23
If certain events
relating to a bankruptcy,
insolvency or reorganization of the Company occur,
the Company
will first pay all Senior Debt, including any interest accrued after the events occur, in full before the Company makes
any payment or distribution, whether in cash, securities or other property, on account of the principal of or interest on
the Debentures. In such an event, the Company will pay or deliver directly to the holders of Senior Debt any payment
or distribution
otherwise
payable
or deliverable
to holders
of the
Debentures.
The Company
makes the payments
to
the holders of Senior Debt according to priorities existing among those holders until the Company has paid all Senior
Debt, including accrued interest, in
full. Notwithstanding the subordination
provisions discussed in
this paragraph, the
Company may make payments or
distributions on the Debentures so
long as:
●
the payments or
distributions consist of securities issued by the Company or another company in connection
with a plan of reorganization or
readjustment; and
●
payment on those
securities is subordinate to outstanding Senior
Debt and any securities issued with respect
to Senior Debt under
such plan of
reorganization
or readjustment at least to
the same extent provided
in the
subordination provisions of the Debentures.
If such
events
relating
to a bankruptcy,
insolvency or
reorganization
of
the Company
occur,
after
it
has paid
in
full
all
amounts owed on
Senior Debt, the
holders of
the
Debentures, together with
the holders
of any
of
the Company’s
other obligations ranking equal with the Debentures, will
be entitled to receive from the Company’s
remaining assets
any principal,
premium or interest due at that time on the Debentures and such other
obligations before the Company
makes any
payment
or
other
distribution
on
account
of
any of
the
Company’s
capital stock
or obligations
ranking
junior to the Debentures.
If
the Company violates the Indenture by making a payment or distribution to holders of the Debentures before it
has paid all the Senior Debt
in full, then the holders
of the Debentures will be deemed to have received the payments
or distributions in trust for the benefit of, and will have to pay or transfer the payments or distributions to, the holders
of the
Senior
Debt
outstanding at
the time.
The
payment
or transfer
to the
holders
of
the Senior
Debt will
be made
according to
the
priorities
existing among
those holders.
Notwithstanding
the
subordination provisions
discussed in
this paragraph, holders
of the Debentures
are
not required to pay,
or transfer payments
or distributions to,
holders
of
Senior Debt so long as:
●
the payments or
distributions consist of securities issued by the Company or another company in connection
with a plan of reorganization or
readjustment; and
●
payment on those
securities is subordinate to outstanding Senior
Debt and any securities issued with respect
to Senior Debt under
such plan of
reorganization
or readjustment at least to
the same extent provided
in the
subordination provisions of those Debentures.
Because
of
the
subordination,
if
the
Company
becomes
insolvent,
holders
of
Senior
Debt
may
receive
more,
ratably,
and
holders
of the
Debentures
may
receive
less,
ratably,
than
the
Company’s
other
creditors.
This
type
of
subordination
will
not
prevent
an
event
of
default
from
occurring
under
the
Indenture
in
connection
with
the
Debentures.
Any modification or amendment
of the Indenture
may
not, without the consent
of the holders of all
Senior Debt
outstanding,
modify
any
of
the
provisions
of
the
Debentures
relating
to
the
subordination
of
the
Debentures
in
a
manner that would adversely affect the holders of Senior Debt.
The Indenture does not place a limitation on the amount of Senior Debt that
the
Company may incur.
Concerning the Indenture Trustee
The indenture
trustee
has
all the
duties and
responsibilities
specified
under the
Trust
Indenture
Act.
Other
than its duties in case of a default, the indenture trustee is under
no obligation to exercise any of the powers under the
Indenture at the request, order or direction of any holders of Debentures
unless
offered reasonable indemnification.