrender of such Unregistered
Subordinated Securities to be exchanged at the agency of the Company that shall
be maintained for such purpose in accordance with Section 3.2 or as specified
pursuant to Section 2.3, with, in the case of Unregistered Subordinated
Securities that have Coupons attached, all unmatured Coupons and all matured
Coupons in default thereto appertaining, and upon payment, if the Company shall
so require, of the charges hereinafter provided. Registered Subordinated
Securities of any series may not be exchanged for Unregistered Subordinated
Securities of such series unless (1) otherwise specified pursuant to Section 2.3
and (2) the Company has delivered to the Trustee an Opinion of Counsel that (x)
the Company has received from the IRS a ruling or (y) since the date hereof,
there has been a change in the applicable Federal income tax law, in either case
to the effect that the inclusion of terms permitting Registered Subordinated
Securities to be exchanged for Unregistered Subordinated Securities would result
in no Federal income tax effect adverse to the Company or to any Holder.
Whenever any Subordinated Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Subordinated Securities which the Holder making the exchange is entitled to
receive. All Subordinated Securities and Coupons, if any, surrendered upon any
exchange or transfer provided for in this Subordinated Indenture shall be
promptly canceled and disposed of by the Trustee, and the Trustee shall deliver
a certificate of disposition thereof to the Company.
All Registered Subordinated Securities presented for registration of
transfer, exchange, redemption or payment shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee duly
executed, by the Holder or his attorney duly authorized in writing.
The Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Subordinated Securities. No service charge shall be
made for any such transaction.
The Company shall not be required to exchange or register a transfer of (a)
any Subordinated Securities of any series for a period of 15 days preceding the
first mailing of notice of redemption of Subordinated Securities of such series
to be redeemed or (b) any Subordinated Securities selected, called or being
called for redemption, in whole or in part, except, in the case of any
Subordinated Security to be redeemed in part, the portion thereof not so to be
redeemed.
Notwithstanding any other provision of this Section 2.8, unless and until
it is exchanged in whole or in part for Subordinated Securities in definitive
registered form, a Registered Global Subordinated Security representing all or a
portion of the Subordinated Securities of a series may not be transferred except
as a whole by the Depositary for such series to a nominee of such Depositary or
by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
for such series or a nominee of such successor Depositary.
If at any time the Depositary for any Registered Subordinated Securities of
a series represented by one or more Registered Global Subordinated Securities
notifies the Company that
<PAGE>
it is unwilling or unable to continue as Depositary for such Registered
Subordinated Securities or if at any time the Depositary for such Registered
Subordinated Securities shall no longer be eligible under Section 2.4, the
Company shall appoint a successor Depositary eligible under Section 2.4 with
respect to such Registered Subordinated Securities. If a successor Depositary
eligible under Section 2.4 for such Registered Subordinated Securities is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company's election pursuant to
Section 2.3 that such Registered Subordinated Securities be represented by one
or more Registered Global Subordinated Securities shall no longer be effective
and the Company will execute, and the Trustee, upon receipt of an Officer's
Certificate for the authentication and delivery of definitive Subordinated
Securities of such series, will authenticate and deliver, Subordinated
Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Registered Global Subordinated Security or Subordinated
Securities representing such Registered Subordinated Securities in exchange for
such Registered Global Subordinated Security or Subordinated Securities.
The Company may at any time and in its sole discretion determine that the
Registered Subordinated Securities of any series issued in the form of one or
more Registered Global Subordinated Securities shall no longer be represented by
a Registered Global Subordinated Security or Subordinated Securities. In such
event the Company will execute, and the Trustee, upon receipt of any Officer's
Certificate for the authentication and delivery of definitive Subordinated
Securities of such series, will authenticate and deliver, Subordinated
Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Registered Global Subordinated Security or Subordinated
Securities representing such Registered Subordinated Securities, in exchange for
such Registered Global Subordinated Security or Subordinated Securities.
If specified by the Company pursuant to Section 2.3 with respect to
Subordinated Securities represented by a Registered Global Subordinated
Security, the Depositary for such Registered Global Subordinated Security may
surrender such Registered Global Subordinated Security in exchange in whole or
in part for Subordinated Securities of the same series in definitive registered
form on such terms as are acceptable to the Company and such Depositary.
Thereupon, the Company shall execute, and the Trustee shall authenticate and
deliver, without service charge,
(i) to the Person specified by such Depositary a new Registered
Subordinated Security or Subordinated Securities of the same series, of any
authorized denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest in the
Registered Global Subordinated Security; and
(ii) to such Depositary a new Registered Global Subordinated Security in a
denomination equal to the difference, if any, between the principal amount of
the surrendered Registered Global Subordinated Security and the aggregate
principal amount of Registered Subordinated Securities authenticated and
delivered pursuant to clause (i) above.
<PAGE>
Upon the exchange of a Registered Global Subordinated Security for
Subordinated Securities in definitive registered form without coupons, in
authorized denominations, such Registered Global Subordinated Security shall be
canceled by the Trustee or an agent of the Company or the Trustee. Subordinated
Securities in definitive registered form without coupons issued in exchange for
a Registered Global Subordinated Security pursuant to this Section 2.8 shall be
registered in such names and in such authorized denominations as the Depositary
for such Registered Global Subordinated Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee or
an agent of the Company or the Trustee. The Trustee or such agent shall deliver
such Subordinated Securities to or as directed by the Persons in whose names
such Subordinated Securities are so registered.
All Subordinated Securities issued upon any transfer or exchange of
Subordinated Securities shall be valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Subordinated
Indenture, as the Subordinated Securities surrendered upon such transfer or
exchange.
Notwithstanding anything herein or in the terms of any series of
Subordinated Securities to the contrary, none of the Company, the Trustee or any
agent of the Company or the Trustee (any of which, other than the Company, shall
rely on an Officer's Certificate and an Opinion of Counsel) shall be required to
exchange any Unregistered Subordinated Security for a Registered Subordinated
Security if such exchange would result in Federal income tax consequences
adverse to the Company (such as, for example, the inability of the Company to
deduct from its income, as computed for Federal income tax purposes, the
interest payable on the Unregistered Subordinated Securities) under then
applicable United States Federal income tax laws.
(b)(i) Subordinated Securities that are distributed to QIBs will be
represented by a global Subordinated Security (the "144A Global Subordinated
Security"). Subordinated Securities that are distributed to Non-U.S. Persons
will be represented by a global Subordinated Security (the "Regulation S Global
Subordinated Security"). Each of the 144A Global Subordinated Security and the
Regulation S Global Subordinated Security shall be referred to herein as a
"Global Subordinated Security." If Global Subordinated Securities are issued,
transfers of interests in the Subordinated Securities between the 144A Global
Subordinated Security and the Regulation S Global Subordinated Security will be
made in accordance with the standing instructions and procedures of the
Depositary and its participants and the Trustee shall make appropriate
endorsements to reflect increases or decreases in the principal amounts of such
Global Subordinated Securities to reflect any such transfers.
Except as provided below, beneficial owners of a Subordinated Security in
global form shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Subordinated Securities in global form.
(ii) So long as the Subordinated Securities are eligible for book-entry
settlement, and to the extent that Subordinated Securities are held by QIBs or
Non-U.S. Persons, as the case may be, in a Global Subordinated Security, or
unless otherwise required by law, upon any
<PAGE>
transfer of a definitive Subordinated Security to a QIB in accordance with Rule
144A or to a Non-U.S. Person in accordance with Regulation S, unless otherwise
requested by the transferor, and upon receipt of the definitive Subordinated
Security or Subordinated Securities being so transferred, together with a
certification from the transferor that the transfer is being made in compliance
with Rule 144A or Regulation S, as the case may be (or other evidence
satisfactory to the Trustee), the Trustee shall make an endorsement on any 144A
Global Subordinated Security or any Regulation S Global Subordinated Security,
as the case may be, to reflect an increase in the aggregate principal amount of
the Subordinated Securities represented by such Global Subordinated Security,
and the Trustee shall cancel such definitive Subordinated Security or
Subordinated Securities in accordance with the standing instructions and
procedures of the Depositary, the aggregate principal amount of Subordinated
Securities represented by such Global Subordinated Security to be increased
accordingly; provided that no definitive Subordinated Security, or portion
thereof, in respect of which the Company or an Affiliate of the Company held any
beneficial interest shall be included in such Global Subordinated Security until
such definitive Subordinated Security is freely tradable in accordance with Rule
144K; provided further that the Trustee shall, at the written request of the
Company, issue Subordinated Securities in definitive form upon any transfer of a
beneficial interest in the Global Subordinated Security to the Company or any
Affiliate of the Company.
Any Global Subordinated Security may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Subordinated Indenture as may be required by the
Depositary, by the New York Stock Exchange or by the National Association of
Securities Dealers, Inc. in order for the Subordinated Securities to be tradable
on the PORTAL Market or as may be required for the Subordinated Securities to be
tradable on any other market developed for trading of securities pursuant to
Rule 144A or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange upon
which the Subordinated Securities may be listed or traded or to conform with any
usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Subordinated Securities are subject.
(iii) Each Subordinated Security that bears or is required to bear the
legend set forth in this Section 2.8(b) (a "Restricted Subordinated Security")
shall be subject to the restrictions on transfer provided in the legend set
forth in this Section 2.8(b), unless such restrictions on transfer shall be
waived by the written consent of the Company, and the Holder of each Restricted
Subordinated Security, by such Holder's acceptance thereof, agrees to be bound
by such restrictions on transfer. As used in this Section 2.8(b), the term
"transfer" encompasses any sale, pledge, transfer or other disposition of any
Restricted Subordinated Security.
Prior to the Transfer Restriction Termination Date, any certificate
evidencing a Subordinated Security shall bear a legend in substantially the
following form, unless otherwise agreed by the Company (with written notice
thereof to the Trustee):
THE SUBORDINATED SECURITY (THE "SECURITY") EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT
<PAGE>
OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO HEALTHSOUTH
CORPORATION (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D)
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE TRUSTEE FOR THE SECURITIES A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE SECURITIES. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO
IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE FOR THE SECURITIES SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND
WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
<PAGE>
Following the Transfer Restriction Termination Date, any Subordinated
Security or security issued in exchange or substitution therefor (other than
Subordinated Securities acquired by the Company or any Affiliate thereof since
the issue date of the Subordinated Securities) may upon surrender of such
Subordinated Security for exchange to the Security Registrar in accordance with
the provisions of this Section 2.8, be exchanged for a new Subordinated Security
or Subordinated Securities, of like tenor and aggregate principal amount, which
shall not bear the restrictive legend required by this Section 2.8(b).
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Subordinated
Securities.
In case any temporary or definitive Subordinated Security or any Coupon
appertaining to any Subordinated Security shall be mutilated, defaced,
destroyed, lost or stolen, the Company in its discretion may execute and, upon
the written request of any officer of the Company, the Trustee shall
authenticate and deliver, a new Subordinated Security of the same series,
maturity date, interest rate and original issue date, bearing a number or other
distinguishing symbol not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Subordinated Security, or in lieu of
and in substitution for the Subordinated Security so destroyed, lost or stolen
with Coupons corresponding to the Coupons appertaining to the Subordinated
Securities so mutilated, defaced, destroyed, lost or stolen, or in exchange or
substitution for the Subordinated Security to which such mutilated, defaced,
destroyed, lost or stolen Coupon appertained, with Coupons appertaining thereto
corresponding to the Coupons so mutilated, defaced, destroyed, lost or stolen.
In every case the applicant for a substitute Subordinated Security or Coupon
shall furnish to the Company and to the Trustee and any agent of the Company or
the Trustee such security or indemnity as may be required by them to indemnify
and defend and to save each of them harmless and, in every case of destruction,
loss or theft, evidence to their satisfaction of the destruction, loss or theft
of such Subordinated Security or Coupon and of the ownership thereof, and in the
case of mutilation or defacement shall surrender the Subordinated Security and
related Coupons to the Trustee or such agent.
Upon the issuance of any substitute Subordinated Security or Coupon, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) or its agent connected
therewith. In case any Subordinated Security or Coupon which has matured or is
about to mature or has been called for redemption in full shall become mutilated
or defaced or be destroyed, lost or stolen, the Company may instead of issuing a
substitute Subordinated Security, pay or authorize the payment of the same or
the relevant Coupon (without surrender thereof except in the case of a mutilated
or defaced Subordinated Security or Coupon), if the applicant for such payment
shall furnish to the Company and to the Trustee and any agent of the Company or
the Trustee such security or indemnity as any of them may require to save each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and the Trustee and any agent of the
Company or the Trustee evidence to their satisfaction of the destruction, loss
or theft of such Subordinated Security or Coupons and of the ownership thereof.
Every substitute Subordinated Security or Coupon of any series issued
pursuant to the provisions of this Section by virtue of the fact that any such
Subordinated Security or Coupon
<PAGE>
is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Subordinated Security or Coupon shall be at any time enforceable by anyone and
shall be entitled to all the benefits of (but shall be subject to all the
limitations of rights set forth in) this Subordinated Indenture equally and
proportionately with any and all other Subordinated Securities or Coupons of
such series duly authenticated and delivered hereunder. All Subordinated
Securities and Coupons shall be held and owned upon the express condition that,
to the extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced or destroyed, lost
or stolen Subordinated Securities and Coupons and shall preclude any and all
other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.10 Cancellation of Subordinated Securities; Destruction Thereof.
All Subordinated Securities and Coupons surrendered for payment,
redemption, registration of transfer or exchange, or for credit against any
payment in respect of a sinking or analogous fund, if any, if surrendered to the
Company or any agent of the Company or the Trustee or any agent of the Trustee,
shall be delivered to the Trustee or its agent for cancellation or, if
surrendered to the Trustee, shall be canceled by it; and no Subordinated
Securities or Coupons shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Subordinated Indenture. The Trustee
or its agent shall dispose of canceled Subordinated Securities and Coupons held
by it and deliver a certificate of disposition to the Company. If the Company or
its agent shall acquire any of the Subordinated Securities or Coupons, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Subordinated Securities or Coupons unless and
until the same are delivered to the Trustee or its agent for cancellation.
SECTION 2.11 Temporary Subordinated Securities.
Pending the preparation of definitive Subordinated Securities for any
series, the Company may execute and the Trustee shall authenticate and deliver
temporary Subordinated Securities for such series (printed, lithographed,
typewritten or otherwise reproduced, in each case in form satisfactory to the
Trustee). Temporary Subordinated Securities of any series shall be issuable as
Registered Subordinated Securities without coupons, or as Unregistered
Subordinated Securities with or without coupons attached thereto, of any
authorized denomination, and substantially in the form of the definitive
Subordinated Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Subordinated Securities, all as
may be determined by the Company with the concurrence of the Trustee as
evidenced by the execution and authentication thereof. Temporary Subordinated
Securities may contain such references to any provisions of this Subordinated
Indenture as may be appropriate. Every temporary Subordinated Security shall be
executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the
definitive Subordinated Securities. Without unreasonable delay the Company shall
execute and shall furnish definitive Subordinated Securities of such series and
thereupon temporary Registered Subordinated Securities of such series may be
surrendered in exchange therefor without charge at each office or agency to be
maintained by the Company for
<PAGE>
that purpose pursuant to Section 3.2 and, in the case of Unregistered
Subordinated Securities, at any agency maintained by the Company for such
purpose as specified pursuant to Section 2.4, and the Trustee shall authenticate
and deliver in exchange for such temporary Subordinated Securities of such
series an equal aggregate principal amount of definitive Subordinated Securities
of the same series having authorized denominations and, in the case of
Unregistered Subordinated Securities, having attached thereto any appropriate
Coupons. Until so exchanged, the temporary Subordinated Securities of any series
shall be entitled to the same benefits under this Subordinated Indenture as
definitive Subordinated Securities of such series, unless otherwise established
pursuant to Section 2.3. The provisions of this Section are subject to any
restrictions or limitations on the issue and delivery of temporary Unregistered
Subordinated Securities of any series that may be established pursuant to
Section 2.4 (including any provision that Unregistered Subordinated Securities
of such series initially be issued in the form of a single global Unregistered
Subordinated Security to be delivered to a depositary or agency located outside
the United States and the procedures pursuant to which definitive or global
Unregistered Subordinated Securities of such series would be issued in exchange
for such temporary global Unregistered Subordinated Security).
ARTICLE 3
COVENANTS OF THE COMPANY
SECTION 3.1 Payment of Principal and Interest.
The Company covenants and agrees for the benefit of each series of
Subordinated Securities that it will duly and punctually pay or cause to be paid
the principal of, and interest on, if any, each of the Subordinated Securities
of such series (together with any additional amounts payable pursuant to the
terms of such Subordinated Securities) at the place or places, at the respective
time or times and in the manner provided in such Subordinated Securities and in
the Coupons, if any, appertaining thereto and in this Subordinated Indenture.
The interest on Subordinated Securities with Coupons attached (together with any
additional amounts payable pursuant to the terms of such Subordinated
Securities) shall be payable only upon presentation and surrender of the several
Coupons for such interest installments as are evidenced thereby as they
severally mature. If any temporary Unregistered Subordinated Security provides
that interest thereon may be paid while such Subordinated Security is in
temporary form, the interest on any such temporary Unregistered Subordinated
Security (together with any additional amounts payable pursuant to the terms of
such Subordinated Security) shall be paid, as to the installments of interest
evidenced by Coupons attached thereto, if any, only upon presentation and
surrender thereof, and, as to the other installments of interest, if any, only
upon presentation of such Subordinated Securities for notation thereon of the
payment of such interest, in each case subject to any restrictions that may be
established pursuant to Section 2.4. The interest, if any, on Registered
Subordinated Securities (together with any additional amounts payable pursuant
to the terms of such Subordinated Securities) shall be payable only to or upon
the written order of the Holders thereof and, at the option of the Company, may
be paid by wire transfer or by mailing checks for such interest payable to or
upon the written order of such Holders at their last addresses as they appear on
the Security Register of the Company.
<PAGE>
SECTION 3.2 Offices for Payments, Etc.
So long as any Registered Subordinated Securities are authorized for
issuance pursuant to this Subordinated Indenture or are outstanding hereunder,
the Company will maintain in the Borough of Manhattan, The City of New York, an
office or agency where the Registered Subordinated Securities of each series may
be presented for payment, where the Subordinated Securities of each series may
be presented for exchange as is provided in this Subordinated Indenture, where
the Subordinated Securities of each series may be surrendered for conversion
and, if applicable, pursuant to Section 2.4 and where the Registered
Subordinated Securities of each series may be presented for registration of
transfer as in this Subordinated Indenture provided.
The Company will maintain one or more offices or agencies in a city or
cities located outside the United States (including any city in which such an
agency is required to be maintained under the rules of any stock exchange on
which the Subordinated Securities of such series are listed) where the
Unregistered Subordinated Securities, if any, of each series and Coupons, if
any, appertaining thereto may be presented for payment. No payment on any
Unregistered Subordinated Security or Coupon will be made upon presentation of
such Unregistered Subordinated Security or Coupon at an agency of the Company
within the United States nor will any payment be made by transfer to an account
in, or by mail to an address in, the United States unless pursuant to applicable
United States laws and regulations then in effect such payment can be made
without tax consequences adverse to the Company. Notwithstanding the foregoing,
payments in Dollars of Unregistered Subordinated Securities of any series and
Coupons appertaining thereto which are payable in Dollars may be made at an
agency of the Company maintained in the Borough of Manhattan, The City of New
York if such payment in Dollars at each agency maintained by the Company outside
the United States for payment on such Unregistered Subordinated Securities is
illegal or effectively precluded by exchange controls or other similar
restrictions.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where notices and demands to or upon the Company in
respect of the Subordinated Securities of any series, the Coupons appertaining
thereto or this Subordinated Indenture may be served.
The Company will give to the Trustee written notice of the location of each
such office or agency and of any change of location thereof. In case the Company
shall fail to maintain any agency required by this Section to be located in the
Borough of Manhattan, The City of New York, or shall fail to give such notice of
the location or for any change in the location of any of the above agencies,
presentations and demands may be made and notices may be served at the Corporate
Trust Office of the Trustee.
The Company may from time to time designate one or more additional offices
or agencies where the Subordinated Securities of a series and any Coupons
appertaining thereto may be presented for payment, where the Subordinated
Securities of that series may be presented for exchange as provided in this
Subordinated Indenture and pursuant to Section 2.4 and where the Registered
Subordinated Securities of that series may be presented for registration of
transfer
<PAGE>
as in this Subordinated Indenture provided, and the Company may from time to
time rescind any such designation, as the Company may deem desirable or
expedient; provided, that no such designation or rescission shall in any manner
relieve the Company of its obligations to maintain the agencies provided for in
this Section. The Company shall give to the Trustee prompt written notice of any
such designation or rescission thereof.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee with respect to each series of
Subordinated Securities hereunder.
SECTION 3.4 Paying Agents.
Whenever the Company shall appoint a Paying Agent other than the Trustee
with respect to the Subordinated Securities of any series, it will cause such
Paying Agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent for the payment
of the principal of or interest on the Subordinated Securities of such series
(whether such sums have been paid to it by the Company or by any other obligor
on the Subordinated Securities of such series) in trust for the benefit of the
Holders of the Subordinated Securities of such series, or Coupons appertaining
thereto, if any, or of the Trustee;
(b) that it will give the Trustee notice of any failure by the Company (or
by any other obligor on the Subordinated Securities of such series) to make any
payment of the principal of or interest on the Subordinated Securities of such
series when the same shall be due and payable; and
(c) that it will pay any such sums so held in trust by it to the Trustee
upon the Trustee's written request at any time during the continuance of the
failure referred to in the foregoing clause (b).
The Company will, on or prior to each due date of the principal of or
interest on the Subordinated Securities of such series, deposit with the Paying
Agent a sum sufficient to pay such principal or interest so becoming due, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of any failure to take such action.
If the Company shall act as its own Paying Agent with respect to the
Subordinated Securities of any series, it will, on or before each due date of
the principal of or interest on the Subordinated Securities of such series, set
aside, segregate and hold in trust for the benefit of the Holders of the
Subordinated Securities of such series or the Coupons appertaining thereto a sum
sufficient to pay such principal or interest so becoming due. The Company will
promptly notify the Trustee of any failure to take such action.
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Anything in this Section to the contrary notwithstanding, but subject to
Section 10.1, the Company may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to one or more or all series of
Subordinated Securities hereunder, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust for any such series by the Company or
any Paying Agent hereunder, as required by this Section, such sums to be held by
the Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the agreement to
hold sums in trust as provided in this Section is subject to the provisions of
Sections 10.3 and 10.4.
SECTION 3.5 Compliance Certificates.
The Company will furnish to the Trustee on or before January 31 in each
year (beginning with January 31, 1999) a brief certificate (which need not
comply with Section 11.5) from the principal executive, financial or accounting
officer of the Company stating that in the course of the performance by the
signer of his or her duties as an officer of the Company he or she would
normally have knowledge of any default or non-compliance by the Company in the
performance of any covenants or conditions contained in this Subordinated
Indenture, stating whether or not he or she has knowledge of any such default or
non-compliance and, if so, describing each such default or non- compliance of
which the signer has knowledge and the nature thereof.
SECTION 3.6 Corporate Existence.
Subject to Article 9, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and the rights (charter and statutory), licenses and franchises of the Company
and its Subsidiaries; provided, that the Company shall not be required to
preserve any such right, license or franchise, if, in the judgment of the
Company, the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries taken as a whole and the loss
thereof is not disadvantageous in any material respect to the Securityholders.
SECTION 3.7 Maintenance of Properties.
The Company will cause all properties used in or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in good
condition, repair, and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary, so that the business carried on in connection therewith may be
properly and advantageously conducted at all time except to the extent that the
Company may be prevented from so doing by circumstances beyond its control;
provided, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Company desirable in the conduct of the business of the Company or any
Subsidiary and not disadvantageous in any material respect to the
Securityholders.
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SECTION 3.8 Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent: (a) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary; and (b) all lawful claims
for labor, materials, and supplies, which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary; provided, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings; and provided further
that the Company shall not be required to cause to be paid or discharged any
such tax, assessment, charge or claim if the Company shall determine that such
payment is not advantageous to the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the failure so to pay or discharge is
not disadvantageous in any material respect to the Securityholders.
SECTION 3.9 Luxembourg Publications.
In the event of the publication of any notice pursuant to Section 5.15,
6.11(a), 6.12, 8.2, 10.4 or 13.2, the party making such publication in the
Borough of Manhattan, The City of New York and London shall also, to the extent
that notice is required to be given to Holders of Subordinated Securities of any
series by applicable Luxembourg law or stock exchange regulation, as evidenced
by an Officer's Certificate delivered to such party, make a similar publication
in Luxembourg.
SECTION 3.10 Usury Laws.
The Company covenants and agrees: (a) not to insist upon, or plead, or in any
manner whatsoever claim the benefit or the advantage of the usury law of any
jurisdiction against the Trustee or the Holders in connection with any claim,
action or proceeding which may be brought by the Trustee or the Holders in order
to enforce any right or remedy under this Subordinated Indenture; and (b) to
resist any and all efforts to compel the Company to claim the benefit or the
advantage of the usury law of any jurisdiction against the Trustee or the
Holders in connection with any claim, action or proceeding which may be brought
by the Trustee or the Holders in order to enforce any right or remedy under this
Indenture.
ARTICLE 4
SECURITYHOLDER LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.1 Company to Furnish Trustee Information as to Names and Addresses of
Securityholders.
If and so long as the Trustee shall not be the Security Registrar for the
Subordinated Securities of any series, the Company and any other obligor on the
Subordinated Securities will
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furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the Holders of the
Registered Subordinated Securities of such series pursuant to Section 312 of the
Trust Indenture Act:
(a) semi-annually not more than 15 days after each Regular Record Date for
the payment of interest on such Registered Subordinated Securities, as
hereinabove specified, as of such record date and on dates to be determined
pursuant to Section 2.4 for non-interest bearing Registered Subordinated
Securities in each year; and
(b) at such other times as the Trustee may reasonably request in writing,
within thirty days after receipt by the Company of any such request as of a date
not more than 15 days prior to the time such information is furnished.
SECTION 4.2 Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 4.1 and the names and
addresses of Holders received by the Trustee in its capacity as Subordinated
Security Registrar. The Trustee may destroy any list furnished to it as provided
in Section 4.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to
their rights under this Subordinated Indenture or under the Subordinated
Sec